UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K
(Mark One)
☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2021
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File Number 1-8097

Valaris Limited
(Exact name of registrant as specified in its charter)

Bermuda 98-1589854
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

Clarendon House, 2 Church Street

Hamilton Bermuda HM 11
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: +44 (0) 20 7659 4660

Securities registered pursuant to Section 12(b) of the Act:

Title of each class Ticker Symbol(s) Name of each exchange on which registered
Common Shares, $0.01 par value share VAL New York Stock Exchange
Warrants to purchase Common Shares VAL WS New York Stock Exchange

Indicate by check mark if the registrant is a well-known seasoned issuer as defined in Rule 405 of the Securities Act. Yes ☒ No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (S232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to
submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and
"emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer ☒ Accelerated filer o

Non-Accelerated filer o Smaller reporting company ☒
Emerging growth company ☐

☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☒ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its
internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C 7262(b)) by the registered public
accounting firm that prepared or issued its audit report.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).
Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the
Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☒ No ☐

The aggregate market value of the common shares (based upon the closing price on the New York Stock Exchange on June 30, 2021 of $28.88
of the registrant held by non-affiliates of Valaris Limited at that date) was approximately $1.9 billion.

As of February 17, 2022, there were 75,000,057 common shares of the registrant issued and outstanding.
 TABLE OF CONTENTS

PART I ITEM 1. BUSINESS 5

ITEM 1A. RISK FACTORS 15

ITEM 1B. UNRESOLVED STAFF COMMENTS 43

ITEM 2. PROPERTIES 44

ITEM 3. LEGAL PROCEEDINGS 47

ITEM 4. MINE SAFETY DISCLOSURES 47

PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED SHAREHOLDER 48

MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION 49

AND RESULTS OF OPERATIONS

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 86

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 87

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING 176

AND FINANCIAL DISCLOSURE

ITEM 9A. CONTROLS AND PROCEDURES 176

ITEM 9B. OTHER INFORMATION 176

PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE 177

ITEM 11. EXECUTIVE COMPENSATION 177

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND 178

MANAGEMENT AND RELATED SHAREHOLDER MATTERS

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR 178
INDEPENDENCE

ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES 178

PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES 179

ITEM 16. FORM 10-K SUMMARY 183

SIGNATURES 184
 FORWARD-LOOKING STATEMENTS

Statements contained in this report that are not historical facts are forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). Forward-looking statements include words or phrases such as "anticipate," "believe," "estimate," "expect," "intend," "likely," "plan,"
"project," "could," "may," "might," "should," "will" and similar words and specifically include statements regarding expected financial
performance; expected utilization, day rates, revenues, operating expenses, cash flows, contract status, terms and duration, contract backlog,
capital expenditures, insurance, financing and funding; the effect, impact, potential duration and other implications of the ongoing COVID-19
pandemic; impact of our emergence from bankruptcy; the offshore drilling market, including supply and demand, customer drilling programs,
stacking of rigs, effects of new rigs on the market and effects of the volatility and declines of commodity prices; expected work commitments,
awards and contracts; the availability, delivery, mobilization, contract commencement or relocation or other movement of rigs and the timing
thereof; future rig reactivations, enhancement, upgrade or repair and timing and cost thereof; the suitability of rigs for future contracts;
performance of our joint venture with Saudi Arabian Oil Company ("Saudi Aramco"); expected divestitures of assets; general market, business
and industry conditions, trends and outlook; future operations; the impact of increasing regulatory complexity; the outcome of tax disputes,
assessments and settlements; expense management; and the likely outcome of litigation, legal proceedings, investigations or insurance or other
claims or contract disputes and the timing thereof.

Such statements are subject to numerous risks, uncertainties and assumptions that may cause actual results to vary materially from
those indicated, particularly in light of uncertain market conditions, including:

• the ongoing COVID-19 pandemic, the related public health measures implemented by governments worldwide, the duration and
severity of the outbreak and its impact on global oil demand, the volatility in prices for oil and natural gas and the extent of disruptions
to our operations;

• downtime or temporary shut down of operations of our rigs as a result of an outbreak of COVID-19 on one or more of our rigs;

• disruptions to the operations and business, as a result of the spread of COVID-19, of our key customers, suppliers and other
counterparties, including impacts affecting our supply chain and logistics;

• disputes over production levels among members of the Organization of Petroleum Exporting Countries and other oil and gas producing
nations (“OPEC+”), which could result in increased volatility in prices for oil and natural gas that could affect the markets for our
services;

• decreases in levels of drilling activity and capital expenditures by our customers, whether as a result of the global capital markets and
liquidity, prices of oil and natural gas or otherwise, which may cause us to idle or stack additional rigs;

• delays in contract commencement dates or cancellation, suspension, renegotiation or termination (with or without cause, including
those due to impacts of the COVID-19 pandemic) of drilling contracts or drilling programs as a result of general and industry-specific
economic conditions, mechanical difficulties, performance, failure of the customer to receive final investment decision (FID) for which
the drilling rig was contracted or other reasons;

• changes in worldwide rig supply and demand, competition or technology, including as a result of delivery of newbuild drilling rigs,
reactivation of stacked drilling rigs and governmental policies that could reduce demand for hydrocarbons, including mandating or
incentivizing the conversion from internal combustion engine powered vehicles to electric-powered vehicles;

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• consumer preferences for alternative fuels and electric-powered vehicles, as part of the global energy transition, may lead to reduced
demand for our services;

• increased scrutiny from regulators, market and industry participants, stakeholders and others in regards to our Environmental, Social
and Governance ("ESG") practices and reporting responsibilities;

• the occurrence of cybersecurity incidents, attacks or other breaches to our information technology systems, including our rig operating
systems;

• potential additional asset impairments;

• the adequacy of sources of liquidity for us and our customers;

• the requirement to make significant expenditures in connection with rig reactivations, customer drilling requirements and to comply
with governing laws or regulations in the regions we operate;

• the impact of our emergence from bankruptcy on our business and relationships and comparability of our financial results, as well as
the potentially dilutive impacts of warrants issued pursuant to the plan of reorganization;

• our ability to attract and retain skilled personnel on commercially reasonable terms, whether due to labor regulations, rising wages,
unionization, or otherwise, or to retain employees;

• internal control risk due to significant employee reductions and changes in management;

• our shared service center initiative may not create the operational efficiencies that we expect, and may create risks relating to the
processing of transactions and recording of financial information;

• downtime and other risks associated with offshore rig operations, including rig or equipment failure, damage and other unplanned
repairs, the limited availability of transport vessels, hazards, self-imposed drilling limitations and other delays due to severe storms and
hurricanes and the limited availability or high cost of insurance coverage for certain offshore perils, such as hurricanes in the Gulf of
Mexico or associated removal of wreckage or debris;

• our customers cancelling or shortening the duration of our drilling contracts, cancelling future drilling programs and seeking pricing
and other contract concessions from us;

• governmental action, terrorism, cyberattacks, piracy, military action and political and economic uncertainties, including civil unrest,
political demonstrations, mass strikes, or an escalation or additional outbreak of armed hostilities or other crises in oil or natural gas
producing areas of the Middle East, North Africa, West Africa, Southeast Asia or other geographic areas, which may result in
expropriation, nationalization, confiscation or deprivation or destruction of our assets; or suspension and/or termination of contracts
based on force majeure events or adverse environmental safety events;

• risks inherent to drilling rig reactivations, repair, modification or upgrades, unexpected delays in equipment delivery, engineering,
design or commissioning issues following delivery, or changes in the commencement, completion or service dates;

• our ability to enter into, and the terms of, future drilling contracts, including contracts for our newbuild rigs and acquired rigs, for rigs
currently idled and for rigs whose contracts are expiring;

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 • any failure to execute definitive contracts following announcements of letters of intent, letters of award or other expected work
commitments;

• the outcome of litigation, legal proceedings, investigations or other claims or contract disputes, including any inability to collect
receivables or resolve significant contractual or day rate disputes, and any renegotiation, nullification, cancellation or breach of
contracts with customers or other parties;

• governmental regulatory, legislative and permitting requirements affecting drilling operations, including limitations on drilling
locations (such as the Gulf of Mexico during hurricane season), limitations on new oil and gas leasing in U.S. federal lands and waters
and regulatory measures to limit or reduce greenhouse gas emissions);

• loss of a significant customer or customer contract, as well as customer consolidation and changes to customer strategy, including
focusing on renewable energy projects;

• potential impacts on our business resulting from climate-change or greenhouse gas legislation or regulations, and the impact on our
business from climate-change related physical changes or changes in weather patterns;

• new and future regulatory, legislative or permitting requirements, future lease sales, changes in laws, rules and regulations that have or
may impose increased financial responsibility, additional oil spill abatement contingency plan capability requirements and other
governmental actions that may result in claims of force majeure or otherwise adversely affect our existing drilling contracts, operations
or financial results;

• environmental or other liabilities, risks, damages or losses, whether related to storms, hurricanes or other weather-related events
(including wreckage or debris removal), collisions, groundings, blowouts, fires, explosions, cyberattacks, terrorism or otherwise, for
which insurance coverage and contractual indemnities may be insufficient, unenforceable or otherwise unavailable;

• tax matters, including our effective tax rates, tax positions, results of audits, changes in tax laws, treaties and regulations, tax
assessments and liabilities for taxes;

• our ability to realize the expected benefits of our joint venture with Saudi Aramco, including our ability to fund any required capital
contributions or to enforce any payment obligations of the joint venture pursuant to outstanding shareholder notes receivable;

• the costs, disruption and diversion of our management's attention associated with campaigns by activist securityholders;

• economic volatility and political, legal and tax uncertainties following the U.K.'s exit from the European Union; and

• adverse changes in foreign currency exchange rates, including their effect on the fair value measurement of any derivative instruments
that we may enter into.

In addition to the numerous risks, uncertainties and assumptions described above, you should also carefully read and consider "Item
1A. Risk Factors" in Part I and "Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations" in Part II of
this Form 10-K. Each forward-looking statement speaks only as of the date of the particular statement, and we undertake no obligation to
publicly update or revise any forward-looking statements, except as required by law.

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 PART I

Item 1. Business

General

Valaris Limited is a global offshore contract drilling company. Unless the context requires otherwise, the terms "Valaris," "Company,"
"we," "us" and "our" refer to Valaris Limited together with all its subsidiaries and predecessors.

We are a leading provider of offshore contract drilling services to the international oil and gas industry. We currently own an offshore
drilling rig fleet of 56 rigs, with drilling operations in almost every major offshore market across six continents. Our rig fleet includes
11 drillships, four dynamically positioned semisubmersible rigs, one moored semisubmersible rig, 40 jackup rigs and a 50% equity interest in
Saudi Aramco Rowan Offshore Drilling Company ("ARO"), our 50/50 joint venture with Saudi Aramco, which owns an additional seven rigs.
We operate the world's largest fleet amongst competitive rigs, including one of the newest ultra-deepwater fleets in the industry and a leading
premium jackup fleet.

Our customers include many of the leading national and international oil companies, in addition to many independent operators. We are
among the most geographically diverse offshore drilling companies, with current operations spanning 14 countries. The markets in which we
operate include the Gulf of Mexico, the North Sea, the Middle East, West Africa, Australia and Southeast Asia.

We provide drilling services on a day rate contract basis. Under day rate contracts, we provide an integrated service that includes the
provision of a drilling rig and rig crews for which we receive a daily rate that may vary between the full rate and zero rate throughout the
duration of the contractual term, depending on the operations of the rig. We also may receive lump-sum fees or similar compensation for the
mobilization, demobilization and capital upgrades of our rigs. Our customers bear substantially all of the costs of constructing the well and
supporting drilling operations, as well as the economic risk relative to the success of the well.

As we entered 2020, we expected the volatility that began with the oil price decline in 2014 to continue over the near-term with the
expectation that long-term oil prices would remain at levels sufficient to support a continued gradual recovery in the demand for offshore
drilling services. We were focused on opportunities to put our rigs to work, manage liquidity, extend our financial runway, and reduce debt as
we sought to navigate the extended market downturn and improve our balance sheet. Recognizing our ability to maintain a sufficient level of
liquidity to meet our financial obligations depended upon our future performance, which is subject to general economic conditions, industry
cycles and financial, business and other factors affecting our operations, many of which are beyond our control, we had significant financial
flexibility within our capital structure to support our liability management efforts. However, starting in early 2020, the COVID-19 pandemic
and the response thereto negatively impacted the macro-economic environment and global economy. Global oil demand fell sharply at the same
time global oil supply increased as a result of certain oil producers competing for market share, leading to a supply glut. As a consequence, the
price of Brent crude oil fell from around $60 per barrel at year-end 2019 to around $20 per barrel in mid-April 2020. In response to
dramatically reduced oil price expectations, our customers reviewed, and in most cases lowered significantly, their capital expenditure plans in
light of revised pricing expectations. This caused our customers, primarily in the second and third quarters of 2020, to cancel or shorten the
duration of many of our drilling contracts, cancel future drilling programs and seek pricing and other contract concessions which led to material
operating losses and liquidity constraints for us.

In 2020, the combined effects of the global COVID-19 pandemic, the significant decline in the demand for oil and the substantial
surplus in the supply of oil resulted in significantly reduced demand and day rates for offshore drilling provided by the Company and increased
uncertainty regarding long-term market conditions. These events had a significant adverse impact on our current and expected liquidity position
and financial runway and led to the filing of the Chapter 11 Cases (as defined herein).

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 In 2021, Brent crude oil prices increased from approximately $50 per barrel at the beginning of 2021 to nearly $80 per barrel by the end
of the year and have subsequently increased to over $90 per barrel in early 2022. Increased oil prices are due to, among other factors,
rebounding demand for hydrocarbons, a measured approach to production increases by OPEC+ members and a focus on cash flow and returns
by major exploration and production companies. The constructive oil price environment led to an improvement in contracting and tendering
activity in 2021 as compared to 2020. Benign floater rig years awarded in 2021 were more than double the amount awarded in 2020. This
increase in activity is particularly evident for drillships with several multi-year contracts awarded and a meaningful improvement in day rates
for this class of assets. Jackup contracting activity also increased in 2021, but at a more modest pace than for floaters; however, demand for
jackups did not decline as significantly in 2020 as it did for floaters. While the near-term outlook for the offshore drilling industry has
improved, particularly for floaters, since the beginning of 2021, the global recovery from the COVID-19 pandemic remains uneven, and there is
still uncertainty around the sustainability of the improvement in oil prices and the recovery in demand for offshore drilling services.

Additionally, the full impact that the pandemic and the volatility of oil prices will have on our results of operations, financial condition,
liquidity and cash flows is uncertain due to numerous factors, including the duration and severity of the pandemic, the continued effectiveness
of the ongoing vaccine rollout, the general resumption of global economic activity along with the injection of substantial government monetary
and fiscal stimulus and the sustainability of the improvements in oil prices and demand in the face of market volatility. To date, the COVID-19
pandemic has resulted in limited operational downtime. Our rigs have had to shut down operations while crews are tested and incremental
sanitation protocols are implemented and while crew changes have been restricted as replacement crews are quarantined. We continue to incur
additional personnel, housing and logistics costs in order to mitigate the potential impacts of COVID-19 to our operations. In limited instances,
we have been reimbursed for these costs by our customers. Our operations and business may be subject to further economic disruptions as a
result of the spread of COVID-19 among our workforce, the extension or imposition of further public health measures affecting supply chain
and logistics, and the impact of the pandemic on key customers, suppliers, and other counterparties. There can be no assurance that these, or
other issues caused by the COVID-19 pandemic, will not materially affect our ability to operate our rigs in the future.

Chapter 11 Proceedings and Emergence from Chapter 11

On August 19, 2020 (the “Petition Date”), Valaris plc (“Legacy Valaris” or “Predecessor”) and certain of its direct and indirect
subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under chapter 11 of the Bankruptcy Code in the
Bankruptcy Court under the caption In re Valaris plc, et al., Case No. 20-34114 (MI) (the “Chapter 11 Cases”). On March 3, 2021, the
Bankruptcy Court confirmed the Debtors' chapter 11 plan of reorganization.

In connection with the Chapter 11 Cases, on and prior to April 30, 2021 (the "Effective Date"), Legacy Valaris effectuated certain
restructuring transactions, pursuant to which the successor company, Valaris, was formed and through a series of transactions Legacy Valaris
transferred to a subsidiary of Valaris substantially all of the subsidiaries, and other assets, of Legacy Valaris.

On the Effective Date, we successfully completed our financial restructuring and together with the Debtors emerged from the Chapter
11 Cases. Upon emergence from the Chapter 11 Cases, we eliminated $7.1 billion of debt and obtained a $520 million capital injection by
issuing the first lien secured notes (the "First Lien Notes"). See “Note 9 - Debt" for additional information on the First Lien Notes. On the
Effective Date, the Legacy Valaris Class A ordinary shares were cancelled and common shares of Valaris with a nominal value of $0.01 per
share (the “Common Shares”) were issued. Also, former holders of Legacy Valaris' equity were issued warrants (the "Warrants") to purchase
Common Shares.

See “Note 2 – Chapter 11 Proceedings” and " Note 3 - Fresh Start Accounting" to our consolidated financial statements included in
"Item 8. Financial Statements and Supplementary Data" for additional details regarding the reorganization, Chapter 11 Cases and related items.

6
Contract Drilling Operations

Our business consists of four operating segments: (1) Floaters, which included our drillships and semisubmersible rigs, (2) Jackups, (3)
ARO and (4) Other, which consists of management services on rigs owned by third-parties and the activities associated with our arrangements
with ARO. Floaters, Jackups and ARO are also reportable segments.

We own and operate 56 rigs, 26 are located in the Middle East, Africa and Asia Pacific, 12 are located in North and South America and
18 are located in Europe as of December 31, 2021.

Our drilling rigs drill and complete oil and natural gas wells. From time to time, our drilling rigs may be utilized as accommodation
units or for non-drilling services, such as workovers and interventions, plug and abandonment and decommissioning work. Demand for our
drilling services is based upon many factors beyond our control. See “Item 1A. Risk Factors - The success of our business largely depends on
the level of activity in the oil and gas industry, which can be significantly affected by volatile oil and natural gas prices.”

Our drilling contracts are the result of negotiations with our customers, and most contracts are awarded upon competitive bidding. The
terms of our drilling contracts can vary significantly, but generally contain the following commercial terms:

• contract duration or term for a specific period of time or a period necessary to drill one or more wells,

• term extension options, exercisable by our customers, upon advance notice to us, at mutually agreed, indexed, fixed rates or current
rate at the date of extension,

• provisions permitting early termination of the contract (1) if the rig is lost or destroyed, (2) if operations are suspended for a
specified period of time due to various events, including damage or breakdown of major rig equipment, unsatisfactory performance,
or "force majeure" events (3) failure of the customer to receive final investment decision (FID) with respect to projects for which
the drilling rig was contracted; or (4) at the convenience (without cause) of the customer, exercisable upon advance notice to us,
and in in certain cases without making an early termination payment to us,

• payment of compensation to us is (generally in U.S. dollars although some contracts require a portion of the compensation to be
paid in local currency) on a day rate basis such that we receive a fixed amount for each day that the drilling rig is under contract
(lower day rates generally apply for limited periods when operations are suspended due to various events, including during delays
that are beyond our reasonable control, during repair of equipment damage or breakdown and during periods of re-drilling damaged
portions of the well, and no day rate, or zero rate, generally applies when these limited periods are exceeded until the event is
remediated, and during periods to remediate unsatisfactory performance or other specified conditions),

• payment by us of the operating expenses of the drilling rig, including crew labor and incidental rig supply and maintenance costs,

• mobilization and demobilization requirements of us to move the drilling rig to and from the planned drilling site, and may include
reimbursement of all or a portion of these moving costs by the customer in the form of an up-front payment, additional day rate
over the contract term or direct reimbursement, and

• provisions allowing us to recover certain labor and other operating cost increases, including certain cost increases due to changes in
applicable law, from our customers through day rate adjustment or direct reimbursement.

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 In general, in a downturn in offshore drilling demand, contract awards are subject to an extremely competitive bidding process. The
intense pressure on operating day rates could result in lower margin contracts that also contain less favorable contractual and commercial terms,
including reduced or no mobilization and/or demobilization fees; reduced day rates or zero day rates during downtime due to damage or failure
of our equipment; reduced standby, redrill and moving rates and reduced periods in which such rates are payable; reduced caps on
reimbursements for lost or damaged downhole tools; reduced periods to remediate downtime due to equipment breakdowns or failure to
perform in accordance with the contractual standards of performance before the operator may terminate the contract; certain limitations on our
ability to be indemnified from operator and third- party damages caused by our fault, resulting in increases in the nature and amounts of
liability allocated to us; and reduced or no early termination fees and/or termination notice periods.

Backlog Information

See "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" for discussion on backlog
information.

Drilling Contracts and Insurance Program

Our drilling contracts provide for varying levels of allocation of responsibility for liability between our customer and us for loss or
damage to each party's property and third-party property, personal injuries and other claims arising out of our drilling operations. We also
maintain insurance for these exposures to personal injuries, damage to or loss of property and certain business risks.

Our insurance program provides coverage, subject to the policies' terms and conditions and to the extent not otherwise assumed by the
customer under the indemnification provisions of the drilling contract, for third-party liability claims arising from our operations. Our insurance
program provides coverage that is customary for our industry. Generally, our insurance program provides third-party liability coverage up to
$750.0 million. We retain the risk for liability not indemnified by the customer in excess of, and for risks not covered by, our insurance
coverage.

Well-control events generally include an unintended release from a well that cannot be contained by using equipment on site, such as a
blowout preventer, by increasing the weight of drilling fluid or by diverting the fluids safely into production facilities. Our customers typically
indemnify us for well-control events.

Our insurance program also provides hull and machinery coverage to us for physical damage (including total loss) to our rigs, cargo
and equipment, excluding damage arising from a named windstorm in the U.S. Gulf of Mexico. Accordingly, we retain the risk for windstorm
damage to our drilling in the U.S. Gulf of Mexico. We do not currently carry insurance for loss of hire. Any such lack of reimbursement may
cause us to incur substantial costs.

Our drilling contracts customarily provide that each party is responsible for injuries or death to their respective personnel and loss or
damage to their respective property (including the personnel and property of each parties’ contractors and subcontractors) regardless of the
cause of the loss or damage. However, in certain drilling contracts our customer’s responsibility for damage to its property and the property of
its other contractors contains an exception to the extent the loss or damage is due to our negligence, which exception is usually subject to
negotiated caps on a per occurrence basis, although in some cases we assume responsibility for all damages due to our negligence. In addition,
our drilling contracts typically provide for our customers to indemnify us, generally based on replacement cost minus some level of
depreciation, for loss or damage to our down-hole equipment, and in some cases for a limited amount of the repair of or replacement cost of our
subsea equipment, unless the damage is caused by our negligence, normal wear and tear or defects in our equipment.

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 Subject to the exceptions noted below, our customers typically assume most of the responsibility for and indemnify us from any loss,
damage or other liability resulting from pollution or contamination arising from operations, including as a result of blowouts, cratering and
seepage, when the source of the pollution originates from the well or reservoir, including costs for clean-up and removal of pollution and third-
party damages. In most drilling contracts, we assume liability for third-party damages resulting from such pollution and contamination caused
by our negligence, usually subject to negotiated caps on a per occurrence or per event basis. In addition, in substantially all of our contracts, the
customer assumes responsibility and indemnifies us for loss or damage to the reservoir, for loss of hydrocarbons escaping from the reservoir
and for the costs of bringing the well under control. Further, subject to the exceptions noted below, most of our contracts provide that the
customer assumes responsibility and indemnifies us for loss or damage to the well, except when the loss or damage to the well is due to our
negligence, in which case most of our contracts provide that the customer's sole remedy is to require us to redrill the lost or damaged portion of
the well at a substantially reduced rate and, in some cases, pay for some of the costs to repair the well.

Most of our drilling contracts incorporate a broad exclusion that limits the operator's indemnity for damages and losses resulting from
our gross negligence and willful misconduct and for fines and penalties and punitive damages levied or assessed directly against us. This
exclusion overrides other provisions in the contract that would otherwise limit our liability for ordinary negligence. In most of these cases, we
are still able to negotiate a liability cap (although these caps are significantly higher than the caps we are able to negotiate for ordinary
negligence) on our exposure for losses or damages resulting from our gross negligence. In certain cases, the broad exclusion only applies to
losses or damages resulting from the gross negligence of our senior supervisory personnel. However, in some cases we have contractually
assumed significantly increased exposure or unlimited exposure for losses and damages due to the gross negligence of some or all our
personnel, and in most cases, we are not able to contractually limit our exposure for our willful misconduct.

Notwithstanding our negotiation of express limitations in our drilling contracts for losses or damages resulting from our ordinary
negligence and any express limitations (albeit usually much higher) for losses or damages in the event of our gross negligence, under the
applicable laws that govern certain of our drilling contracts, the courts will not enforce any indemnity for losses and damages that result from
our gross negligence or willful misconduct. As a result, under the laws of such jurisdictions, the indemnification provisions of our drilling
contracts that would otherwise limit our liability in the event of our gross negligence or willful misconduct are deemed to be unenforceable as
being contrary to public policy, and we are exposed to unlimited liability for losses and damages that result from our gross negligence or willful
misconduct, regardless of any express limitation of our liability in the relevant drilling contracts. Under the laws of certain jurisdictions, an
indemnity from an operator for losses or damages of third-parties resulting from our gross negligence is enforceable, but an indemnity for
losses or damages of the operator is not enforceable. In such cases, the contractual indemnity obligation of the operator to us would be
enforceable with respect to third-party claims for losses of damages, such as may arise in pollution claims, but the contractual indemnity
obligation of the operator to us with respect to injury or death to the operator's personnel and the operator’s damages to the well, to the reservoir
and for the costs of well control would not be enforceable. Furthermore, although there is a lack of precedential authority for these types of
claims in countries where the civil law is applied, in those situations where a fault based codified civil law system is applicable to our drilling
contracts, as opposed to the common law system, the courts generally will not enforce a contractual indemnity clause that totally indemnifies us
from losses or damages due to our gross negligence but may enforce the contractual indemnity over and above a cap on our liability for gross
negligence, assuming the cap requires us to accept a significant amount of liability.

Similar to gross negligence, regardless of any express limitations in a drilling contract regarding our liability for fines and penalties and
punitive damages, the laws of most jurisdictions will not enforce an indemnity that indemnifies a party for a fine or penalty that is levied or
punitive damages arising from willful misconduct that are assessed directly against such party on the ground that it is against public policy to
indemnify a party from a fine, loss, penalty or punitive damages, especially where the purpose of such levy or assessment is to deter the
behavior that resulted in the fine, loss or penalty or punish such party for the behavior that warranted the assessment of punitive damages.

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 The above description of our insurance program and the indemnification provisions of our drilling contracts is only a summary as of the
date hereof and is general in nature. In addition, our drilling contracts are individually negotiated, and the degree of indemnification we receive
from operators against the liabilities discussed above can vary from contract to contract based on market conditions and customer requirements
existing when the contract was negotiated and the interpretation and enforcement of applicable law when the claim is adjudicated.
Notwithstanding a contractual indemnity from a customer, there can be no assurance that our customers will be financially able to indemnify us
or will otherwise honor a contractual indemnity obligation that is enforceable under applicable law. Our insurance program and the terms of our
drilling contracts may change in the future.

In certain cases, vendors who provide equipment or services to us limit their pollution liability to a specific monetary cap, and we
assume the liability above that cap. Typically, in the case of original equipment manufacturers, the cap is a negotiated amount based on mutual
agreement of the parties considering the risk profiles and thresholds of each party. However, for smaller vendors, the liability is usually limited
to the value, or double the value, of the contract.

We generally indemnify the customer for legal and financial consequences of spills of waste oil, fuels, lubricants, motor oils, pipe dope,
paint, solvents, ballast, bilge, garbage, debris, sewage, hazardous waste and other liquids, the discharge of which originates from our rigs or
equipment above the surface of the water and in some cases from our subsea equipment. Our contracts generally provide that, in the event of
any such spill from our rigs, we are responsible for fines and penalties.

Major Customers

We provide our contract drilling services to major international, government-owned and independent oil and gas companies. During the
eight months ended December 31, 2021 (Successor), our five largest customers accounted for 42% of consolidated revenues. BP, our only
customer who accounts for 10% or more of consolidated revenues, accounted for 11% of consolidated revenues. During the four months ended
April 30, 2021 (Predecessor), our five largest customers accounted for 45% of consolidated revenues. BP, our only customer who accounts for
10% or more of consolidated revenues, accounted for 14% of consolidated revenues.

Competition

The offshore contract drilling industry is highly competitive. Drilling contracts are, for the most part, awarded on a competitive bid
basis. Price is often the primary factor in determining which contractor is awarded a contract, although quality of service, operational and safety
performance, equipment suitability and availability, location of equipment, reputation and technical expertise also are factors. There are
numerous competitors with significant resources in the offshore contract drilling industry.

Governmental Regulation and Environmental Matters

Our operations are affected by political initiatives and by laws and regulations that relate to the oil and gas industry, including laws and
regulations that have or may impose increased financial responsibility and oil spill abatement contingency plan capability requirements.
Accordingly, we will be directly affected by the approval and adoption of laws and regulations curtailing exploration and development drilling
for oil and natural gas for economic, environmental, safety or other policy reasons. It is also possible that these laws and regulations and
political initiatives could adversely affect our operations in the future by significantly increasing our operating costs or restricting areas open
for drilling activity. See "Item 1A. Risk Factors - Increasing regulatory complexity could adversely impact the costs associated with our
offshore drilling operations."

Our operations are subject to laws and regulations controlling the discharge of materials into the environment, pollution, contamination
and hazardous waste disposal or otherwise relating to the protection of the environment. These laws and regulations may, among other things:

10
 • require the acquisition of various permits before drilling commences;

• require notice to stakeholders of proposed and ongoing operations;

• require the installation of expensive pollution control equipment;

• restrict the types, quantities and concentration of various substances that can be released into the environment in connection
with drilling; and

• restrict the production rate of natural resources below the rate that would otherwise be possible.

Environmental laws and regulations specifically applicable to our business activities could impose significant liability on us for
damages, clean-up costs, fines and penalties in the event of oil spills or similar discharges of pollutants or contaminants into the environment or
improper disposal of hazardous waste generated in the course of our operations, which may not be covered by contractual indemnification or
insurance or for which indemnity is prohibited by applicable law and could have a material adverse effect on our financial position, operating
results and cash flows. To date, such laws and regulations have not had a material adverse effect on our operating results. However, the
legislative, judicial and regulatory response to any well-control incidents could substantially increase our customers' liabilities in respect of oil
spills and also could increase our liabilities. In addition to potential increased liabilities, such legislative, judicial or regulatory action could
impose increased financial, insurance or other requirements that may adversely impact the entire offshore drilling industry.

Additionally, environmental laws and regulations are revised frequently, and any changes, including changes in implementation or
interpretation of existing laws/regulations, that result in more stringent and costly waste handling, disposal and cleanup requirements for our
industry could have a significant impact on our operating costs.

The International Convention on Oil Pollution Preparedness, Response and Cooperation, the International Convention on Civil Liability
for Oil Pollution Damage 1992, the U.K. Merchant Shipping Act 1995, Marpol 73/78 (the International Convention for the Prevention of
Pollution from Ships), the U.K. Merchant Shipping (Oil Pollution Preparedness, Response and Co-operation Convention) Regulations 1998, as
amended, and other related legislation and regulations and the Oil Pollution Act of 1990 ("OPA 90"), as amended, the Clean Water Act and
other U.S. federal statutes applicable to us and our operations, as well as similar statutes in Texas, Louisiana, other coastal states and other non-
U.S. jurisdictions, address oil spill prevention, reporting and control and have significantly expanded potential liability, fine and penalty
exposure across many segments of the oil and gas industry. Such statutes and related regulations impose a variety of obligations on us related to
the prevention of oil spills, disposal of waste and liability for resulting damages. For instance, OPA 90 imposes strict and, with limited
exceptions, joint and several liability upon each responsible party for oil removal costs as well as a variety of fines, penalties and damages.
Similar environmental laws apply in our other areas of operation. Failure to comply with these statutes and regulations may subject us to civil
or criminal enforcement action, which may not be covered by contractual indemnification or insurance, or for which indemnity is prohibited
under applicable law, and could have a material adverse effect on our financial position, operating results and cash flows.

High-profile and catastrophic events such as the 2010 Macondo well incident have heightened governmental and environmental
concerns about the oil and gas industry. From time to time, legislative proposals have been introduced that would materially limit or prohibit
offshore drilling in certain areas. We are adversely affected by restrictions on drilling in certain areas of the U.S. Gulf of Mexico and
elsewhere, including the adoption of additional safety requirements and policies regarding the approval of drilling permits and restrictions on
development and production activities in the U.S. Gulf of Mexico that have and may further impact our operations.

As a result of the 2010 Macondo well incident, the United States Bureau of Safety and Environmental Enforcement ("BSEE") issued a
drilling safety rule in 2012 that included requirements for the cementing of wells, well-control barriers, blowout preventers, well-control fluids,
well completions, workovers and decommissioning operations. BSEE also issued regulations requiring operators to have safety and
environmental management

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systems ("SEMS") prior to conducting operations and requiring operators and contractors to agree on how the contractors will assist the
operators in complying with the SEMS. In addition, in August 2012, BSEE issued an Interim Policy Document ("IPD") stating that it would
begin issuing Incidents of Non-Compliance to contractors as well as operators for serious violations of BSEE regulations. Following federal
court decisions successfully challenging the scope of BSEE’s jurisdiction over offshore contractors, this IPD has been removed from the list of
IPDs on the BSEE website. If this judicial precedent stands, it may reduce regulatory and civil litigation liability exposures.

On July 28, 2016, BSEE adopted the 2016 Well Control Rule. This rule included more stringent design requirements for well-control
equipment used in offshore drilling operations. Subsequently, on May 2, 2019, BSEE issued the 2019 Well Control Rule, the revised well
control and blowout preventer rule governing the Outer Continental Shelf (OCS) activities. The rule revised existing regulations impacting
offshore oil and gas drilling, completions, workovers and decommissioning activities. Specifically, the 2019 Well Control Rule addresses six
areas of offshore operations: well design, well control, casing, cementing, real-time monitoring and subsea containment. The revisions were
targeted to ensure safety and environmental protection while correcting errors in the 2016 rule and reducing unnecessary regulatory burden. We
have not incurred significant costs to comply with the 2016 Well Control Rule or 2019 Well Control Rule.

The continuing and evolving threat of cyber attacks will likely require increased expenditures to strengthen cyber risk management
systems for drilling rigs and onshore facilities. For example, on May 11, 2017, an executive order was issued entitled Strengthening the
Cybersecurity of Federal Networks and Critical Infrastructure, which is intended to improve the nation's ability to defend against increasing and
evolving cyber attacks, and in July 2017 the USCG issued proposed cybersecurity guidelines for port facilities and offshore facilities, including
drilling rigs, that could be impacted by cyber attacks. We cannot currently estimate the future expenditures associated with increased regulatory
requirements, which may be material, and we continue to monitor regulatory changes as they occur.

Additionally, climate change is receiving increasing attention from scientists and legislators, and significant focus is being put on
companies that are active producers of hydrocarbon resources. Globally, there are a number of legislative and regulatory proposals at various
levels of government to address the greenhouse gas emissions that contribute to climate change, such as laws or regulations incentivizing or
mandating the use of alternative energy sources such as wind power and solar energy and programs to mandate or incentivize the conversion
from internal combustion engine powered vehicles to electric-powered vehicles. Although it is not possible at this time to predict how
legislation or new regulations that may be adopted to address greenhouse gas emissions would impact our business, any such future laws and
regulations could require us or our customers to incur increased operating costs. Any such legislation or regulatory programs could also
increase the cost of consuming oil, and thereby reduce demand for oil, which could reduce our customers’ demand for our services.
Consequently, legislation and regulatory programs to reduce greenhouse gas emissions could have an adverse effect on our financial position,
operating results and cash flows.

Although the United States had withdrawn from the Paris Agreement in November 2020, the United States officially reentered the
agreement in February 2021. Further, in November 2021, the Unites States and other countries entered into the Glasgow Climate Pact, which
includes a range of measures designed to address climate change, including but not limited to the phase-out of fossil fuel subsidies, reducing
methane emissions 30% by 2030, and cooperating toward the advancement of the development of clean energy. It is likely that new executive
orders, regulatory action, and/or legislation targeting greenhouse gas emissions, or prohibiting, restricting, or delaying oil and gas development
activities in certain areas, will be proposed and/or promulgated. For example, multiple executive orders pertaining to environmental regulations
and climate change have recently been issued, including the (1) Executive Order on Protecting Public Health and the Environment and
Restoring Science to Tackle the Climate Crisis and (2) Executive Order on Tackling the Climate Crisis at Home and Abroad. The latter
executive order announced a moratorium on new oil and gas leasing on federal lands and offshore waters pending completion of a
comprehensive review and reconsideration of federal oil and gas permitting and leasing practices, established climate change as a primary
foreign policy and national security consideration and affirmed that achieving net-zero greenhouse gas emissions by or before mid-century is a
critical priority. In June 2021, a federal judge for the U.S. District Court of the Western District of Louisiana issued a nationwide preliminary
injunction

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against the pause of oil and natural gas leasing on public lands or in offshore waters while litigation challenging that aspect of the executive
order is ongoing. On January 27, 2022, the United States District Court for the District of Columbia found that the Bureau of Ocean Energy
Management’s failure to calculate the potential emissions from foreign oil consumption violated the agency’s approval of oil and gas leases in
the Gulf of Mexico under the National Environmental Policy Act. The full impact of these federal actions, or any other future restrictions or
prohibitions, remains unclear.

If new laws are enacted or other government actions are taken that restrict or prohibit offshore drilling in our principal areas of
operation, impose additional regulatory (including environmental protection) requirements that materially increase the liabilities, financial
requirements or operating or equipment costs associated with offshore drilling, exploration, development or production of oil and natural gas,
or promote other sources of clean energy, our financial position, operating results and cash flows could be materially adversely affected. See
"Item 1A. Risk Factors - Compliance with or breach of environmental laws can be costly and could limit our operations."

Non-U.S. Operations

Revenues from non-U.S. operations were 87%, 81%, 83% and 85% of our total consolidated revenues during eight months ended
December 31, 2021 (Successor), four months ended April 30, 2021 (Predecessor), year-ended December 31, 2020 and 2019 (Predecessor),
respectively.

See "Item 1A. Risk Factors - Our non-U.S. operations involve additional risks not associated with U.S. operations."

Executive Officers

Officers generally serve for a one-year term or until successors are elected and qualified to serve. The table below sets forth certain
information regarding our executive officers as of February 22, 2022:
Name Age Position
Anton Dibowitz 50 President and Chief Executive Officer
Darin Gibbins 40 Interim Chief Financial Officer and Vice President, Investor Relations
and Treasurer
Gilles Luca 50 Senior Vice President - Chief Operating Officer

Set forth below is certain additional information on our executive officers, including the business experience of each executive officer
for at least the last five years:

Anton Dibowitz became the President and Chief Executive Officer of Valaris in December 2021, following his service as the
Company’s interim President and Chief Executive Officer since September 2021. Previously, he served as an advisor of Seadrill Ltd. from
November 2020 until March 2021. He served as Chief Executive Officer of Seadrill Ltd. from July 2017 until October 2020. Prior to this Mr.
Dibowitz served as Executive Vice President of Seadrill Management since June 2016, and as Chief Commercial Officer since January 2013.
He has over 20 years of drilling industry experience. Prior to joining Seadrill, Mr. Dibowitz held various positions within tax, process
reengineering and marketing at Transocean Ltd. and Ernst & Young LLP. He is a Certified Public Accountant and a graduate of the University
of Texas at Austin where he received a Bachelor's degree in Business Administration, and Master's degrees in Professional Accounting (MPA)
and Business Administration (MBA).

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 Darin Gibbins became the Interim Chief Financial Officer and Vice President, Investor Relations and Treasurer of Valaris in September
2021. Previously, he served as Vice President, Investor Relations and Treasurer of the Company since June 2020 and has also served as Vice
President, Treasurer of the Company from April 2019 through June 2020. Prior to joining the Company, he spent over thirteen years at Rowan
Companies plc, beginning in November 2006. At Rowan Companies plc, he most recently served as Vice President, FP&A and Treasurer from
February 2017 to April 2019 and Treasurer & Director, Financial Planning from March 2016 through February 2017. Mr. Gibbins also worked
as a Senior Consultant at Protiviti Inc. from August 2004 through November 2006. Mr. Gibbins is a graduate of the University of Texas at
Austin, where he earned his Bachelor of Business Administration (BBA) in Finance with a minor in Accounting.

Gilles Luca joined Valaris in 1997 and was appointed to his current position of Senior Vice President - Chief Operating Officer in
November 2019. Prior to his current position, Mr. Luca served as Senior Vice President - Western Hemisphere, Vice President - Business
Development and Strategic Planning, Vice President - Brazil Business Unit and General Manager - Europe and Africa. He holds a Master's
Degree in Petroleum Engineering from the French Petroleum Institute and a Bachelor in Civil Engineering from ESTP, Paris.

Employees

We employed approximately 4,900 personnel worldwide including contract employees, and approximately 3,400 personnel excluding
contract employees, as of December 31, 2021. The majority of our personnel work on rig crews and are compensated on an hourly basis.

Available Information

Our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports
that we file or furnish to the Securities and Exchange Commission ("SEC") in accordance with the Exchange Act are available on our website
at www.valaris.com/investors. In addition, the SEC maintains an Internet site at www.sec.gov that contains reports, proxy and information
statements, and other information regarding issuers that file electronically with the SEC. These reports also are available in print without charge
by contacting our Investor Relations Department as soon as reasonably practicable after we electronically file the information with, or furnish it
to, the SEC. The information contained on our website is not included as part of, or incorporated by reference into, this report.

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 RISK FACTORS SUMMARY

An investment in our securities involves a high degree of risk. You should consider carefully all of the risks described below, together
with the other information contained in this Form 10-K, before making a decision to invest in our securities. If any of the following events
occur, our business, financial condition and operating results may be materially adversely affected. In that event, the trading price of our
securities could decline, and you could lose all or part of your investment.

Risks Related to Our Business, Operations, Indebtedness and Market Conditions

• The effects of the COVID-19 pandemic have adversely impacted, and could continue to adversely impact, our financial condition and
results of operations.
• The success of our business largely depends on the level of activity in the oil and gas industry, which can be significantly affected by
oil and natural gas prices.
• The offshore contract drilling industry historically has been highly competitive and cyclical, with periods of low demand and excess rig
availability that could result in adverse effects on our business.
• Our current backlog of contract drilling revenue may not be fully realized and may decline significantly in the future.
• Our business will be adversely affected if we are unable to secure contracts on economically favorable terms.
• Our customers may be unable or unwilling to fulfill their contractual commitments to us, including their obligations to pay for losses,
damages or other liabilities.
• We may suffer losses if our customers terminate or seek to renegotiate our contracts, if operations are suspended or interrupted or if a
rig becomes a total loss.
• The loss of a significant customer or customer contract, as well as customer consolidation and changes to customer strategy, could
adversely affect us.
• Rig reactivation, upgrade and enhancement projects are subject to risks, including delays and cost overruns.
• We have historically made significant expenditures to maintain our fleet to comply with laws and the applicable regulations and
standards of governmental authorities and organizations, or to expand our fleet, and we may be required to make significant capital
expenditures to maintain our competitiveness.
• Failure to recruit and retain skilled personnel could adversely affect our business.
• Our shared service center may not create the operational efficiencies that we expect, and may create risks relating to the processing of
transactions and recording of financial information.
• We may not realize the expected benefits of ARO, which depends on a single customer for its income and accounts receivable.
• Our information technology systems, including rig operating systems, are subject to cybersecurity risks.
• We may have difficulty obtaining or maintaining insurance in the future on terms we find acceptable and our insurance coverage cannot
protect us against all of the risks and hazards we face.
• The potential for hurricane related windstorm damage or liabilities could result in uninsured losses.
• Geopolitical events and violence could affect the markets for our services and have a material adverse effect on our business and cost
and availability of insurance.
• Our drilling contracts with national oil companies may expose us to greater risks than we normally assume in drilling contracts with
non-governmental customers.
• Unionization efforts and labor regulations in certain countries in which we operate could materially increase our costs or limit our
flexibility with regard to the management of our personnel.

15
 • Significant part or equipment shortages, supplier capacity constraints, supplier production disruptions, supplier quality and sourcing
issues or price increases could increase our operating costs, decrease our revenues and adversely impact our operations.
• We may incur impairments as a result of future declines in demand for offshore drilling rigs.
• Our long-term contracts are subject to the risk of cost increases, which could adversely affect our profitability.
• Our ability to pay our operating and capital expenses and make payments due on our debt depends on many factors beyond our control.
• The Indenture (as defined below) governing the First Lien Notes contains operating and financial restrictions that restrict our business
and financing activities.
• On April 30, 2021, we emerged from bankruptcy, which may adversely affect our business and relationships.
• Our actual financial results after emergence from bankruptcy may not be comparable to our projections filed with the Bankruptcy Court
in the course of the Chapter 11 Cases.
• Our historical financial information will not be indicative of future financial performance as a result of the implementation of the plan
of reorganization and the transactions contemplated thereby, as well as our application of fresh start accounting following emergence.
• The exercise of all or any number of outstanding warrants or the issuance of stock-based awards may dilute the holders of our Common
Shares.

ESG Risks

• Regulation of greenhouse gases and climate change could have a negative impact on our business.
• Consumer preferences for alternative fuels and electric-powered vehicles, as part of the global energy transition, may lead to reduced
demand for our services.
• Increased scrutiny from stakeholders and others regarding our ESG practices and reporting responsibilities could result in additional
costs or risks and adversely impact our business and reputation.

Regulatory, Legal and Tax Risks

• Failure to comply with anti-bribery statutes could result in fines, criminal penalties, drilling contract terminations and have an adverse
effect on our business.
• Increasing regulatory complexity could adversely impact our offshore drilling operations and reduce demand.
• Compliance with or breach of environmental laws could be costly and limit our operations.
• The Internal Revenue Service ("IRS") may not agree with the conclusion that we should be treated as a foreign corporation for U.S.
federal tax purposes.
• U.S. tax laws and IRS guidance could affect our ability to engage in certain transactions.
• Governments may pass laws that subject us to additional taxation or may challenge our tax positions.
• Our consolidated effective income tax rate may vary substantially over time.
• The rights of our shareholders are governed under Bermuda law, and as a result, holders of our Common Shares may have difficulty
enforcing civil judgments against us.
• Our bye-laws restrict shareholders from bringing legal action against our officers and directors.
• Provisions in our bye-laws could delay or prevent a change in control of our company.

16
 • Our business could be affected as a result of activist investors.

Risks Related to Our International Operations

• Our non-U.S. operations involve additional risks not typically associated with U.S. operations.
• Legislation enacted in Bermuda as to Economic Substance may affect our operations.
• The impact of the U.K.'s withdrawal from the E.U. on economic conditions may affect our business.

Item 1A. Risk Factors

Risks Related to Our Business, Operations, Indebtedness and Market Conditions

The effects of the COVID-19 pandemic have adversely impacted, and could continue to adversely impact, our financial condition and
results of operations.

Beginning in March 2020, the COVID-19 pandemic and related public health measures implemented by governments worldwide
negatively impacted the global macroeconomic environment and resulted in a sharp decline in global oil demand and prices. In response to
reduced oil price expectations, our customers significantly lowered their capital expenditure plans. As of February 2022, crude oil prices and
demand have recovered from the historic lows seen in the first half of 2020. While the near-term outlook for the offshore drilling industry has
improved, particularly for floaters, the global recovery from the COVID-19 pandemic remains uneven, and there is still uncertainty around the
sustainability of the improvement in oil prices and the recovery in demand for offshore drilling services.

To date, there have been various impacts from the pandemic and the resultant drop in oil prices, including contract cancellations and the
delay or cancellation of drilling programs by operators, contract concessions, stacking rigs, inability to change crews due to travel restrictions,
and workforce reductions. Our operations and business may be subject to further disruptions as a result of the spread of COVID-19 and its
variants among our workforce, the extension or imposition of further public health measures affecting our supply chain and logistics, and the
impact of the pandemic on key customers, suppliers, and other counterparties. In addition, government vaccine mandates and the vaccination
requirements of our customers could affect our ability to retain offshore crews or require us to increase wages to retain qualified personnel for
our drilling rigs.

The COVID-19 pandemic could continue to adversely impact the supply chain for equipment or services needed for operations,
including as a result of mandatory shutdowns and other pandemic-related measures implemented in locations where such equipment or services
are manufactured or distributed. In addition to experiencing increased shipping costs, we could also see significant disruptions of the operations
to our logistics and service providers.

Oil prices may continue to be volatile as a result of production instability, ongoing COVID-19 outbreaks, including variant strains of
COVID-19, the implementation of vaccination programs and the related impact on overall economic activity, global inflation, changes in oil
inventories, industry demand and global and national economic performance.

17
The success of our business largely depends on the level of activity in offshore oil and natural gas exploration, development and production,
which can be significantly affected by volatile oil and natural gas prices.

The success of our business largely depends on the level of activity in offshore oil and natural gas exploration, development and
production. Oil and natural gas prices, and market expectations of potential changes in these prices, significantly affect the level of drilling
activity. Historically, when operator capital spending declines, utilization and day rates also decline and drilling may be reduced or
discontinued, resulting in an oversupply of drilling rigs. The oversupply of drilling rigs may be exacerbated by the entry of newbuild rigs into
the market. Oil and natural gas prices declined significantly from prices in excess of $100 since mid-2014, causing operators to reduce capital
spending and cancel or defer existing programs, substantially reducing the opportunities for new drilling contracts. While market conditions
have recently improved, we have not yet experienced an extended period of sustained oil and natural gas prices. The lack of a sustained and
stable recovery of oil and natural gas prices, further price reductions or volatility in prices may cause our customers to lower levels of capital
spending or reduce their overall level of activity, in which case demand for our services may decline and revenues may be adversely affected
through lower rig utilization and/or lower day rates. Numerous factors may affect oil and natural gas prices and the level of demand for our
services, including:

• regional and global economic conditions and changes therein,

• COVID-19 and related public health measures implemented by governments worldwide and the occurrence or threat of other
epidemic or pandemic diseases, including variants of COVID-19, and any government response to such occurrence or threat,

• oil and natural gas supply and demand, which is affected by worldwide economic activity and population growth,

• expectations regarding future energy prices,

• the ability of the Organization of Petroleum Exporting Countries ("OPEC") to reach further agreements to set and maintain
production levels and pricing and to implement existing and future agreements,

• capital allocation decisions by our customers, including the relative economics of offshore development versus alternative
prospects,

• the level of production by non-OPEC countries,

• U.S. and non-U.S. tax policy,

• advances in exploration and development technology,

• costs associated with exploring for, developing, producing and delivering oil and natural gas,

• the rate of discovery of new oil and gas reserves and the rate of decline of existing oil and gas reserves,

• investors reducing, or ceasing to provide, funding to the oil and gas industry in response to initiatives to limit climate change,

• laws and government regulations that limit, restrict or prohibit exploration and development of oil and natural gas in various
jurisdictions, or materially increase the cost of such exploration and development (such as the current moratorium on oil and gas
leasing and permitting in federal lands and waters, which is currently subject to ongoing litigation),

18
 • the development and exploitation of alternative fuels or energy sources and increased demand for electric-powered vehicles,

• disruption to exploration and development activities due to hurricanes and other severe weather conditions and the risk thereof,

• natural disasters or incidents resulting from operating hazards inherent in offshore drilling, such as oil spills, and

• the worldwide military or political environment, including the global macroeconomic effects of trade disputes and increased tariffs
and sanctions and uncertainty or instability resulting from an escalation or additional outbreak of armed hostilities or other crises in
oil or natural gas producing areas or geographic areas in which we operate, or acts of terrorism.

The agreements of OPEC and certain non-OPEC countries to freeze and/or cut production may not be fully realized. The lack of actual
production cuts or freezes, or the perceived risk that OPEC countries may not comply with such agreements, may result in depressed
commodity prices for an extended period of time.

Higher commodity prices may not necessarily translate into increased activity, however, and even during periods of high commodity
prices, customers may cancel or curtail their drilling programs, or reduce their levels of capital expenditure for exploration and production for a
variety of reasons, including their expectations for future oil prices, extended periods of price volatility and their lack of success in exploration
efforts. Advances in onshore exploration and development technologies, particularly with respect to onshore shale, could also result in our
customers allocating more of their capital expenditure budgets to onshore exploration and production activities and less to offshore activities. In
addition, some of our customers are transitioning their businesses to renewable energy projects and away from oil and natural gas exploration
and production, which could result in reduced capital spending by such customers on oil and natural gas projects and in turn reduced demand
for our services. These factors could cause our revenues and profits to decline, as a result of declines in utilization and day rates, and limit our
future growth prospects. Any significant decline in day rates or utilization of our drilling rigs could materially reduce our revenues and
profitability. In addition, these risks could increase instability in the financial and insurance markets and make it more difficult for us to access
capital and obtain insurance coverage that we consider adequate or are otherwise required by our contracts.

The offshore contract drilling industry historically has been highly competitive and cyclical, with periods of low demand and excess rig
availability that could result in adverse effects on our business.

Our industry is highly competitive, and our contracts are traditionally awarded on a competitive bid basis. Pricing, safety records and
competency are key factors in determining which qualified contractor is awarded a contract. Rig availability, location and technical capabilities
also can be significant factors in the determination. If we are not able to compete successfully, our revenues and profitability may decline.

Demand for offshore contract drilling services is highly cyclical, which is primarily driven by the demand for drilling rigs and the
available supply of drilling rigs. Demand for drilling rigs is driven by the levels of offshore exploration and development conducted by oil and
gas companies, which is beyond our control and may fluctuate substantially from year-to-year and from region-to-region.

Prolonged periods of reduced demand or excess rig supply have required us, and may in the future require us, to idle or scrap rigs and
enter into low day rate contracts or contracts with unfavorable terms. There can be no assurance that the current demand for drilling rigs will
increase in the future or that any short-term improvement to market conditions will be sustained. Any further decline in demand for drilling
rigs, coupled with the prolonged oversupply of drilling rigs, could adversely affect our financial position, operating results or cash flows.

19
Our current backlog of contract drilling revenue may not be fully realized and may decline significantly in the future.

As of February 21, 2022, our contract backlog was approximately $2.4 billion, which represents an increase of $1.4 billion to the
reported backlog of $1.0 billion as of December 31, 2020. This amount reflects the remaining contractual terms multiplied by the applicable
contractual day rate. The contractual revenue may be higher than the actual revenue we ultimately receive because of a number of factors,
including rig downtime or suspension of operations. Several factors could cause rig downtime or a suspension of operations, many of which are
beyond our control, including:

• the early termination, repudiation or renegotiation of contracts,

• breakdowns of equipment,

• work stoppages, including labor strikes,

• shortages of material or skilled labor,

• surveys by government and maritime authorities,

• periodic classification surveys,

• severe weather, strong ocean currents or harsh operating conditions,

• the occurrence or threat of epidemic or pandemic diseases and any government response to such occurrence or threat, and

• force majeure events.

Our customers may seek to terminate, repudiate or renegotiate our drilling contracts for various reasons, including in the event of a total
loss of the drilling rig, the suspension or interruption of operations for extended periods due to breakdown of major rig equipment, failure to
comply with performance conditions or equipment specifications, "force majeure" events, the failure of the customer to receive final investment
decision (FID) with respect to projects for which the drilling rig was contracted or other reasons. Generally, our drilling contracts permit early
termination of the contract by the customer for convenience (without cause), exercisable upon advance notice to us, and in certain cases without
making an early termination payment to us. There can be no assurances that our customers will be able to or willing to fulfill their contractual
commitments to us.

A decline in oil prices and any resulting downward pressure on utilization may cause some customers to consider early termination of
select contracts despite having to pay onerous early termination fees in certain cases. Customers may request to renegotiate the terms of
existing contracts, or they may request early termination or seek to repudiate contracts. Furthermore, as contracts expire, we may be unable to
secure new contracts for our drilling rigs. Therefore, revenues recorded in future periods could differ materially from our current backlog. Our
inability to realize the full amount of our contract backlog may have a material adverse effect on our financial position, operating results or cash
flows.

20
Our business will be adversely affected if we are unable to secure contracts on economically favorable terms or if option periods in existing
contracts are not exercised as expected.

Our ability to renew expiring contracts or obtain new contracts and the terms of any such contracts will depend on market conditions.
Our customers’ decisions to exercise option periods resulting in additional work for the rig under contract also depend on market conditions.
We may be unable to renew our expiring contracts, including contracts expiring for failure by the customer to exercise option periods, or obtain
new contracts for the drilling rigs under contracts that have expired or have been terminated, and the day rates under any new contracts or any
renegotiated contracts may be substantially below the existing day rates, which could adversely affect our revenues and profitability. If
customers do not exercise option periods under contracts that we currently expect to be exercised, we may face increased idle time associated
with the related rig, as we may have difficulty securing additional work to cover the option period. In addition, we may choose to stack idle rigs
that are not under contract, which would require us to incur stacking costs for such rigs.

Our customers may be unable or unwilling to fulfill their contractual commitments to us, including their obligations to pay for losses,
damages or other liabilities.

Certain of our customers are subject to liquidity risk and such risk could lead them to seek to repudiate, cancel or renegotiate our
drilling contracts or fail to fulfill their commitments to us under those contracts. These risks are heightened in periods of depressed market
conditions. Our drilling contracts provide for varying levels of indemnification from our customers. Our drilling contracts also provide for
varying levels of indemnification and allocation of liabilities between our customers and us with respect to loss or damage to property and
injury or death to persons arising from the drilling operations we perform. Under our drilling contracts, liability with respect to personnel and
property customarily is allocated so that we and our customers each assume liability for our respective personnel and property. Our customers
have historically assumed most of the responsibility for and indemnified us from loss, damage or other liability resulting from pollution or
contamination, including clean-up and removal and third-party damages arising from operations under the contract when the source of the
pollution originates from the well or reservoir, including those resulting from blow-outs or cratering of the well. However, we regularly are
required to assume a limited amount of liability for pollution damage caused by our negligence, which liability generally has caps for ordinary
negligence, with much higher caps or unlimited liability where the damage is caused by our gross negligence or willful misconduct.
Notwithstanding a contractual indemnity from a customer, there can be no assurance that our customers will be financially able to assume their
responsibility and honor their indemnity to us for such losses. In addition, under the laws of certain jurisdictions, such indemnities under certain
circumstances are not enforceable if the cause of the damage was our gross negligence or willful misconduct. This could result in us having to
assume liabilities in excess of those agreed in our contracts due to customer balance sheet or liquidity issues or applicable law.

We may suffer losses if our customers terminate or seek to renegotiate our contracts, if operations are suspended or interrupted or if a rig
becomes a total loss.

In market downturns, our customers may not be able to honor the terms of existing contracts, may terminate contracts even where there
may be onerous termination fees, may seek to void or otherwise repudiate our contracts including by claiming we have breached the contract,
or may seek to renegotiate contract day rates and terms. Our drilling contracts may be subject to termination without cause or termination for
convenience upon notice by the customer. In certain cases, our contracts require the customer to pay an early termination fee in the event of an
early termination for convenience (without cause), exercisable upon advance notice to us. Such payment would provide some level of
compensation to us for the lost revenue from the contract but in many cases would not fully compensate us for all of the lost revenue. Certain
contracts may permit termination by the customer without an early termination fee. Furthermore, financially distressed customers may seek to
negotiate reduced termination fees as part of a restructuring package.

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 Drilling contracts customarily specify automatic termination or termination at the option of the customer in the event of a total loss of
the drilling rig and often include provisions addressing termination rights or reduction or cessation of day rates if operations are suspended or
interrupted for extended periods due to breakdown of major rig equipment, unsatisfactory performance, "force majeure" events beyond the
control of either party or other specified conditions.

If a customer cancels a contract or if we terminate a contract due to the customer’s breach and, in either case, we are unable to secure a
new contract on a timely basis and on substantially similar terms, or if a contract is disputed or suspended for an extended period of time or
renegotiated, it could materially and adversely affect our financial position, operating results or cash flows.

The loss of a significant customer or customer contract, as well as customer consolidation and changes to customer strategy, could
adversely affect us.

We provide our services to major international, government-owned and independent oil and gas companies. During the eight months
ended December 31, 2021 (Successor), our five largest customers accounted for 42% of consolidated revenues, with our largest customer
representing 11% of our consolidated revenues and a significant percentage of our operating cash flows. During the four months ended April
30, 2021 (Predecessor), our five largest customers accounted for 45% of consolidated revenues. BP, our only customer who accounts for 10%
or more of consolidated revenues, accounted for 14% of consolidated revenues. Our financial position, operating results or cash flows may be
materially adversely affected if any of our higher day rate contracts were terminated or renegotiated on less favorable terms or if a major
customer terminates its contracts with us, fails to renew its existing contracts with us, requires renegotiation of our contracts or declines to
award new contracts to us.

Some of our customers have consolidated and could use their size and purchasing power to achieve economies of scale and pricing
concessions. In addition, certain of our customers are increasingly focusing their business strategy on renewable energy projects and away from
oil and gas exploration and production. Such customer consolidation and strategic transitions could result in reduced capital spending by such
customers, decreased demand for our drilling services, loss of competitive position and negative pricing impacts. If we cannot maintain service
and pricing levels for existing customers or replace such revenues with increased business activities from other customers, our results of
operations or financial condition will be negatively impacted.

Rig reactivation, upgrade and enhancement projects are subject to risks, including delays and cost overruns, which could have a material
adverse effect on our financial position, operating results or cash flows.

The costs required to reactivate a stacked rig and return the rig to drilling service are significant. Depending on the length of time that a
rig has been stacked, we may incur significant costs to restore the rig to drilling capability, which may also include capital expenditures due to,
among other things, technological obsolescence or an equipment overhaul of the rig. During 2022, we currently anticipate that we will be
reactivating four floater rigs. These drilling rigs were previously stacked, and expenditures will be required to return these rigs to drilling
service. In the future, market conditions may not justify these types of expenditures or enable us to operate our rigs profitably during the
remainder of their economic lives. In addition, we may not recover the expenditures incurred to reactivate rigs through the associated drilling
contract or otherwise. We can provide no assurance that we will have access to adequate or economical sources of capital to fund the return of
stacked rigs to drilling service.

During periods of increased rig reactivation, upgrade and enhancement projects, shipyards and third-party equipment vendors may be
under significant resource constraints to meet delivery obligations. Such constraints may lead to substantial delivery and commissioning delays,
equipment failures and/or quality deficiencies. Furthermore, drilling rigs may face start-up or other operational complications following
completion of upgrades or maintenance. Other unexpected difficulties, including equipment failures, design or engineering problems, could
result in significant downtime at reduced or zero day rates or the cancellation or termination of drilling contracts.

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 Rig reactivation, upgrade, life extension and repair projects are subject to the risks of delay or cost overruns, including the following:

• failure of third-party equipment to meet quality and/or performance standards,

• delays in equipment deliveries or shipyard construction,

• shortages of materials or skilled labor,

• disruptions occurring as the result of COVID-19 and related public health measures implemented by governments worldwide,

• damage to shipyard facilities, including damage resulting from fire, explosion, flooding, severe weather, terrorism, war or other armed
hostilities,

• unforeseen design or engineering problems, including those relating to the commissioning of newly designed equipment,

• unanticipated actual or purported change orders,

• strikes, labor disputes or work stoppages,

• financial or operating difficulties of equipment vendors or the shipyard while enhancing, upgrading, improving or repairing a rig or
rigs,

• unanticipated cost increases,

• foreign currency exchange rate fluctuations impacting overall cost,

• inability to obtain the requisite permits or approvals,

• client acceptance delays,

• disputes with shipyards and suppliers,

• latent damages or deterioration to hull, equipment and machinery in excess of engineering estimates and assumptions,

• claims of force majeure events, and

• additional risks inherent to shipyard projects in a non-U.S. location.

We have historically made substantial expenditures to meet customer requirements, maintain our fleet to comply with laws and the
applicable regulations and standards of governmental authorities and organizations, or to expand our fleet, and we may be required to
make significant capital expenditures to maintain our competitiveness.

We have historically made substantial expenditures to maintain our fleet. These expenditures could increase as a result of changes in:

• offshore drilling technology,

• the cost of labor and materials,

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 • customer requirements,

• fleet size,

• the cost of replacement parts for existing drilling rigs,

• the geographic location of the drilling rigs,

• length of drilling contracts,

• governmental regulations and maritime self-regulatory organization and technical standards relating to safety, security or the
environment, and

• industry standards.

Changes in offshore drilling technology, customer requirements for new or upgraded equipment, such as equipping the VALARIS DS-
11 with 20,000 psi well-control equipment, and competition within our industry may require us to make significant capital expenditures. In
addition, changes in governmental regulations relating to decarbonization, environmental, emissions, safety or equipment standards, as well as
compliance with standards imposed by maritime self-regulatory organizations, may require us to make additional unforeseen capital
expenditures. In addition, commitments made by us, or our customers, to reduce emissions, or decarbonize, may require us to upgrade or
retrofit our drilling rigs with additional equipment, less carbon intensive equipment or instrumentation. As a result, we may be required to take
our drilling rigs out of service for extended periods of time, with corresponding losses of revenues, in order to make such alterations or to add
such equipment. In the future, market conditions may not justify these expenditures or enable us to operate our drilling rigs profitably during
the remainder of their economic useful lives.

Additionally, in order to expand our fleet, we may require additional capital in the future. If we are unable to fund capital requirements
with cash flows from operations or proceeds from sales of non-core assets, we may be required to either incur additional borrowings or raise
capital through the sale of debt or equity securities. Our ability to access the capital markets may be limited by our financial condition at the
time, by restrictive covenants in our debt agreements, bye-laws and regulations and by adverse market conditions resulting from, among others,
general economic conditions, contingencies and uncertainties that are beyond our control. Similarly, when lenders and institutional investors
reduce, and in some cases cease to provide, funding to industry borrowers, the liquidity and financial condition of us and our customers can be
adversely impacted. If we raise funds by issuing equity securities, existing shareholders may experience dilution, and if we raise funds by
issuing additional debt securities, we may have to pledge some, or all, of our assets as collateral. Our failure to obtain the funds for necessary
future capital expenditures could have a material adverse effect on our business and on our financial position, operating results or cash flows.

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Failure to recruit and retain skilled personnel could adversely affect our business.

We require skilled personnel to operate our drilling rigs and to provide technical services and support for our business, and our rig
reactivation program will require that we hire additional skilled personnel. Competition for the labor required for drilling operations and
construction projects has recently intensified as the number of active drilling rigs has increased, potentially leading to shortages of qualified
personnel in the industry. During such periods of intensified competition, it is more difficult and costly to recruit, train and retain qualified
employees, including in foreign countries that require a certain percentage of national employees. The recent prolonged industry downturn and
reductions in offshore personnel wages further reduced the number of qualified personnel available. As demand for our services has increased,
competition for labor has intensified, resulting in higher wages in order to retain qualified offshore personnel. The increase in wages causes an
increase in operating expenses, with a resulting reduction in net income, and our ability to fully staff and operate our drilling rigs may be
negatively affected. In addition, due to the specialized skills and qualifications required to operate an offshore drilling rig, new personnel that
we hire may need to undergo training to develop the skills needed to perform their job duties. There can be no assurance that our training
programs will be adequate for these purposes, which could expose us to operational hazards and risks. We may also incur additional training
costs to ensure that new or promoted personnel have the right skills and qualifications.

In an environment where competition for labor is intense, we may be required to increase existing levels of compensation to retain our
skilled workforce, especially if our competitors raise their wage rates. We also are subject to potential legislative or regulatory action that may
impact working conditions, paid time off or other conditions of employment, including mandated vaccination programs. These conditions could
further increase our costs or limit our ability to fully staff and operate our drilling rigs.

Our shared service center may not create the operational efficiencies that we expect, and may create risks relating to the processing of
transactions and recording of financial information, which could have an adverse effect on our financial condition, operating results or
cash flows.

We have undertaken a shared service center initiative pursuant to which we are outsourcing certain finance, human resources, supply
chain and IT functions. We have and will continue to align the design and operation of our financial control environment as part of our shared
service center initiative. As part of this initiative, we are outsourcing, and will continue to outsource, certain accounting, payroll, human
resources, supply chain and IT functions to a third-party service provider. The party that we utilize for these services may not be able to handle
the volume of activity or perform the quality of service necessary to support our operations. The failure of the third-party to fulfill its
obligations could disrupt our operations. In addition, the move to a shared service environment, including our reliance on a third-party provider,
may create risks relating to the processing of transactions and recording of financial information. We could experience a lapse in the operation
of internal controls due to turnover, lack of legacy knowledge, inappropriate training and use of a third-party provider, which could result in
significant deficiencies or material weaknesses in our internal control over financial reporting and have an adverse effect on our financial
condition, operating results or cash flows.

We may not realize the expected benefits of ARO, which depends on a single customer for its income and accounts receivable, and our
inability to realize such benefits may introduce additional risks to our business.

Our 50/50 joint venture with Saudi Aramco, ARO, has plans to purchase 20 newbuild jackup rigs over an approximate 10-year period.
In January 2020, ARO ordered the first two newbuild jackups. The first rig is expected to be delivered in the fourth quarter of 2022, and the
second rig is expected either late in the fourth quarter of 2022 or in the first quarter of 2023. ARO is expected to place orders for two additional
newbuild jackups in 2022. There can be no assurance that the new jackup rigs will begin operations as anticipated or we will realize the
expected return on our investment. We may also experience difficulty in jointly managing the venture. Further, in the event ARO has
insufficient cash from operations or is unable to obtain third-party financing, we may periodically be required to make additional capital
contributions to ARO, up to a maximum aggregate contribution of $1.25 billion. Any required capital contributions we make will negatively
impact our liquidity position and financial condition.

25
 In 2017 and 2018, Rowan Companies Limited (formerly Rowan Companies plc) ("Rowan") issued 10-year shareholder notes
receivables to ARO, which are governed by the laws of Saudi Arabia, earn interest based on a one-year LIBOR rate, set as of the end of the
year prior to the year applicable, plus two percent and mature during 2027 and 2028. In the event of a dispute with ARO over the repayment of
the long-term notes receivable, our ability to enforce the payment obligations of ARO or to exercise other remedies are subject to several
significant limitations, including that our ability to accelerate outstanding amounts under the long-term notes receivable is subject to the
consent of Saudi Aramco and that the long-term notes receivable are governed by the laws of Saudi Arabia and we are limited to the remedies
available under Saudi law.

As a result of these risks, it may take longer than expected for us to realize the expected returns from ARO or such returns may
ultimately be less than anticipated. Additionally, if we are unable to make any required contributions, our ownership in ARO could be diluted
which could hinder our ability to effectively manage ARO and adversely impact our operating results or financial condition.

ARO’s income and accounts receivable are concentrated with one customer. The loss of this customer, or a substantial decrease in
demand by this customer for ARO’s services, would have a material adverse effect on ARO’s business, results of operations and financial
condition, which could adversely impact our operating results or financial condition.

ARO, as a provider of offshore drilling services, faces many of the same risks as we face. Operating through ARO, in which we have a
shared interest, may result in our having less control over many decisions made with respect to projects, operations, safety, utilization, internal
controls and other operating and financial matters. ARO may not apply the same controls and policies that we follow to manage our risks, and
ARO’s controls and policies may not be as effective. As a result, operational, financial and control issues may arise, which could have a
material adverse effect on our financial condition and results of operations. Additionally, in order to establish or preserve our relationship with
our joint venture partner we may agree to risks and contributions of resources that are proportionately greater than the returns we could receive,
which could reduce our income and return on our investment in ARO compared to what we may traditionally require in other areas of our
business.

26
Our information technology systems, including rig operating systems, and critical data are subject to cybersecurity risks.

We depend on technologies, systems and networks to conduct our offshore operations and help run our financial and onshore
operations functions, including the collection of payments from customers, payments to vendors and employees and storage of company
records. Our information technology and infrastructure may fail or be subject to flaws that could adversely impact our business. In addition,
despite our security measures, we could be vulnerable to attacks by third-parties or breaches due to employee error, malfeasance or other
disruptions. The risks associated with the failure of our computer systems and cyber incidents and attacks on our information technology
systems could include disruptions of certain systems on our rigs; other impairments of our ability to conduct our operations, including
disruptions in our ability to make or receive payments and financial and onshore operating functions, loss of intellectual property, proprietary
information, customer and vendor data or other sensitive information; corruption or unauthorized release of our or our customer’s critical data;
disruption of our or our customers' operations; and increased costs to prevent, respond to or mitigate cybersecurity events. Any such breach or
attack could result in injury to people, loss of control of, or damage to, our, or our customer's, assets, downtime, loss of revenue or harm to the
environment. Any such breach or attack could also compromise our networks or our customers' and vendors' networks and the information
stored there could be accessed, publicly disclosed, lost or stolen. Any such access, disclosure or other loss of information could result in
significant fines, civil and/or criminal claims or proceedings. Laws and regulations governing data privacy and the unauthorized disclosure of
confidential or protected information, including the European Union General Data Protection Regulation, pose increasingly complex
compliance challenges and potential costs, and any failure to comply with these laws and regulations could result in significant penalties and
legal liability. Disruption to our operations and damage to our reputation could adversely affect our financial position, operating results or cash
flows. In the past, we have experienced data security breaches resulting from unauthorized access to our systems, which to date have not had a
material impact on our operations; however, there can be no assurance that such impacts will not be material in the future. There can also be no
assurance that our efforts, or the efforts of our partners and vendors, to invest in the protection of information technology infrastructure and
data will prevent or identify breaches in our systems.

We may have difficulty obtaining or maintaining insurance in the future on terms we find acceptable and our insurance coverage cannot
protect us against all of the risks and hazards we face, including those specific to offshore operations.

Our operations are subject to hazards inherent in the offshore drilling industry, such as blow-outs, reservoir damage, loss of production,
loss of well-control, uncontrolled formation pressures, lost or stuck drill strings, equipment failures and mechanical breakdowns, punch-
throughs, craterings, industrial accidents, fires, explosions, oil spills and pollution. These hazards can cause personal injury or loss of life,
severe damage to or destruction of property and equipment, pollution or environmental damage, which could lead to claims by third-parties or
customers or prosecution by governmental authorities, suspension of operations and contract terminations. Our fleet is also subject to hazards
inherent in marine operations, either while on-site or during mobilization, such as punch-throughs, capsizing, sinking, grounding, mooring
failures, collision, damage from severe weather and marine life infestations. We have safety processes in place in an effort to mitigate the risks
of the above hazards occurring, but our processes may not be effective to fully eliminate these risks or may not be followed. Additionally, a
cyber-attack or other security breach of our information systems or other technological failure could lead to a material disruption of our
operations, information systems and/or loss of business information, which could result in an adverse impact to our business. Our drilling
contracts provide for varying levels of indemnification from our customers, including with respect to well-control and subsurface risks. For
example, most of our drilling contracts include limitations in the form of liability caps for damages and losses resulting from our gross
negligence and willful misconduct and for fines and penalties and punitive damages levied or assessed directly against us.

27
 We generally identify and assess the operational hazards for which we will procure insurance coverage based on the likelihood of loss,
the potential magnitude of loss, the cost, availability and reliability of insurance coverage, the requirements of our customer contracts and
applicable legal requirements. Although we maintain what we believe to be an appropriate level of insurance covering hazards and risks we
currently encounter during our operations, it is not possible to obtain insurance against all potential risks and hazards, nor may it always be
possible to maintain the same levels and types of coverage that we have maintained in the past. Cyclical insurance market conditions, major
insurance losses, changes in the perceived risk exposure, new regulations, changes in our financial position and/or our operating conditions
could cause insurance companies to increase our premiums and deductibles or limit our coverage amounts.

As a result of climate change activism or increased costs to insurance companies due to regulatory, geopolitical or other developments,
insurance companies that have historically participated in underwriting energy-related risks may discontinue that practice, may reduce the
insurance capacity they are willing to deploy or demand significantly higher premiums or deductibles to cover these risks. Additionally, a
significant number of high cost energy-related insurance claims or natural catastrophes such as floods, windstorms or earthquakes may result in
withdrawal of insurance capacity and increasing premiums to energy industry companies.

Furthermore, our insurance carriers may interpret our insurance policies such that they do not provide coverage for all of our losses.
Our insurance policies also have exclusions of coverage for some losses. Uninsured exposures may include radiation hazards, certain loss or
damage to property onboard our drilling rigs, loss of hire and losses relating to terrorist acts or strikes and some cyber events.

If we are unable to obtain or maintain adequate insurance at rates and with deductibles or retention amounts that we consider
commercially reasonable, we may choose to forgo insurance coverage and retain the associated risk of loss or damage.

If a significant accident or other event occurs and is not fully covered by insurance or contractual indemnity (or if our contractual
indemnity is not enforceable under applicable law or our clients are unable to meet their indemnification obligation), it could adversely affect
our financial position, operating results or cash flows.

The potential for U.S. Gulf of Mexico hurricane related windstorm damage or liabilities could result in uninsured losses and may cause us
to alter our operating procedures during hurricane season.

Certain areas of the world, such as the U.S. Gulf of Mexico experience hurricanes or similar extreme weather conditions on a relatively
frequent basis. Some of our drilling rigs in the U.S. Gulf of Mexico are located in areas that could cause them to be susceptible to damage
and/or total loss by these storms. We had 10 rigs in the U.S. Gulf of Mexico as of December 31, 2021. Damage caused by high winds and
turbulent seas could result in personal injury, rig loss or damage, termination of drilling contracts for lost or severely damaged rigs or
curtailment of operations on damaged drilling rigs with reduced or suspended day rates for significant periods of time until the damage can be
repaired. Moreover, even if our drilling rigs are not directly damaged by such storms, we may experience disruptions in our operations due to
damage to our customers' platforms and other related facilities in the area. Our drilling operations in the U.S. Gulf of Mexico have been
impacted by hurricanes in the past, including the total loss of drilling rigs, with associated losses of contract revenues and potential liabilities.

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 Insurance companies incurred substantial losses in the offshore drilling, exploration and production industries as a consequence of
hurricanes that occurred in the U.S. Gulf of Mexico during 2004, 2005 and 2008. Accordingly, insurance companies have substantially reduced
the nature and amount of insurance coverage available for losses arising from named tropical storm or hurricane damage in the U.S. Gulf of
Mexico and have dramatically increased the cost of available windstorm coverage. The tight insurance market not only applies to coverage
related to U.S. Gulf of Mexico windstorm damage or loss of our drilling rigs, but also impacts coverage for any potential liabilities to third-
parties associated with property damage, personal injury or death and environmental liabilities, as well as coverage for removal of wreckage
and debris associated with hurricane losses. It is likely that the tight insurance market for windstorm damage, liabilities and removal of
wreckage and debris will continue into the foreseeable future.

We have not purchased windstorm insurance for hull and machinery losses to our drilling rigs arising from windstorm damage in the
U.S. Gulf of Mexico due to the significant premium, high deductible and limited coverage for windstorm damage. We believe it is no longer
customary for drilling contractors with similar size and fleet composition to purchase windstorm insurance for drilling rigs in the U.S. Gulf of
Mexico for the aforementioned reasons. Accordingly, we have retained the risk of loss or damage for our drilling rigs arising from windstorm
damage in the U.S. Gulf of Mexico.

We have established operational procedures designed to mitigate risk to our drilling rigs in the U.S. Gulf of Mexico during hurricane
season, and these procedures may, on occasion, result in a decision to decline to operate on a customer-designated location during hurricane
season notwithstanding that the location, water depth and other standard operating conditions are within a rig's normal operating range. Our
procedures and the associated regulatory requirements addressing drilling rig operations in the U.S. Gulf of Mexico during hurricane season,
coupled with our decision to retain (self-insure) certain windstorm-related risks, may result in a significant reduction in the utilization of our
jackups in the U.S. Gulf of Mexico.

Any retained exposures for property loss or damage and wreckage and debris removal or other liabilities associated with U.S. Gulf of
Mexico tropical storms or hurricanes may have a material adverse effect on our financial position, operating results or cash flows if we sustain
significant uninsured or underinsured losses or liabilities as a result of these storms or hurricanes.

Geopolitical events and violence could affect the markets for our services and have a material adverse effect on our business and cost and
availability of insurance.

Geopolitical events have resulted in military actions, terrorist, pirate and other armed attacks, civil unrest, political demonstrations,
mass strikes and government responses. Military action by the United States or other nations could escalate, and acts of terrorism, piracy,
kidnapping, extortion, acts of war, violence, civil war or general disorder may initiate or continue. Such acts could be directed against
companies such as ours. Such developments have caused instability in the world’s financial and insurance markets in the past. In addition, these
developments could lead to increased volatility in prices for oil and natural gas and could affect the markets for our services, particularly to the
extent that such events take place in regions with significant oil and natural gas reserves, refining facilities or transportation infrastructure.
Insurance premiums could increase and coverage for these kinds of events may be unavailable in the future. Any or all of these effects could
have a material adverse effect on our financial position, operating results or cash flows.

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Our drilling contracts with national oil companies may expose us to greater risks than we normally assume in drilling contracts with non-
governmental customers.

We currently own and operate 15 drilling rigs that are contracted with national oil companies. The terms of these contracts are often
non-negotiable and may expose us to greater commercial, political and operational risks than we assume in other contracts, such as exposure to
materially greater environmental liability, personal injury and other claims for damages (including consequential damages), or, in certain cases,
the risk of early termination of the contract for convenience (without cause), exercisable upon advance notice to us, contractually or by
governmental action, without making an early termination payment to us. We can provide no assurance that the increased risk exposure will not
have an adverse impact on our future operations or that we will not increase the number of drilling rigs contracted to national oil companies
with commensurate additional contractual risks.

Unionization efforts and labor regulations in certain countries in which we operate could materially increase our costs or limit our
flexibility with regard to the management of our personnel.

Outside of the U.S., we are often subject to collective bargaining agreements that require periodic salary negotiations, which usually
result in higher personnel expenses and other benefits. Efforts have been made from time to time to unionize other portions of our workforce. In
addition, we have been subjected to strikes or work stoppages and other labor disruptions in certain countries. Additional unionization efforts,
new collective bargaining agreements or work stoppages could materially increase our costs, reduce our revenues or limit our flexibility.

Certain legal obligations require us to contribute certain amounts to retirement funds or other benefit plans and restrict our ability to
dismiss employees. Future regulations or court interpretations established in the countries in which we conduct our operations could increase
our costs and materially adversely affect our business, financial position, operating results or cash flows.

Significant equipment or part shortages, supplier capacity constraints, supplier production disruptions, supplier quality and sourcing issues
or price increases could increase our operating costs, decrease our revenues and adversely impact our operations.

Our reliance on third-party suppliers, manufacturers and service providers to secure equipment, parts, components and sub-systems
used in our operations exposes us to potential volatility in the quality, prices and availability of such items. Certain high-specification parts and
equipment that we use in our operations may be available only from a small number of suppliers, manufacturers or service providers, or in
some cases must be sourced through a single supplier, manufacturer or service provider. The business environment since the 2014 downturn as
well as industry consolidation has reduced the number of available suppliers, and our suppliers have been and may continue to be impacted by
supply chain and logistics disruptions that began during the COVID-19 pandemic. A disruption in the deliveries from such third-party
suppliers, manufacturers or service providers, capacity constraints, production disruptions, price increases, including those related to inflation
and supply chain disruption, quality control issues, recalls or other decreased availability of parts and equipment could adversely affect our
ability to meet our commitments to customers by making it cost prohibitive to do so, thus adversely impacting our operations and revenues
and/or our operating costs. Delays in the delivery of critical drilling equipment could cause unscheduled operational downtime, or such delays
could cause our drilling rigs to be unavailable within the commencement window established by the operator in the contract and subject us to
potential termination of the contract for such late delivery of the drilling rig.

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We may incur impairments as a result of future declines in demand for offshore drilling rigs.

We evaluate the carrying value of our property and equipment, primarily our drilling rigs, when events or changes in circumstances
indicate that the carrying value of such rigs may not be recoverable. The offshore drilling industry historically has been highly cyclical, and it
is not unusual for rigs to be idle or underutilized for significant periods of time and subsequently resume full or near full utilization when
business cycles change. Likewise, during periods in which rig supply exceeds rig demand, competition may force us to contract our rigs at or
near cash break-even rates for extended periods of time.

Since 2014 Predecessor has recorded pre-tax, non-cash losses on impairment of long-lived assets totaling $9.8 billion, including $756.5
million aggregate pre-tax, non-cash impairments with respect to certain floaters, jackups and spare equipment, which Predecessor recorded
during the first quarter of 2021. See "Note 8 - Property and Equipment" to our consolidated financial statements included in "Item 8. Financial
Statements and Supplementary Data" for additional information.

Our long-term contracts are subject to the risk of cost increases, which could adversely impact our profitability.

In general, our costs increase as the demand for contract drilling services and skilled labor increases. While some of our contracts
include cost escalation provisions that allow changes to our day rate based on stipulated cost increases or decreases, the timing and amount
earned from these day rate adjustments may differ from our actual increase in costs and many contracts do not allow for such day rate
adjustments. During times of reduced demand, reductions in costs may not be immediate as portions of the crew may be required to prepare our
rigs for stacking, after which time the crew members are assigned to active rigs or dismissed. Moreover, as our rigs are mobilized from one
geographic location to another, the labor and other operating and maintenance costs can vary significantly. In general, labor costs increase
primarily due to higher salary levels in a particular geographic location and inflation. Equipment maintenance expenses fluctuate depending
upon the type of activity a drilling rig is performing and the age and condition of the equipment, as well as the impact of supply chain
disruptions and inflation on the costs of parts and materials. Contract preparation expenses vary based on the scope and length of contract
preparation required.

Our ability to pay our operating and capital expenses and make payments due on our debt depends on many factors beyond our control.

Our ability to pay our operating and capital expenses and make payments due on our debt depends on our future performance, which
will be affected by financial, business, economic, legislative and other factors, many of which are beyond our control. The First Lien Notes
contain payment-in-kind interest provisions, which reduce the cash needed to pay interest while increasing the principal amount of First Lien
Notes that ultimately must be retired with a cash payment. Our business may not generate sufficient cash flow from operations in the future,
which could result in our being unable to repay indebtedness or to fund other liquidity needs. A range of economic, competitive, business and
industry factors will affect our future financial performance, and many of these factors, such as the economic and financial condition of our
industry, the global economy and initiatives of our competitors, are beyond our control. If we do not generate enough cash flow from operations
to satisfy our debt obligations, we may have to undertake alternative financing plans, such as:

• selling assets;
• reducing or delaying capital investments;
• seeking to raise additional capital; or
• restructuring or refinancing all or a portion of our indebtedness at or before maturity.

We cannot be assured that we will be able to accomplish any of these alternatives on terms acceptable to us or at all. In addition, the
terms of existing or future debt agreements may restrict us from adopting any of these alternatives. The failure to generate sufficient cash flow
or to achieve any of these alternatives could materially adversely affect our ability to pay the amounts due under our debt.

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The indenture dated April 30, 2021 (the "Indenture") governing the First Lien Notes contains operating and financial restrictions that
restrict our business and financing activities and could limit our growth.

The primary restrictive covenants contained in the Indenture governing the First Lien Notes limit our ability to, among other things:

• incur additional indebtedness or issue certain types of preferred shares;

• sell or convey certain assets;
• make loans to or investments in others;
• enter into mergers;
• engage in transactions with affiliates;
• make certain payments;
• incur liens; and
• pay dividends or repurchase Common Shares.

As a result of these restrictive covenants, we will be limited in the manner in which we conduct our business, and we may be unable to
engage in favorable business activities, take advantage of business opportunities or finance future operations or capital needs. A failure to
comply with these operating restrictions, as well as the other financial covenants under the First Lien Notes, would result in an event of default,
which, if not cured or waived, would cause some or all of our indebtedness to become immediately due and payable and have a material
adverse effect on our business, financial condition and results of operations.

On April 30, 2021, we emerged from bankruptcy, which may adversely affect our business and relationships.

Our having filed for bankruptcy and our emergence from the Chapter 11 Cases on April 30, 2021 may adversely affect our business and
relationships with our vendors, suppliers, service providers, customers, employees and other third-parties. Many risks exist as a result of the
Chapter 11 Cases and our emergence, including the following:

• we may have difficulty obtaining acceptable and sufficient financing to execute our business plan;
• key suppliers, vendors and customers may, among other things, renegotiate the terms of their agreements with us, attempt to terminate
their relationship with us or require financial assurances from us;
• our ability to renew existing contracts and obtain new contracts on reasonably acceptable terms and conditions may be adversely
affected;
• our ability to attract, motivate and retain key employees and executives may be adversely affected; and
• competitors may take business away from us, and our ability to compete for new business and attract and retain customers may be
negatively impacted.

The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition and
reputation. We cannot assure you that having been subject to bankruptcy protection will not adversely affect our operations in the future.

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Our actual financial results after emergence from bankruptcy may not be comparable to our projections filed with the Bankruptcy Court in
the course of the Chapter 11 Cases.

In connection with the disclosure statement we filed with the Bankruptcy Court and the hearing to consider confirmation of the plan of
reorganization, we prepared projected financial information to demonstrate to the Bankruptcy Court the feasibility of the plan of reorganization
and our ability to continue operations upon our emergence from the Chapter 11 Cases. Those projections were prepared solely for the purpose
of the Chapter 11 Cases and have not been and will not be updated and should not be relied upon by investors. At the time they were prepared,
the projections reflected numerous assumptions concerning our anticipated future performance with respect to then prevailing and anticipated
market and economic conditions that were and remain beyond our control and that may not materialize. We have not updated the projections
prepared solely for the purpose of our Chapter 11 Cases or the assumptions on which they were based after our emergence. Projections are
inherently subject to substantial and numerous uncertainties and to a wide variety of significant business, economic and competitive risks, and
the assumptions underlying the projections or valuation estimates may prove to be wrong in material respects. Actual results may vary
significantly from those contemplated by the projections. As a result, investors should not rely on these projections.

Our historical financial information will not be indicative of future financial performance as a result of the implementation of the plan of
reorganization and the related transactions, as well as our application of fresh start accounting following emergence.

Our capital structure was significantly impacted by the plan of reorganization. Under fresh start accounting rules that we applied on the
Effective Date, assets and liabilities were adjusted to fair values and our accumulated deficit was reset to zero. Accordingly, as a result of the
application of fresh start accounting, our financial condition and results of operations following emergence from the Chapter 11 Cases are not
comparable to the financial condition and results of operations reflected in our historical financial statements on or prior to the Effective Date.

The exercise of all or any number of outstanding warrants or the issuance of stock-based awards may dilute the holders of our Common
Shares.

On the Effective Date, we issued 75,000,000 Common Shares and 5,645,161 warrants to purchase 5,645,161 Common Shares at an
exercise price of $131.88 per share, exercisable for a seven year period commencing on that date. Additionally, on May 3, 2021, our board of
directors approved and ratified the Valaris Limited 2021 Management Incentive Plan (the “MIP”) and reserved 8,960,573 of our Common
Shares for issuance under the MIP primarily for employees and directors. The grant and vesting of equity awards in the future, any exercise of
the warrants into Common Shares and any sale of Common Shares underlying outstanding warrants would have a dilutive effect to the holdings
of our existing shareholders and could have an adverse effect on the market for our Common Shares, including the price that an investor could
obtain for their Common Shares.

ESG Risks

Regulation of greenhouse gases and climate change could have a negative impact on our business.

Governments around the world are increasingly focused on enacting laws and regulations regarding climate change and regulation of
greenhouse gases. Lawmakers and regulators in the U.S. and the jurisdictions where we operate have proposed or enacted regulations requiring
reporting of greenhouse gas emissions and the restriction thereof, including increased fuel efficiency standards, carbon taxes or cap and trade
systems, restrictive permitting, and incentives for renewable energy. In addition, efforts have been made and continue to be made in the
international community toward the adoption of international treaties or protocols that would address global climate change issues and impose
reductions of hydrocarbon-based fuels, including plans developed in connection with the Paris climate conference in December 2015, the
Katowice climate conference in December 2018 and the COP26 UN Climate Change Conference in November 2021.

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 Laws or regulations incentivizing or mandating the use of alternative energy sources such as wind power and solar energy have also
been enacted in certain jurisdictions. Additionally, numerous large cities globally and several countries have adopted programs to mandate or
incentivize the conversion from internal combustion engine powered vehicles to electric-powered vehicles and placed restrictions on non-public
transportation. Such policies or other laws, regulations, treaties and international agreements related to greenhouse gases and climate change
may negatively impact the price of oil relative to other energy sources, reduce demand for hydrocarbons, limit drilling in the offshore oil and
gas industry, or otherwise unfavorably impact our business, our suppliers and our customers, and result in increased compliance costs and
additional operating restrictions, all of which would have a material adverse impact on our business.

In addition to potential impacts on our business resulting from climate-change legislation or regulations, our business also could be
negatively affected by climate-change related physical changes or changes in weather patterns. An increase in severe weather patterns could
result in damages to or loss of our drilling rigs, impact our ability to conduct our operations and/or result in a disruption of our customers’
operations. Finally, increasing attention to the risks of climate change has resulted in an increased possibility of lawsuits or investigations
brought by public and private entities against oil and natural gas companies in connection with their greenhouse gas emissions. Should we be
targeted by any such litigation or investigations, we may incur liability, which could be imposed without regard to the causation of or
contribution to the asserted damage, or to other mitigating factors. The ultimate impact of greenhouse gas emissions-related agreements,
legislation and measures on our company’s financial performance is highly uncertain because we are unable to predict with certainty, for a
multitude of individual jurisdictions, the outcome of political decision-making processes and the variables and trade-offs that inevitably occur
in connection with such processes.

Consumer preferences for alternative fuels and electric-powered vehicles, as part of the global energy transition, may lead to
reduced demand for our services.

The increasing penetration of renewable energy into the energy supply mix, the increased production of electric-powered vehicles and
improvements in energy storage, as well as changes in consumer preferences, including increased consumer demand for alternative fuels,
energy sources and electric-powered vehicles may affect the demand for oil and natural gas and our drilling services. This evolving transition of
the global energy system from fossil-based systems of energy production and consumption to more renewable energy sources, commonly
referred to as the energy transition, could have a material adverse impact on our results of operations, financial position and cash flows. As a
result of changes in consumer preferences and uncertainty regarding the pace of the energy transition and expected impacts on oil and natural
gas demand, some of our customers are transitioning their businesses to renewable energy projects and away from oil and natural gas
exploration and production, which could result in reduced capital spending by such customers on oil and natural gas projects and in turn
reduced demand for our services.

Increased scrutiny from stakeholders and others regarding climate change, as well as our ESG practices and reporting
responsibilities, could result in additional costs or risks and adversely impact our business and reputation.

In recent years the investment community, including investment advisors and certain sovereign wealth, pension and endowment funds,
has promoted the divestment of fossil fuel equities and pressured lenders to cease or limit funding to companies engaged in the extraction of
fossil fuel reserves. Such initiatives aimed at limiting climate change and decarbonization could ultimately interfere with our business activities
and operations and our access to capital.

In addition to such initiatives, ESG matters more generally have been the subject of increased focus by investors, investment funds and
other market and industry participants, as well as certain regulators, including in the U.S. and the EU. We publish an annual Sustainability
Report, which includes disclosure of our ESG practices and goals. We published our 2020 Sustainability Report in September 2021. Our
disclosures on these matters, a failure

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to meet these goals or evolving stakeholder expectations for ESG practices and reporting may potentially harm our reputation and impact
employee retention, customer relationships and access to capital. For example, certain market participants use third-party benchmarks or scores
to measure a company’s ESG practices in making investment decisions and customers and suppliers may evaluate our ESG practices or require
that we adopt certain ESG policies as a condition of awarding contracts. By electing to set and share publicly our corporate ESG standards, our
business may also face increased scrutiny related to ESG activities. As ESG best-practices and reporting standards continue to develop, we may
incur increased costs related to ESG monitoring and reporting and complying with ESG initiatives. In addition, it may be difficult or expensive
for us to comply with any ESG-linked contracting policies adopted by customers and suppliers, particularly given the complexity of our supply
chain and our reliance on third-party manufacturers.

Regulatory, Legal and Tax Risks

Failure to comply with anti-bribery statutes could result in fines, criminal penalties, drilling contract terminations and an adverse effect on
our business.

We operate in a number of countries throughout the world, including countries known to have a reputation for corruption and are
subject to the U.S. Foreign Corrupt Practices Act of 1977 (“FCPA”), the U.S. Treasury Department's Office of Foreign Assets Control
("OFAC") regulations, the U.K. Bribery Act ("UKBA"), other U.S. laws and regulations governing our international operations and similar
laws in other countries.

In August 2017, one of our Brazilian subsidiaries was contacted by the Office of the Attorney General for the Brazilian state of Paraná
in connection with a criminal investigation procedure initiated against agents of both Samsung Heavy Industries, a shipyard in South Korea
(“SHI”), and Pride International LLC ("Pride") in relation to the drilling services agreement with Petrobras for the DS-5 (the "DSA"). The
Brazilian authorities requested information regarding our compliance program and the findings of our internal investigations relating to the
DSA. We cooperated with the Office of the Attorney General and provided documents in response to its request. We cannot predict the scope
or ultimate outcome of this procedure or whether any Brazilian governmental authority will open an investigation into Pride’s involvement in
this matter, or if a proceeding were opened, the scope or ultimate outcome of any such investigation.

Any violation of the FCPA, OFAC regulations, the UKBA or other applicable anti-corruption laws by us, our affiliated entities or their
respective officers, directors, employees and agents could in some cases provide a customer with termination rights and other remedies under
the terms of their contracts(s) with us and also result in substantial fines, sanctions, civil and/or criminal penalties and curtailment of operations
in certain jurisdictions and could adversely affect our financial condition, operating results or cash flows. Further, we may incur significant
costs and consume significant internal resources in our efforts to detect, investigate and resolve actual or alleged violations.

Increasing regulatory complexity could adversely impact the costs associated with our offshore drilling operations and reduce demand.

The offshore contract drilling industry is dependent on demand for services from the oil and gas industry. Accordingly, we will be
directly affected by the approval and adoption of laws and regulations limiting or curtailing exploration and development drilling for oil and
natural gas for economic, environmental, safety and other policy reasons. Furthermore, we may be required to make significant capital
expenditures or incur substantial additional costs to comply with new governmental laws and regulations. It is also possible that legislative and
regulatory activity could adversely affect our operations by limiting drilling opportunities or significantly increasing our operating costs.
Increases in regulatory requirements could significantly increase our costs. In recent years, we have seen several significant regulatory changes
that have affected the way we operate in the U.S. Gulf of Mexico. See “Item 1. Business – Governmental Regulations and Environmental
Matters.”

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 Any new or additional regulatory, legislative, permitting or certification requirements in the U.S., including laws and regulations that
have or may impose increased financial responsibility, oil spill abatement contingency plan capability requirements, or additional operational
requirements and certifications, could materially adversely affect our financial position, operating results or cash flows.

We anticipate that government regulation in other countries where we operate may follow the U.S. in regard to enhanced safety and
environmental regulation, which could also result in governments imposing sanctions on contractors when operators fail to comply with
regulations that impact drilling operations. Even if not a requirement in these countries, most international operating companies, and many
others, are voluntarily complying with some or all of the U.S. inspections and safety and environmental guidelines when operating outside the
U.S. Such additional governmental regulation and voluntary compliance by operators could increase the cost of our operations and expose us to
greater liability.

Compliance with or breach of environmental laws can be costly and could limit our operations.

Our operations are subject to laws and regulations controlling the discharge of materials into the environment, pollution, contamination
and hazardous waste disposal or otherwise relating to the protection of the environment. Environmental laws and regulations specifically
applicable to our business activities could impose significant liability on us for damages, clean-up costs, fines and penalties in the event of oil
spills or similar discharges of pollutants or contaminants into the environment or improper disposal of hazardous waste generated in the course
of our operations. To date, such laws and regulations have not had a material adverse effect on our operating results, and we have not
experienced an accident that has exposed us to material liability arising out of or relating to discharges of pollutants into the environment.
However, the legislative, judicial and regulatory response to a well incident could substantially increase our and our customers' liabilities. In
addition to potential increased liabilities, such legislative, judicial or regulatory action could impose increased financial, insurance or
other requirements that may adversely impact the entire offshore drilling industry. See “Item 1. Business – Governmental Regulations and
Environmental Matters.”

ESG initiatives and high profile and catastrophic events, including the 2010 Macondo well incident, have increased the regulation of
offshore oil and gas drilling. We are adversely affected by restrictions on drilling in certain areas in which we operate, including policies and
guidelines regarding the approval of drilling permits, restrictions on development and production activities, and directives and regulations that
have and may further impact our operations. From time to time, legislative and regulatory proposals have been introduced that would materially
limit or prohibit offshore drilling in certain areas, or that would increase the liabilities or costs associated with offshore drilling. If new laws are
enacted, or if government actions are taken that restrict or prohibit offshore drilling in our principal areas of operation or that impose
environmental or other requirements that materially increase the liabilities, financial requirements or operating or equipment costs associated
with offshore drilling, exploration, development, or production of oil and natural gas, our financial position, operating results or cash flows
could be materially adversely affected.

The IRS may not agree with the conclusion that we should be treated as a foreign corporation for U.S. federal tax purposes.

Although Valaris Limited is incorporated in Bermuda (and thus would generally be considered a “foreign” corporation (or non-U.S. tax
resident)), the U.S. Internal Revenue Service (“IRS”) may assert that we should be treated as a U.S. corporation (and U.S. tax resident)
pursuant to the rules under Section 7874 of the Internal Revenue Code. While we do not believe we are a U.S. corporation pursuant to these
rules, the rules are complex and the determination is subject to factual uncertainties. If the IRS successfully challenged our status as a foreign
corporation, significant adverse tax consequences would result for us and for certain of our shareholders.

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U.S. tax laws and IRS guidance could affect our ability to engage in certain acquisition strategies and certain internal restructurings.

Even if we are currently treated as a foreign corporation for U.S. federal income tax purposes, Section 7874 of the Internal Revenue
Code and U.S. Treasury Regulations promulgated thereunder, including temporary Treasury Regulations, may adversely affect our ability to
engage in certain future acquisitions of U.S. businesses in exchange for our equity, which may affect the tax efficiencies that otherwise might
be achieved in such potential future transactions.

Governments may pass laws that subject us to additional taxation or may challenge our tax positions.

There is increasing uncertainty with respect to tax laws, regulations and treaties, and the interpretation and enforcement thereof that
may affect our business. The Organization for Economic Cooperation and Development (“OECD”) has issued its final reports on base erosion
and profit shifting, which generally focus on situations where profits are earned in low-tax jurisdictions, or payments are made between
affiliates from jurisdictions with high tax rates to jurisdictions with lower tax rates. Certain countries within which we operate have recently
enacted changes to their tax laws in response to the OECD recommendations or otherwise and these and other countries may enact changes to
their tax laws or practices in the future (prospectively or retroactively), which may have a material adverse effect on our financial position,
operating results or cash flows. U.S. federal income tax reform legislation enacted in late 2017 introduced significant changes to U.S. income
tax law, including a reduction in the statutory income tax rate from 35% to 21%, a one-time transition tax on deemed repatriation of deferred
foreign income, a base erosion anti-abuse tax that effectively imposes a minimum tax on certain payments to non-U.S. affiliates, new and
revised rules relating to the current taxation of certain income of foreign subsidiaries and revised rules associated with limitations on the
deduction of interest.

In addition, our tax positions are subject to audit by U.K., U.S. and other foreign tax authorities. Such tax authorities may disagree with
our interpretations or assessments of the effects of tax laws, treaties or regulations or their applicability to our corporate structure or certain
transactions we have undertaken. Even if we are successful in maintaining our tax positions, we may incur significant expenses in defending
our positions and contesting claims asserted by tax authorities. If we are unsuccessful in defending our tax positions, the resulting assessments
or rulings could significantly impact our consolidated income taxes in past or future periods.

As required by law, we file periodic tax returns that are subject to review and examination by various revenue agencies within the
jurisdictions in which we operate. We are currently subject to tax assessments in various jurisdictions, which we are contesting.

As a result of these uncertainties, as well as changes in the administrative practices and precedents of tax authorities or other matters
(such as changes in applicable accounting rules) that increase the amounts we have provided for income taxes or deferred tax assets and
liabilities in our consolidated financial statements, we cannot provide any assurances as to what our consolidated effective income tax rate will
be in future periods. If we are unable to mitigate the negative consequences of any change in law, audit or other matters, this could cause our
consolidated income taxes to increase and cause a material adverse effect on our financial position, operating results or cash flows.

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Our consolidated effective income tax rate may vary substantially over time.

We cannot provide any assurances as to what our future consolidated effective income tax rate will be because of, among other matters,
uncertainty regarding the nature and extent of our business activities in any particular jurisdiction in the future and the tax laws of such
jurisdictions, as well as potential changes in U.K., U.S. and other foreign tax laws, regulations or treaties or the interpretation or enforcement
thereof, changes in the administrative practices and precedents of tax authorities or other matters (such as changes in applicable accounting
rules) that increase the amounts we have provided for income taxes or deferred tax assets and liabilities in our consolidated financial
statements. In addition, as a result of frequent changes in the taxing jurisdictions in which our drilling rigs are operated and/or owned, changes
in the overall level of our income and changes in tax laws, our consolidated effective income tax rate may vary substantially from one reporting
period to another. In periods of declining profitability, our income tax expense may not decline proportionately with income. Further, we may
continue to incur income tax expense in periods in which we operate at a loss. Income tax rates imposed in the tax jurisdictions in which our
subsidiaries conduct operations vary, as does the tax base to which the rates are applied. In some cases, tax rates may be applicable to gross
revenues, statutory or negotiated deemed profits or other bases utilized under local tax laws, rather than to net income. In some instances, the
movement of drilling rigs among taxing jurisdictions will involve the transfer of ownership of the drilling rigs among our subsidiaries. If we are
unable to mitigate the negative consequences of any change in law, audit, business activity or other matters, this could cause our consolidated
effective income tax rate to increase and cause a material adverse effect on our financial position, operating results or cash flows.

We are a Bermuda company and it may be difficult to enforce judgments against us or our directors and executive officers.

We are a Bermuda exempted company. As a result, the rights of holders of our Common Shares are governed by Bermuda law and our
memorandum of association and bye-laws. The rights of shareholders under Bermuda law may differ from the rights of shareholders of
companies incorporated in other jurisdictions. Some of our directors and officers are not residents of the United States, and a substantial portion
of our assets are located outside the United States. As a result, it may be difficult for investors to effect service of process on those persons in
the United States or to enforce in the United States judgments obtained in U.S. courts against us or those persons based on the civil liability
provisions of the U.S. securities laws. It is doubtful whether courts in Bermuda will enforce judgments obtained in other jurisdictions, including
the United States, against us or our directors or officers under the securities laws of those jurisdictions or entertain actions in Bermuda against
us or our directors or officers under the securities laws of other jurisdictions.

Our bye-laws restrict shareholders from bringing legal action against our officers and directors.

Our bye-laws contain a broad waiver by our shareholders of any claim or right of action, both individually and on our behalf, against
any of our officers or directors. The waiver applies to any action taken by an officer or director, or the failure of an officer or director to take
any action, in the performance of his or her duties, except with respect to any matter involving any fraud or dishonesty on the part of the officer
or director. This waiver limits the right of shareholders to assert claims against our officers and directors unless the act or failure to act involves
fraud or dishonesty.

Provisions in our bye-laws could delay or prevent a change in control of our company, which could adversely affect the price of our
Common Shares.

The existence of some provisions in our bye-laws could delay or prevent a change in control of our company that a shareholder may
consider favorable, which could adversely affect the price of our Common Shares. Certain provisions of our bye-laws could make it more
difficult for a third-party to acquire control of our company, even if the change of control would be beneficial to our shareholders. These
provisions include:

• authority of our board to determine its size;

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 • the ability of our board of directors to issue preferred shares without shareholder approval;
• limitations on the removal of directors; and
• limitations on the ability of our shareholders to act by written consent in lieu of a meeting.

In addition, our bye-laws establish advance notice provisions for shareholder proposals and nominations for elections to the board of
directors to be acted upon at meetings of shareholders.

Our business could be affected as a result of activist investors.

Publicly traded companies have increasingly become subject to campaigns by activist investors advocating corporate actions such as
actions related to ESG matters, financial restructuring, increased borrowing, dividends, share repurchases or sales of assets or even the entire
company. Responding to proxy contests and other actions by such activist investors or others in the future could be costly and time-consuming,
disrupt our operations and divert the attention of our Board of Directors and senior management from the pursuit of our business strategies,
which could adversely affect our results of operations and financial condition. Additionally, perceived uncertainties as to our future direction as
a result of investor activism or changes to the composition of the Board of Directors may lead to the perception of a change in the direction of
our business, instability or lack of continuity which may be exploited by our competitors, cause concern to our current or potential customers,
and make it more difficult to attract and retain qualified personnel. If customers choose to delay, defer or reduce transactions with us or transact
with our competitors instead of us because of any such issues, then our revenue, earnings and operating cash flows could be adversely affected.
In addition, the trading price of our shares could experience periods of increased volatility as a result of investor activism.

Risks Related to Our International Operations

Our non-U.S. operations involve additional risks not typically associated with U.S. operations.

Revenues from non-U.S. operations were 87%, 81%, 83% and 85% of our total consolidated revenues during eight months ended
December 31, 2021 (Successor), four months ended April 30, 2021 (Predecessor), year-ended December 31, 2020 and 2019 (Predecessor),
respectively. Our non-U.S. operations and shipyard rig construction and enhancement projects are subject to political, economic and other
uncertainties, including:

• terrorist acts, war and civil disturbances,

• expropriation, nationalization, deprivation or confiscation of our equipment or our customer's property,

• repudiation or nationalization of contracts,

• assaults on property or personnel,

• piracy, kidnapping and extortion demands,

• significant governmental influence over many aspects of local economies and customers,

• unexpected changes in law and regulatory requirements, including changes in interpretation or enforcement of existing laws,

• work stoppages, often due to strikes over which we have little or no control,

• complications associated with repairing and replacing equipment in remote locations,

• limitations on insurance coverage, such as war risk coverage, in certain areas,

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 • imposition of trade barriers,

• wage and price controls,

• import-export quotas,

• exchange restrictions,

• currency fluctuations,

• changes in monetary policies,

• uncertainty or instability resulting from hostilities or other crises in the Middle East, West Africa, Latin America, Southeastern Asia
or other geographic areas in which we operate,

• changes in the manner or rate of taxation,

• limitations on our ability to recover amounts due,

• increased risk of government and vendor/supplier corruption,

• increased local content requirements,

• the occurrence or threat of epidemic or pandemic diseases (including the COVID-19 pandemic) and any government response to
such occurrence or threat,

• changes in political conditions, and

• other forms of government regulation and economic conditions that are beyond our control.

We historically have maintained insurance coverage and obtained contractual indemnities that protect us from some, but not all, of the
risks associated with our non-U.S. operations such as nationalization, deprivation, expropriation, confiscation, political and war risks. However,
there can be no assurance that any particular type of contractual or insurance protection will be available in the future or that we will be able to
purchase our desired level of insurance coverage at commercially feasible rates. Moreover, we may initiate a self-insurance program through
one or more captive insurance subsidiaries. In circumstances where we have insurance protection for some or all of the risks associated with
non-U.S. operations, such insurance may be subject to cancellation on short notice, and it is unlikely that we would be able to remove our rig or
rigs from the affected area within the notice period. Accordingly, a significant event for which we are uninsured, underinsured or self-insured,
or for which we have not received an enforceable contractual indemnity from a customer, could cause a material adverse effect on our financial
position, operating results or cash flows.

We are subject to various tax laws and regulations in substantially all countries in which we operate or have a legal presence. Actions
by tax authorities that impact our business structures and operating strategies, such as changes to tax treaties, laws and regulations, or the
interpretation or repeal of any of the foregoing or changes in the administrative practices and precedents of tax authorities, adverse rulings in
connection with audits or otherwise, or other challenges may have a material impact on our tax expense.

As required by law, we file periodic tax returns that are subject to review and examination by various revenue agencies within the
jurisdictions in which we operate. We are currently subject to tax assessments in various jurisdictions, which we are contesting. Although the
outcome of such assessments cannot be predicted with certainty, unfavorable outcomes could have a material adverse effect on our liquidity.

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 Our non-U.S. operations also face the risk of fluctuating currency values, which may impact our revenues, operating costs and capital
expenditures. We currently conduct contract drilling operations in certain countries that have experienced substantial fluctuations in the value
of their currency compared to the U.S. dollar. In addition, some of the countries in which we operate have enacted exchange controls.
Generally, we have contractually mitigated these risks by invoicing and receiving payment in U.S. dollars (our functional currency) or freely
convertible currency and, to the extent possible, by limiting our acceptance of foreign currency to amounts which approximate our expenditure
requirements in such currencies. However, not all of our contracts contain these terms and there is no assurance that our contracts will contain
such terms in the future.

A portion of the costs and expenditures incurred by our non-U.S. operations, including certain capital expenditures, are settled in local
currencies, exposing us to risks associated with fluctuation in the value of these currencies relative to the U.S. dollar. We have historically used
foreign currency forward contracts to reduce this exposure in certain cases. However, a relative weakening in the value of the U.S. dollar in
relation to the local currencies in these countries may increase our costs and expenditures.

Our non-U.S. operations are also subject to various laws and regulations in countries in which we operate, including laws and
regulations relating to the operation of drilling rigs and the requirements for equipment. We may be required to make significant capital
expenditures to operate in such countries, which may not be reimbursed by our customers. Governments in some countries are active in
regulating and controlling the ownership of oil, natural gas and mineral concessions and companies holding such concessions, the exploration
of oil and natural gas and other aspects of the oil and gas industry in their countries. In some areas of the world, government activity has
adversely affected the amount of exploration and development work performed by major international oil companies and may continue to do
so. Moreover, certain countries accord preferential treatment to local contractors or joint ventures or impose specific quotas for local goods and
services, which can increase our operational costs and place us at a competitive disadvantage. There can be no assurance that such laws and
regulations or activities will not have a material adverse effect on our future operations.

The shipment of goods, services and technology across international borders subjects us to extensive trade laws and regulations. Our
import activities are governed by specific customs laws and regulations in each of the countries where we operate. Moreover, many countries,
including the United States, control the export and re-export of certain goods, services and technology and impose related export recordkeeping
and reporting obligations. Governments also may impose express or de facto economic sanctions against certain countries, persons and other
entities that may restrict or prohibit transactions involving such countries, persons and entities.

The laws and regulations concerning import activity, export recordkeeping and reporting, export control and economic sanctions are
complex and constantly changing. These laws and regulations may be enacted, amended, enforced or interpreted in a manner materially
impacting our operations. Shipments can be delayed and denied export or entry for a variety of reasons, some of which are outside our control
and some of which may result from failure to comply with existing legal and regulatory regimes. Shipping delays or denials could cause
unscheduled operational downtime, reduced day rates during such downtime and contract cancellations. Any failure to comply with applicable
legal and regulatory trading obligations also could result in criminal and civil penalties and sanctions, such as fines, imprisonment, exclusion
from government contracts, seizure of shipments and loss of import and export privileges.

Our employees, contractors and agents may take actions in violation of our policies and procedures designed to promote compliance
with the laws of the jurisdictions in which we operate. Any such violation could have a material adverse effect on our financial position,
operating results or cash flows.

Legislation enacted in Bermuda as to Economic Substance may affect our operations.

Pursuant to the Economic Substance Act 2018 (as amended) of Bermuda (the “ES Act”) that came into force on January 1, 2019, a
registered entity other than an entity which is resident for tax purposes in certain jurisdictions outside Bermuda (“non-resident entity”) that
carries on as a business any one or more of the “relevant

41
activities” referred to in the ES Act must comply with economic substance requirements. The ES Act may require in-scope Bermuda entities
which are engaged in such “relevant activities” to be directed and managed in Bermuda, have an adequate level of qualified employees in
Bermuda, incur an adequate level of annual expenditure in Bermuda, maintain physical offices and premises in Bermuda or perform core
income-generating activities in Bermuda. The list of “relevant activities” includes carrying on any one or more of: banking, insurance, fund
management, financing, leasing, headquarters, shipping, distribution and service center, intellectual property and holding entities. The ES Act
could affect the manner in which we operate our business, which could adversely affect our business, financial condition and results of
operations.

The U.K.'s withdrawal from the E.U. may have a negative effect on economic conditions, financial markets and our business.

On April 27, 2021, the European Parliament approved the agreement on the terms of the U.K.’s future relationship with the E.U. (the
“Trade and Cooperation Agreement”), which provides for zero tariffs and quotas on the movement of goods between the U.K. and the E.U.
(provided they comply with the parties’ agreed rules of origin) and seeks to minimize trade disruption arising from technical and administrative
barriers to trade. However, there can be no guarantee that the ongoing implementation of the Trade and Cooperation Agreement will not lead to
significant increased costs and supply chain disruption for our business and the businesses of our U.K. customers and suppliers. Any
incremental costs incurred by our U.K. suppliers may be passed on to us and any supply chain disruption experienced by our U.K. customers or
suppliers may in turn disrupt our own operations.

The U.K.’s withdrawal from the E.U. has also given rise to calls for the governments of other E.U. member states to consider
withdrawal, while the U.K.’s withdrawal negotiation process has increased the risk of the possibility of a further referendum concerning
Scotland’s independence from the rest of the U.K. These developments, or the perception that any of them could occur, have had and may
continue to have a material adverse effect on global, regional and/or national economic conditions and the stability of global financial markets,
and may significantly reduce global market liquidity.

The implementation of the Trade and Cooperation Agreement and/or any subsequent divergence of the law applicable in the U.K. and
the E.U. could depress economic activity, result in changes to currency exchange rates, taxes, import/export regulations, laws and other
regulatory matters, and/or restrict our access to capital and the free movement of our employees, which could have a material adverse effect on
our financial position, operating results or cash flows. Approximately 22% and 19% of our total revenues were generated in the U.K. for the
eight months ended December 31, 2021 (Successor) and four months ended April 30, 2021 (Predecessor), respectively.

42
Item 1B. Unresolved Staff Comments

None.

43
Item 2. Properties

Contract Drilling Fleet

The following table provides certain information about the rigs in our drilling fleet as of February 21, 2022:
Maximum
Year Built/ Water Depth/
Rig Name Rig Type Rebuilt Design Drilling Depth Location Status
Floaters
VALARIS DS-4 Drillship 2010 Dynamically Positioned 12,000'/40,000' Spain Under reactivation(3)
VALARIS DS-7 Drillship 2013 Dynamically Positioned 10,000'/40,000' Spain Preservation stacked(1)
VALARIS DS-8 Drillship 2015 Dynamically Positioned 12,000'/40,000' Spain Preservation stacked(1)
VALARIS DS-9 Drillship 2015 Dynamically Positioned 12,000'/40,000' Spain Under reactivation(3)
VALARIS DS-10 Drillship 2015 Dynamically Positioned 12,000'/40,000' Namibia Under contract
VALARIS DS-11 Drillship 2013 Dynamically Positioned 12,000'/40,000' Spain Preservation stacked(1)(4)
VALARIS DS-12 Drillship 2013 Dynamically Positioned 12,000'/40,000' Angola Under contract
VALARIS DS-13 Drillship Under construction Dynamically Positioned 12,000'/40,000' South Korea Option(2)
VALARIS DS-14 Drillship Under construction Dynamically Positioned 12,000'/40,000' South Korea Option(2)
VALARIS DS-15 Drillship 2014 Dynamically Positioned 12,000'/40,000' Brazil Under contract
VALARIS DS-16 Drillship 2014 Dynamically Positioned 12,000'/40,000' Gulf of Mexico Under reactivation(3)
VALARIS DS-17 Drillship 2014 Dynamically Positioned 12,000'/40,000' Spain Preservation stacked(1)
VALARIS DS-18 Drillship 2015 Dynamically Positioned 12,000'/40,000' Gulf of Mexico Under contract
VALARIS DPS-1 Semisubmersible 2012 Dynamically Positioned 10,000'/35,000' Australia Under contract
VALARIS DPS-3 Semisubmersible 2010 Dynamically Positioned 8,500'/37,500' Gulf of Mexico Preservation stacked(1)
VALARIS DPS-5 Semisubmersible 2012 Dynamically Positioned 8,500'/35,000' Gulf of Mexico Under contract
VALARIS DPS-6 Semisubmersible 2012 Dynamically Positioned 8,500'/35,000' Gulf of Mexico Preservation stacked(1)
VALARIS MS-1 Semisubmersible 2011 F&G ExD Millennium 8,200'/40,000 Australia Under contract
Jackups
VALARIS 36 Jackup 1981/2011 MLT 116-C 300'/25,000' Saudi Arabia Leased to ARO drilling
VALARIS 54 Jackup 1982/2004 F&G L-780 MOD II-C 300'/25,000' Saudi Arabia Under contract
VALARIS 67 Jackup 1976/2005 MLT 84-CE 350'/30,000' Indonesia Preservation stacked(1)
VALARIS 72 Jackup 1981/2011 Hitachi K1025N 225'/25,000' United Kingdom Under contract
VALARIS 75 Jackup 1999 MLT Super 116-C 400'/30,000' Gulf of Mexico Preservation stacked(1)
VALARIS 76 Jackup 2000 MLT Super 116-C 350'/30,000' Saudi Arabia Under contract
VALARIS 92 Jackup 1982/2003 MLT 116-C 210'/25,000' United Kingdom Under contract
VALARIS 102 Jackup 2002 KFELS MOD V-A 400'/30,000' Gulf of Mexico Preservation stacked(1)
VALARIS 104 Jackup 2002/2011 KFELS MOD V-B 400'/30,000' UAE Preservation stacked(1)
VALARIS 106 Jackup 2005 KFELS MOD V-B 400'/30,000' Indonesia Under contract
VALARIS 107 Jackup 2006 KFELS MOD V-B 400'/30,000' Australia Under contract
VALARIS 108 Jackup 2007/2009 KFELS MOD V-B 400'/30,000' Saudi Arabia Under contract
VALARIS 109 Jackup 2008 KFELS MOD V-Super B 350'/35,000' Namibia Preservation stacked(1)
VALARIS 110 Jackup 2015 KFELS MOD V-B 400'/35,000' Qatar Under contract
VALARIS 111 Jackup 2003 KFELS MOD V Enhanced B-Class 400'/36,000' Croatia Preservation stacked(1)
VALARIS 113 Jackup 2012 Baker Marine Pacific Class 400 400'/30,000' Philippines Preservation stacked(1)

44
 Maximum
Year Built/ Water Depth/
Rig Name Rig Type Rebuilt Design Drilling Depth Location Status
Jackups
(Continued)
VALARIS 114 Jackup 2012 Baker Marine Pacific Class 400 400'/30,000' Philippines Preservation stacked(1)
VALARIS 115 Jackup 2013 Baker Marine Pacific Class 400 400'/30,000' Thailand Under contract
VALARIS 116 Jackup 2008/2018 LT 240- C 375'/35,000' Saudi Arabia Leased to ARO drilling
VALARIS 117 Jackup 2009 LT 240- C 350'/35,000' Mexico Under contract
VALARIS 118 Jackup 2012 LT 240- C 350'/35,000 Mexico Under contract
VALARIS 120 Jackup 2013 KFELS Super A 400'/40,000' United Kingdom Under contract
VALARIS 121 Jackup 2013 KFELS Super A 400'/40,000' United Kingdom Under contract
VALARIS 122 Jackup 2013 KFELS Super A 400'/40,000' United Kingdom Under contract
VALARIS 123 Jackup 2016 KFELS Super A 400'/40,000' Netherlands Under contract
VALARIS 140 Jackup 2016 LT Super 116E 340'/30,000' Saudi Arabia Leased to ARO drilling
VALARIS 141 Jackup 2016 LT Super 116E 340'/30,000' Saudi Arabia Under contract
VALARIS 143 Jackup 2010/2018 LT EXL Super 116-E 350'/35,000' Saudi Arabia Leased to ARO drilling
VALARIS 144 Jackup 2010 LT Super 116-E 350'/35,000' Gulf of Mexico Under contract
VALARIS 145 Jackup 2010 LT Super 116-E 350'/35,000' Gulf of Mexico Preservation stacked(1)
VALARIS 146 Jackup 2011/2018 LT EXL Super 116-E 320'/35,000' Saudi Arabia Leased to ARO drilling
VALARIS 147 Jackup 2012/2019 LT Super 116-E 350'/30,000' Saudi Arabia Leased to ARO drilling
VALARIS 148 Jackup 2013/2019 LT Super 116-E 350'/30,000' Saudi Arabia Leased to ARO drilling
VALARIS 247 Jackup 1998 LT Super Gorilla 400'/35,000' United Kingdom Under contract
VALARIS 248 Jackup 2001/2014 LT Super Gorilla 400'/35,000' United Kingdom Under contract
VALARIS 249 Jackup 2001 LT Super Gorilla 400'/35,000' New Zealand Under contract
VALARIS 250 Jackup 2003 LT Super Gorilla XL 550'/35,000' Saudi Arabia Leased to ARO drilling
VALARIS Viking Jackup 2011 KEFLS N Class 435'/35,000' Norway Under contract
VALARIS Stavanger Jackup 2011 KEFLS N Class 400'/35,000' Norway Under contract
VALARIS Norway Jackup 2011 KEFLS N Class 400'/35,000' United Kingdom Under contract

(1)
Prior to stacking, upfront steps are taken to preserve the rig. This may include a quayside power source to dehumidify key equipment
and/or provide electric current to the hull to prevent corrosion. Also, certain equipment may be removed from the rig for storage in a
temperature-controlled environment. While stacked, large equipment that remains on the rig is periodically inspected and maintained by
Valaris personnel. These steps are designed to reduce time and lower cost to reactivate the rig when market conditions improve.
(2) Prior to our chapter 11 filing, we had contractual commitments for the construction of VALARIS DS-13 and VALARIS DS-14. On
February 26, 2021, we entered into amended agreements with the shipyard that became effective upon our emergence from bankruptcy.
The amendments provide for, among other things, an option construct whereby the Company has the right, but not the obligation, to take
delivery of either or both rigs on or before December 31, 2023. Under the amended agreements, the purchase price for the rigs is
estimated to be approximately $119.1 million for the VALARIS DS-13 and $218.3 million for the VALARIS DS-14, assuming a
December 31, 2023 delivery date. Delivery can be requested any time prior to December 31, 2023 with a downward purchase price
adjustment based on predetermined terms. If the Company elects not to purchase the rigs, the Company has no further obligations to the
shipyard. The amended agreements removed any parent company guarantee.
(3) Rig being reactivated for a firm contract.

45
 (4)
Rig preservation stacked but has a firm contract that commences in July 2024. In February 2022, the customer decided not to sanction
and therefore withdraw from the project associated with this contract. As of the date hereof, the customer has not terminated the
contract, but may do so upon the payment of an early termination fee should the project not receive a final investment decision (FID).
The project has not received FID. We are in discussions with the customer and its partner on the project to determine next steps.

The equipment on our drilling rigs includes engines, draw works, derricks, pumps to circulate drilling fluid, well control systems, drill
string and related equipment. The engines power a top-drive mechanism that turns the drill string and drill bit so that the hole is drilled by
grinding subsurface materials, which are then returned to the rig by the drilling fluid. The intended water depth, well depth and geological
conditions are the principal factors that determine the size and type of rig most suitable for a particular drilling project.

Floater rigs consist of drillships and semisubmersibles. Drillships are purpose-built maritime vessels outfitted with drilling
apparatus. Drillships are self-propelled and can be positioned over a drill site through the use of a computer-controlled propeller or "thruster"
dynamic positioning systems. Our drillships are capable of drilling in water depths of up to 12,000 feet and are suitable for deepwater drilling
in remote locations because of their superior mobility and large load-carrying capacity. Although drillships are most often used for deepwater
drilling and exploratory well drilling, drillships can also be used as a platform to carry out well maintenance or completion work such as casing
and tubing installation or subsea tree installations.

Semisubmersibles are drilling rigs with pontoons and columns that are partially submerged at the drilling location to provide added
stability during drilling operations. Semisubmersibles are held in a fixed location over the ocean floor either by being anchored to the sea
bottom with mooring chains or dynamically positioned by computer-controlled propellers or "thrusters" similar to that used by our
drillships. Moored semisubmersibles are most commonly used for drilling in water depths of 4,499 feet or less. However, VALARIS MS-1,
which is a moored semisubmersible, is capable of deepwater drilling in water depths greater than 5,000 feet. Dynamically positioned
semisubmersibles generally are outfitted for drilling in deeper water depths and are well-suited for deepwater development and exploratory well
drilling. Further, we have two hybrid semisubmersibles, VALARIS DPS-3 and VALARIS DPS-5, which leverage both moored and
dynamically positioned configurations. This hybrid design provides multi-faceted drilling solutions to customers with both shallow water and
deepwater requirements.

Jackup rigs stand on the ocean floor with their hull and drilling equipment elevated above the water on connected leg supports. Jackups
are generally preferred over other rig types in shallow water depths of 400 feet or less, primarily because jackups provide a more stable drilling
platform with above water well-control equipment. Our jackups are of the independent leg design where each leg can be fixed into the ocean
floor at varying depths and equipped with a cantilever that allows the drilling equipment to extend outward from the hull over fixed platforms
enabling safer drilling of both exploratory and development wells. The jackup hull supports the drilling equipment, jacking system, crew
quarters, storage and loading facilities, helicopter landing pad and related equipment and supplies.

As of February 21, 2022, we owned all rigs in our fleet. We also manage the drilling operations for two platform rigs owned by a third-
party.

We lease office space in the UK (London & Aberdeen), the USA (Houston), Australia, Indonesia, Mexico, Brazil, Nigeria, The
Netherlands, UAE (Dubai), Saudi Arabia, Thailand, and Norway. We own offices and other facilities in Louisiana, Angola, and Brazil.

46
Item 3. Legal Proceedings

Environmental Matters

We are currently subject to pending notices of assessment relating to spills of drilling fluids, oil, brine, chemicals, grease or fuel from
drilling rigs operating offshore Brazil from 2008 to 2019, pursuant to which the governmental authorities have assessed, or are anticipated to
assess, fines. We have contested these notices and appealed certain adverse decisions and are awaiting decisions in these cases. Although we do
not expect final disposition of these assessments to have a material adverse effect on our financial position, operating results and cash flows,
there can be no assurance as to the ultimate outcome of these assessments. A $0.4 million liability related to these matters was included in
Accrued liabilities and other on our Consolidated Balance Sheet as of December 31, 2021 included in "Item 8. Financial Statements and
Supplementary Data."

Other Matters

In addition to the foregoing, we are named defendants or parties in certain other lawsuits, claims or proceedings incidental to our
business and are involved from time to time as parties to governmental investigations or proceedings, including matters related to taxation,
arising in the ordinary course of business. Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty and
the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, we do not expect
these matters to have a material adverse effect on our financial position, operating results or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

47
 PART II

Item 5. Market for Registrant's Common Equity, Related Shareholder Matters and Issuer Purchases of Equity Securities

Market Information
Predecessor
As a result of the Chapter 11 Cases, the Class A ordinary shares of Legacy Valaris were delisted from the NYSE effective September
14, 2020. On the Effective Date, the Class A ordinary shares were cancelled.
Successor
On April 30, 2021, pursuant to the Plan, the Company issued an aggregate of approximately 75,000,000 Common Shares and 5,645,161
Warrants and has listed the Common Shares and the Warrants on The New York Stock Exchange under the symbols “VAL” and “VAL WS”,
respectively.

Many of our shareholders hold shares electronically, all of which are owned by a nominee of DTC. We had 208 shareholders of record
on February 1, 2022.

Dividends

For the Successor, we have not paid or declared any dividends on our Common Shares. Our Indenture includes provisions that limit our
ability to pay dividends.

Bermuda Tax

We have been designated by the Bermuda Monetary Authority as a non-resident for Bermuda exchange control purposes. This
designation allows us to engage in transactions in currencies other than the Bermuda dollar, and there are no restrictions on our ability to
transfer funds (other than funds denominated in Bermuda dollars) in and out of Bermuda or to pay dividends to United States residents who are
holders of our Common Shares.

At the present time, there is no Bermuda income or profits tax, withholding tax, capital gains tax, capital transfer tax, estate duty or
inheritance tax payable by us or by our shareholders in respect of our shares. We have obtained an assurance from the Minister of Finance of
Bermuda under the Exempted Undertakings Tax Protection Act 1966 that, in the event that any legislation is enacted in Bermuda imposing any
tax computed on profits or income, or computed on any capital asset, gain or appreciation or any tax in the nature of estate duty or inheritance
tax, such tax shall not, until March 31, 2035, be applicable to us or to any of our operations or to our shares, debentures or other obligations
except insofar as such tax applies to persons ordinarily resident in Bermuda or is payable by us in respect of real property owned or leased by
us in Bermuda.

Equity Compensation Plans

For information on shares issued or to be issued in connection with our equity compensation plans, see "Part III, Item 12. Security
Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters."

48
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations

INTRODUCTION

Our Business

We are a leading provider of offshore contract drilling services to the international oil and gas industry. We currently own an offshore
drilling rig fleet of 56 rigs, with drilling operations in almost every major offshore market across six continents. Our rig fleet includes
11 drillships, four dynamically positioned semisubmersible rigs, one moored semisubmersible rig, 40 jackup rigs and a 50% equity interest in
ARO, our 50/50 joint venture with Saudi Aramco, which owns an additional seven rigs. We operate the world's largest fleet amongst
competitive rigs, including one of the newest ultra-deepwater fleets in the industry and a leading premium jackup fleet.

Our customers include many of the leading national and international oil companies, in addition to many independent operators. We are
among the most geographically diverse offshore drilling companies, with current operations spanning 14 countries. The markets in which we
operate include the Gulf of Mexico, the North Sea, the Middle East, West Africa, Australia and Southeast Asia.

We provide drilling services on a day rate contract basis. Under day rate contracts, we provide an integrated service that includes the
provision of a drilling rig and rig crews for which we receive a daily rate that may vary between the full rate and zero rate throughout the
duration of the contractual term, depending on the operations of the rig. We also may receive lump-sum fees or similar compensation for the
mobilization, demobilization and capital upgrades of our rigs. Our customers bear substantially all of the costs of constructing the well and
supporting drilling operations, as well as the economic risk relative to the success of the well.

Chapter 11 Proceedings, Emergence from Chapter 11 and Fresh Start Accounting

On the Petition Date, the Debtors filed voluntary petitions for reorganization under chapter 11 of the Bankruptcy Code in the
Bankruptcy Court.

In connection with the Chapter 11 Cases and the plan of reorganization, on and prior to the Effective Date, Legacy Valaris effectuated
certain restructuring transactions, pursuant to which Valaris was formed and, through a series of transactions, Legacy Valaris transferred to a
subsidiary of Valaris substantially all of the subsidiaries, and other assets, of Legacy Valaris.

On the Effective Date, we successfully completed our financial restructuring and together with the Debtors emerged from the Chapter
11 Cases. Upon emergence from the Chapter 11 Cases, we eliminated $7.1 billion of debt and obtained a $520 million capital injection by
issuing the First Lien Notes. See “Note 9 - Debt" to our consolidated financial statements included in "Item 8. Financial Statements and
Supplementary Data" for additional information on the First Lien Notes. On the Effective Date, the Legacy Valaris Class A ordinary shares
were cancelled and the Common Shares were issued. Also, former holders of Legacy Valaris' equity were issued the Warrants to purchase
Common Shares. See “Note 11 - Shareholders' Equity" to our consolidated financial statements included in "Item 8. Financial Statements and
Supplementary Data" for additional information on the issuance of the Common Shares and Warrants.

References to the financial position and results of operations of the "Successor" or "Successor Company" relate to the financial position
and results of operations of the Company after the Effective Date. References to the financial position and results of operations of the
"Predecessor" or "Predecessor Company" refer to the financial position and results of operations of Legacy Valaris on and prior to the Effective
Date. References to the “Company,” “we,” “us” or “our” in this Annual Report are to Valaris Limited, together with its consolidated
subsidiaries, when referring to periods following the Effective Date, and to Legacy Valaris, together with its consolidated subsidiaries, when
referring to periods prior to and including the Effective Date.

49
 Upon emergence from the Chapter 11 Cases, we qualified for and adopted fresh start accounting. The application of fresh start
accounting resulted in a new basis of accounting, and the Company became a new entity for financial reporting purposes. Accordingly, our
financial statements and notes after the Effective Date are not comparable to our financial statements and notes on and prior to that date.

See “Note 2 – Chapter 11 Proceedings” and " Note 3 - Fresh Start Accounting" to our consolidated financial statements included in
"Item 8. Financial Statements and Supplementary Data" for additional details regarding the bankruptcy, our emergence and fresh start
accounting.

Our Industry

Operating results in the offshore contract drilling industry are highly cyclical and are directly related to the demand for and the
available supply of drilling rigs. Low demand and excess supply can independently affect day rates and utilization of drilling rigs. Therefore,
adverse changes in either of these factors can result in adverse changes in our industry. While the cost of moving a rig may cause the balance of
supply and demand to vary somewhat between regions, significant variations between most regions are generally of a short-term nature due to
rig mobility.

As we entered 2020, we expected the volatility that began with the oil price decline in 2014 to continue over the near-term with the
expectation that long-term oil prices would remain at levels sufficient to support a continued gradual recovery in the demand for offshore
drilling services. We were focused on opportunities to put our rigs to work, manage liquidity, extend our financial runway, and reduce debt as
we sought to navigate the extended market downturn and improve our balance sheet. Recognizing our ability to maintain a sufficient level of
liquidity to meet our financial obligations depended upon our future performance, which is subject to general economic conditions, industry
cycles and financial, business and other factors affecting our operations, many of which are beyond our control, we had significant financial
flexibility within our capital structure to support our liability management efforts. However, starting in early 2020, the COVID-19 pandemic
and the response thereto negatively impacted the macro-economic environment and global economy. Global oil demand fell sharply at the same
time global oil supply increased as a result of certain oil producers competing for market share, leading to a supply glut. As a consequence, the
price of Brent crude oil fell from around $60 per barrel at year-end 2019 to around $20 per barrel in mid-April 2020. In response to
dramatically reduced oil price expectations, our customers reviewed, and in most cases lowered significantly, their capital expenditure plans in
light of revised pricing expectations. This caused our customers, primarily in the second and third quarters of 2020, to cancel or shorten the
duration of many of our drilling contracts, cancel future drilling programs and seek pricing and other contract concessions which led to material
operating losses and liquidity constraints for us.

In 2020, the combined effects of the global COVID-19 pandemic, the significant decline in the demand for oil and the substantial
surplus in the supply of oil resulted in significantly reduced demand and day rates for offshore drilling provided by the Company and increased
uncertainty regarding long-term market conditions. These events had a significant adverse impact on our current and expected liquidity position
and financial runway and led to the filing of the Chapter 11 Cases.

50
 In 2021, Brent crude oil prices increased from approximately $50 per barrel at the beginning of 2021 to nearly $80 per barrel by the end
of the year and have subsequently increased to over $90 per barrel in early 2022. Increased oil prices are due to, among other factors,
rebounding demand for hydrocarbons, a measured approach to production increases by OPEC+ members and a focus on cash flow and returns
by major exploration and production companies. The constructive oil price environment led to an improvement in contracting and tendering
activity in 2021 as compared to 2020. Benign floater rig years awarded in 2021 were more than double the amount awarded in 2020. This
increase in activity is particularly evident for drillships with several multi-year contracts awarded and a meaningful improvement in day rates
for this class of assets. Jackup contracting activity also increased in 2021, but at a more modest pace than for floaters; however, demand for
jackups did not decline as significantly in 2020 as it did for floaters. While the near-term outlook for the offshore drilling industry has
improved, particularly for floaters, since the beginning of 2021, the global recovery from the COVID-19 pandemic remains uneven, and there is
still uncertainty around the sustainability of the improvement in oil prices and the recovery in demand for offshore drilling services.

Additionally, the full impact that the pandemic and the volatility of oil prices will have on our results of operations, financial condition,
liquidity and cash flows is uncertain due to numerous factors, including the duration and severity of the pandemic, the continued effectiveness
of the ongoing vaccine rollout, the general resumption of global economic activity along with the injection of substantial government monetary
and fiscal stimulus and the sustainability of the improvements in oil prices and demand in the face of market volatility. To date, the COVID-19
pandemic has resulted in limited operational downtime. Our rigs have had to shut down operations while crews are tested and incremental
sanitation protocols are implemented and while crew changes have been restricted as replacement crews are quarantined. We continue to incur
additional personnel, housing and logistics costs in order to mitigate the potential impacts of COVID-19 to our operations. In limited instances,
we have been reimbursed for these costs by our customers. Our operations and business may be subject to further economic disruptions as a
result of the spread of COVID-19 among our workforce, the extension or imposition of further public health measures affecting supply chain
and logistics, and the impact of the pandemic on key customers, suppliers, and other counterparties. There can be no assurance that these, or
other issues caused by the COVID-19 pandemic, will not materially affect our ability to operate our rigs in the future.

Backlog

Our contract drilling backlog reflects commitments, represented by signed drilling contracts, and is calculated by multiplying the
contracted day rate by the contract period. The contracted day rate excludes certain types of lump sum fees for rig mobilization, demobilization,
contract preparation, as well as customer reimbursables and bonus opportunities. Our backlog excludes ARO's backlog, but includes backlog
from our rigs leased to ARO at the contractual rates, which are subject to adjustment under the terms of the shareholder agreement.

ARO backlog is inclusive of backlog on both ARO owned rigs and rigs leased from us. As an unconsolidated 50/50 joint venture, when
ARO realizes revenue from its backlog, 50% of the earnings thereon would be reflected in our results in the equity in earnings of ARO in our
Condensed Consolidated Statement of Operations. The earnings from ARO backlog with respect to rigs leased from us will be net of, among
other things, payments to us under bareboat charters for those rigs. See "Note 6 - Equity Method Investment in ARO" to our consolidated
financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional information.

51
 The following table summarizes our and ARO's contract backlog of business as of February 21, 2022 and December 31, 2020 (in
millions):
2021 2020
Floaters (1) $ 1,665.3 $ 163.7
Jackups 643.0 737.6
Other(2) 135.6 140.1
Total $ 2,443.9 $ 1,041.4
ARO $ 1,501.1 $ 347.5

(1)
Approximately $428 million of backlog as of February 21, 2022 is attributable to our contract awarded to VALARIS DS-11 for an eight-
well contract for a deepwater project in the U.S. Gulf of Mexico expected to commence in mid-2024. In February 2022, the customer
decided not to sanction and therefore withdraw from the project associated with this contract. As of the date hereof, the customer has not
terminated the contract, but may do so upon the payment of an early termination fee should the project not receive a final investment
decision (FID). The project has not received FID. We are in discussions with the customer and its partner on the project to determine
next steps.
(2) Other includes the bareboat charter backlog for the jackup rigs leased to ARO to fulfill contracts between ARO and Saudi Aramco in
addition to backlog for our managed rig services. Substantially all the operating costs for jackups leased to ARO through the bareboat
charter agreements will be borne by ARO.

The increase in our backlog of $1.4 billion is due to recent contract awards and contract extensions, partially offset by revenues
realized. As revenues are realized and if we experience customer contract cancellations, we may experience declines in backlog, which would
result in a decline in revenues and operating cash flows.

The increase in ARO's backlog of $1.2 billion is primarily due to contracts awarded to seven ARO owned rigs during 2021 and four
rigs leased from us to ARO, partially offset by revenues realized.

The following table summarizes our and ARO's contract backlog of business as of February 21, 2022 and the periods in which revenues
are expected to be realized (in millions):
2024
2022 2023 and Beyond Total
Floaters $ 506.3 $ 454.2 $ 704.8 $ 1,665.3
Jackups 469.2 153.3 20.5 643.0
Other 46.0 45.0 44.6 135.6
Total $ 1,021.5 $ 652.5 $ 769.9 $ 2,443.9
ARO $ 375.2 $ 394.8 $ 731.1 $ 1,501.1

The amount of actual revenues earned and the actual periods during which revenues are earned will be different from amounts
disclosed in our backlog calculations due to a lack of predictability of various factors, including unscheduled repairs, maintenance
requirements, weather delays, contract terminations or renegotiations and other factors.

Our drilling contracts generally contain provisions permitting early termination of the contract if the rig is lost or destroyed or by the
customer if operations are suspended for a specified period of time due to breakdown of major rig equipment, unsatisfactory performance,
"force majeure" events beyond the control of either party or other specified conditions. In addition, our drilling contracts generally permit early
termination of the contract by the customer for convenience (without cause), exercisable upon advance notice to us, and in certain cases without

52
making an early termination payment to us. There can be no assurances that our customers will be able to or willing to fulfill their contractual
commitments to us.

See "Item 1A. Risk Factors - Our current backlog of contract drilling revenue may not be fully realized and may decline significantly in
the future, which may have a material adverse effect on our financial position, results of operations and cash flows” and “Item 1A. Risk Factors
- We may suffer losses if our customers terminate or seek to renegotiate our contracts, if operations are suspended or interrupted or if a rig
becomes a total loss.”

BUSINESS ENVIRONMENT

Floaters

Limited demand and excess supply continue to affect our floater fleet. Floater demand declined materially in March and April 2020, as
our customers reduced capital expenditures particularly for capital-intensive, long-lead deepwater projects in the wake of oil price declines
from around $60 per barrel at year-end 2019 to around $20 per barrel in mid-April 2020. This caused our customers, primarily in the second
and third quarters of 2020, to cancel or delay drilling programs, to terminate drilling contracts and to request contract concessions. As discussed
above, the more constructive oil price environment led to an improvement in contracting and tendering activity in 2021 as compared to 2020.
However, the global recovery from the COVID-19 pandemic remains uneven, and there is still uncertainty around the sustainability of the
improvement in oil prices and the recovery in demand for offshore drilling services.

Our backlog for our floater segment was $1.7 billion (including approximately $428 million for the VALARIS DS-11 discussed above)
and $163.7 million as of February 21, 2022 and December 31, 2020, respectively. The increase in our backlog was due to new contract awards
and contract extensions, partially offset by revenues realized. A majority of these awards were executed at the end of 2021 for contracts
expected to commence in 2022. As a result, we expect utilization and day rates to improve upon those of 2020 and 2021.

Utilization for our floaters was 27% during the year ended December 31, 2021 compared to 26% during the year ended December 31,
2020. Average day rates were approximately $193,000 and $192,000 during the years ended December 31, 2021 and 2020, respectively.

Globally, there are 20 newbuild drillships and benign environment semisubmersible rigs reported to be under construction, of which 6
are scheduled to be delivered before the end of 2022. Most newbuild floaters are uncontracted. Several newbuild deliveries have been delayed
into future years, and more uncontracted newbuilds may be delayed or cancelled.

Drilling contractors have retired 134 benign environment floaters since the beginning of 2014. Seven benign environment floaters older
than 20 years of age are currently idle, five additional benign environment floaters older than 20 years have contracts that will expire within six
months without follow-on work, and there are a further 13 benign environment floaters that have been stacked for more than three years.
Operating costs associated with keeping these rigs idle as well as expenditures required to re-certify some of these aging rigs may prove cost
prohibitive. Drilling contractors will likely elect to scrap or cold-stack a portion of these rigs.

Continued improvements in demand and/or reductions in supply are necessary to maintain the improving utilization and day rate
trajectory.

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Jackups

During 2020, demand for jackups declined in light of increased market uncertainty. This caused our customers, primarily in the second
and third quarters of 2020, to cancel or delay drilling programs, to terminate drilling contracts and to request contract concessions. We have
observed a slight increase in customer tendering activity for jackups that commenced in the latter part of 2020. However, the global recovery
from the COVID-19 pandemic remains uneven, and there is still uncertainty around the sustainability of the improvement in oil prices and the
recovery in demand for offshore drilling services.

Our backlog for our jackup segment was $643.0 million and $737.6 million as of February 21, 2022 and December 31, 2020,
respectively. The decrease in our backlog was due to customer contract cancellations, customer concessions and revenues realized, partially
offset by the addition of backlog from new contract awards and contract extensions.

Utilization for our jackups was 54% during the years ended December 31, 2021 and 2020. Average day rates were approximately
$95,000 during the year ended December 31, 2021 compared to approximately $86,000 during the year ended December 31, 2020.

Globally, there are 29 newbuild jackup rigs reported to be under construction, of which 18 are scheduled to be delivered before the end
of 2022. Most newbuild jackups are uncontracted. Over the past year, some jackup orders have been cancelled, and many newbuild jackups
have been delayed. We expect that scheduled jackup deliveries will continue to be delayed until more rigs are contracted.

Drilling contractors have retired 161 jackups since the beginning of the downturn. There are 63 jackups older than 30 years which are
idle, 21 jackups that are 30 years or older have contracts expiring within the next six months without follow-on work, and there are a further 15
jackups that have been stacked for more than three years. Expenditures required to re-certify some of these aging rigs may prove cost
prohibitive and drilling contractors may instead elect to scrap or cold-stack these rigs. We expect jackup scrapping and cold-stacking to
continue in 2022.

Improvements in demand and/or reductions in supply will be necessary before meaningful and sustained increases in utilization and day
rates are realized.

RESULTS OF OPERATIONS

In analyzing our results of operations, we are not able to compare the results of operations for the four-month period ended April 30,
2021 (the “2021 Predecessor Period”) to any of the previous periods reported in the consolidated financial statements, and we do not believe
reviewing this period in isolation would be useful in identifying any trends in or reaching any conclusions regarding our overall operating
performance. With the exception of certain one-time charges as separately described below, we believe that the discussion of our results of
operations for the eight months ended December 31, 2021 (the “Successor Period”) combined with the 2021 Predecessor Period provides a
more meaningful comparison to the year ended December 31, 2020 and is more useful in understanding operational trends. These combined
results do not comply with GAAP and have not been prepared as pro forma results under applicable SEC rules, but are presented because we
believe they provide the most meaningful comparison of our results to prior periods.

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 The following table summarizes our Consolidated Results of Operations (in millions):
Combined
Successor Predecessor (Non-GAAP) Predecessor
Eight Months
Ended Four Months Year Ended Year Ended Year Ended
December 31, Ended April December 31, December 31, December 31,
2021 30, 2021 2021 2020 2019
Revenues $ 835.0 $ 397.4 $ 1,232.4 $ 1,427.2 $ 2,053.2
Operating expenses
Contract drilling (exclusive of depreciation) 728.7 343.8 1,072.5 1,470.4 1,807.8
Loss on impairment — 756.5 756.5 3,646.2 104.0
Depreciation 66.1 159.6 225.7 540.8 609.7
General and administrative 58.2 30.7 88.9 214.6 188.9
Total operating expenses 853.0 1,290.6 2,143.6 5,872.0 2,710.4
Other operating income — — — 118.1 —
Equity in earnings (losses) of ARO 6.1 3.1 9.2 (7.8) (12.6)
Operating loss (11.9) (890.1) (902.0) (4,334.5) (669.8)
Other income (expense), net 20.1 (3,557.5) (3,537.4) (782.5) 606.0
Provision (benefit) for income taxes 37.4 16.2 53.6 (259.4) 128.4
Net loss (29.2) (4,463.8) (4,493.0) (4,857.6) (192.2)
Net (income) loss attributable to noncontrolling
interests (3.8) (3.2) (7.0) 2.1 (5.8)
Net loss attributable to Valaris $ (33.0) $ (4,467.0) $ (4,500.0) $ (4,855.5) $ (198.0)

Overview

Year Ended December 31, 2021

Revenues declined $194.8 million, or 13.6%, for the combined Successor and Predecessor results for the year ended December 31,
2021 as compared to the prior year. This decline is primarily due to $199.8 million resulting from fewer operating days in the current year,
$46.3 million due to termination fees received for certain rigs in the prior year period and $19.0 million due to lower revenues earned under an
agreement to provide certain Rowan employees through secondment arrangements to assist with various onshore and offshore services for the
benefit of ARO (the "Secondment Agreement"). See "Note 6 - Equity Method Investment in ARO" to our consolidated financial statements
included in "Item 8. Financial Statements and Supplementary Data" for additional information. This decline was partially offset by a $111.2
million increase in revenue for certain rigs with higher average day rates in the combined Successor and Predecessor revenues as a result of
suspension periods at lower rates in the prior year.

Contract drilling expense declined $397.9 million, or 27.1%, for the combined Successor and Predecessor results for the year ended
December 31, 2021 as compared to the prior year. This decline is primarily due to $279.8 million of lower costs for idle rigs, $77.8 million
from rigs sold between the comparative periods, a $26.5 million reduction in costs related to contract preparation projects in 2020 and
approximately $40.0 million of lower costs due to spend control efforts. Additionally, there was a decline of $19.0 million related to the
Secondment Agreement with ARO as almost all remaining seconded employees became employees of ARO during the second quarter of 2020.
This decrease was partially offset by an increase of $84.4 million in reactivation costs for certain rigs stacked in the prior year.

55
 During the 2021 Predecessor Period, we recorded non-cash losses on impairment totaling $756.5 million with respect to certain assets
in our fleet. During the first and second quarters of 2020 (Predecessor), we recorded non-cash losses on impairment totaling $3.6 billion, with
respect to assets in our fleet, primarily due to the adverse change in the current and anticipated market for these assets. See "Note 8 - Property
and Equipment" for additional information.

Depreciation expense declined $315.1 million, or 58.3%, for the combined Successor and Predecessor results for the year ended
December 31, 2021 as compared to the prior year primarily due to lower depreciation resulting from the reduction in values of property and
equipment from the application of fresh start accounting and lower depreciation due to the impairment of certain non-core assets in 2020 and
the first quarter of 2021. Certain of the assets impaired in the first and second quarters of 2020 were also sold during that year.

General and administrative expenses decreased by $125.7 million or 59%, for the combined Successor and Predecessor results for the
year ended December 31, 2021 as compared to the prior year primarily due to charges incurred in the prior year for professional fees incurred in
relation to the Chapter 11 Cases prior to the Petition Date, professional fees associated with shareholder activism defense, organizational
change initiatives, as well as merger integration related costs. This decline is partially offset by executive severance cost incurred in the
Successor Period in connection with the separations of certain former members of executive management.

Other operating income decrease of $118.1 million was due to loss of hire insurance recoveries collected for the VALARIS DS-8
during the year ended December 31, 2020.

Other expense, net, includes reorganization expenses of $15.5 million, $3.6 billion and $527.6 million in the Successor Period, the 2021
Predecessor Period and the year ended December 31, 2020, respectively, for costs incurred as a direct result of the Chapter 11 Cases. Other
expense, net, also includes interest expense of $31.0 million, $2.4 million and $291.9 million in the Successor Period, the 2021 Predecessor
Period and the year ended December 31, 2020, respectively. The decrease in interest expense in the Successor Period results from our lower
debt level following emergence from chapter 11. See “Note 2 – Chapter 11 Proceedings” for details related to reorganization items as well as
changes in our debt and related interest.

Year Ended December 31, 2020 (Predecessor)

Revenues declined by $626.0 million, or 30%, as compared to the prior year. This decline is primarily attributable to a $287.4 million
decline in revenue resulting from the sale of VALARIS 5004, VALARIS 5006, VALARIS 6002, VALARIS 68, VALARIS 84, VALARIS 87,
VALARIS 88, and VALARIS 96, which operated in the prior year comparative period, a $286.7 million decline in revenue as a result of fewer
days under contract across our fleet, a $150.0 million decline in revenue due to the termination of the VALARIS DS-8 contract and a $28.3
million and $16.0 million decline in revenues earned under the Secondment Agreement and Transition Services Agreement with ARO,
respectively. Further, the additional revenues earned under Lease Agreements with ARO due to the inclusion of a full year of results in 2020 as
compared to the period from the date of the combination with Rowan in April 11, 2019 (the "Rowan Transaction") to December 31, 2019 from
the comparable period was offset by a reduction of our rental revenues to reflect an amendment to the Shareholder Agreement that impacted the
bareboat charter rate in the lease agreements. See "Note 6 - Equity Method Investment in ARO" to our consolidated financial statements
included in "Item 8. Financial Statements and Supplementary Data" for additional information. The decline in revenue was partially offset by
$113.6 million of revenue earned by rigs added from the Rowan Transaction, and $46.3 million of contract termination fees received for certain
rigs.

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 Contract drilling expense declined by $337.4 million, or 19%, as compared to the prior year primarily due to a $184.4 million decline as
a result of lower costs for idle rigs, $136.4 million lower costs on VALARIS 5004, VALARIS 5006, VALARIS 6002, VALARIS 8500,
VALARIS 8501, VALARIS 8502, VALARIS 8504, VALARIS DS-3, VALARIS DS-5, VALARIS DS-6, VALARIS 68, VALARIS 84,
VALARIS 87, VALARIS 88 and VALARIS 96, as these rigs were sold, and reduced costs resulting primarily from spend control efforts.
Additionally, there was a decline in expenses due to a decrease in services provided to ARO under the Secondment Agreement as almost all
remaining employees seconded to ARO became employees of ARO during the second quarter of 2020. This decrease was partially offset by
$140.1 million of contract drilling expenses incurred on rigs added from the Rowan Transaction.

During the year ended December 31, 2020 (Predecessor), we recorded non-cash losses on impairment totaling $3.6 billion, with respect
to assets in our fleet, primarily due to the adverse change in the current and anticipated market for these assets. See "Note 8 - Property and
Equipment" to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional
information.

Depreciation expense declined by $68.9 million, or 11%, as compared to the prior year primarily due to lower depreciation expense on
certain assets which were impaired during the first and second quarters of 2020, some of which were subsequently sold in the third and fourth
quarters of 2020. This decrease was partially offset by depreciation expense recorded for rigs added in the Rowan Transaction as well as for the
VALARIS 123 which commenced operations in August 2019.

General and administrative expenses increased by $25.7 million, or 14%, as compared to the prior year primarily due to the backstop
commitment fee and legal and other professional advisor fees incurred in relation to the Chapter 11 Cases, but prior to the Petition Date. This
increase was partially offset by merger related costs incurred in the prior year comparative period.

Other operating income of $118.1 million recognized during 2020 was due to loss of hire insurance recoveries collected for the
VALARIS DS-8 non-drilling incident.

Other expense, net, increased by $1.4 billion as compared to the prior year, primarily due to the prior period $637.0 million gain on
bargain purchase recognized in connection with the Rowan Transaction, pre-tax gain related to the settlement award from the SHI matter of
$200.0 million and $194.1 million of pre-tax gain on debt extinguishment related to the repurchase of senior notes in connection with July 2019
tender offers. Additionally, the current year period includes $527.6 million of reorganization items directly related to the Chapter 11 Cases.
Partially offsetting these increases, our Interest Expense, net decreased $137.7 million primarily due to a $140.7 million reduction as we
discontinued accruing interest on our outstanding debt subsequent to the chapter 11 filing.

Rig Counts, Utilization and Average Day Rates

The following table summarizes our offshore drilling rigs by reportable segment, rigs held-for-sale and ARO's offshore drilling rigs as
of December 31, 2021 (Successor), 2020 (Predecessor) and 2019 (Predecessor):
2021 2020 2019
Floaters(1) 16 16 24
Jackups(2) 33 36 41
Other(3) 7 9 9
Held-for-sale(4) — — 3
Total Valaris 56 61 77
ARO(5) 7 7 7

(1) During 2020, we sold VALARIS 5004, VALARIS 8500, VALARIS 8501, VALARIS 8502, VALARIS 8504, VALARIS DS-3,
VALARIS DS-5 and VALARIS DS-6.

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(2) During 2021, we sold VALARIS 100, VALARIS 101, VALARIS 142.

During 2020, we sold VALARIS 71, VALARIS 84, VALARIS 87, VALARIS 88 and VALARIS 105.
(3) This represents the rigs leased to ARO through bareboat charter agreements whereby substantially all operating costs are incurred by
ARO. All jackup rigs leased to ARO are under three-year contracts with Saudi Aramco. During 2021, we sold VALARIS 37 and
VALARIS 22, which were previously leased to ARO.
(4)
During 2019, we classified VALARIS 68, VALARIS 70 and VALARIS 6002 as held-for-sale, all of which were subsequently sold in
2020.
(5)
This represents the jackup rigs owned by ARO which are operating under long-term contracts with Saudi Aramco.

We provide management services in the U.S. Gulf of Mexico on two rigs owned by a third-party not included in the table above.

We are a party to contracts whereby we have the option to take delivery of two drillships, VALARIS DS-13 and VALARIS DS-14, that
are not included in the table above.

ARO has ordered two newbuild jackups which are under construction in the Middle East that are not included in the table above. The
first of these newbuild rigs is expected to be delivered in the fourth quarter of 2022 with the second rig expected either late in the fourth quarter
of 2022 or in the first quarter of 2023.

The following table summarizes our and ARO's rig utilization and average day rates by reportable segment for each of the years in the
three-year period ended December 31, 2021. Rig utilization and average day rates include results of rigs added in the Rowan Transaction or
ARO from the date the Rowan Transaction closed in April 2019:

2021 2020 2019

Rig Utilization(1)
Floaters 27% 26% 47%
Jackups 54% 54% 66%
Other(2) 100% 98% 100%
Total Valaris 54% 52% 63%
ARO 87% 89% 93%
Average Day Rates(3)
Floaters $ 192,984 $ 192,057 $ 218,837
Jackups 95,304 86,266 78,133
Other(2) 31,301 37,580 49,236
Total Valaris $ 88,847 $ 87,547 $ 108,313
ARO $ 73,799 $ 82,624 $ 71,170

(1) Rig utilization is derived by dividing the number of days under contract by the number of days in the period. Days under contract equals the
total number of days that rigs have earned and recognized day rate revenue, including days associated with early contract terminations,
compensated downtime and mobilizations and excluding suspension periods. When revenue is deferred and amortized over a future period,
for example, when we receive fees while mobilizing to commence a new contract or while being upgraded in a shipyard, the related

58
 days are excluded from days under contract. Beginning in 2021, our method for calculating rig utilization has been updated to remove the
impact of suspension periods. To the extent applicable, comparative period calculations have been retroactively adjusted.

For newly-constructed or acquired rigs, the number of days in the period begins upon commencement of drilling operations for rigs with a
contract or when the rig becomes available for drilling operations for rigs without a contract.
(2) Includes our two management services contracts and our rigs leased to ARO under bareboat charter contracts.
(3)
Average day rates are derived by dividing contract drilling revenues, adjusted to exclude certain types of non-recurring reimbursable
revenues, lump-sum revenues, revenues earned during suspension periods and revenues attributable to amortization of drilling contract
intangibles, by the aggregate number of contract days, adjusted to exclude contract days associated with certain suspension periods,
mobilizations, demobilizations and shipyard contracts. Beginning in 2021, our method for calculating average day rates has been updated to
remove the impact of suspension periods. To the extent applicable, comparative period calculations have been retroactively adjusted.

Operating Income by Segment

Our business consists of four operating segments: (1) Floaters, which includes our drillships and semisubmersible rigs, (2) Jackups, (3)
ARO and (4) Other, which consists of management services on rigs owned by third-parties and the activities associated with our arrangements
with ARO under the Rig Lease Agreements, the Secondment Agreement and the Transition Services Agreement. Floaters, Jackups and ARO
are also reportable segments.

Upon emergence, we ceased allocation of our onshore support costs included within contract drilling expenses to our operating
segments for purposes of measuring segment operating income (loss) and as such, those costs are included in “Reconciling Items”. We have
adjusted the historical periods to conform with current period presentation. Further, general and administrative expense and depreciation
expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income
(loss) and are included in "Reconciling Items". Substantially all of the expenses incurred associated with our Transition Services Agreement
with ARO are included in General and administrative under "Reconciling Items" in the table set forth below.

The full operating results included below for ARO (representing only results of ARO from the closing date of the Rowan Transaction)
are not included within our consolidated results and thus deducted under "Reconciling Items" and replaced with our equity in earnings of ARO.

Upon establishment of ARO, Rowan entered into (1) an agreement to provide certain back-office services for a period of time until
ARO develops its own infrastructure (the "Transition Services Agreement"), and (2) the Secondment Agreement. These agreements remained
in place subsequent to the Rowan Transaction. Pursuant to these agreements, we or our seconded employees provide various services to ARO,
and in return, ARO provides remuneration for those services. During the quarter ended June 30, 2020, almost all remaining employees
seconded to ARO became employees of ARO. Further, our services to ARO under the Transition Services Agreement were completed as of
December 31, 2020. See "Note 6 - Equity Method Investment in ARO" to our consolidated financial statements included in "Item 8. Financial
Statements and Supplementary Data" for additional information on ARO and related arrangements.

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 Segment information for the eight months ended December 31, 2021 (Successor), the four months ended April 30, 2021 (Predecessor),
the years ended December 31, 2020 and 2019 (Predecessor), respectively are presented below (in millions).

Eight Months Ended December 31, 2021 (Successor)

Reconciling
Floaters Jackups ARO Other Items Consolidated Total
Revenues $ 254.5 $ 487.1 $ 307.1 $ 93.4 $ (307.1) $ 835.0
Operating expenses
Contract drilling
(exclusive of depreciation) 250.7 365.2 246.2 38.9 (172.3) 728.7
Depreciation 31.0 32.0 44.2 2.8 (43.9) 66.1
General and administrative — — 13.6 — 44.6 58.2
Equity in earnings of ARO — — — — 6.1 6.1
Operating income (loss) $ (27.2) $ 89.9 $ 3.1 $ 51.7 $ (129.4) $ (11.9)

Four Months Ended April 30, 2021 (Predecessor)

Reconciling Consolidated
Floaters Jackups ARO Other Items Total
Revenues $ 115.7 $ 232.4 $ 163.5 $ 49.3 $ (163.5) $ 397.4
Operating expenses
Contract drilling
(exclusive of depreciation) 106.5 175.0 116.1 19.9 (73.7) 343.8
Loss on impairment 756.5 — — — — 756.5
Depreciation 72.1 69.7 21.0 14.8 (18.0) 159.6
General and administrative — — 4.2 — 26.5 30.7
Equity in losses of ARO — — — — 3.1 3.1
Operating income (loss) $ (819.4) $ (12.3) $ 22.2 $ 14.6 $ (95.2) $ (890.1)

Combined Year Ended December 31, 2021 (Non-GAAP)

Reconciling Consolidated
Floaters Jackups ARO Other Items Total
Revenues $ 370.2 $ 719.5 $ 470.6 $ 142.7 $ (470.6) $ 1,232.4
Operating expenses
Contract drilling
(exclusive of depreciation) 357.2 540.2 362.3 58.8 (246.0) 1,072.5
Loss on impairment 756.5 — — — — 756.5
Depreciation 103.1 101.7 65.2 17.6 (61.9) 225.7
General and administrative — — 17.8 — 71.1 88.9
Equity in earnings of ARO — — — — 9.2 9.2
Operating income (loss) $ (846.6) $ 77.6 $ 25.3 $ 66.3 $ (224.6) $ (902.0)

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 Year Ended December 31, 2020 (Predecessor)
Reconciling Consolidated
Floaters Jackups ARO Other Items Total
Revenues $ 505.8 $ 765.3 $ 549.4 $ 156.1 $ (549.4) $ 1,427.2
Operating expenses
Contract drilling
(exclusive of depreciation) 566.1 659.5 388.2 82.8 (226.2) 1,470.4
Loss on impairment 3,386.2 254.3 — 5.7 — 3,646.2
Depreciation 262.8 217.2 54.8 44.8 (38.8) 540.8
General and administrative — — 24.2 — 190.4 214.6
Other operating income 118.1 — — — — 118.1
Equity in losses of ARO — — — — (7.8) (7.8)
Operating income (loss) $ (3,591.2) $ (365.7) $ 82.2 $ 22.8 $ (482.6) $ (4,334.5)

Year Ended December 31, 2019 (Predecessor)

Reconciling
Floaters Jackups ARO Other Items Consolidated Total
Revenues $ 1,014.4 $ 834.6 $ 410.5 $ 204.2 $ (410.5) $ 2,053.2
Operating expenses
Contract drilling
(exclusive of depreciation) 785.0 711.3 280.2 111.0 (79.7) 1,807.8
Loss on impairment 88.2 10.2 — — 5.6 104.0
Depreciation 362.3 203.3 40.3 25.5 (21.7) 609.7
General and administrative — — 27.1 — 161.8 188.9
Equity in losses of ARO — — — — (12.6) (12.6)
Operating income (loss) $ (221.1) $ (90.2) $ 62.9 $ 67.7 $ (489.1) $ (669.8)

Floaters

2021 compared to 2020

Floater revenue declined $135.6 million, or 27%, for the combined Successor and Predecessor results for the year ended December 31,
2021 as compared to the prior year primarily due to $121.0 million resulting from fewer operating days in the current year and $46.3 million
due to termination fees received for certain rigs in the prior year. This decline was partially offset by a $45.9 million increase in revenue from
certain rigs with higher average day rates in the combined Successor and Predecessor revenues as a result of suspension periods at lower rates
in the prior year.

Floater contract drilling expense declined $208.9 million, or 37%, for the combined Successor and Predecessor results for the year
ended December 31, 2021 as compared to the prior year. This decline is primarily due to $190.8 million as a result of lower costs for idle rigs in
addition to lower costs of $31.4 million from rigs sold between the comparative periods. This decrease was partially offset by an increase of
$35.1 million in reactivation cost for certain rigs stacked in the prior year.

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 During the 2021 Predecessor Period, we recorded a non-cash loss on impairment totaling $756.5 million with respect to certain assets
in our Floater segment. During 2020, we recorded a non-cash loss on impairment of $3.4 billion, with respect to assets in our Floater segment
due to the adverse change in the current and anticipated market for these assets. See "Note 8 -Property and Equipment" to our consolidated
financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional information.

Floater depreciation expense declined $159.7 million, or 61%, for the combined Successor and Predecessor results for the year ended
December 31, 2021, as compared to the prior year period, primarily as a result of the reduction in values of property and equipment from the
application of fresh start accounting and lower depreciation due to impairment of certain non-core assets in 2020 and the first quarter of 2021.

Other operating income of $118.1 million recognized by the Predecessor during 2020 was due to loss of hire insurance recoveries
collected for the VALARIS DS-8 non-drilling incident.

2020 compared to 2019 (Predecessor)

During 2020, revenues declined by $508.6 million, or 50%, as compared to the prior year due to $241.0 million from the sale of
VALARIS 5004, VALARIS 5006, and VALARIS 6002, which operated in the prior year comparative period, $189.4 million as a result of
fewer days under contract across the floater fleet and $150.0 million due to the termination of the VALARIS DS-8 contract. This decline was
partially offset by $46.3 million of contract termination fees received for certain rigs and $40.1 million earned by rigs added in the Rowan
Transaction.

Contract drilling expense declined by $218.9 million, or 28%, as compared to the prior year primarily due to $131.1 million lower cost
on idle rigs, $93.2 million lower costs on VALARIS 5004, VALARIS 5006, VALARIS 6002, VALARIS 8500, VALARIS 8501, VALARIS
8502, VALARIS 8504, VALARIS DS-3, VALARIS DS-5 and VALARIS DS-6, as such rigs were sold, and reduced costs resulting primarily
from spend control efforts. This decrease was partially offset by $53.8 million of contract drilling expense incurred by rigs added in the Rowan
Transaction.

During 2020, we recorded a non-cash loss on impairment of $3.4 billion, with respect to assets in our Floater segment due to the
adverse change in the current and anticipated market for these assets. See "Note 8 -Property and Equipment" to our consolidated financial
statements included in "Item 8. Financial Statements and Supplementary Data" for additional information.

Depreciation expense declined by $99.5 million, or 27%, compared to the prior year primarily due to lower depreciation on certain non-
core assets which were impaired during the first and second quarters of 2020 and subsequently sold in the third and fourth quarters of 2020 with
the exception of one floater.

Other operating income of $118.1 million recognized during 2020 was due to loss of hire insurance recoveries collected for the
VALARIS DS-8 non-drilling incident.

Jackups

2021 compared to 2020

Jackup revenues declined $45.8 million, or 6%, for the combined Successor and Predecessor results for the year ended December 31,
2021, as compared to the prior year, primarily due to declines of $80.1 million resulting from fewer operating days in the current year. This
decline was partially offset by a $71.4 million increase in revenue for certain rigs with higher average day rates in the combined Successor and
Predecessor revenues as a result of suspension periods at lower rates in the prior year.

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 Jackup contract drilling expense declined $119.3 million, or 18%, for the combined Successor and Predecessor results for the year
ended December 31, 2021 as compared to the prior year. This decline was primarily due to $89.0 million of lower costs for idle rigs, $46.4
million from rigs sold between the comparative periods and $26.5 million in reduced costs for contract preparation projects in 2020. This
decrease was partially offset by an increase of $49.3 million in reactivation costs for certain rigs stacked in the prior year.

Jackup depreciation expense declined $115.5 million, or 53%, for the combined Successor and Predecessor results for the year ended
December 31, 2021 as compared to the prior year primarily as a result of the reduction in values of property and equipment from the application
of fresh start accounting and lower depreciation due to impairments of certain non-core assets in the first and second quarters of 2020.

2020 compared to 2019 (Predecessor)

During 2020, revenues declined by $69.3 million, or 8%, as compared to the prior year primarily due to $97.3 million as a result of
fewer days under contract across the jackup fleet and $46.4 million due to the sale of VALARIS 68, VALARIS 84, VALARIS 87, VALARIS
88, and VALARIS 96, which operated in the prior year period. This decrease was partially offset by $73.5 million of revenue earned by rigs
added in the Rowan Transaction.

Contract drilling expense declined by $51.8 million, or 7%, as compared to the prior year primarily due to $53.3 million lower cost on
idle rigs, $43.2 million from the sale of VALARIS 68, VALARIS 84, VALARIS 87, VALARIS 88 and VALARIS 96 which operated in the
prior year period, and reduced costs resulting from spend control efforts. This decrease was partially offset by $86.3 million of contract drilling
expense incurred by rigs added in the Rowan Transaction.

During 2020, we recorded a non-cash loss on impairment of $254.3 million with respect to assets in our Jackup segment primarily due
to the adverse change in the current and anticipated market for these assets. See "Note 8 - Property and Equipment" to our consolidated
financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional information.

Depreciation expense increased by $13.9 million, or 7%, as compared to the prior year primarily due to the addition of rigs in our
combination with Rowan in April 2019 as well as the commencement of operations of the VALARIS 123 in August 2019. This increase was
partially offset by lower depreciation on certain non-core assets which were impaired during 2020 of which three of these jackups were sold in
2020.

ARO

ARO currently owns a fleet of seven jackup rigs, leases another eight jackup rigs from us and has plans to purchase 20 newbuild jackup
rigs over an approximate 10 year period. In January 2020, ARO ordered the first two newbuild jackups. The first rig is expected to be delivered
in the fourth quarter of 2022, and the second rig is expected either late in the fourth quarter of 2022 or in the first quarter of 2023. ARO is
expected to place orders for two additional newbuild jackups later this year. The joint venture partners intend for the newbuild jackup rigs to be
financed out of available cash from ARO's operations and/or funds available from third-party debt financing. ARO paid a 25% down payment
from cash on hand for each of the newbuilds ordered in January 2020 and is actively exploring financing options for the remaining payments
due upon delivery. In the event ARO has insufficient cash from operations or is unable to obtain third-party financing, each partner may
periodically be required to make additional capital contributions to ARO, up to a maximum aggregate contribution of $1.25 billion from each
partner to fund the newbuild program. Each partner's commitment shall be reduced by the actual cost of each newbuild rig, on a proportionate
basis.

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 The joint venture partners agreed that Saudi Aramco, as a customer, will provide drilling contracts to ARO in connection with the
acquisition of the newbuild rigs. The initial contracts for each newbuild rig will be determined using a pricing mechanism that targets a six-year
payback period for construction costs on an EBITDA basis. The initial eight-year contracts will be followed by a minimum of another eight
years of term, re-priced in three-year intervals based on a market pricing mechanism. We lease eight rigs to ARO through bareboat charter
agreements whereby substantially all operating costs are incurred by ARO. Seven jackup rigs leased to ARO are operating under three-year
contracts, or related extensions, with Saudi Aramco. We expect ARO to execute a long-term contract with Saudi Aramco for the remaining
leased rig in the first quarter of 2022. All seven ARO-owned jackup rigs are operating under long-term contracts with Saudi Aramco. See "Note
6 - Equity Method Investment in ARO" to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary
Data" for additional information on ARO and related arrangements.

The results of ARO reflect the periods from the date of the Rowan Transaction in April 2019 through December 31, 2021.

The operating revenues of ARO reflect revenues earned under drilling contracts with Saudi Aramco for the seven ARO-owned jackup
rigs and the rigs leased from us.

Contract drilling expenses are inclusive of the bareboat charter fees for the rigs leased from us. Costs incurred under the Secondment
Agreement are included in Contract drilling expense and general and administrative, depending on the function to which the seconded
employees' services related. General and administrative expenses include costs incurred under the Transition Services Agreement and other
administrative costs. Services under the Transition Services Agreement were completed as of December 31, 2020.

2021 compared to 2020

Revenue for 2021 decreased $78.8 million or 14% as compared to the prior year primarily due to $56.0 million from lower day rates, as
well as, $8.7 million decrease from fewer operating days related to certain rigs for which operations were temporarily suspended or which were
undergoing maintenance. Additionally, a decrease of $9.3 million related to one rig leased to ARO which completed its contract in August
2021.

Contract drilling expense for 2021 decreased $25.9 million or 7% as compared to the prior year primarily due to $17.7 million lower
costs for repairs and maintenance and an $8.1 million reduction in expenses related to lower support costs as compared to the prior year.

Depreciation expense for 2021 increased $10.4 million or 19% as compared to the prior year primarily due to capital expenditures.

General and administrative expenses for 2021 decreased $6.4 million or 26% as compared to the prior year, primarily due to a reduction
in labor cost, professional fees and services received under the Transition Services Agreement which was completed as of December 31, 2020.

2020 compared to 2019

During 2020, revenues increased by $138.9 million, or 34%, as compared to the prior year period from the date of the Rowan
Transaction in April 2019 through December 31, 2019 primarily due to a full year of ARO results in 2020 compared to a partial year in 2019.

Contract drilling expense increased by $108.0 million, or 39%, in 2020 as compared to the prior year period from the date of the Rowan
Transaction in April 2019 through December 31, 2019 primarily due to a full year of ARO results in 2020 compared to a partial year in 2019.

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 Depreciation expense increased by $14.5 million, or 36%, in 2020 as compared to the prior year period from the date of the Rowan
Transaction in April 2019 through December 31, 2019 primarily due to a full year of ARO results in 2020 compared to a partial year in 2019.

General and administrative expenses decreased by $2.9 million, or 11%, in 2020 as compared to the prior year period from the date of
the Rowan Transaction in April 2019 through December 31, 2019 primarily due to a decrease in services received under the Transition Services
Agreement.

See "Note 6 - Equity Method Investment in ARO" to our consolidated financial statements included in "Item 8. Financial Statements
and Supplementary Data" for additional information on ARO.

Other

2021 compared to 2020

Other revenues declined $13.4 million, or 9%, for the combined Successor and Predecessor results for the year ended December 31,
2021 as compared to the prior year, primarily due to $19.0 million of lower revenues earned under the Secondment Agreement, partially offset
by a $4.9 million increase in revenue from the Lease Agreements with ARO. See "Note 6 - Equity Method Investment in ARO" to our
consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional information.

Other contract drilling expenses declined $24.0 million, or 29%, for the combined Successor and Predecessor results for the year ended
December 31, 2021 as compared to the prior year, primarily due to a $19.0 million decrease in cost for services provided to ARO under the
Secondment Agreement as almost all remaining employees seconded to ARO became employees of ARO during the second quarter of 2020.

Depreciation expense declined $27.2 million, or 61%, for the combined Successor and Predecessor results for the year ended
December 31, 2021 as compared to the prior year primarily due to the reduction in the values of property and equipment from the application of
fresh start accounting.

2020 compared to 2019 (Predecessor)

Other revenues declined $48.1 million, or 24%, for the year ended December 31, 2020, as compared to the prior year, primarily due to
lower revenues earned under the Secondment Agreement and Transition Services Agreement with ARO of $28.3 million and $16.0 million,
respectively. Further, the additional revenues earned under Lease Agreements due to the inclusion of a full year of results in 2020 as compared
to the period from April 11, 2019 to December 31, 2019 from the comparable period was offset by a reduction of our rental revenues to reflect
an amendment to the Shareholder Agreement that impacted the bareboat charter rate in the lease agreements. See "Note 6 - Equity Method
Investment in ARO" to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional
information.

Other contract drilling expenses declined $28.2 million, or 25%, for the year ended December 31, 2020, as compared to the prior year,
primarily due to a decrease in services provided to ARO under the Secondment Agreement as almost all remaining employees seconded to
ARO became employees of ARO during the second quarter of 2020.

During 2020, we recorded a non-cash loss on impairment of $5.7 million, with respect to a certain contract intangible due to current
market conditions. See "Note 5 - Rowan Transaction" to our consolidated financial statements included in "Item 8. Financial Statements and
Supplementary Data" for additional information.

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 Depreciation expense increased $19.3 million, or 76%, as compared to the prior year primarily due to the impact of full year results for
2020 as compared to the prior year period from the date of the Rowan Transaction in April 2019 through December 31, 2019 as well as
additional depreciation due to capital expenditures and the commencement of the VALARIS 147 and VALARIS 148 which were in the
shipyard most of the comparative period.

Impairment of Long-Lived Assets

See "Note 8 - Property and Equipment" and "Note 16 - Leases" to our consolidated financial statements included in "Item 8. Financial
Statements and Supplementary Data" for information on impairment of long-lived assets.

Other Income (Expense), Net

The following table summarizes other income (expense), net, (in millions):

Successor Predecessor Combined Predecessor

(Non-GAAP)
Eight Months Four Months Year Ended Year Ended Year Ended
Ended Ended April December 31, December 31, December 31,
December 31, 30, 2021 2021 2020 2019
2021
Interest income $ 28.5 $ 3.6 $ 32.1 $ 19.7 $ 28.1
Interest expense, net:
Interest expense (31.0) (2.4) (33.4) (291.9) (449.2)
Capitalized interest — — — 1.3 20.9
(31.0) (2.4) (33.4) (290.6) (428.3)
Reorganization items, net (15.5) (3,584.6) (3,600.1) (527.6) —
Other, net 38.1 25.9 64.0 16.0 1,006.2
$ 20.1 $ (3,557.5) $ (3,537.4) $ (782.5) $ 606.0

Interest income increased by $12.4 million or 63% for the combined Successor and Predecessor results for the year ended December
31, 2021 as compared to the prior year primarily due to $20.8 million in amortization of the discount on our note receivable from ARO
recorded in fresh start accounting. This increase was partially offset by a $5.8 million decrease due to lower LIBOR rates earned on our note
receivable from ARO. Interest income decreased during 2020 (Predecessor) as compared to 2019 (Predecessor) primarily due to fewer
investments.

Interest expense decreased by $258.5 million, or 89%, for the combined Successor and Predecessor results for the year ended
December 31, 2021 as compared to the prior year, primarily due to a $258.7 million decrease in interest cost as a result of our lower debt level
following emergence from chapter 11.

Interest expense decreased during 2020 by $157.3 million, or 35%, as compared to the prior year as we did not accrue interest of
$140.7 million on our outstanding debt or amortize discounts, premiums and debt issuance costs of $29.8 million subsequent to the chapter 11
filing. Further, debt repurchases resulted in interest savings of $19.2 million. These declines were partially offset by increased interest on debt
acquired from Rowan totaling $35.7 million.

Interest expense capitalized in the year ended December 31, 2019, was attributable to capital invested in newbuild construction.
Following the delivery of our last newly constructed rig in 2019, capitalized interest declined significantly.

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 Reorganization items, net of $3.6 billion recognized for the 2021 Predecessor Period, was related to the effects of the emergence from
bankruptcy including the application of fresh start accounting, legal and other professional advisory service fees pertaining to the Chapter 11
Cases and contract items related to rejecting certain operating leases.

Reorganization items, net of $527.6 million recognized during 2020 was related to other net losses and expenses directly related to the
Chapter 11 Cases, consisting of the write off of unamortized debt discounts, premiums and issuance costs of $447.9 million, professional fees
of $66.8 million and DIP facility fees costs of $20.0 million, partially offset by $7.1 million of contract items relating to rejection and
amendment of certain operating leases. See "Note 2 - Chapter 11 Proceedings" to our consolidated financial statements included in "Item 8.
Financial Statements and Supplementary Data" for additional information.

Other, net, increased by $48.0 million for the combined Successor and Predecessor results for the year ended December 31, 2021 as
compared to the prior year primarily due to $32.5 million of net foreign currency exchange gains and losses, as discussed further below, and
$15.4 million increase on gain from sale of certain assets.

Other, net, decreased by $990 million during the year ended December 31, 2020 (Predecessor) as compared to the prior year.

Other, net in 2020 (Predecessor) included $14.6 million of net periodic income, excluding service cost, for our pension and retiree
medical plans, $11.8 million gain from sale of certain assets, a $3.2 million of net unrealized gains from marketable securities held in our
supplemental executive retirement plans ("the SERP") and a $3.1 million pre-tax gain on extinguishment of debt. We also incurred $11.0
million of losses on net foreign currency exchange, as discussed further below, and had a $6.3 million reduction to gain on bargain purchase as
a result of measurement adjustments made in the first quarter 2020 related to the Rowan Transaction.

Other, net in 2019 (Predecessor) included a gain on bargain purchase recognized in connection with the Rowan Transaction of $637.0
million, a pre-tax gain related to the settlement with Samsung Heavy Industries of $200.0 million, a pre-tax gain from debt extinguishment of
$194.1 million related to the senior notes repurchased in connection with the July 2019 tender offers, and net unrealized gains of $5.0 million
from marketable securities held in our SERP. During the same period, we also recognized a pre-tax loss of $20.3 million related to settlement
of a dispute with a local partner of legacy Ensco plc in the Middle East, and a net foreign currency exchange loss of $7.4 million, as further
discussed below.

Our functional currency is the U.S. dollar, and a portion of the revenues earned and expenses incurred by certain of our subsidiaries are
denominated in currencies other than the U.S. dollar. These transactions are remeasured in U.S. dollars based on a combination of both current
and historical exchange rates. Net foreign currency exchange gain of $21.5 million, and losses (inclusive of offsetting fair value derivatives) of
$11.0 million and $7.4 million, were included in Other, net, in our Consolidated Statements of Operations for the combined Successor and
Predecessor results for the year ended December 31, 2021, 2020 (Predecessor) and 2019 (Predecessor), respectively.

Net foreign currency exchange gains for the combined Successor and Predecessor results for the year ended December 31, 2021
primarily included $11.7 million and $8.8 million related to Libyan dinar and euros, respectively. Net foreign currency exchange losses
incurred during 2020 primarily included $7.3 million and $1.4 million related to euros and Angolan kwanza, respectively. Net foreign currency
exchange losses incurred during 2019 included $3.3 million and $2.8 million, related to euros and Angolan kwanza, respectively.

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Provision for Income Taxes

Valaris Limited, the Successor Company and our parent company, is domiciled and resident in Bermuda. Our subsidiaries conduct
operations and earn income in numerous countries and are subject to the laws of taxing jurisdictions within those countries. The income of our
non-Bermuda subsidiaries is not subject to Bermuda taxation as there is not an income tax regime in Bermuda. Valaris plc, the Predecessor
Company and our former parent company, was domiciled and resident in the U.K. The income of our non-U.K. subsidiaries was generally not
subject to U.K. taxation.

Income tax rates and taxation systems in the jurisdictions in which our subsidiaries conduct operations vary and our subsidiaries are
frequently subjected to minimum taxation regimes. In some jurisdictions, tax liabilities are based on gross revenues, statutory deemed profits or
other factors, rather than on net income, and our subsidiaries are frequently unable to realize tax benefits when they operate at a loss.
Accordingly, during periods of declining profitability, our income tax expense may not decline proportionally with income, which could result
in higher effective income tax rates. Furthermore, we will continue to incur income tax expense in periods in which we operate at a loss.

Our drilling rigs frequently move from one taxing jurisdiction to another to perform contract drilling services. In some instances, the
movement of drilling rigs among taxing jurisdictions will involve the transfer of ownership of the drilling rigs among our subsidiaries. As a
result of frequent changes in the taxing jurisdictions in which our drilling rigs are operated and/or owned, changes in profitability levels and
changes in tax laws, our annual effective income tax rate may vary substantially from one reporting period to another.

U.S. Tax Reform and CARES Act

The U.S. Tax Cuts and Jobs Act (“U.S. tax reform”) was enacted on December 22, 2017 and introduced significant changes to U.S.
income tax law, effective January 1, 2018. Due to the timing of the enactment of U.S. tax reform and the complexity involved in applying its
provisions, the U.S. Treasury Department continued finalizing rules associated with U.S. tax reform during 2018 and 2019. During 2019, we
recognized a tax expense of $13.8 million associated with final rules issued related to U.S. tax reform.

The U.S. Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted on March 27, 2020 and introduced
various corporate tax relief measures into law. Among other things, the CARES Act allows net operating losses ("NOLs") generated in 2018,
2019 and 2020 to be carried back to each of the five preceding years. During 2020, we recognized a tax benefit of $122.1 million associated
with the carryback of NOLs to recover taxes paid in prior years.

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 Effective Tax Rate

During the eight months ended December 31, 2021 (Successor) and the four months ended April 30, 2021 (Predecessor), we recorded
an income tax expense of $37.4 million and $16.2 million, respectively. During the year ended December 31, 2020, we recorded an income tax
benefit of $259.4 million and during the year ended December 31, 2019, we recorded an income tax expense of $128.4 million, respectively.
Our consolidated effective income tax rates during the same periods were 456.1%, (0.4)%, 5.1% and (201.3)%, respectively.

Our eight months ended December 31, 2021 (Successor) consolidated effective income tax rate includes $15.3 million associated with
the impact of various discrete items, including $30.7 million income tax expense associated with changes in liabilities for unrecognized tax
benefits and resolution of other prior period tax matters, offset by $15.4 million of tax benefit related to deferred taxes associated with
Switzerland tax reform. Our four months ended April 30, 2021 (Predecessor) consolidated effective income tax rate included $2.2 million
associated with the impact of various discrete items, including $21.5 million of income tax expense associated with changes in liabilities for
unrecognized tax benefits and resolution of other prior period tax matters, offset by $19.3 million of tax benefit related to fresh start accounting
adjustments.

Our 2020 consolidated effective income tax rate included a $322.4 million tax benefit associated with the impact of various discrete tax
items, including restructuring transactions, impairments of rigs and other assets, implementation of the U.S. CARES Act, changes in liabilities
for unrecognized tax benefits associated with tax positions taken in prior years, rig sales, reorganization items and the resolution of other prior
period tax matters.

Our 2019 consolidated effective income tax rate included $2.3 million associated with the impact of various discrete tax items,
including $28.3 million of tax expense associated with final rules relating to U.S. tax reform, gains on repurchase of debt and settlement
proceeds, partially offset by $26.0 million of tax benefit related to restructuring transactions, changes in liabilities for unrecognized tax benefits
associated with tax positions taken in prior years and other resolutions of prior year tax matters and rig sales.

Excluding the impact of the aforementioned discrete tax items, our consolidated effective income rates for the eight months ended
December 31, 2021 (Successor) and the four months ended April 30, 2021 (Predecessor) were 387.7% and (12.9)%, respectively. Excluding the
impact of the aforementioned discrete tax items, our consolidated effective income tax rates for the years ended December 31, 2020 and 2019
(Predecessor) were (7.6)% and (14.6)%, respectively. The changes in our consolidated effective income tax rate excluding discrete tax items
during the three-year period result primarily from changes in the relative components of our earnings from the various taxing jurisdictions in
which our drilling rigs are operated and/or owned and differences in tax rates in such taxing jurisdictions.

Divestitures

Our business strategy has been to focus on ultra-deepwater floater and premium jackup operations and de-emphasize other assets and
operations that are not part of our long-term strategic plan or that no longer meet our standards for economic returns. Consistent with this
strategy, we sold 16 jackup rigs, five dynamically positioned semisubmersible rigs, two moored semisubmersible rigs and three drillships
during the three-year period ended December 31, 2021.

We continue to focus on our fleet management strategy in light of the composition of our rig fleet. While taking into account certain
restrictions on the sales of assets under our Indenture, as part of our strategy, we may act opportunistically from time to time to monetize assets
to enhance stakeholder value and improve our liquidity profile, in addition to reducing holding costs by selling or disposing of lower-
specification or non-core rigs.

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 We sold the following rigs during the eight months ended December 31, 2021 (Successor) and the period January 1, 2019 to April 30,
2021 (Predecessor) (in millions):
Net Book Pre-tax
Rig Date of Sale Segment(1) Net Proceeds Value(2) Gain/(Loss)
Successor
VALARIS 37 November 2021 Jackups $ 4.2 $ 0.3 $ 3.9
VALARIS 22 October 2021 Jackups 4.0 0.3 3.7
VALARIS 142 October 2021 Jackups 15.0 2.0 13.0
VALARIS 100 August 2021 Jackups 1.1 1.0 0.1
$ 24.3 $ 3.6 $ 20.7

Predecessor
VALARIS 101 April 2021 Jackups $ 26.4 $ 21.1 $ 5.3
VALARIS 8504 October 2020 Floater 4.7 4.0 0.7
VALARIS 88 October 2020 Jackups 1.4 0.3 1.1
VALARIS 84 October 2020 Jackups 1.2 0.3 0.9
VALARIS 105 September 2020 Jackups 2.1 0.8 1.3
VALARIS DS-6 August 2020 Floaters 5.7 6.1 (0.4)
VALARIS 87 August 2020 Jackups 0.3 0.2 0.1
VALARIS 8500 July 2020 Floaters 4.0 0.7 3.3
VALARIS 8501 July 2020 Floaters 4.0 0.7 3.3
VALARIS 8502 July 2020 Floaters 1.8 0.7 1.1
VALARIS DS-3 July 2020 Floaters 6.1 6.1 —
VALARIS DS-5 July 2020 Floaters 6.1 6.1 —
VALARIS 71 June 2020 Jackups 0.2 0.8 (0.6)
VALARIS 70 June 2020 Jackups 0.6 1.0 (0.4)
VALARIS 5004 April 2020 Floaters 1.9 2.0 (0.1)
VALARIS 68 January 2020 Jackups 0.3 0.3 —
VALARIS 6002 January 2020 Floaters 2.1 0.9 1.2
VALARIS 96 December 2019 Jackups 1.9 0.3 1.6
VALARIS 5006 November 2019 Floaters 7.0 6.0 1.0
VALARIS 42 October 2019 Jackups 2.9 2.5 0.4
Gorilla IV May 2019 Jackups 2.5 2.5 —
ENSCO 97 April 2019 Jackups 1.7 1.0 0.7
$ 84.9 $ 64.4 $ 20.5

(1) Classification denotes the location of the operating results and gain (loss) on sale for each rig in our Consolidated Statements of Operations.
(2) Includes the rig's net book value as well as materials and supplies and other assets on the date of the sale.

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LIQUIDITY AND CAPITAL RESOURCES

Liquidity

We expect to fund our short-term liquidity needs, including contractual obligations and anticipated capital expenditures, as well as
working capital requirements, from cash and cash equivalents. We expect to fund our long-term liquidity needs, including contractual
obligations and anticipated capital expenditures from cash and cash equivalents, cash flows from operations and, if necessary, we may rely on
the issuance of debt and/or equity securities in the future to supplement our liquidity needs. However, the Indenture contains covenants that
limit our ability to incur additional indebtedness.

Our liquidity position is summarized in the table below (in millions, except ratios):
Successor Predecessor
December 31, December 31, December 31,
2021 2020 2019
Cash and cash equivalents $ 608.7 $ 325.8 $ 97.2
Available DIP facility capacity(1) — 500.0 —
Available credit facility borrowing capacity — — 1,622.2
Total liquidity $ 608.7 $ 825.8 $ 1,719.4
Working capital $ 784.6 $ 746.1 $ 233.7
Current ratio 2.9 2.7 1.3

(1) On September 25, 2020, we entered into a $500.0 million DIP facility to provide liquidity when the Chapter 11 Cases were pending.
However, the same was terminated upon our emergence from the Chapter 11 Cases on the Effective Date.

Cash Flows and Capital Expenditures

Absent periods where we have significant financing or investing transactions or activities, such as debt or equity issuances, debt
repayments or business combinations, our primary sources and uses of cash are driven by cash generated from or used in operations and capital
expenditures. Our net cash used in operating activities and capital expenditures were as follows (in millions):

Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended Ended April December 31, December 31,
December 31, 30, 2021 2020 2019
2021
Net cash used in operating activities $ (26.2) $ (39.8) $ (251.7) $ (276.9)
Capital expenditures $ (50.2) $ (8.7) $ (93.8) $ (227.0)

During the eight months ended December 31, 2021 (Successor), our primary source of cash was proceeds of $25.1 million from the
disposition of assets. Our primary uses of cash for the same period were $26.2 million used in operating activities and $50.2 million for the
enhancement and other improvements of our drilling rigs. During the four months ended April 30, 2021 (Predecessor), our primary sources of
cash were $520.0 million from the issuance of the First Lien Notes and proceeds of $30.1 million from the disposition of assets. Our primary
uses of cash for the same period were $39.8 million used in operating activities and $8.7 million for the enhancement and other improvements
of our drilling rigs.

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 Net cash used in operating activities during the eight months ended December 31, 2021 (Successor) primarily relates to reorganization
costs and interest payments on the First Lien Notes while net cash used in operating activities for the four months ended April 30, 2021
(Predecessor) primarily relates to reorganization costs, partially offset by cash received from a tax refund.

During the year ended December 31, 2020 (Predecessor), our primary sources of cash were $596 million from borrowings on our credit
facility and proceeds of $51.8 million for the disposition of assets. Our primary uses of cash for the same period were $251.7 million used in
operating activities and $93.8 million for the enhancement and other improvements of our drilling rigs.

During 2020 (Predecessor), cash flows used in operating activities decreased by $25.2 million as compared to the prior year due to
lower interest costs, partially offset by declining margins.

During the year ended December 31, 2019 (Predecessor), our primary sources of cash were cash acquired of $931.9 million in the
Rowan acquisition and proceeds of $474.0 million from the maturity of short-term investments. Our primary uses of cash for the same period
were $928.1 million used to repay long-term borrowings, $276.9 million used in operating activities and $227.0 million for the enhancement
and other improvements of our drilling rigs.

Prior to our chapter 11 filing, we had contractual commitments for the construction of VALARIS DS-13 and VALARIS DS-14. On
February 26, 2021, we entered into amended agreements with the shipyard that became effective upon our emergence from bankruptcy. The
amendments provide for, among other things, an option construct whereby the Company has the right, but not the obligation, to take delivery of
either or both rigs on or before December 31, 2023. Under the amended agreements, the purchase price for the rigs is estimated to be
approximately $119.1 million for VALARIS DS-13 and $218.3 million for VALARIS DS-14, assuming a December 31, 2023 delivery date.
Delivery can be requested any time prior to December 31, 2023 with a downward purchase price adjustment based on predetermined terms. If
the Company elects not to purchase the rigs, the Company has no further obligations to the shipyard. The amended agreements removed any
parent company guarantee.

We continue to take a disciplined approach to reactivations with our stacked rigs, only returning them to the active fleet when there is
visibility into work at attractive economics. In most cases, we expect the initial contract to pay for the reactivation costs and that the rig would
have solid prospects for longer-term work. Most of this reactivation cost will be operating expenses, recognized in the income statement,
related to de-preservation activities, including reinstalling key pieces of equipment and crewing up the rigs. Capital expenditures during
reactivations include rig modifications, equipment overhauls and any customer required capital upgrades. We would generally expect to be
compensated for these customer-specific enhancements.

Based on our current projections, we expect capital expenditures during 2022 to approximate $225 million to $250 million for rig
enhancement, reactivation and upgrade projects. We expect that customers will reimburse us for a significant portion of the 2022 expenditures.
Depending on market conditions and future opportunities, we may make additional capital expenditures to upgrade rigs for customer
requirements and construct or acquire additional rigs.

Approximately $70 million of our expected capital expenditures for 2022 relate to the reactivation and upgrade of the VALARIS DS-11
for an eight-well contract for a deepwater project in the U.S. Gulf of Mexico expected to commence in mid-2024. The contract requires the rig
to be upgraded with 20,000 psi well-control equipment. In February 2022, the customer decided not to sanction and therefore withdraw from
the project associated with this contract. As of the date hereof, the customer has not terminated the contract, but may do so upon the payment of
an early termination fee should the project not receive a final investment decision (FID). The project has not received FID. We are in
discussions with the customer and its partner on the project to determine next steps. In the event of termination, the early termination fee and
contractual reimbursements from the customer will be more than sufficient to cover expenses and commitments incurred by Valaris on the
project.

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 As we begin to reactivate rigs, we expect future spending levels to increase beyond the levels we incurred in 2020 and 2021, with more
spending associated with reactivation of our floater fleet relative to our jackup fleet and for rigs that have been preservation stacked for longer
periods of time.

We review from time to time possible acquisition opportunities relating to our business, which may include the acquisition of rigs or
other businesses. The timing, size or success of any acquisition efforts and the associated potential capital commitments are unpredictable and
uncertain. We may seek to fund all or part of any such efforts with cash on hand and proceeds from debt and/or equity issuances and may issue
equity directly to the sellers. Our ability to obtain capital for additional projects to implement our growth strategy over the longer term will
depend on our future operating performance, financial condition and, more broadly, on the availability of equity and debt financing. Capital
availability will be affected by prevailing conditions in our industry, the global economy, the global financial markets and other factors, many
of which are beyond our control. In addition, any additional debt service requirements we take on could be based on higher interest rates and
shorter maturities and could impose a significant burden on our results of operations and financial condition, and the issuance of additional
equity securities could result in significant dilution to shareholders.

Financing and Capital Resources

Successor First Lien Notes

On the Effective Date, in accordance with the plan of reorganization and Backstop Commitment Agreement, dated August 18, 2020 (as
amended, the "BCA"), the Company consummated the rights offering of the First Lien Notes and associated shares in an aggregate principal
amount of $550 million. In accordance with the BCA, certain holders of senior notes claims and certain holders of claims under the Revolving
Credit Facility who provided backstop commitments received the backstop premium in an aggregate amount equal to $50.0 million in First
Lien Notes and 2.7% of the Common Shares on the Effective Date. The Debtors paid a commitment fee of $20.0 million, in cash prior to the
Petition Date, which was loaned back to the reorganized company upon emergence. Therefore, upon emergence the Debtors received
$520 million in cash in exchange for a $550 million note, which includes the backstop premium. See “Note 2 – Chapter 11 Proceedings” to our
consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional information.

The First Lien Notes were issued pursuant to the Indenture among Valaris Limited, certain direct and indirect subsidiaries of Valaris
Limited as guarantors, and Wilmington Savings Fund Society, FSB, as collateral agent and trustee (in such capacities, the “Collateral Agent”).

The First Lien Notes are guaranteed, jointly and severally, on a senior basis, by certain of the direct and indirect subsidiaries of the
Company. The First Lien Notes and such guarantees are secured by first-priority perfected liens on 100% of the equity interests of each
Restricted Subsidiary directly owned by the Company or any guarantor and a first-priority perfected lien on substantially all assets of the
Company and each guarantor of the First Lien Notes, in each case subject to certain exceptions and limitations. The following is a brief
description of the material provisions of the Indenture and the First Lien Notes.

The First Lien Notes are scheduled to mature on April 30, 2028. Interest on the First Lien Notes accrues, at our option, at a rate of: (i)
8.25% per annum, payable in cash; (ii) 10.25% per annum, with 50% of such interest to be payable in cash and 50% of such interest to be paid
in kind; or (iii) 12% per annum, with the entirety of such interest to be paid in kind. Interest is due semi-annually in arrears on May 1 and
November 1 of each year and shall be computed on the basis of a 360-day year of twelve 30-day months. The first cash interest payment was
made on November 1, 2021.

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 At any time prior to April 30, 2023, the Company may redeem up to 35% of the aggregate principal amount of the First Lien Notes at a
redemption price of 104% up to the net cash proceeds received by the Company from equity offerings provided that at least 65% of the
aggregate principal amount of the First Lien Notes remains outstanding and provided that the redemption occurs within 120 days after such
equity offering of the Company. At any time prior to April 30, 2023 the Company may redeem the First Lien Notes at a redemption price of
104% plus a “make-whole” premium. On or after April 30, 2023, the Company may redeem all or part of the First Lien Notes at fixed
redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid interest, if any, to, but excluding, the redemption
date. The Company may also redeem the First Lien Notes, in whole or in part, at any time and from time to time on or after April 30, 2026 at a
redemption price equal to 100% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption
date. Notwithstanding the foregoing, if a Change of Control (as defined in the Indenture, with certain exclusions as provided therein) occurs,
the Company will be required to make an offer to repurchase all or any part of each note holder’s notes at a purchase price equal to 101% of the
aggregate principal amount of First Lien Notes repurchased, plus accrued and unpaid interest to, but excluding, the applicable date.

The Indenture contains covenants that limit, among other things, the Company's ability and the ability of the guarantors and other
restricted subsidiaries, to: (i) incur, assume or guarantee additional indebtedness; (ii) pay dividends or distributions on equity interests or
redeem or repurchase equity interests; (iii) make investments; (iv) repay or redeem junior debt; (v) transfer or sell assets; (vi) enter into sale and
lease back transactions; (vii) create, incur or assume liens; and (viii) enter into transactions with certain affiliates. These covenants are subject
to a number of important limitations and exceptions. As of December 31, 2021, we were in compliance with our covenants under the Indenture.

The Indenture also provides for certain customary events of default, including, among other things, nonpayment of principal or interest,
breach of covenants, failure to pay final judgments in excess of a specified threshold, failure of a guarantee to remain in effect, failure of a
collateral document to create an effective security interest in collateral, with a fair market value in excess of a specified threshold, bankruptcy
and insolvency events, cross payment default and cross acceleration, which could permit the principal, premium, if any, interest and other
monetary obligations on all the then outstanding First Lien Notes to be declared due and payable immediately.

Predecessor Senior Notes

The commencement of the Chapter 11 Cases was considered an event of default under each series of our senior notes and all
obligations thereunder were accelerated. However, any efforts to enforce payment obligations related to the acceleration of our debt were
automatically stayed as a result of the filing of the Chapter 11 Cases. Accordingly, the $6.5 billion in aggregate principal amount outstanding
under the Predecessor senior notes as well as $201.9 million in associated accrued interest as of the Petition Date were classified as Liabilities
Subject to Compromise in our Consolidated Balance Sheet as of December 31, 2020. On the Effective Date, pursuant to the plan of
reorganization, each series of our senior notes were cancelled and the holders thereunder received the treatment as set forth in the plan of
reorganization.

See "Note 2 - Chapter 11 Proceedings" to our consolidated financial statements included in "Item 8. Financial Statements and
Supplementary Data" for more information related to our emergence from Chapter 11 Cases and cancellation of Predecessor debt.

Tender Offers and Open Market Repurchases (Predecessor)

In early March 2020, we repurchased $12.8 million of our outstanding 4.70% senior notes due 2021 on the open market for an
aggregate purchase price of $9.7 million, excluding accrued interest, with cash on hand. As a result of the transaction, we recognized a pre-tax
gain of $3.1 million net of discounts in other, net, in the Consolidated Statements of Operations.

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 On June 25, 2019, we commenced cash tender offers for certain series of senior notes issued by us and certain of our wholly-owned
subsidiaries. The tender offers expired on July 23, 2019, and we repurchased $951.8 million of our outstanding senior notes for an aggregate
purchase price of $724.1 million. As a result of the transaction, we recognized a pre-tax gain from debt extinguishment of $194.1 million, net of
discounts, premiums and debt issuance costs.

Predecessor Revolving Credit Facility

The commencement of the Chapter 11 Cases constituted an event of default under our then existing Revolving Credit Facility.
However, the ability of the lenders to exercise remedies in respect of the Revolving Credit Facility was stayed upon commencement of the
Chapter 11 Cases. Accordingly, the $581.0 million of outstanding borrowings as well as accrued interest as of the Petition Date were classified
as Liabilities Subject to Compromise in our Consolidated Balance Sheet as of December 31, 2020. On the Effective Date, pursuant to the plan
of reorganization, the Revolving Credit Facility was cancelled and the holders thereunder received the treatment as set forth in the plan of
reorganization.

Prior to the Effective Date, pursuant to the plan of reorganization, all undrawn letters of credit issued under the Revolving Credit
Facility were collateralized pursuant to the terms of the Revolving Credit Facility.

Investment in ARO and Notes Receivable from ARO

We consider our investment in ARO to be a significant component of our investment portfolio and an integral part of our long-term
capital resources. We expect to receive cash from ARO in the future both from the maturity of our long-term notes receivable and from the
distribution of earnings from ARO. The long-term notes receivable, which are governed by the laws of Saudi Arabia, mature during 2027 and
2028. In the event that ARO is unable to repay these notes when they become due, we would require the prior consent of our joint venture
partner to enforce ARO’s payment obligations.

The distribution of earnings to the joint-venture partners is at the discretion of the ARO Board of Managers, consisting of 50/50
membership of managers appointed by Saudi Aramco and managers appointed by us, with approval required by both shareholders. The timing
and amount of any cash distributions to the joint-venture partners cannot be predicted with certainty and will be influenced by various factors,
including the liquidity position and long-term capital requirements of ARO. ARO has not made a cash distribution of earnings to its partners
since its formation. See "Note 6 - Equity Method Investment in ARO" to our consolidated financial statements included in "Item 8. Financial
Statements and Supplementary Data" for additional information on our investment in ARO and notes receivable from ARO.

The following table summarizes the maturity schedule of our notes receivable from ARO as of December 31, 2021 (in millions):
Maturity Date Principal amount
October 2027 $ 265.0
October 2028 177.7
Total $ 442.7

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 Contractual Obligations

The following table summarizes our significant contractual obligations as of December 31, 2021 and the periods in which such
obligations are due (in millions):
Payments due by period
2022 2023 and 2024 2025 and 2026 Thereafter Total
Principal payments on long-term debt $ — $ — $ — $ 550.0 $ 550.0
Interest payments on long-term debt(1) 45.4 90.7 90.7 68.1 294.9
Operating leases 11.3 5.3 4.0 6.8 27.4
Total contractual obligations(2) $ 56.7 $ 96.0 $ 94.7 $ 624.9 $ 872.3

(1)
Interest on the First Lien Notes accrues, at our option, at a rate of: (i) 8.25% per annum, payable in cash; (ii) 10.25% per annum, with
50% of such interest to be payable in cash and 50% of such interest to be paid in kind; or (iii) 12% per annum, with the entirety of such
interest to be paid in kind. Interest in the table above assumes 8.25% per annum of cash interest payments.
(2)
Contractual obligations do not include $320.2 million of unrecognized tax benefits, inclusive of interest and penalties, included on our
Consolidated Balance Sheet as of December 31, 2021. We are unable to specify with certainty whether we would be required to and in
which periods we may be obligated to settle such amounts.

In connection with our 50/50 joint venture, we have a potential obligation to fund ARO for newbuild jackup rigs. ARO has plans to
purchase 20 newbuild jackup rigs over an approximate 10-year period. In January 2020, ARO ordered the first two newbuild jackups, each with
a shipyard price of $176.0 million, with the first rig expected to be delivered in the fourth quarter of 2022 and the second rig is expected either
late in the fourth quarter or in the first quarter of 2023. ARO is expected to place orders for two additional newbuild jackups in 2022. The joint
venture partners intend for the newbuild jackup rigs to be financed out of available cash from ARO's operations and/or funds available from
third-party debt financing. ARO paid a 25% down payment from cash on hand for each of the newbuilds ordered in January 2020 and is
actively exploring financing options for remaining payments due upon delivery. In the event ARO has insufficient cash from operations or is
unable to obtain third-party financing, each partner may periodically be required to make additional capital contributions to ARO, up to a
maximum aggregate contribution of $1.25 billion from each partner to fund the newbuild program. Each partner's commitment shall be reduced
by the actual cost of each newbuild rig, on a proportionate basis. See "Note 6 - Equity Method Investment in ARO" to our consolidated
financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional information on our joint venture.

Prior to our chapter 11 filing, we had contractual commitments for the construction of VALARIS DS-13 and VALARIS DS-14. On
February 26, 2021, we entered into amended agreements with the shipyard that became effective upon our emergence from bankruptcy. The
amendments provide for, among other things, an option construct whereby the Company has the right, but not the obligation, to take delivery of
either or both rigs on or before December 31, 2023. Under the amended agreements, the purchase price for the rigs are estimated to be
approximately $119.1 million for VALARIS DS-13 and $218.3 million for VALARIS DS-14, assuming a December 31, 2023 delivery date.
Delivery can be requested any time prior to December 31, 2023 with a downward purchase price adjustment based on predetermined terms. If
the Company elects not to purchase the rigs, the Company has no further obligations to the shipyard. The amended agreements removed any
parent company guarantee.

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 Other Commitments

We have other commitments that we are contractually obligated to fulfill with cash under certain circumstances. As of December 31,
2021, we were contingently liable for an aggregate amount of $36.5 million under outstanding letters of credit which guarantee our
performance as it relates to our drilling contracts, contract bidding, customs duties, tax appeals and other obligations in various jurisdictions.
Obligations under these letters of credit are not normally called, as we typically comply with the underlying performance requirement. As of
December 31, 2021, we had collateral deposits in the amount of $31.1 million with respect to these agreements.

The following table summarizes our other commitments as of December 31, 2021 (in millions):
Commitment expiration by period
2022 2023 and 2024 2025 and 2026 Thereafter Total
Letters of credit $ 23.8 $ 12.7 $ — $ — $ 36.5

Tax Assessments

During 2019, the Australian tax authorities issued aggregate tax assessments totaling approximately A$101 million (approximately
$73.4 million converted at current period-end exchange rates) plus interest related to the examination of certain of our tax returns for the years
2011 through 2016. During the third quarter of 2019, we made a A$42 million payment (approximately $29 million at then-current exchange
rates) to the Australian tax authorities to litigate the assessment. We have an $18 million liability for unrecognized tax benefits relating to these
assessments as of December 31, 2021. We believe our tax returns are materially correct as filed, and we are vigorously contesting these
assessments. Although the outcome of such assessments and related administrative proceedings cannot be predicted with certainty, we do not
expect these matters to have a material adverse effect on our financial position, operating results and cash flows. See "Note 14 - Income Taxes"
to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional information on the
tax assessments.

Guarantees of Registered Securities

The First Lien Notes issued by Valaris Limited have been fully and unconditionally guaranteed, jointly and severally, on a senior
secured basis, by certain of the direct and indirect subsidiaries (the “Guarantors”) of Valaris Limited under the Indenture governing the First
Lien Notes (the “Guarantees”). The First Lien Notes and Guarantees are secured by liens on the collateral, including, among other things,
subject to certain agreed security principles, (i) first-priority perfected liens on 100% of the equity interests of each restricted subsidiary directly
owned by Valaris Limited or any Guarantor and (ii) a first-priority perfected lien on substantially all assets of Valaris Limited and each
Guarantor, in each case subject to certain exceptions and limitations (collectively, the “Collateral”). We are providing the following information
about the Guarantors and the Collateral in compliance with Rules 13-01 and 13-02 of Regulation S-X.

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 First Lien Note Guarantees

The Guarantees are joint and several senior secured obligations of each Guarantor and rank equally in right of payment with existing
and future senior indebtedness of such Guarantor and effectively senior to such Guarantor’s existing and future indebtedness (i) that is not
secured by a lien on the Collateral securing the First Lien Notes, or (ii) that is secured by a lien on the Collateral securing the First Lien Notes
ranking junior to the liens securing the First Lien Notes. The Guarantees rank effectively junior to such Guarantor’s existing and future secured
indebtedness (i) that is secured by a lien on the Collateral that is senior or prior to the lien securing the First Lien Notes, or (ii) that is secured
by liens on assets that are not part of the Collateral, to the extent of the value of such assets. The Guarantees rank equally with such Guarantor’s
existing and future indebtedness that is secured by first-priority liens on the Collateral and senior in right of payment to any existing and future
subordinated indebtedness of such Guarantor. The Guarantees are structurally subordinated to all existing and future indebtedness and other
liabilities of any non-Guarantors, including trade payables (other than indebtedness and liabilities owed to such Guarantor).

Under the Indenture, a Guarantor may be automatically and unconditionally released and relieved of its obligations under its guarantee
under certain circumstances, including: (1) in connection with any sale, transfer or other disposition (including by merger, consolidation,
distribution, dividend or otherwise) of all or substantially all of the assets of such Guarantor to a person that is not the Company or a restricted
subsidiary, if such sale, transfer or other disposition is conducted in accordance with the applicable terms of the Indenture, (2) in connection
with any sale, transfer or other disposition (including by merger, consolidation, amalgamation, distribution, dividend or otherwise) of all of the
capital stock of any Guarantor, if such sale, transfer or other disposition is conducted in accordance with the applicable terms of the Indenture,
(3) upon our exercise of legal defeasance, covenant defeasance or discharge under the Indenture, (4) unless an event of default has occurred and
is continuing, upon the dissolution or liquidation of a Guarantor in accordance with the Indenture, and (5) if such Guarantor is properly
designated as an unrestricted subsidiary, in each case in accordance with the provisions of the Indenture.

We conduct our operations primarily through our subsidiaries. As a result, our ability to pay principal and interest on the First Lien
Notes is dependent on the cash flow generated by our subsidiaries and their ability to make such cash available to us by dividend or otherwise.
The Guarantors’ earnings will depend on their financial and operating performance, which will be affected by general economic, industry,
financial, competitive, operating, legislative, regulatory and other factors beyond their control. Any payments of dividends, distributions, loans
or advances to us by the Guarantors could also be subject to restrictions on dividends under applicable local law in the jurisdictions in which
the Guarantors operate. In the event that we do not receive distributions from the Guarantors, or to the extent that the earnings from, or other
available assets of, the Guarantors are insufficient, we may be unable to make payments on the First Lien Notes.

Pledged Securities of Affiliates

Pursuant to the terms of the First Lien Notes collateral documents, the Collateral Agent under the Indenture may pursue remedies, or
pursue foreclosure proceedings on the Collateral (including the equity of the Guarantors and other direct subsidiaries of Valaris Limited and the
Guarantors), following an event of default under the Indenture. The Collateral Agent’s ability to exercise such remedies is limited by the
intercreditor agreement for so long as any priority lien debt is outstanding.

The combined value of the affiliates whose securities are pledged as Collateral constitutes substantially all of the Company’s value,
including assets, liabilities and results of operations. As such, the assets, liabilities and results of operations of the combined affiliates whose
securities are pledged as Collateral are not materially different than the corresponding amounts presented in the consolidated financial
statements of the Company. The value of the pledged equity is subject to fluctuations based on factors that include, among other things, general
economic conditions and the ability to realize on the Collateral as part of a going concern and in an orderly fashion to available and willing
buyers and outside of distressed circumstances. There is no trading market for the pledged equity interests.

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 Under the terms of the Indenture and the other documents governing the obligations with respect to the First Lien Notes (the “Notes
Documents”), Valaris Limited and the Guarantors will be entitled to the release of the Collateral from the liens securing the First Lien Notes
under one or more circumstances, including (1) upon full and final payment of any such obligations; (2) to the extent that proceeds continue to
constitute Collateral, in the event that Collateral is sold, transferred, disbursed or otherwise disposed of in accordance with the Notes
Documents; (3) upon our exercise of legal defeasance, covenant defeasance or discharge under the Indenture; (4) with respect to vessels, certain
specified events permitting release of the mortgage with respect to such vessels under the Indenture; (5) with the consent of the requisite
holders under the Indenture; (6) with respect to equity interests in restricted subsidiaries that incur permitted indebtedness, if such equity
interests shall secure such other indebtedness and the same is permitted under the terms of the Indenture; and (7) as provided in the intercreditor
agreement. The collateral agency agreement also provides for release of the Collateral from the liens securing the Notes under the above
described circumstances (but including additional requirements for release in relation to all of the documents governing the indebtedness that is
secured by first-priority liens on the Collateral, in addition to the Indenture). Upon the release of any subsidiary from its guarantee, if any, in
accordance with the terms of the Indenture, the lien on any pledged equity interests issued by such Guarantor and on any assets of such
Guarantor will automatically terminate.

Summarized Financial Information

The summarized financial information below reflects the combined accounts of the Guarantors and Valaris Limited (collectively, the
“Obligors”), for the dates and periods indicated. The financial information is presented on a combined basis and intercompany balances and
transactions between entities in the Obligor group have been eliminated.

Summarized Balance Sheet Information:

Successor Predecessor
December 31,
(in millions) 2021 December 31, 2020
ASSETS
Current assets $ 1,140.2 $ 901.8
Amounts due from non-guarantor subsidiaries, current 785.8 756.5
Amounts due from related party, current 13.1 20.5
Noncurrent assets 989.8 10,514.5
Amounts due from non-guarantor subsidiaries, noncurrent 1,469.7 4,879.2
LIABILITIES AND SHAREHOLDER'S EQUITY
Current liabilities 308.0 369.4
Amounts due to non-guarantor subsidiaries, current 55.3 865.5
Amounts due to related party, current 38.3 —
Long-term debt 545.3 —
Noncurrent liabilities 438.5 653.4
Amounts due to non-guarantor subsidiaries, noncurrent 1,921.6 7,848.6
Noncontrolling interest 2.6 (4.4)

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 Summarized Statement of Operations Information:

Successor Predecessor
Eight Months Four Months Year Ended Year Ended
(in millions) Ended December Ended April 30, December 31, December 31,
31, 2021 2021 2020 2019
Operating revenues $ 843.9 $ 384.1 $ 1,583.1 $ 2,344.6
Operating revenues from related party 37.0 23.1 63.0 79.3
Operating costs and expenses 847.5 1,268.2 5,790.1 2,672.2
Reorganization expense (15.6) (3,584.1) 12.9 —
Income (loss) from continuing operations before income 174.3 (4,337.0) (3,688.7) (511.4)
taxes
Net income (loss) attributable to noncontrolling interest (3.8) (3.2) 2.1 (5.8)
Net income (loss) 170.5 (4,340.2) (3,686.6) (517.2)

Effects of Climate Change and Climate Change Regulation

Greenhouse gas (“GHG”) emissions have increasingly become the subject of international, national, regional, state and local attention.
At the December 2015 Conference of the Parties to the United Nations Framework Convention on Climate Change held in Paris, an agreement
was reached that requires countries to review and “represent a progression” in their intended nationally determined contributions to the
reduction of GHG emissions, setting GHG emission reduction goals every five years beginning in 2020. This agreement, known as the Paris
Agreement, entered into force on November 4, 2016. The United Nations Climate Change Conference held in Katowice, Poland in December
2018 adopted further rules regarding the implementation of the Paris Agreement and, in connection with this conference, numerous countries
issued commitments to increase their GHG emission reduction targets. Although the United States had withdrawn from the Paris Agreement in
November 2020, the current Presidential Administration officially reentered the United States into the agreement in February 2021. It is
expected that new executive orders, regulatory action, and/or legislation targeting greenhouse gas emissions, or prohibiting, restricting, or
delaying oil and gas development activities in certain areas, will be proposed and/or promulgated. For example, the current Presidential
Administration has issued multiple executive orders pertaining to environmental regulations and climate change, including the (1) Executive
Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis and (2) Executive Order on
Tackling the Climate Crisis at Home and Abroad. The latter executive order announced a moratorium on new oil and gas leasing on federal
lands and offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing
practices, established climate change as a primary foreign policy and national security consideration and affirmed that achieving net-zero
greenhouse gas emissions by or before mid-century is a critical priority. In June 2021, a federal judge for the U.S. District Court of the Western
District of Louisiana issued a nationwide preliminary injunction against the pause of oil and natural gas leasing on public lands or in offshore
waters while litigation challenging that aspect of the executive order is ongoing. On January 27, 2022, the United States District Court for the
District of Columbia found that the Bureau of Ocean Energy Management’s failure to calculate the potential emissions from foreign oil
consumption violated the agency’s approval of oil and gas leases in the Gulf of Mexico under the National Environmental Policy Act. The full
impact of these federal actions, or any other future restrictions or prohibitions, remains unclear.

In an effort to reduce GHG emissions, governments have implemented or considered legislative and regulatory mechanisms to institute
carbon pricing mechanisms, such as the European Union’s Emission Trading System, and to impose technical requirements to reduce carbon
emissions.

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 During 2009, the United States Environmental Protection Agency (the “EPA”) officially published its findings that emissions of carbon
dioxide, methane and other GHGs present an endangerment to human health and the environment because emissions of such gases are,
according to the EPA, contributing to warming of the earth’s atmosphere and other climatic changes. These findings allowed the agency to
proceed with the adoption and implementation of regulations to restrict GHG emissions under existing provisions of the Clean Air Act that
establish permitting requirements, including emissions control technology requirements, for certain large stationary sources that are potential
major sources of GHG emissions. The EPA has also adopted rules requiring annual monitoring and reporting of GHG emissions from specified
sources in the U.S., including, among others, certain onshore and offshore oil and natural gas production facilities. Although a number of bills
related to climate change have been introduced in the U.S. Congress in the past, comprehensive federal climate legislation has not yet been
passed by Congress. If such legislation were to be adopted in the U.S., such legislation could adversely impact many industries. In the absence
of federal legislation, almost half of the states have begun to address GHG emissions, primarily through the development or planned
development of emission inventories or regional GHG cap and trade programs and commitments to contribute to meeting the goals of the Paris
Agreement.

Future regulation of GHG emissions could occur pursuant to future treaty obligations, statutory or regulatory changes or new climate
change legislation in the jurisdictions in which we operate. Depending on the particular program, we, or our customers, could be required to
control GHG emissions or to purchase and surrender allowances for GHG emissions resulting from our operations. It is uncertain whether any
of these initiatives will be implemented. If such initiatives are implemented, we do not believe that such initiatives would have a direct, material
adverse effect on our financial condition, operating results and cash flows in a manner different than our competitors.

Restrictions on GHG emissions or other related legislative or regulatory enactments could have an indirect effect in those industries that
use significant amounts of petroleum products, which could potentially result in a reduction in demand for petroleum products and,
consequently, our offshore contract drilling services. We are currently unable to predict the manner or extent of any such effect. Furthermore,
one of the long-term physical effects of climate change may be an increase in the severity and frequency of adverse weather conditions, such as
hurricanes, which may increase our insurance costs or risk retention, limit insurance availability or reduce the areas in which, or the number of
days during which, our customers would contract for our drilling rigs in general and in the Gulf of Mexico in particular. We are currently
unable to predict the manner or extent of any such effect.

In addition, in recent years the investment community, including investment advisors and certain sovereign wealth, pension and
endowment funds, has promoted divestment of fossil fuel equities and pressured lenders to cease or limit funding to companies engaged in the
extraction of fossil fuel reserves. Such environmental initiatives aimed at limiting climate change and reducing air pollution could ultimately
interfere with our business activities and operations. Finally, increasing attention to the risks of climate change has resulted in an increased
possibility of lawsuits brought by public and private entities against oil and gas companies in connection with their greenhouse gas emissions.
Should we be targeted by any such litigation, we may incur liability, which, to the extent that societal pressures or political or other factors are
involved, could be imposed without regard to the company’s causation of or contribution to the asserted damage, or to other mitigating factors.

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CRITICAL ACCOUNTING POLICIES AND ESTIMATES

The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the
United States of America requires us to make estimates, judgments and assumptions that affect the amounts reported in our consolidated
financial statements and accompanying notes. Concurrent with our emergence from bankruptcy, we applied fresh start accounting and elected
to change our accounting policies related to property and equipment as well as materials and supplies see "Note 1 - Description of the Business
and Summary of Significant Accounting Policies" to our consolidated financial statements included in "Item 8. Financial Statements and
Supplementary Data" for more information. Our significant accounting policies are included in "Note 1 - Description of the Business and
Summary of Significant Accounting Policies" to our consolidated financial statements included in "Item 8. Financial Statements and
Supplementary Data". These policies, along with our underlying judgments and assumptions made in their application, have a significant
impact on our consolidated financial statements.

We identify our critical accounting policies as those that are the most pervasive and important to the portrayal of our financial position
and operating results and that require the most difficult, subjective and/or complex judgments regarding estimates in matters that are inherently
uncertain. Our critical accounting policies are those related to property and equipment, impairment of property and equipment, income taxes
and pension and other post-retirement benefits.

Property and Equipment

Concurrent with our emergence from bankruptcy, we applied fresh start accounting and adjusted the carrying value of our drilling rigs
to estimated fair value. See "Note 3 - Fresh Start Accounting" to our consolidated financial statements included in "Item 8. Financial Statements
and Supplementary Data" for more information. As of December 31, 2021, the carrying value of our property and equipment totaled $890.9
million, which represented 34% of total assets. This carrying value reflects the application of our property and equipment accounting policies,
which incorporate our estimates, judgments and assumptions relative to the capitalized costs, useful lives and salvage values of our rigs.

We develop and apply property and equipment accounting policies that are designed to appropriately and consistently capitalize those
costs incurred to enhance, improve and extend the useful lives of our assets and expense those costs incurred to repair or maintain the existing
condition or useful lives of our assets. The development and application of such policies requires estimates, judgments and assumptions relative
to the nature of, and benefits from, expenditures on our assets. We establish property and equipment accounting policies that are designed to
depreciate our assets over their estimated useful lives.

Prior to emergence from bankruptcy, we recorded our drilling rigs as a single asset with a useful life ascribed by the expected useful
life of that asset. Upon emergence, we identified the significant components of our drilling rigs and ascribed useful lives based on the expected
time until the next required overhaul or the end of the expected economic lives of the components.

The judgments and assumptions used in determining the next overhaul or the economic lives of the components of our property and
equipment reflect both historical experience and expectations regarding future operations, utilization and performance of our assets. The use of
different estimates, judgments and assumptions in the establishment of our property and equipment accounting policies, especially those
involving the useful lives of the significant components our rigs, would likely result in materially different asset carrying values and operating
results.

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 The useful lives of our drilling rigs are difficult to estimate due to a variety of factors, including technological advances that impact the
methods or cost of oil and natural gas exploration and development, changes in market or economic conditions and changes in laws or
regulations affecting the drilling industry. We evaluate the remaining useful lives of our rigs on a periodic basis, considering operating
condition, functional capability and market and economic factors.

Property and equipment held-for-sale is recorded at the lower of net book value or fair value less cost to sell.

Our fleet of 16 floater rigs represented 45% of the gross cost and the net carrying amount of our depreciable property and equipment as
of December 31, 2021. Our fleet of 33 jackup rigs represented 44% of the gross cost and the net carrying amount of our depreciable property
and equipment as of December 31, 2021.

Impairment of Property and Equipment

We do not consider Impairment of Property and Equipment to be a critical accounting policy for Valaris Limited (Successor) due to the
significantly reduced carrying values. However, for Legacy Valaris (Predecessor), this was a critical accounting policy and have included
disclosure below for historical periods.

During the four months ended April 30, 2021, we recorded an aggregate pre-tax, non-cash impairment with respect to certain floaters of
$756.5 million. During the year ended December 31, 2020 and the year ended December 31, 2019, we recorded an aggregate pre-tax, non-cash
impairment with respect to certain floaters, jackups and spare equipment of $3.6 billion and $98.4 million, respectively. See "Note 8 - Property
and Equipment" to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" for additional
information on our impairments of property and equipment.

We evaluate the carrying value of our property and equipment, primarily our drilling rigs, on a quarterly basis to identify events or
changes in circumstances ("triggering events") that indicate that the carrying value of such rigs may not be recoverable. Generally, extended
periods of idle time and/or inability to contract rigs at economical rates are an indication that a rig may be impaired. Impairment situations may
arise with respect to specific individual rigs, groups of rigs, such as a specific type of drilling rig, or rigs in a certain geographic location.

For property and equipment used in our operations, recoverability generally is determined by comparing the carrying value of an asset
to the expected undiscounted future cash flows of the asset. If the carrying value of an asset is not recoverable, the amount of impairment loss is
measured as the difference between the carrying value of the asset and its estimated fair value. The determination of expected undiscounted
cash flow amounts requires significant estimates, judgments and assumptions, including utilization levels, day rates, expense levels and capital
requirements, as well as cash flows generated upon disposition, for each of our drilling rigs. Due to the inherent uncertainties associated with
these estimates, we perform sensitivity analysis on key assumptions as part of our recoverability test.

Our judgments and assumptions about future cash flows to be generated by our drilling rigs are highly subjective and based on
consideration of the following:

• global macroeconomic and political environment,

• historical utilization, day rate and operating expense trends by asset class,
• regulatory requirements such as surveys, inspections and recertification of our rigs,
• remaining useful lives of our rigs,
• expectations on the use and eventual disposition of our rigs,
• weighted-average cost of capital,
• oil price projections,
• sanctioned and unsanctioned offshore project data,
• offshore economic project break-even data,

83
 • global rig supply and construction orders,
• global rig fleet capabilities and relative rankings, and
• expectations of global rig fleet attrition.

We collect and analyze the above information to develop a range of estimated utilization levels, day rates, expense levels and capital
requirements, as well as estimated cash flows generated upon disposition. The drivers of these assumptions that impact our impairment analyses
include projections of future oil prices and timing of global rig fleet attrition, which, in large part, impact our estimates on timing and
magnitude of recovery from the current industry downturn. However, there are numerous judgments and assumptions unique to the projected
future cash flows of each rig that individually, and in the aggregate, can significantly impact the recoverability of its carrying value.

The highly cyclical nature of our industry cannot be reasonably predicted with a high level of accuracy and, therefore, differences
between our historical judgments and assumptions and actual results will occur. We reassess our judgments and assumptions in the period in
which significant differences are observed and may conclude that a triggering event has occurred and perform a recoverability test. We
recognized impairment charges in recent periods upon observation of significant unexpected changes in our business climate and estimated
useful lives of certain assets.

There are numerous factors underlying the highly cyclical nature of our industry that are reasonably likely to impact our judgments and
assumptions including, but not limited to, the following:

• changes in global economic conditions and demand,

• production levels of the Organization of Petroleum Exporting Countries (“OPEC”),
• production levels of non-OPEC countries,
• advances in exploration and development technology,
• offshore and onshore project break-even economics,
• development and exploitation of alternative fuels,
• natural disasters or other operational hazards,
• changes in relevant law and governmental regulations,
• political instability and/or escalation of military actions in the areas we operate,
• changes in the timing and rate of global newbuild rig construction, and
• changes in the timing and rate of global rig fleet attrition.

There is a wide range of interrelated changes in our judgments and assumptions that could reasonably occur as a result of unexpected
developments in the aforementioned factors, which could result in materially different carrying values for an individual rig, group of rigs or our
entire rig fleet, materially impacting our operating results.

Income Taxes

We conduct operations and earn income in numerous countries and are subject to the laws of numerous tax jurisdictions. As of
December 31, 2021, our Consolidated Balance Sheet included an $47.3 million net deferred income tax asset, a $31.0 million liability for
income taxes currently payable and a $320.2 million liability for unrecognized tax benefits, inclusive of interest and penalties.

The carrying values of deferred income tax assets and liabilities reflect the application of our income tax accounting policies and are
based on estimates, judgments and assumptions regarding future operating results and levels of taxable income. Carryforwards and tax credits
are assessed for realization as a reduction of future taxable income by using a more-likely-than-not determination. We do not offset deferred tax
assets and deferred tax liabilities attributable to different tax paying jurisdictions.

84
 We do not provide deferred taxes on the undistributed earnings of certain subsidiaries because our policy and intention is to reinvest
such earnings indefinitely. Should we make a distribution from these subsidiaries in the form of dividends or otherwise, we may be subject to
additional income taxes.

The carrying values of liabilities for income taxes currently payable and unrecognized tax benefits are based on our interpretation of
applicable tax laws and incorporate estimates, judgments and assumptions regarding the use of tax planning strategies in various taxing
jurisdictions. The use of different estimates, judgments and assumptions in connection with accounting for income taxes, especially those
involving the deployment of tax planning strategies, may result in materially different carrying values of income tax assets and liabilities and
operating results.

We operate in several jurisdictions where tax laws relating to the offshore drilling industry are not well developed. In jurisdictions
where available statutory law and regulations are incomplete or underdeveloped, we obtain professional guidance and consider existing
industry practices before utilizing tax planning strategies and meeting our tax obligations.

Tax returns are routinely subject to audit in most jurisdictions and tax liabilities occasionally are finalized through a negotiation
process. In some jurisdictions, income tax payments may be required before a final income tax obligation is determined in order to avoid
significant penalties and/or interest. While we historically have not experienced significant adjustments to previously recognized tax assets and
liabilities as a result of finalizing tax returns, there can be no assurance that significant adjustments will not arise in the future. In addition, there
are several factors that could cause the future level of uncertainty relating to our tax liabilities to increase, including the following:

• During recent years, the number of tax jurisdictions in which we conduct operations has increased.

• In order to utilize tax planning strategies and conduct operations efficiently, our subsidiaries frequently enter into transactions with
affiliates that are generally subject to complex tax regulations and are frequently reviewed and challenged by tax authorities.

• We may conduct future operations in certain tax jurisdictions where tax laws are not well developed, and it may be difficult to secure
adequate professional guidance.

• Tax laws, regulations, agreements, treaties and the administrative practices and precedents of tax authorities change frequently,
requiring us to modify existing tax strategies to conform to such changes.

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Pension and Other Postretirement Benefits

Our pension and other postretirement benefit liabilities and costs are based upon actuarial computations that reflect our assumptions
about future events, including long-term asset returns, interest rates, annual compensation increases, mortality rates and other factors. Key
assumptions at December 31, 2021, included (1) a weighted average discount rate of 2.73% to determine pension benefit obligations, (2) a
weighted average discount rate of 2.84% to determine net periodic pension cost and (3), an expected long-term rate of return on pension plan
assets of 6.03% to determine net periodic pension cost. Upon emergence, our pension and other post retirement plans were remeasured as of the
Effective Date. Key assumptions at the Effective Date included (1) a weighted average discount rate of 2.81% to determine pension benefit
obligations and (2) an expected long-term rate of return on pension plan assets of 6.03% to determine net periodic pension cost. The assumed
discount rate is based upon the average yield for Moody’s Aa-rated corporate bonds, and the rate of return assumption reflects a probability
distribution of expected long-term returns that is weighted based upon plan asset allocations. Using our key assumptions at December 31, 2021,
a one-percentage-point decrease in the assumed discount rate would increase our recorded pension and other postretirement benefit liabilities
by approximately $109.1 million, while a one-percentage-point decrease (increase) in the expected long-term rate of return on plan assets
would increase (decrease) annual net benefits cost by approximately $4.1 million. To develop the expected long-term rate of return on assets
assumption, we considered the current level of expected returns on risk-free investments (primarily government bonds), the historical level of
the risk premium associated with the plans’ other asset classes, and the expectations for future returns of each asset class. The expected return
for each asset class was then weighted based upon the current asset allocation to develop the expected long-term rate of return on assets
assumption for the plan, which increased to 6.26% at December 31, 2021 from 6.03% at December 31, 2020. See "Note 13 - Pension and Other
Post Retirement Benefits" to our consolidated financial statements included in "Item 8. Financial Statements and Supplementary Data" for
information on our pension and other postretirement benefit plans.

NEW ACCOUNTING PRONOUNCEMENTS

See "Note 1 - Description of the Business and Summary of Significant Accounting Policies" to our consolidated financial statements
included in "Item 8. Financial Statements and Supplementary Data" for information on new accounting pronouncements.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.

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Item 8. Financial Statements and Supplementary Data

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is
defined in Exchange Act Rules 13a-15(f) or 15d-15(f). Our internal control over financial reporting system is designed to provide reasonable
assurance as to the reliability of our financial reporting and the preparation and presentation of consolidated financial statements in accordance
with accounting principles generally accepted in the United States, as well as to safeguard assets from unauthorized use or disposition. Because
of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems
determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Projections
of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including the Chief Executive Officer and Interim Chief Financial
Officer, we have conducted an evaluation of the effectiveness of our internal control over financial reporting based on the criteria established in
Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
Based on this evaluation, we have concluded that our internal control over financial reporting is effective as of December 31, 2021 to provide
reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles.

KPMG LLP, the independent registered public accounting firm who audited our consolidated financial statements, has issued an audit
report on our internal control over financial reporting. KPMG LLP's audit report on our internal control over financial reporting is included
herein.

February 22, 2022

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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Valaris Limited:

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Valaris Limited and subsidiaries (the Company) as of December 31, 2021
(Successor) and 2020 (Predecessor), the related consolidated statements of operations, comprehensive loss, and cash flows for the periods from
May 1, 2021 to December 31, 2021 (Successor period) and from January 1, 2021 to April 30, 2021 and for each of the years in the two-year
period ended December 31, 2020 (Predecessor periods), and the related notes (collectively, the consolidated financial statements). In our
opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31,
2021 (Successor) and 2020(Predecessor), and the results of its operations and its cash flows for the Successor and Predecessor periods, in
conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
Company’s internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated
Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 22,
2022 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

New Basis of Presentation

As discussed in Note 1 to the consolidated financial statements, on March 3, 2021, the Bankruptcy Court for the Southern District of Texas
entered an order confirming the Company's plan for reorganization under Chapter 11, which became effective on April 30, 2021. Accordingly,
the accompanying consolidated financial statements as of December 31, 2021 and for the Successor period have been prepared in conformity
with Accounting Standards Codification 852, Reorganization, with the Company's assets, liabilities, and capital structure having carrying
amounts not comparable with prior periods.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be
independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the
Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our
audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error
or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the
amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and
significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe
that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that
were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to
the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of
critical audit matters does not alter

88
in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters
below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of drilling rigs upon emergence from bankruptcy

As disclosed in Note 3 to the consolidated financial statements, on April 30, 2021, the Company satisfied all conditions to effect its Plan of
Reorganization and emerged from Chapter 11 bankruptcy. In connection with its emergence and in accordance with ASC 852, the Company
qualified for and applied fresh start accounting. The Company involved third-party valuation advisors to assist with the valuation process of
certain assets valued in fresh start. The Company's principal assets are its property and equipment, which is primarily comprised of the drilling
rigs. As part of fresh start accounting, management recorded property, plant and equipment of $909.1 million, a portion of which related to the
drilling rigs. The valuation of the Company's drilling rigs was estimated using an income approach or estimated sales price.

We identified the valuation of the Company's drilling rigs upon emergence from bankruptcy as a critical audit matter. A higher degree of
subjective auditor judgment was required to evaluate the methodology used in the application of the adjustment to reconcile the fair value of the
drilling rigs to the reorganization value and certain assumptions used in the Company's determination of fair value of its drilling rigs using the
income approach. Specifically, future day rates and utilization associated with rig stacking assumptions were based on unobservable inputs for
which there was limited information. In addition, the audit effort involved the use of professionals with specialized skills and knowledge.

The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating
effectiveness of certain internal controls related to the emergence date valuation process. This included controls related to management's
valuation methodology and the application of fresh start accounting, including application of the adjustment to reconcile the fair value of the
drilling rigs to the reorganization value, and controls related to the development of the future day rates and utilization associated with rig
stacking assumptions used in the valuation of the drilling rigs. We evaluated the reasonableness of the future day rates used in the income
approach by comparing them to contractual agreements with consideration of the current industry environment and economic trends, including
third-party forecasted oil prices and demand curves. We evaluated the reasonableness of the utilization associated with rig stacking assumptions
by comparing the timing of scheduled rig reactivations to third-party demand and supply forecasts. We involved valuation professionals with
specialized skills and knowledge who assisted in evaluating the accuracy of management's model in applying the methodology used in the
application of the adjustment to reconcile the valuation of the drilling rigs to the reorganization value. We also involved professionals with
specialized skills and knowledge who assisted in evaluating the appropriateness of the methodology used in the application of the adjustment to
reconcile the valuation of the drilling rigs to the reorganization value.

Income tax positions pertaining to certain tax transactions

As discussed in Note 1 and 14 to the consolidated financial statements, the Company evaluates the income tax effect of certain transactions
which often requires local country tax expertise and judgment. This requires the Company to interpret complex tax laws in multiple
jurisdictions to assess whether its tax positions have a more than 50 percent likelihood of being sustained with the taxing authorities.

We identified the assessment of income tax positions pertaining to certain tax transactions as a critical audit matter. Complex auditor judgment
was required to evaluate the Company's assessment that certain tax positions have a more than 50 percent likelihood of being sustained with the
taxing authorities. In addition, specialized skills and knowledge were required to evaluate the Company's interpretation of tax laws in the
applicable jurisdictions.

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The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating
effectiveness of certain internal controls over the Company's income tax process. This included controls related to the interpretation of tax laws
applicable to certain transactions and the assessment that tax positions pertaining to those transactions have a more than 50 percent likelihood
of being sustained with taxing authorities. We involved tax professionals with specialized skills and knowledge, who assisted in evaluating the
Company's interpretation of local tax laws and assessment of whether tax positions had a greater than 50 percent likelihood of being sustained
with taxing authorities.

/s/ KPMG LLP

We have served as the Company’s auditor since 2002.

Houston, Texas
February 22, 2022

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 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Shareholders

Valaris Limited:

Opinion on Internal Control Over Financial Reporting

We have audited Valaris Limited and subsidiaries’ (the Company) internal control over financial reporting as of December 31, 2021, based on
criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway
Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of
December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the
consolidated balance sheets of the Company as of December 31, 2021 (Successor) and 2020 (Predecessor), the related consolidated statements
of operations, comprehensive loss, and cash flows for the periods from May 1, 2021 to December 31, 2021 (Successor period) and from
January 1, 2021 to April 30, 2021 and for each of the years in the two-year period ended December 31, 2020 (Predecessor periods), and the
related notes (collectively, the consolidated financial statements), and our report dated February 22, 2022 expressed an unqualified opinion on
those consolidated financial statements.

Basis for Opinion

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the
effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over
Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.
We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance
with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of
internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that
a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a
reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A
company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in
reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance
that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and
directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or
disposition of the company’s assets that could have a material effect on the financial statements.

91
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any
evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or
that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

Houston, Texas
February 22, 2022

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 VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except per share amounts)
Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended Ended April December 31, December 31,
December 31, 30, 2021 2020 2019
2021
OPERATING REVENUES $ 835.0 $ 397.4 $ 1,427.2 $ 2,053.2
OPERATING EXPENSES
Contract drilling (exclusive of depreciation) 728.7 343.8 1,470.4 1,807.8
Loss on impairment — 756.5 3,646.2 104.0
Depreciation 66.1 159.6 540.8 609.7
General and administrative 58.2 30.7 214.6 188.9
Total operating expenses 853.0 1,290.6 5,872.0 2,710.4
OTHER OPERATING INCOME — — 118.1 —
EQUITY IN EARNINGS (LOSSES) OF ARO 6.1 3.1 (7.8) (12.6)
OPERATING LOSS (11.9) (890.1) (4,334.5) (669.8)
OTHER INCOME (EXPENSE)
Interest income 28.5 3.6 19.7 28.1
Interest expense, net (Unrecognized contractual interest expense
for debt subject to compromise was $132.9 million and $140.7
million for the four months ended April 30, 2021 and the year
ended December 31, 2020, respectively) (31.0) (2.4) (290.6) (428.3)
Reorganization items, net (15.5) (3,584.6) (527.6) —
Other, net 38.1 25.9 16.0 1,006.2
20.1 (3,557.5) (782.5) 606.0
INCOME (LOSS) BEFORE INCOME TAXES 8.2 (4,447.6) (5,117.0) (63.8)
PROVISION (BENEFIT) FOR INCOME TAXES
Current income tax expense (benefit) 58.7 34.4 (153.7) 104.5
Deferred income tax expense (benefit) (21.3) (18.2) (105.7) 23.9
37.4 16.2 (259.4) 128.4
NET LOSS (29.2) (4,463.8) (4,857.6) (192.2)
NET (INCOME) LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS (3.8) (3.2) 2.1 (5.8)
NET LOSS ATTRIBUTABLE TO VALARIS $ (33.0) $ (4,467.0) $ (4,855.5) $ (198.0)
LOSS PER SHARE - BASIC AND DILUTED $ (0.44) $ (22.38) $ (24.42) $ (1.14)
WEIGHTED-AVERAGE SHARES OUTSTANDING
Basic and Diluted 75.0 199.6 198.9 173.4

The accompanying notes are an integral part of these consolidated financial statements.

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 VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in millions)

Successor Predecessor
Eight Four
Months Months Year Ended Year Ended
Ended Ended December December
December April 30, 31, 2020 31, 2019
31, 2021 2021
NET LOSS $ (29.2) $ (4,463.8) $ (4,857.6) $ (192.2)
OTHER COMPREHENSIVE LOSS, NET
Net changes in pension and other postretirement plan assets and benefit
obligations recognized in other comprehensive loss, net of income tax
benefit of $5.9 million for the year ended December 31, 2019. No income
tax benefit was recognized during the eight months ended December 31,
2021 (Successor), four months ended April 30, 2021 (Predecessor), and
year ended December 31, 2020 (Predecessor). (9.1) 0.1 (76.3) (21.7)
Net change in fair value of derivatives — — (5.4) 1.6
Amortization of settlement gain, net of income tax expense of $0.1 million for
the year ended December 31, 2020 — — (0.2) —
Reclassification of net (gains) losses on derivative instruments from other
comprehensive loss into net loss — (5.6) (11.6) 8.3
Other — — (0.6) (0.2)
NET OTHER COMPREHENSIVE LOSS (9.1) (5.5) (94.1) (12.0)
COMPREHENSIVE LOSS (38.3) (4,469.3) (4,951.7) (204.2)
COMPREHENSIVE (INCOME) LOSS ATTRIBUTABLE TO
NONCONTROLLING INTERESTS (3.8) (3.2) 2.1 (5.8)
COMPREHENSIVE LOSS ATTRIBUTABLE TO VALARIS $ (42.1) $ (4,472.5) $ (4,949.6) $ (210.0)

The accompanying notes are an integral part of these consolidated financial statements.

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 VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in millions, except share and par value amounts)
Successor Predecessor
December 31, December 31,
ASSETS 2021 2020
CURRENT ASSETS
Cash and cash equivalents $ 608.7 $ 325.8
Restricted cash 35.9 11.4
Accounts receivable, net 444.2 449.2
Other current assets 117.8 386.5
Total current assets 1,206.6 1,172.9
PROPERTY AND EQUIPMENT, AT COST 957.0 13,209.3
Less accumulated depreciation 66.1 2,248.8
Property and equipment, net 890.9 10,960.5
LONG-TERM NOTES RECEIVABLE FROM ARO 249.1 442.7
INVESTMENT IN ARO 86.6 120.9
OTHER ASSETS 176.0 176.2
$ 2,609.2 $ 12,873.2
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 225.8 $ 176.4
Accrued liabilities and other 196.2 250.4
Total current liabilities 422.0 426.8
LONG-TERM DEBT 545.3 —
OTHER LIABILITIES 581.1 762.4
Total liabilities not subject to compromise 1,548.4 1,189.2
LIABILITIES SUBJECT TO COMPROMISE — 7,313.7
COMMITMENTS AND CONTINGENCIES
VALARIS SHAREHOLDERS' EQUITY
Predecessor Class A ordinary shares, U.S. $0.40 par value, 206.1 million shares issued as of December
31, 2020 — 82.5
Predecessor Class B ordinary shares, £1 par value, 50,000 shares issued as of December 31, 2020 — 0.1
Successor common shares, $0.01 par value, 700 million shares authorized, 75 million shares issued as of
December 31, 2021 0.8 —
Successor preference shares, $0.01 par value, 150 million shares authorized, no shares issued as of
December 31, 2021 — —
Successor stock warrants 16.4 —
Additional paid-in capital 1,083.0 8,639.9
Retained deficit (33.0) (4,183.8)
Accumulated other comprehensive loss (9.1) (87.9)
Predecessor Treasury shares, at cost, 6.6 million shares as of December 31, 2020 — (76.2)
Total Valaris shareholders' equity 1,058.1 4,374.6
NONCONTROLLING INTERESTS 2.7 (4.3)
Total equity 1,060.8 4,370.3
$ 2,609.2 $ 12,873.2

The accompanying notes are an integral part of these consolidated financial statements.

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 VALARIS LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in millions)
Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended December Ended April 30, December 31, 2020 December 31, 2019
31, 2021 2021
OPERATING ACTIVITIES
Net loss $ (29.2) $ (4,463.8) $ (4,857.6) $ (192.2)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation expense 66.1 159.6 540.8 609.7
Deferred income tax expense (benefit) (21.3) (18.2) (105.7) 23.9
Gain on asset disposals (21.2) (6.0) (11.8) (1.8)
Accretion of discount on shareholders note (20.8) — — —
Net periodic pension and retiree medical income (8.7) (5.4) (14.6) (4.3)
Equity in losses (earnings) of ARO (6.1) (3.1) 7.8 12.6
Share-based compensation expense 4.3 4.8 21.4 37.3
Amortization, net 2.3 (4.8) 6.2 (16.8)
Debt discounts and other 0.5 — 36.8 31.5
Loss on Impairment — 756.5 3,646.2 104.0
Adjustment to (gain on) bargain purchase — — 6.3 (637.0)
Gain on debt extinguishment — — (3.1) (194.1)
Debtor in possession financing fees and payments on Backstop Commitment Agreement — — 40.0 —
Non-cash reorganization items, net — 3,487.3 436.4 —
Other 0.3 7.3 33.3 16.0
Changes in operating assets and liabilities, net of acquisition 10.3 68.5 (22.0) (52.5)
Contributions to pension plans and other post-retirement benefits (2.7) (22.5) (12.1) (13.2)
Net cash used in operating activities (26.2) (39.8) (251.7) (276.9)
INVESTING ACTIVITIES
Additions to property and equipment (50.2) (8.7) (93.8) (227.0)
Net proceeds from disposition of assets 25.1 30.1 51.8 17.7
Rowan cash acquired — — — 931.9
Maturities of short-term investments — — — 474.0
Purchases of short-term investments — — — (145.0)
Net cash provided by (used in) investing activities (25.1) 21.4 (42.0) 1,051.6
FINANCING ACTIVITIES
Issuance of first lien notes — 520.0 — —
Payments to Predecessor creditors — (129.9) — —
Borrowings on credit facility — — 596.0 215.0
Debtor in possession financing fees and payments on Backstop Commitment Agreement — — (40.0) —
Repayments of credit facility borrowings — — (15.0) (215.0)
Reduction of long-term borrowings — — (9.7) (928.1)
Purchase of noncontrolling interest — — (7.2) —
Debt solicitation fees — — — (9.5)
Cash dividends paid — — — (4.5)
Other — (1.4) (1.9) (10.2)
Net cash provided by (used in) financing activities — 388.7 522.2 (952.3)
Effect of exchange rate changes on cash and cash equivalents (0.1) (0.1) 0.1 (0.3)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH (51.4) 370.2 228.6 (177.9)
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR 696.0 325.8 97.2 275.1
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR $ 644.6 $ 696.0 $ 325.8 $ 97.2

The accompanying notes are an integral part of these consolidated financial statements.

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 VALARIS LIMITED AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. DESCRIPTION OF THE BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Business

We are a leading provider of offshore contract drilling services to the international oil and gas industry. We currently own an offshore
drilling rig fleet of 56 rigs, with drilling operations in almost every major offshore market across six continents. Our rig fleet includes
11 drillships, four dynamically positioned semisubmersible rigs, one moored semisubmersible rig, 40 jackup rigs and a 50% equity interest in
Saudi Aramco Rowan Offshore Drilling Company ("ARO"), our 50/50 joint venture with Saudi Aramco, which owns an additional seven rigs.
We operate the world's largest fleet amongst competitive rigs, including one of the newest ultra-deepwater fleets in the industry and a leading
premium jackup fleet.

Our customers include many of the leading national and international oil companies, in addition to many independent operators. We are
among the most geographically diverse offshore drilling companies, with current operations spanning 14 countries. The markets in which we
operate include the Gulf of Mexico, South America, North Sea, the Middle East, Africa, Australia and Southeast Asia.

We provide drilling services on a day rate contract basis. Under day rate contracts, we provide an integrated service that includes the
provision of a drilling rig and rig crews for which we receive a daily rate that may vary between the full rate and zero rate throughout the
duration of the contractual term, depending on the operations of the rig. We also may receive lump-sum fees or similar compensation for the
mobilization, demobilization and capital upgrades of our rigs. Our customers bear substantially all of the costs of constructing the well and
supporting drilling operations, as well as the economic risk relative to the success of the well.

Chapter 11 Cases

On August 19, 2020 (the “Petition Date”), Valaris plc (“Legacy Valaris” or “Predecessor”) and certain of its direct and indirect
subsidiaries (collectively, the “Debtors”) filed voluntary petitions for reorganization under chapter 11 of the United States Bankruptcy Code
("Bankruptcy Code") in the Bankruptcy Court for the Southern District of Texas (the "Bankruptcy Court") The Debtors obtained joint
administration of their chapter 11 cases under the caption In re Valaris plc, et al., Case No. 20-34114 (MI) (the “Chapter 11 Cases”).

In connection with the Chapter 11 Cases, on and prior to April 30, 2021 (the "Effective Date"), Legacy Valaris effectuated certain
restructuring transactions, pursuant to which the successor company, Valaris, was formed and, through a series of transactions, Legacy Valaris
transferred to a subsidiary of Valaris substantially all of the subsidiaries, and other assets, of Legacy Valaris.

References to the financial position and results of operations of the "Successor" or "Successor Company" relate to the financial position
and results of operations of the Company after the Effective Date. References to the financial position and results of operations of the
"Predecessor" or "Predecessor Company" refer to the financial position and results of operations of Legacy Valaris on and prior to the Effective
Date. References to the “Company,” “we,” “us” or “our” in this Annual Report are to Valaris Limited, together with its consolidated
subsidiaries, when referring to periods following the Effective Date, and to Legacy Valaris, together with its consolidated subsidiaries, when
referring to periods prior to and including Effective Date.

See “Note 2 – Chapter 11 Proceedings” for additional details regarding the Chapter 11 Cases.

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Fresh Start Accounting

On the Effective Date, the Debtors emerged from the Chapter 11 Cases. Upon emergence from the Chapter 11 Cases, we qualified for
and adopted fresh start accounting. The application of fresh start accounting resulted in a new basis of accounting, and the Company became a
new entity for financial reporting purposes. Accordingly, our financial statements and notes after the Effective Date are not comparable to our
financial statements and notes on and prior to that date. Furthermore, the consolidated financial statements and notes have been presented with
a black line division to delineate the lack of comparability between the Predecessor and Successor.

See “Note 2 – Chapter 11 Proceedings” and “Note 3 - Fresh Start Accounting” for additional details regarding the Chapter 11 Cases
and fresh start accounting.

Changes in Accounting Policies

Upon emergence from bankruptcy, we elected to change our accounting policies related to property and equipment as well as materials
and supplies.

Prior to emergence from bankruptcy, we recorded our drilling rigs as a single asset with a useful life ascribed by the expected useful
life of that asset. Upon emergence, we have identified the significant components of our drilling rigs and ascribed useful lives based on the
expected time until the next required overhaul or the end of the expected economic lives of the components.

Historically, we recognized materials and supplies on the balance sheet when purchased and subsequently expensed items when
consumed. Following emergence, materials and supplies will be expensed as a period cost when received. Additionally, a customer
arrangement provides that we take title to their materials and supplies for the duration of the contract and return or pay cash for them at the
termination of the contract. Together with our policy change on materials and supplies, we elected to record these assets and the obligation to
our customer on a net basis as opposed to a gross basis.

Accounting Policies

Principles of Consolidation

The accompanying consolidated financial statements include the accounts of Valaris Limited, those of our wholly-owned subsidiaries
and entities in which we hold a controlling financial interest. All intercompany accounts and transactions have been eliminated. Investments in
operating entities in which we have the ability to exercise significant influence, but where we do not control operating and financial policies are
accounted for using the equity method. Significant influence generally exists if we have an ownership interest representing between 20% and
50% of the voting stock of the investee. We account for our interest in ARO using the equity method of accounting and only recognize our
portion of equity in earnings in our consolidated financial statements. ARO is a variable interest entity; however, we are not the primary
beneficiary and therefore do not consolidate ARO.

Reclassification

Certain previously reported amounts have been reclassified to conform to the current year presentation.

Pervasiveness of Estimates

The preparation of financial statements in conformity with U.S. GAAP requires us to make certain estimates, judgments and
assumptions that affect the reported amounts of assets and liabilities, the related revenues and expenses and disclosures of gain and loss
contingencies as of the date of the financial statements. Actual results could differ from those estimates.

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 Foreign Currency Remeasurement and Translation

Our functional currency is the U.S. dollar. As is customary in the oil and gas industry, a majority of our revenues and expenses are
denominated in U.S. dollars; however, a portion of the revenues earned and expenses incurred by certain of our subsidiaries are denominated in
currencies other than the U.S. dollar. These transactions are remeasured in U.S. dollars based on a combination of both current and historical
exchange rates. Most transaction gains and losses, including certain gains and losses on our prior derivative instruments, are included in Other,
net, in our Consolidated Statements of Operations. Certain gains and losses from the translation of foreign currency balances of our non-U.S.
dollar functional currency subsidiaries are included in Accumulated other comprehensive income on our Consolidated Balance Sheet. Net
foreign currency exchange gains were $8.1 million and $13.4 million, and were included in Other, net, in our Consolidated Statements of
Operations for the eight months ended December 31, 2021 (Successor) and four months ended April 30, 2021 (Predecessor), respectively. Net
foreign currency exchange losses, inclusive of offsetting fair value derivatives were $11.0 million and $7.4 million, and were included in Other,
net, in our Consolidated Statements of Operations for the year ended December 31, 2020 (Predecessor) and 2019 (Predecessor), respectively.

Cash Equivalents and Short-Term Investments

Highly liquid investments with maturities of three months or less at the date of purchase are considered cash equivalents. Highly liquid
investments with maturities of greater than three months but less than one year at the date of purchase are classified as short-term investments.

There were no short-term investments as of December 31, 2021 (Successor) and 2020 (Predecessor). Cash flows from purchases and
maturities of short-term investments were classified as investing activities in our Consolidated Statements of Cash Flows for the year ended
December 31, 2019. To mitigate our credit risk, our investments in time deposits have historically been diversified across multiple, high-quality
financial institutions.

Property and Equipment

All costs incurred in connection with the acquisition, construction, major enhancement and improvement of assets are capitalized,
including allocations of interest incurred during periods that our drilling rigs are under construction or undergoing major enhancements and
improvements. Costs incurred to place an asset into service are capitalized, including costs related to the initial mobilization of a newbuild
drilling rig. Repair and maintenance costs are charged to contract drilling expense in the period in which they are incurred. Upon the sale or
retirement of assets, the related cost and accumulated depreciation are removed from the balance sheet, and the resulting gain or loss is included
in Other, net in our Consolidated Statements of Operations.

See "Changes in Accounting Policies" above for a discussion of the change in our accounting policy for property and equipment upon
emergence from bankruptcy. Our property and equipment is depreciated on a straight-line basis, after allowing for salvage values, over the
estimated useful lives of our assets. Drilling rigs and related equipment are depreciated over estimated useful lives ranging from five to 35
years. Buildings and improvements are depreciated over estimated useful lives ranging from 10 to 30 years. Other equipment, including
computer and communications hardware and software, is depreciated over estimated useful lives ranging from two to six years.

We evaluate the carrying value of our property and equipment, primarily our drilling rigs, on a quarterly basis to identify events or
changes in circumstances ("triggering events") that indicate that the carrying value of such rigs may not be recoverable. For property and
equipment used in our operations, recoverability generally is determined by comparing the carrying value of an asset to the expected
undiscounted future cash flows of the asset. If the carrying value of an asset is not recoverable, the amount of impairment loss is measured as
the difference between the carrying value of the asset and its estimated fair value. Property and equipment held-for-sale is recorded at the lower
of net book value or fair value less cost to sell.

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 We recorded pre-tax, non-cash impairment losses related to long-lived assets of $756.5 million, $3.6 billion and $104.0 million, in the
four months ended April 30, 2021 (Predecessor), the year ended December 31, 2020 (Predecessor) and the year ended December 31, 2019
(Predecessor), respectively. See "Note 8 - Property and Equipment" for additional information on our impairment charges.

Operating Revenues and Expenses

See "Note 4 - Revenue from Contracts with Customers" for information on our accounting policies for revenue recognition and certain
operating costs that are deferred and amortized over future periods.

Derivative Instruments

We did not have any open derivative instruments as of December 31, 2021 (Successor) or 2020 (Predecessor). However, we have
historically used derivatives to reduce our exposure to various market risks, primarily foreign currency exchange rate risk. See "Note 10 -
Derivative Instruments" for additional information on how and why we used derivatives and the impact of the Chapter 11 Cases.

Derivatives are recorded on our Consolidated Balance Sheet at fair value. Derivatives subject to legally enforceable master netting
agreements are not offset on our Consolidated Balance Sheet. Accounting for the gains and losses resulting from changes in the fair value of
derivatives depends on the use of the derivative and whether it qualifies for hedge accounting. Derivatives qualify for hedge accounting when
they are formally designated as hedges and are effective in reducing the risk exposure that they are designated to hedge.

Changes in the fair value of derivatives that are designated as hedges of the variability in expected future cash flows associated with
existing recognized assets or liabilities or forecasted transactions ("cash flow hedges") are recorded in accumulated other comprehensive
income ("AOCI"). Amounts recorded in AOCI associated with cash flow hedges are subsequently reclassified into contract drilling,
depreciation or interest expense as earnings are affected by the underlying hedged forecasted transactions.

Gains and losses on a cash flow hedge, or a portion of a cash flow hedge, that no longer qualifies as effective due to an unanticipated
change in the forecasted transaction are recognized currently in earnings and included in Other, net, in our Consolidated Statements of
Operations based on the change in the fair value of the derivative. When a forecasted transaction becomes probable of not occurring, gains and
losses on the derivative previously recorded in AOCI are reclassified currently into earnings and included in Other, net, in our Consolidated
Statements of Operations.

Historically, we would enter into derivatives that hedge the fair value of recognized assets or liabilities but do not designate such
derivatives as hedges or the derivatives otherwise do not qualify for hedge accounting. In these situations, a natural hedging relationship
generally exists where changes in the fair value of the derivatives offset changes in the fair value of the underlying hedged items. Changes in
the fair value of these derivatives are recognized currently in earnings in other, net, in our Consolidated Statements of Operations.

Derivatives with asset fair values are reported in other current assets or other assets, net, on our Consolidated Balance Sheet depending
on maturity date. Derivatives with liability fair values are reported in accrued liabilities and other, or other liabilities on our Consolidated
Balance Sheet depending on maturity date.

Income Taxes

We conduct operations and earn income in numerous countries. Current income taxes are recognized for the amount of taxes payable or
refundable based on the laws and income tax rates in the taxing jurisdictions in which operations are conducted and income is earned.

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 Deferred tax assets and liabilities are recognized for the anticipated future tax effects of temporary differences between the financial
statement basis and the tax basis of our assets and liabilities using the enacted tax rates in effect at year-end. A valuation allowance for deferred
tax assets is recorded when it is more-likely-than-not that the benefit from the deferred tax asset will not be realized. We do not offset deferred
tax assets and deferred tax liabilities attributable to different tax paying jurisdictions.

We operate in certain jurisdictions where tax laws relating to the offshore drilling industry are not well developed and change
frequently. Furthermore, we may enter into transactions with affiliates or employ other tax planning strategies that generally are subject to
complex tax regulations. As a result of the foregoing, the tax liabilities and assets we recognize in our financial statements may differ from the
tax positions taken, or expected to be taken, in our tax returns. Our tax positions are evaluated for recognition using a more-likely-than-not
threshold, and those tax positions requiring recognition are measured as the largest amount of tax benefit that is greater than 50% likely of
being realized upon effective settlement with a taxing authority that has full knowledge of all relevant information. Interest and penalties
relating to income taxes are included in Current income tax expense in our Consolidated Statements of Operations.

Our drilling rigs frequently move from one taxing jurisdiction to another based on where they are contracted to perform drilling
services. The movement of drilling rigs among taxing jurisdictions may involve a transfer of drilling rig ownership among our subsidiaries
through an intercompany rig sale. The pre-tax profit resulting from an intercompany rig sale is eliminated from our consolidated financial
statements, and the carrying value of a rig sold in an intercompany transaction remains at historical net depreciated cost prior to the transaction.
Our consolidated financial statements do not reflect the asset disposition transaction of the selling subsidiary or the asset acquisition transaction
of the acquiring subsidiary. The income tax effects resulting from intercompany rig sales are recognized in earnings in the period in which the
sale occurs.

In some instances, we may determine that certain temporary differences will not result in a taxable or deductible amount in future years,
as it is more-likely-than-not we will commence operations and depart from a given taxing jurisdiction without such temporary differences being
recovered or settled. Under these circumstances, no future tax consequences are expected and no deferred taxes are recognized in connection
with such operations. We evaluate these determinations on a periodic basis and, in the event our expectations relative to future tax
consequences change, the applicable deferred taxes are recognized or derecognized.

We do not provide deferred taxes on the undistributed earnings of certain subsidiaries because our policy and intention is to reinvest
such earnings indefinitely. Should we make a distribution from these subsidiaries in the form of dividends or otherwise, we may be subject to
additional income taxes.

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 Share-Based Compensation

We sponsor share-based compensation plans that provide equity compensation to our key employees, officers and non-employee
directors. Our Management Incentive Plan (the “MIP”) allows our Board of Directors to authorize share grants to be settled in cash, shares or a
combination of shares and cash. Compensation expense for time-based share awards to be settled in shares is measured at fair value on the date
of grant and recognized on a straight-line basis over the requisite service period (usually the vesting period). Compensation expense for
performance awards is recognized over the requisite service period using the accelerated method and is reduced for forfeited awards in the
period in which the forfeitures occur. For our performance awards that cliff vest and require the employee to render service through the vesting
date, even though attainment of performance objectives might be earlier, our expense under the accelerated method would be a ratable expense
over the vesting period. Equity settled performance awards generally vest at the end of a three-year measurement period based on attainment of
performance goals. The estimated probable outcome of attainment of the specified performance goals is based primarily on relative
performance over the requisite performance period. Any subsequent changes in this estimate as it relates to performance objectives are
recognized as a cumulative adjustment to compensation cost in the period in which the change in estimate occurs, except in the case of
objectives based on a market condition, such as our stock price. Compensation cost for awards based on a market performance objective is
recognized as long as the requisite service period is completed and will not be reversed even if the market-based objective is never satisfied.
Compensation expense for share awards to be settled in cash are recognized as liabilities and remeasured each quarter with a cumulative
adjustment to compensation cost during the period based on changes in our share price. Any adjustments to the compensation cost recognized
in our Consolidated Statements of Operations for awards that are forfeited are recognized in the period in which the forfeitures occur. See
"Note 12 - Share Based Compensation" for additional information on our share-based compensation.

Pension and Other Post-retirement benefit plans

We measure our actuarially determined obligations and related costs for our defined benefit pension and other post-retirement plans,
retiree life and medical supplemental plan benefits by applying assumptions, the most significant of which include long-term rate of return on
plan assets, discount rates and mortality rates. For the long-term rate of return, we develop our assumptions regarding the expected rate of
return on plan assets based on historical experience and projected long-term investment returns, and we weight the assumptions based on each
plan's asset allocation. For the discount rate, we base our assumptions on a yield curve approach. Actual results may differ from the
assumptions included in these calculations. If gains or losses exceed 10% of the greater of the plan assets or plan liabilities, we amortize such
gains or losses into income over either the period of expected future service of active participants, or over the expected average remaining
lifetime of all participants. We recognize gains or losses related to plan curtailments at the date the plan amendment or termination is adopted
which may precede the effective date.

Fair Value Measurements

We measure certain of our assets and liabilities based on a fair value hierarchy that prioritizes the inputs to valuation techniques used to
measure fair value. The hierarchy assigns the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities
("Level 1") and the lowest priority to unobservable inputs ("Level 3"). Level 2 measurements represent inputs that are observable for similar
assets or liabilities, either directly or indirectly, other than quoted prices included within Level 1. See "Note 7 - Fair Value Measurements" for
additional information on the fair value measurement of certain of our assets and liabilities.

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 Noncontrolling Interests

Third-parties hold a noncontrolling ownership interest in certain of our non-U.S. subsidiaries. Noncontrolling interests are classified as
equity on our Consolidated Balance Sheet, and net income attributable to noncontrolling interests is presented separately in our Consolidated
Statements of Operations. For the eight months ended December 31, 2021 (Successor), the four months ended April 30, 2021 (Predecessor),
the year ended December 31, 2020 (Predecessor) and the year ended December 31, 2019 (Predecessor), all income attributable to
noncontrolling interest was from continuing operations.

Earnings Per Share

Basic income (loss) per share is computed by dividing net income (loss) available to common shareholders by the weighted-average
number of common shares outstanding during the period. Basic and diluted earnings per share ("EPS") for the Predecessor was calculated in
accordance with the two-class method. Predecessor net loss attributable to Legacy Valaris used in our computations of basic and diluted EPS
was adjusted to exclude net income allocated to non-vested shares granted to our employees and non-employee directors. Weighted-average
shares outstanding used in our computation of diluted EPS is calculated using the treasury stock method and for the Successor includes the
effect of all potentially dilutive warrants, restricted stock unit awards and performance stock unit awards and for the Predecessor includes the
effect of all potentially dilutive stock options and excludes non-vested shares. In the eight months ended December 31, 2021 (Successor), the
four months ended April 30, 2021 (Predecessor), the year ended December 31, 2020 (Predecessor) and the year ended December 31, 2019
(Predecessor), our potentially dilutive instruments were not included in the computation of diluted EPS as the effect of including these shares in
the calculation would have been anti-dilutive.

The following table is a reconciliation of loss from continuing operations attributable to our shares, or Legacy Valaris shares in the case
of the Predecessor periods, used in our basic and diluted EPS computations (in millions).

Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended Ended April December 31, December 31,
December 31, 30, 2021 2020 2019
2021
Loss from continuing operations attributable to Valaris $ (33.0) $ (4,467.0) $ (4,855.5) $ (198.0)
Income from continuing operations allocated to non-vested share awards
(1) — — — (0.1)
Loss from continuing operations attributable to Valaris shares $ (33.0) $ (4,467.0) $ (4,855.5) $ (198.1)

(1)
Losses are not allocated to non-vested share awards. Due to the net loss position, potentially dilutive share awards are excluded from the
computation of diluted EPS.

Anti-dilutive share awards totaling 600,000, 300,000, 400,000 and 300,000 for the eight months ended December 31, 2021 (Successor),
the four months ended April 30, 2021 (Predecessor), the year ended December 31, 2020 (Predecessor) and the year ended December 31, 2019
(Predecessor), respectively, were excluded from the computation of diluted EPS.

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 The Predecessor previously had the 2024 Convertible Notes (as defined and more fully described in Note 9 "Debt") for which we had
the option to settle in cash, shares or a combination thereof for the aggregate amount due upon conversion. On the Effective Date, pursuant to
the plan of reorganization, all outstanding obligations under the 2024 Convertible Notes, were cancelled and the holders thereunder received the
treatment as set forth in the plan of reorganization. However, if the Legacy Valaris average share price had exceeded the exchange price during
a respective predecessor reporting period, an assumed number of shares required to settle the conversion obligation in excess of the principal
amount would have been included in our denominator for the computation of diluted EPS using the treasury stock method. The Legacy Valaris
average share price did not exceed the exchange price during the four months ended April 30, 2021 (Predecessor) or the years ended
December 31, 2020 (Predecessor) or 2019 (Predecessor).

Cancellation of Predecessor Equity and Issuance of Warrants

On the Effective Date and pursuant to the plan of reorganization, the Legacy Valaris Class A ordinary shares were cancelled. In
accordance with the plan of reorganization, all agreements, instruments and other documents evidencing, relating or otherwise connected with
any of Legacy Valaris' equity interests outstanding prior to the Effective Date, including all equity-based awards, were cancelled. On the
Effective Date and pursuant to the plan of reorganization, the Company issued 5,645,161 Warrants to the former holders of the Company's
equity interests outstanding prior to the Effective Date. The Warrants are exercisable for one Common Share per Warrant at an initial exercise
price of $131.88 per Warrant, in each case as may be adjusted from time to time pursuant to the applicable warrant agreement. The Warrants
are exercisable for a period of seven years and will expire on April 29, 2028. The exercise of these Warrants into Common Shares would have a
dilutive effect to the holdings of Valaris Limited's existing shareholders.

New Accounting Pronouncements

Recently adopted accounting pronouncements

Income Taxes - In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income
Taxes ("Update 2019-12"), which removes certain exceptions for investments, intraperiod allocations and interim tax calculations and adds
guidance to reduce complexity in accounting for income taxes. We were required to adopt the amended guidance in annual and interim periods
beginning after December 15, 2020. The various amendments in Update 2019-12 are applied on a retrospective basis, modified retrospective
basis and prospective basis, depending on the amendment. We adopted Update 2019-12 effective January 1, 2021 with no material impact to
our financial statements upon adoption.

Accounting pronouncements to be adopted

Reference Rate Reform - In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848): Facilitation of the
Effects of Reference Rate Reform on Financial Reporting ("Update 2020-04"), which provides optional expedients and exceptions for applying
GAAP to contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments in
Update 2020-04 apply only to contracts, hedging relationships and other transactions that reference LIBOR or another reference rate expected
to be discontinued because of reference rate reform. The expedients and exceptions provided by the amendments do not apply to contract
modifications made and hedging relationships entered into or evaluated after December 31, 2022, except for hedging relationships existing as
of December 31, 2022, for which an entity has elected certain optional expedients and that are retained through the end of the hedging
relationship. The provisions in Update 2020-04 are effective upon issuance and can be applied prospectively through December 31, 2022. Our
notes receivable with ARO, from which we generate interest income on a LIBOR-based rate, are impacted by the application of this standard.
As the notes bear interest on the LIBOR rate determined at the end of the preceding year, the rate governing our interest income in 2022 has
already been determined. We expect to be able to modify the terms of our notes receivable to a comparable interest rate before the applicable
LIBOR rate is no longer available and as such, do not expect this standard to have a material impact to our consolidated financial statements.

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 Leases - In July 2021, the FASB issued ASU 2021-05, “Leases (Topic 842); Lessors - Certain Leases with Variable Lease Payments”,
(“Update 2021-05”) which requires a lessor to classify a lease with entirely or partially variable payments that do not depend on an index or
rate as an operating lease if another classification (i.e. sales-type or direct financing) would trigger a day-one loss. Update 2021-05 is effective
for fiscal years beginning after December 15, 2021, with early adoption permitted. We are in the process of evaluating the impact this
amendment will have on our consolidated financial statements.

Business Combinations - In October 2021, the FASB issued ASU 2021-08, “Accounting for Contracts Assets and Contract Liabilities
from Contracts with Customers” (“Update 2021-08”). ASU 2021-08 requires an entity (acquirer) to recognize and measure contract assets and
contract liabilities acquired in a business combination in accordance with Topic 606 and provides practical expedients for acquirers when
recognizing and measuring acquired contract assets and contract liabilities from revenue contracts in a business combination. The amendments
also apply to contract assets and contract liabilities from other contracts to which the provisions of Topic 606 apply, such as contract liabilities
for the sale of nonfinancial assets within the scope of Subtopic 610-20, Other Income - Gains and Losses from the Derecognition of
Nonfinancial Assets. The FASB issued the update to improve the accounting for acquired revenue contracts with customers in a business
combination. The ASU’s amendments are effective for fiscal years beginning after December 15, 2022, and interim periods within those fiscal
years, with early adoption permitted. We will adopt Update 2021-08 in the period required and will apply it to any business combination
completed subsequent to the adoption.

With the exception of the updated standards discussed above, there have been no accounting pronouncements issued and not yet
effective that have significance, or potential significance, to our consolidated financial statements.

2. CHAPTER 11 PROCEEDINGS

Chapter 11 Cases and Emergence from Chapter 11

On the Petition Date, the Debtors filed voluntary petitions for reorganization under chapter 11 of the Bankruptcy Code in the
Bankruptcy Court. The Debtors obtained joint administration of the Chapter 11 Cases under the caption In re Valaris plc, et al., Case No. 20-
34114 (MI). On March 3, 2021, the Bankruptcy Court confirmed the Debtors' chapter 11 plan of reorganization.

On the Effective Date, we successfully completed our financial restructuring and together with the Debtors emerged from the Chapter
11 Cases. Upon emergence from the Chapter 11 Cases, we eliminated $7.1 billion of debt and obtained a $520 million capital injection by
issuing the first lien secured notes (the "First Lien Notes"). See “Note 9 - Debt" for additional information on the First Lien Notes. On the
Effective Date, the Legacy Valaris Class A ordinary shares were cancelled and common shares of Valaris with a nominal value of $0.01 per
share (the “Common Shares”) were issued. Also, former holders of Legacy Valaris' equity were issued warrants (the "Warrants") to purchase
Common Shares.

Below is a summary of the terms of the plan of reorganization:

• Appointed six new members to the Company's Board of Directors to replace all of the directors of Legacy Valaris, other than the
director also serving as President and Chief Executive Officer at the Effective Date, who was re-appointed pursuant to the plan of
reorganization. All but one of the seven directors became directors as of the Effective Date and one became a director on July 1, 2021.
• Obligations under Legacy Valaris's outstanding senior notes (the "Senior Notes") were cancelled and the related indentures were
cancelled, except to the limited extent expressly set forth in the plan of reorganization and the holders thereunder received the treatment
as set forth in the plan of reorganization;

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• The Legacy Valaris revolving credit facility (the "Revolving Credit Facility") was terminated and the holders thereunder received the
treatment as set forth in the plan of reorganization;
•
Holders of the Senior Notes received their pro rata share of (1) 38.48%, or 28,859,900, of Common Shares and (2) approximately
97.6% of the subscription rights to participate in the rights offering (the "Rights Offering") through which the Company offered
$550 million of the First Lien Notes, which includes the backstop premium;

• Holders of the Senior Notes who participated in the Rights Offering received their pro rata share of approximately 29.3%, or
21,975,000, of Common Shares, and senior noteholders who agreed to backstop the Rights Offering received their pro rata share of
approximately 2.63%, or 1,975,500 of Common Shares and approximately $48.8 million in First Lien Notes as a backstop premium;

• Certain Revolving Credit Facility lenders ("RCF Lenders") who participated in the Rights Offering received their pro rata share of
approximately 0.7%, or 525,000 Common Shares, RCF Lenders who agreed to backstop the Rights Offering received their pro rata
share of 0.07%, or 49,500 of Common Shares and approximately $1.2 million in First Lien Notes as a backstop premium;

• Senior noteholders, solely with respect to Pride International LLC's 6.875% senior notes due 2020 and 7.875% senior notes due 2040,
Ensco International 7.20% Debentures due 2027, and the 4.875% senior notes due 2022, 4.75% senior notes due 2024, 7.375% senior
notes due 2025, 5.4% senior notes due 2042 and 5.85% senior notes due 2044, received an aggregate cash payment of $26.0 million in
connection with settlement of certain alleged claims against the Company;

• The two RCF Lenders who chose to participate in the Rights Offering received their pro rata share of (1) 5.3%, or 4,005,000 of
Common Shares (2) approximately 2.427% of the First Lien Notes (and associated Common Shares), (3) $7.8 million in cash, and (4)
their pro rata share of the backstop premium. The RCF Lenders who entered into the amended restructuring support agreement and
elected not to participate in the Rights Offering received their pro rata share of (1) 22.980%, or 17,235,000 of Common Shares and (2)
$96.1 million in cash;

• Holders of general unsecured claims are entitled to receive payment in full within ninety days after the later of (a) the Effective Date
and (b) the date such claim comes due;

• 375,000 Common Shares were issued and $5.0 million was paid to Daewoo Shipbuilding & Marine Engineering Co., Ltd (the
"Shipyard");

• Legacy Valaris Class A ordinary shares were cancelled and holders received 5,645,161 in Warrants exercisable for one Common Share
per Warrant at initial exercise price of $131.88 per Warrant, in each case as may be adjusted from time to time pursuant to the
applicable warrant agreement. The Warrants are exercisable for a period of seven years and will expire on April 29, 2028;

• All equity-based awards of Legacy Valaris that were outstanding were cancelled;

• On the Effective Date, Valaris Limited entered into a registration rights agreement with certain parties who received Common Shares;

• On the Effective Date, Valaris Limited entered into a registration rights agreement with certain parties who received First Lien Notes;
and

• There were no borrowings outstanding against our debtor-in-possession ("DIP") facility and there were no DIP claims that were not due
and payable on, or that otherwise survived, the Effective Date. The DIP Credit Agreement terminated on the Effective Date.

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 Management Incentive Plan

In accordance with the plan of reorganization, Valaris Limited adopted the 2021 Management Incentive Plan (the “MIP”) as of the
Effective Date and authorized and reserved 8,960,573 Common Shares for issuance pursuant to equity incentive awards to be granted under the
MIP, which may be in the form of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation
rights, dividend equivalents and cash awards or any combination thereof. See "Note 12 - Share Based Compensation" for more information on
awards granted under the MIP after the Effective date.

Liabilities Subject to Compromise

The Debtors' pre-petition Senior Notes and related unpaid accrued interest as of the Petition Date were classified as Liabilities Subject
to Compromise on our Consolidated Balance Sheets as of December 31, 2020 (Predecessor). The liabilities were reported at the amounts that
were expected to be allowed as claims by the Bankruptcy Court.

Liabilities subject to compromise at December 31, 2020 (Predecessor) consisted of the following (in millions):
6.875% Senior notes due 2020 $ 122.9
4.70% Senior notes due 2021 100.7
4.875% Senior notes due 2022 620.8
3.00% Exchangeable senior notes due 2024 849.5
4.50% Senior notes due 2024 303.4
4.75% Senior notes due 2024 318.6
8.00% Senior notes due 2024 292.3
5.20% Senior notes due 2025 333.7
7.375% Senior notes due 2025 360.8
7.75% Senior notes due 2026 1,000.0
7.20% Debentures due 2027 112.1
7.875% Senior notes due 2040 300.0
5.40% Senior notes due 2042 400.0
5.75% Senior notes due 2044 1,000.5
5.85% Senior notes due 2044 400.0
Amounts drawn under the Revolving Credit Facility 581.0
Accrued Interest on Senior Notes and Revolving Credit Facility 203.5
Rig holding costs(1) 13.9
Total liabilities subject to compromise $ 7,313.7

(1) Represents
the holding costs incurred to maintain VALARIS DS-13 and VALARIS DS-14 in the shipyard.

The contractual interest expense on the outstanding Senior Notes and the Revolving Credit Facility was in excess of recorded interest
expense by $132.9 million and $140.7 million for the four months ended April 30, 2021 (Predecessor) and for the year ended December 31,
2020 (Predecessor), respectively. This excess contractual interest was not included as interest expense on our Consolidated Statements of
Operations as we had discontinued accruing interest on the Predecessor's Senior Notes and Revolving Credit Facility subsequent to the Petition
Date. The Predecessor discontinued making interest payments on the Senior Notes beginning in June 2020.

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 Pre-petition Charges

We have reported the backstop commitment fee and legal and other professional advisor fees incurred in relation to the Chapter 11
Cases, but prior to the Petition Date, as General and administrative expenses in our Consolidated Statements of Operations for the year ended
December 31, 2020 (Predecessor) in the amount of $64.7 million.

Reorganization Items

Expenditures, gains and losses that are realized or incurred by the Debtors as of or subsequent to the Petition Date and as a direct result
of the Chapter 11 Cases are reported as Reorganization items, net in our Consolidated Statements of Operations for the eight months ended
December 31, 2021 (Successor), four months ended April 30, 2021 (Predecessor) and the year ended December 31, 2020 (Predecessor). These
costs include legal and other professional advisory service fees pertaining to the Chapter 11 Cases, contract items related to rejecting and
amending certain operating leases ("Contract items") and the effects of the emergence from bankruptcy, including the application of fresh start
accounting. Additionally, Reorganization items, net for the year ended December 31, 2020 (Predecessor) included all adjustments made to the
carrying amount of certain pre-petition liabilities reflecting claims that were expected to be allowed by the Bankruptcy Court and DIP facility
fees.

The components of reorganization items, net were as follows (in millions):

Successor Predecessor
Eight Months Ended Four Months Ended Year Ended December
December 31, 2021 April 30, 2021 31, 2020
DIP facility fees $ — $ — $ 20.0
Professional fees 17.2 93.4 66.8
Contract items (1.7) 3.9 4.4
Reorganization items (fees) 15.5 97.3 91.2

Write-off of unamortized debt

discounts, premiums and issuance
costs — — 447.9
Contract items — 0.5 (11.5)
Backstop premium — 30.0 —
Gain on settlement of liabilities subject to compromise — (6,139.0) —
Issuance of Common Shares for
backstop premium — 29.1 —
Issuance of Common Shares to the Shipyard — 5.4 —
Write-off of unrecognized share-based compensation
expense — 16.0 —
Impact of newbuild contract amendments — 350.7 —
Loss on fresh start adjustments — 9,194.6 —
Reorganization items (non-cash) — 3,487.3 436.4

Total reorganization items, net $ 15.5 $ 3,584.6 $ 527.6

Reorganization items (fees) unpaid $ 0.8 $ 38.3 $ 61.2

Reorganization items (fees) paid $ 14.7 $ 59.0 $ 30.0

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3. FRESH START ACCOUNTING

Applicability of Fresh Start Accounting

Upon emergence from bankruptcy, we qualified for and applied fresh start accounting, which resulted in the Company becoming a new
entity for financial reporting purposes because (1) the holders of the then existing Class A ordinary shares of the Predecessor received less than
50 percent of the Common Shares of the Successor outstanding upon emergence and (2) the reorganization value of the Company’s assets
immediately prior to confirmation of the plan of reorganization was less than the total of all post-petition liabilities and allowed claims.

The reorganization value derived from the range of enterprise values associated with the plan of reorganization was allocated to the
Company’s identifiable tangible and intangible assets and liabilities based on their fair values (except for deferred income taxes). The amount
of deferred income taxes recorded was determined in accordance with the applicable income tax accounting standard. The April 30, 2021 fair
values of the Company’s assets and liabilities differ materially from their recorded values as reflected on the historical balance sheets.

Reorganization Value

The reorganization value represents the fair value of the Successor's total assets and was derived from the enterprise value associated
with the plan of reorganization, which represents the estimated fair value of an entity's long-term debt and equity less unrestricted cash upon
emergence from chapter 11. As set forth in the disclosure statement and approved by the Bankruptcy Court, third-party valuation advisors
estimated the enterprise value to be between $1,860.0 million and $3,145.0 million. The enterprise value range of the reorganized Debtors was
determined primarily by using a discounted cash flow analysis. The value agreed in the plan of reorganization is indicative of an enterprise
value at the low end of this range, or $1,860.0 million.

The following table reconciles the enterprise value to the estimated fair value of Successor Common Shares as of the Effective Date (in
millions, except per share value):
April 30, 2021
Enterprise Value $ 1,860.0
Plus: Cash and cash equivalents 607.6
Less: Fair value of debt (544.8)
Less: Warrants (16.4)
Less: Noncontrolling interest 1.1
Less: Pension and other post retirement benefits liabilities (189.0)
Less: Adjustments not contemplated in Enterprise Value (639.0)
Fair value of Successor Common Shares $ 1,079.5
Shares issued upon emergence 75.0
Per share value $ 14.39

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 The following table reconciles the enterprise value to the reorganization value as of the Effective Date (in millions):
April 30, 2021
Enterprise Value $ 1,860.0
Plus: Cash and cash equivalents 607.6
Plus: Non-interest bearing current liabilities 346.0
Less: Adjustments not contemplated in Enterprise Value (218.0)
Reorganization value of Successor assets $ 2,595.6

Adjustments not contemplated in Enterprise Value represent certain obligations of the Successor that were either not contemplated or
contemplated in a different amount in the forecasted cash flows of the enterprise valuation performed by third-party valuation advisors that, had
they incorporated those anticipated cash flows into their analysis, the resulting valuation would have been different. For the reconciliation of
Reorganization value of Successor assets, this item includes certain tax balances, contract liabilities, as well as an adjustment for the fair value
of pension obligations. The reconciliation to Successor Common Share value includes these same reconciling items as well as other current and
non-current liabilities of the Successor at the emergence.

The enterprise value and corresponding implied equity value are dependent upon achieving the future financial results set forth in the
valuation utilizing assumptions regarding future day rates, utilization, operating costs and capital requirements as of the emergence date. All
estimates, assumptions, valuations and financial projections, including the fair value adjustments, the enterprise value and equity value
projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, there is no
assurance that the estimates, assumptions, valuations or financial projections will be realized, and actual results could vary materially.

Valuation Process

The fair values of the Company's principal assets and liabilities including property, plant and equipment as well as our 50% equity
interest in ARO and our notes receivable from ARO, options to purchase Newbuild Rigs, the First Lien Notes, pensions and Warrants were
estimated with the assistance of third-party valuation advisors.

Property, Plant and Equipment

The valuation of the Company’s drilling rigs was estimated by using an income approach or estimated sales price. These valuations
were based on unobservable inputs that require significant judgments for which there is limited information, including, in the case of an income
approach, assumptions regarding future day rates, utilization, operating costs, reactivation costs and capital requirements. In developing these
assumptions, forecasted day rates and utilization took into account current market conditions and our anticipated business outlook. The cash
flows were discounted at our weighted average cost of capital ("WACC"), which was derived from a blend of our after-tax cost of debt and our
cost of equity, and computed using public share price information for similar offshore drilling market participants, certain U.S. Treasury rates
and certain risk premiums specific to the Company.

Our remaining property and equipment, including owned real estate and other equipment, was valued using a cost approach, in which
the estimated replacement cost of the assets was adjusted for physical depreciation and obsolescence, where applicable, to arrive at estimated
fair value.

The estimated fair value of our property and equipment includes an adjustment to reconcile to our reorganization value.

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 Notes Receivable from ARO

The fair value of the long-term notes receivable from ARO was estimated using an income approach to value the forecasted cash flows
attributed to the note receivable using a discount rate based on a comparable yield with a country-specific risk premium.

Investment in ARO

We estimated the fair value of the equity investment in ARO primarily by applying an income approach, using projected discounted
cash flows of the underlying assets, a risk-adjusted discount rate and an estimated effective income tax rate.

Options to Purchase Newbuild Rigs

The fair value of the options to purchase Newbuild Rigs was estimated using an option pricing model utilizing the estimated fair value
of a newbuild rig, estimated purchase price upon exercise of the options, the holding period, equity volatility and the risk-free rate.

First Lien Notes

The fair value of the First Lien Notes was determined to approximate the par value based on third-party valuation advisors’ analysis of
the Company’s collateral coverage, financial metrics, and interest rate for the First Lien Notes relative to market rates of recent placements of a
similar term for industry participants with similar credit risk.

Pensions

Our pension and other postretirement benefit liabilities and costs are based upon actuarial computations that reflect our assumptions
about future events, including long-term asset returns, interest rates, annual compensation increases, mortality rates and other factors. Upon
emergence, our pension and other post retirement plans were remeasured as of the Effective Date. Key assumptions at the Effective Date
included (1) a weighted average discount rate of 2.81% to determine pension benefit obligations and (2) an expected long-term rate of return on
pension plan assets of 6.03% to determine net periodic pension cost.

Warrants

The fair value of the Warrants was determined using an option pricing model considering the contractual terms of the Warrant issuance.
The key market data assumptions for the option pricing model are the estimated volatility and the risk-free rate. The volatility assumption was
estimated using market data for offshore drilling market participants with consideration for differences in leverage. The risk-free rate
assumption was based on U.S. Treasury Constant Maturity rates with a comparable term.

Condensed Consolidated Balance Sheet

The adjustments included in the following Condensed Consolidated Balance Sheet reflect the effects of the transactions contemplated
by the plan of reorganization and executed by the Company on the Effective Date (reflected in the column “Reorganization Adjustments”), and
fair value and other required accounting adjustments resulting from the adoption of fresh start accounting (reflected in the column “Fresh Start
Accounting Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded.

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 As of April 30, 2021
Fresh Start
Reorganization Accounting
Predecessor Adjustments Adjustments Successor

ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 280.2 $ 327.4 (a) $ — $ 607.6
Restricted cash 45.7 42.7 (b) — 88.4
Accounts receivable, net 425.9 — — 425.9
Other current assets 370.1 1.5 (c) (281.1) (o) 90.5
Total current assets 1,121.9 371.6 (281.1) 1,212.4
PROPERTY AND EQUIPMENT, NET 10,026.4 (417.6) (d) (8,699.7) (p) 909.1
LONG-TERM NOTES RECEIVABLE FROM ARO 442.7 — (214.4) (q) 228.3
INVESTMENT IN ARO 123.9 — (43.4) (r) 80.5
OTHER ASSETS 166.4 (10.0) (e) 8.9 (s) 165.3
$ 11,881.3 $ (56.0) $ (9,229.7) $ 2,595.6
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 161.5 $ 13.1 (f) $ (.5) (t) $ 174.1
Accrued liabilities and other 290.7 (12.4) (g) (61.8) (u) 216.5
Total current liabilities 452.2 0.7 (62.3) 390.6
LONG-TERM DEBT — 544.8 (h) — 544.8
OTHER LIABILITIES 706.2 (55.2) (i) (85.6) (v) 565.4
Total liabilities not subject to compromise 1,158.4 490.3 (147.9) 1,500.8
LIABILITIES SUBJECT TO COMPROMISE 7,313.7 (7,313.7) (j) — —
COMMITMENTS AND CONTINGENCIES
VALARIS SHAREHOLDERS' EQUITY
Predecessor Class A ordinary shares 82.5 (82.5) (k) — —
Predecessor Class B ordinary shares 0.1 (0.1) (k) — —
Successor common shares — 0.8 (l) — 0.8
Successor stock warrants — 16.4 (m) — 16.4
Predecessor additional paid-in capital 8,644.0 (8,644.0) (k) — —
Successor additional paid-in capital — 1,078.7 (l) — 1,078.7
Retained deficit (5,147.4) 14,322.6 (n) (9,175.2) (w) —
Accumulated other comprehensive loss (93.4) — 93.4 (x) —
Predecessor treasury shares (75.5) 75.5 (k) — —
Total Valaris shareholders' equity 3,410.3 6,767.4 (9,081.8) 1,095.9
NONCONTROLLING INTERESTS (1.1) — — (1.1)
Total equity 3,409.2 6,767.4 (9,081.8) 1,094.8
$ 11,881.3 $ (56.0) $ (9,229.7) $ 2,595.6

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Reorganization Adjustments

(a) Cash

Represents the reorganization adjustments (in millions):

Receipt of cash for First Lien Notes $ 500.0

Loan proceeds from backstop lenders 20.0
Funds received for liquidation of rabbi trust related to certain employee benefits 17.6
Payments to Predecessor creditors (129.9)
Transfer of funds for payment of certain professional fees to escrow account (42.7)
Payment for certain professional services fees (29.0)
Various other (8.6)
$ 327.4

(b) Restricted cash

Reflects the reorganization adjustment to record the transfer of cash for payment of certain professional fees to restricted cash, which
will be held in escrow until billings from professionals have been received and reconciled at which time the funds in the account will be
released.

(c) Other current asset

Reflects certain prepayments incurred upon emergence.

(d) Property and Equipment, net

Reflects the reorganization adjustment to remove $417.6 million of work-in-process related to the Newbuild Rigs. These values have
been removed from property and equipment, net, based on the terms of the amended agreements with the Shipyard. As a result of the option to
take delivery, we removed the historical work-in-process balances from the balance sheet.

(e) Other assets

Represents the reorganization adjustments (in millions):

Liquidation of rabbi trust related to certain employee benefits $ (17.6)

Elimination of right-of-use asset associated with Newbuild Rigs (5.5)
Fair value of options to purchase Newbuild Rigs 13.1
$ (10.0)

Our supplemental executive retirement plans (the "SERP") are non-qualified plans that provided eligible employees an opportunity to
defer a portion of their compensation for use after retirement. The SERP was frozen to the entry of new participants in November 2019 and to
future compensation deferrals as of January 1, 2020. Upon emergence, assets previously held in a rabbi trust maintained for the SERP were
liquidated and the SERP was amended.

In accordance with the amended agreement with the Shipyard, our leases were terminated and we have eliminated the historical right-
of-use asset associated with the berthing locations of VALARIS DS-13 and VALARIS DS-14.

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 Additionally, upon effectiveness of the plan of reorganization, the amended agreement with the Shipyard provides the Company with
the option to purchase the Newbuild Rigs. The reorganization adjustments include an asset that reflects the fair value of the option to purchase
the Newbuild Rigs and embedded feature related to the ability, under the amended agreements with the Shipyard, for the equity issued pursuant
to this arrangement to be put to the Company for $8.0 million of consideration for each rig, should we choose to take delivery.

(f) Accounts payable - trade

Reflects the following reorganization adjustments (in millions):

Professional fees incurred upon emergence $ 26.1

Payment of professional fees incurred prior to emergence (12.6)
Payment of certain accounts payable incurred prior to emergence (0.4)
$ 13.1

(g) Accrued liabilities and other

Reflects the following reorganization adjustments (in millions):

Elimination of lease liabilities associated with Newbuild Rigs $ (5.0)

Elimination of accrued post-petition holding costs associated with Newbuild Rigs (4.1)
Payment of certain accrued liabilities incurred prior to emergence (3.3)
$ (12.4)

In accordance with the amended agreement with the Shipyard, our leases were terminated and we have eliminated the historical lease
liability associated with the berthing locations of VALARIS DS-13 and VALARIS DS-14. Accrued post-petition holding costs have also been
eliminated as a result of the amendments made effective upon emergence. Additionally, reorganization adjustments to accrued liabilities and
other includes an amount primarily related to payment of professional fees incurred prior to emergence.

(h) Long-term debt

Reflects the reorganization adjustment to record the issuance of the $550.0 million aggregate principal amount of First Lien Notes and
debt issuance costs of $5.2 million.

(i) Other liabilities

Reflects the following reorganization adjustments (in millions):

Elimination of construction contract intangible liabilities associated with Newbuild Rigs $ (49.9)
Elimination of accrued post-petition holding costs associated with Newbuild Rigs (4.7)
Elimination of lease liabilities associated with Newbuild Rigs (0.6)
$ (55.2)

The reorganization adjustments to other liabilities primarily relate to the elimination of construction contract intangible liabilities
associated with the Newbuild Rigs. These construction contract intangible liabilities were recorded in purchase accounting for the original
contracting entity. As the amended contract is structured as an option whereby we have the right, not the obligation to take delivery of the rigs,
there is no longer an intangible liability associated with the contracts.

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 We have eliminated the historical lease liability associated with the berthing locations of VALARIS DS-13 and VALARIS DS-14 and
accrued post-petition holding costs as described in (g) above.

(j) Liabilities subject to compromise

Reflects the following reorganization adjustments (in millions):

Settlement of liabilities subject to compromise $ 7,313.7

Issuance of common stock to Predecessor creditors (721.0)
Issuance of common stock to backstop parties (323.8)
Payments to Predecessor creditors (129.9)
Gain on settlement of liabilities subject to compromise $ 6,139.0

(k) Predecessor ordinary shares, additional paid-in capital and treasury shares

Represents the cancellation of the Predecessor's ordinary shares of $82.6 million, additional paid-in capital of $8,644.0 million and
treasury stock of $75.5 million.

(l) Successor common shares and additional paid-in capital

Represents par value of 75 million new Common Shares of $0.8 million and capital in excess of par value of $1,078.7 million.

(m) Successor stock warrants

On the Effective Date and pursuant to the plan of reorganization, Valaris Limited issued an aggregate of 5.6 million Warrants
exercisable for up to an aggregate of 5.6 million Common Shares to former holders of Legacy Valaris's equity interests. The fair value of the
Warrants as of the Effective Date was $16.4 million.

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(n) Retained deficit

Represents the reorganization adjustments to total equity as follows (in millions):

Gain on settlement of liabilities subject to compromise $ (6,139.0)

Issuance of Common Shares for backstop premium 29.1
Issuance of Common Shares to the Shipyard 5.4
Write-off of unrecognized share-based compensation expense 16.0
Professional fees and success fees 35.9
Backstop premium 30.0
Impact of newbuild contract amendments 350.7
Reorganization items, net (5,671.9)
Cancellation of Predecessor common shares (82.6)
Cancellation of Predecessor treasury shares 75.5
Cancellation of Predecessor additional paid in capital (7,856.4)
Cancellation of equity component of Predecessor convertible notes (220.0)
Cancellation of Predecessor cash and equity compensation plans (583.6)
Fair value of Warrants 16.4
$ (14,322.6)

Fresh Start Adjustments

(o) Other current assets

Reflects the fresh start adjustments to record the estimated fair value of other current assets as follows (in millions):

Elimination of materials and supplies $ (260.8)

Elimination of historical deferred contract drilling expenses (20.3)
$ (281.1)

Primarily reflects the fresh start adjustment to eliminate the historical balance for materials and supplies as the result of a change in
accounting policies upon emergence.

The fresh start adjustment for the elimination of historical deferred contract drilling expenses primarily relates to deferred mobilization
costs, deferred contract preparation costs and deferred certification costs. Costs incurred for mobilization and contract preparation prior to the
commencement of drilling services are deferred and subsequently amortized over the term of the related drilling contract. Additionally, we
must obtain certifications from various regulatory bodies in order to operate our drilling rigs and must maintain such certifications through
periodic inspections and surveys. The costs incurred in connection with maintaining such certifications, including inspections, tests, surveys
and drydock, as well as remedial structural work and other compliance costs, are deferred and amortized on a straight-line basis over the
corresponding certification periods. These deferred costs have no future economic benefit and are eliminated from the fresh start financial
statements.

(p) Property and equipment, net

Reflects the fresh start adjustments to historical amounts to record the estimated fair value of property and equipment.

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(q) Long-term notes receivable from ARO

Reflects the fresh start adjustment to record the estimated fair value of the long-term notes receivable from ARO. The fair value of the
long-term notes receivable from ARO was estimated using an income approach to value the forecasted cash flows attributed to the note
receivable using a discount rate based on comparable yield with a country-specific risk premium.

(r) Investment in ARO

Reflects the fresh start adjustment to record the estimated fair value of the equity investment in ARO.

(s) Other assets

Reflects the fresh start adjustments to record the estimated fair value of other assets as follows (in millions):

Deferred tax impacts of certain fresh start adjustments $ 21.1

Fair value of contracts with customers 8.5
Fair value adjustments to right-of-use assets 0.4
Elimination of historical deferred contract drilling expenses (16.5)
Elimination of other deferred costs (4.6)
$ 8.9

The fresh start adjustment for deferred income tax assets represents the estimated incremental deferred income taxes, which reflects the
tax effect of the differences between the estimated fair value of certain assets and liabilities recorded under fresh start accounting and the
carryover tax basis of those assets and liabilities.

The fresh start adjustment to record the estimated fair value of contracts with customers represents the intangible assets recognized for
firm customer contracts in place at the Effective Date that have favorable contract terms as compared to current market day rates for
comparable drilling rigs. The various factors considered in the adjustment are (1) the contracted day rate for each contract, (2) the remaining
term of each contract, (3) the rig class and (4) the market conditions for each respective rig class at the emergence date. The intangible assets
are computed based on the present value of the difference in cash inflows over the remaining contract term as compared to a hypothetical
contract with the same remaining term at an estimated current market day rate using a risk-adjusted discount rate and an estimated effective
income tax rate. This balance will be amortized to operating revenues over the respective remaining contract terms on a straight-line basis.

The fresh start adjustment to right-of-use assets reflects the remeasuring of our operating leases as of the emergence date. Certain
operating leases had unfavorable terms as of the emergence date, and as a result the right-of-use asset for such leases does not equal the lease
liability upon emergence.

The fresh start adjustment to eliminate historical deferred contract drilling expenses reflects the noncurrent portion of historical
deferred contract drilling expenses described in (o) above as well as the elimination of customer contract intangibles previously recorded in
purchase accounting for the Rowan Transaction.

The fresh start adjustments to eliminate other deferred costs reflect non-operational deferred costs that have no future economic benefit.

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(t) Accounts payable - trade

The fresh start adjustment to accounts payable trade reflects the write off of certain deferred amounts related to our operating leases.
This value was eliminated through the remeasurement of our leases as of the emergence date.

(u) Accrued liabilities and other

Reflects the fresh start adjustments to record the estimated fair value of current liabilities as follows (in millions):

Elimination of customer payable balance $ (36.8)

Elimination of historical deferred revenues (25.9)
Fair value of contracts with customers 0.5
Fair value adjustment to lease liabilities 0.4
$ (61.8)

The fresh start adjustment to eliminate the customer payable balance is related to the change in accounting policy to present the balance
on a net basis.

The fresh start adjustment to eliminate historical deferred revenues is primarily related to amounts previously received for the
reimbursement for capital upgrades, upfront contract deferral fees and mobilization. Such amounts are deferred and subsequently amortized
over the term of the related drilling contract. The deferred revenue does not represent any future performance obligations and is therefore
eliminated as a fresh start accounting adjustment.

The fresh start adjustment to record the estimated fair value of contracts with customers reflects the intangible liabilities recognized for
firm customer contracts in place at the Effective Date that have unfavorable contract terms as compared to current market day rates for
comparable drilling rigs. The various factors considered in the adjustment are (1) the contracted day rate for each contract, (2) the remaining
term of each contract, (3) the rig class and (4) the market conditions for each respective rig class at the emergence date. The intangible
liabilities are computed based on the present value of the difference in cash inflows over the remaining contract term as compared to a
hypothetical contract with the same remaining term at an estimated current market day rate using a risk-adjusted discount rate and an estimated
effective income tax rate. This balance will be amortized to operating revenues over the respective remaining contract terms on a straight-line
basis.

The fresh start adjustment to lease liabilities reflects the remeasuring of our operating leases as of the Effective Date.

(v) Other liabilities

Reflects the fresh start adjustments to record the estimated fair value of other liabilities as follows (in millions):

Adjustment to fair value of pension and other post-retirement plan liabilities $ (82.7)
Elimination of historical deferred revenue (5.9)
Deferred tax impacts of certain fresh start adjustments 1.7
Fair value adjustments to lease liabilities 1.1
Fair value adjustments to other liabilities 0.2
$ (85.6)

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 The fresh start adjustment to fair value pension and other post-retirement plan liabilities results from the remeasurement of the pension
and other post-retirement benefit plans at the emergence date.

The fresh start adjustment to eliminate deferred revenues reflects the noncurrent portion of deferred revenues described in (u) above.

The fresh start adjustment for deferred income tax liabilities represents the estimated incremental deferred taxes, which reflects the tax
effect of the differences between the estimated fair value certain assets and liabilities recorded under fresh start accounting and the carryover
tax basis of those assets and liabilities.

The fresh start adjustment to lease liabilities reflects the remeasuring of our operating leases as of the Effective Date.

(w) Retained Deficit

Reflects the fresh start adjustments to retained deficit as follows (in millions):

Fair value adjustments to prepaid and other current assets $ (281.1)

Fair value adjustments to property (8,699.7)
Fair value of intangible assets 8.5
Fair value adjustment to investment in ARO (43.4)
Fair value adjustment to note receivable from ARO (214.4)
Fair value adjustments to other assets (20.7)
Fair value adjustments to other current liability 62.8
Fair value of intangible liabilities (0.5)
Fair value adjustment to other liabilities 87.3
Elimination of Predecessor accumulated other comprehensive loss (93.4)
Total fresh start adjustments included in reorganization items, net $ (9,194.6)
Tax impact of fresh start adjustments 19.4
$ (9,175.2)

(x) Accumulated other comprehensive loss

Reflects the fresh start adjustments for the elimination of Predecessor accumulated other comprehensive loss through Reorganization
items, net.

4. REVENUE FROM CONTRACTS WITH CUSTOMERS

Our drilling contracts with customers provide a drilling rig and drilling services on a day rate contract basis. Under day rate contracts,
we provide an integrated service that includes the provision of a drilling rig and rig crews for which we receive a daily rate that may vary
between the full rate and zero rate throughout the duration of the contractual term, depending on the operations of the rig.

We also may receive lump-sum fees or similar compensation for the mobilization, demobilization and capital upgrades of our rigs. Our
customers bear substantially all of the costs of constructing the well and supporting drilling operations, as well as the economic risk relative to
the success of the well.

Our drilling contracts contain a lease component and we have elected to apply the practical expedient provided under ASC 842 to not
separate the lease and non-lease components and apply the revenue recognition guidance in ASU No. 2014-09, Revenue from Contracts with
Customers (Topic 606). Our drilling service provided under each drilling contract is a single performance obligation satisfied over time and
comprised of a series of

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distinct time increments, or service periods. Total revenue is determined for each individual drilling contract by estimating both fixed and
variable consideration expected to be earned over the contract term. Fixed consideration generally relates to activities such as mobilization,
demobilization and capital upgrades of our rigs that are not distinct performance obligations within the context of our contracts and is
recognized on a straight-line basis over the contract term. Variable consideration generally relates to distinct service periods during the contract
term and is recognized in the period when the services are performed.

The amount estimated for variable consideration is only recognized as revenue to the extent that it is probable that a significant reversal
will not occur during the contract term. We have applied the optional exemption afforded in ASU No. 2014-09, Revenue from Contracts with
Customers (Topic 606), and have not disclosed the variable consideration related to our estimated future day rate revenues. The remaining
duration of our drilling contracts based on those in place as of December 31, 2021 was between approximately 1 month and 3.5 years.

Day Rate Drilling Revenue

Our drilling contracts provide for payment on a day rate basis and include a rate schedule with higher rates for periods when the drilling
rig is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The day rate invoiced to the
customer is determined based on the varying rates applicable to specific activities performed on an hourly or other time increment basis. Day
rate consideration is allocated to the distinct hourly or other time increment to which it relates within the contract term and is generally
recognized consistent with the contractual rate invoiced for the services provided during the respective period. Invoices are typically issued to
our customers on a monthly basis and payment terms on customer invoices are typically 30 days.

Certain of our contracts contain performance incentives whereby we may earn a bonus based on pre-established performance criteria.
Such incentives are generally based on our performance over individual monthly time periods or individual wells. Consideration related to
performance bonus is generally recognized in the specific time period to which the performance criteria was attributed.

We may receive termination fees if certain drilling contracts are terminated by the customer prior to the end of the contractual term.
Such compensation is recognized as revenue when our performance obligation is satisfied, the termination fee can be reasonably measured and
collection is probable.

Mobilization / Demobilization Revenue

In connection with certain contracts, we receive lump-sum fees or similar compensation for the mobilization of equipment and
personnel prior to the commencement of drilling services or the demobilization of equipment and personnel upon contract completion. Fees
received for the mobilization or demobilization of equipment and personnel are included in Operating revenues. The costs incurred in
connection with the mobilization and demobilization of equipment and personnel are included in Contract drilling expense.

Mobilization fees received prior to commencement of drilling operations are recorded as a contract liability and amortized on a straight-
line basis over the contract term. Demobilization fees expected to be received upon contract completion are estimated at contract inception and
recognized on a straight-line basis over the contract term. In some cases, demobilization fees may be contingent upon the occurrence or non-
occurrence of a future event. In such cases, this may result in cumulative-effect adjustments to demobilization revenues upon changes in our
estimates of future events during the contract term.

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 Capital Upgrade / Contract Preparation Revenue

In connection with certain contracts, we receive lump-sum fees or similar compensation for requested capital upgrades to our drilling
rigs or for other contract preparation work. Fees received for requested capital upgrades and other contract preparation work are recorded as a
contract liability and amortized on a straight-line basis over the contract term to operating revenues. Costs incurred for capital upgrades are
capitalized and depreciated over the useful life of the asset.

Contract Assets and Liabilities

Contract assets represent amounts recognized as revenue but for which the right to invoice the customer is dependent upon our future
performance. Once the previously recognized revenue is invoiced, the corresponding contract asset, or a portion thereof, is transferred to
accounts receivable.

Contract liabilities generally represent fees received for mobilization, capital upgrades or in the case of our 50/50 joint venture with
Saudi Aramco, represent the difference between the amounts billed under the bareboat charter arrangements and lease revenues earned up to the
respective period end. See “Note 6 – Equity Method Investment in ARO" for additional details regarding our balances with ARO.

Contract assets and liabilities are presented net on our Consolidated Balance Sheets on a contract-by-contract basis. Current contract
assets and liabilities are included in Other current assets and Accrued liabilities and other, respectively, and noncurrent contract assets and
liabilities are included in Other assets and Other liabilities, respectively, on our Consolidated Balance Sheets.

The following table summarizes our contract assets and contract liabilities (in millions):
Successor Predecessor
December 31, 2021 December 31, 2020
Current contract assets $ 0.3 $ 1.4
Noncurrent contract assets $ — $ 0.4
Current contract liabilities (deferred revenue) $ 45.8 $ 57.6
Noncurrent contract liabilities (deferred revenue) $ 10.8 $ 14.3

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 Changes in contract assets and liabilities during the period are as follows (in millions):
Contract
Contract Assets Liabilities
Balance as of December 31, 2020 (Predecessor) $ 1.8 $ 71.9
Revenue recognized in advance of right to bill customer 2.3 —
Increase due to cash received — 10.2
Decrease due to amortization of deferred revenue that was included in the beginning contract
liability balance — (14.8)
Decrease due to transfer to receivables during the period (1.6) —
Fresh start accounting revaluation (0.3) (31.6)
Balance as of April 30, 2021 (Predecessor) 2.2 35.7
Balance as of May 1, 2021 (Successor) 2.2 35.7
Revenue recognized in advance of right to bill customer 2.5 —
Increase due to cash received — 80.1
Decrease due to amortization of deferred revenue that was added during the period — (21.5)
Decrease due to transfer to receivables and payables during the period (4.4) (37.7)
Balance as of December 31, 2021 (Successor) $ 0.3 $ 56.6

Deferred Contract Costs

Costs incurred for upfront rig mobilizations and certain contract preparations are attributable to our future performance obligation under
each respective drilling contract. These costs are deferred and amortized on a straight-line basis over the contract term. Demobilization costs
are recognized as incurred upon contract completion. Costs associated with the mobilization of equipment and personnel to more promising
market areas without contracts are expensed as incurred. Deferred contract costs were included in Other current assets and Other assets on our
Consolidated Balance Sheets and totaled $31.4 million and $13.8 million as of December 31, 2021 (Successor) and December 31, 2020
(Predecessor), respectively. For the Successor, during the eight months ended December 31, 2021, amortization of such costs totaled $22.0
million. For the Predecessor, during the four months ended April 30, 2021, the year ended December 31, 2020 and the year ended
December 31, 2019, amortization of such costs totaled $7.6 million, $42.1 million and $42.1 million respectively.

Deferred Certification Costs

We must obtain certifications from various regulatory bodies in order to operate our drilling rigs and must maintain such certifications
through periodic inspections and surveys. The costs incurred in connection with maintaining such certifications, including inspections, tests,
surveys and drydock, as well as remedial structural work and other compliance costs, are deferred and amortized on a straight-line basis over
the corresponding certification periods. Deferred regulatory certification and compliance costs were included in Other current assets and Other
assets on our Consolidated Balance Sheets and totaled $3.3 million and $8.4 million as of December 31, 2021 (Successor) and December 31,
2020 (Predecessor), respectively. For the Successor, during the eight months ended December 31, 2021, amortization of such costs totaled $0.7
million. For the Predecessor, during the four months ended April 30, 2021, the year ended December 31, 2020 and the year ended
December 31, 2019, amortization of these costs totaled $3.1 million, $8.9 million and $10.3 million respectively.

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 Future Amortization of Contract Liabilities and Deferred Costs

Our contract liabilities and deferred costs are amortized on a straight-line basis over the contract term or corresponding certification
period to Operating revenues and Contract drilling expense, respectively, with the exception of the contract liabilities related to our bareboat
charter arrangements with ARO which would not be contractually payable until the end of the lease term or termination, if sooner. See "Note 6
- Equity Method Investment in ARO" for additional information on ARO and related arrangements. For the Successor, expected future
amortization of our contract liabilities, or in the case of our contract liabilities related to our bareboat charter arrangements with ARO, the
amount is reflected at the end of the lease term, and deferred costs recorded as of December 31, 2021 is set forth in the table below (in
millions):

2025 &
2022 2023 2024 Thereafter Total
Amortization of contract liabilities $ 45.8 $ 7.8 $ 1.2 $ 1.8 $ 56.6
Amortization of deferred costs $ 26.9 $ 6.9 $ 0.9 $ — $ 34.7

5. ROWAN TRANSACTION

On April 11, 2019 (the "Transaction Date"), we completed our combination with Rowan Companies Limited (formerly Rowan
Companies plc) ("Rowan") pursuant to the Transaction Agreement (the "Rowan Transaction"). We were considered to be the acquirer for
accounting purposes. As a result, Rowan's assets acquired and liabilities assumed in the Rowan Transaction were recorded at their estimated
fair values as of the Transaction Date under the acquisition method of accounting. When the fair value of the net assets acquired exceeds the
consideration transferred in an acquisition, the difference is recorded as a bargain purchase gain in the period in which the transaction occurs.
As of March 31, 2020, we completed our fair value assessments of assets acquired and liabilities assumed. The provisional amounts recorded
for assets and liabilities acquired were based on preliminary estimates of their fair values as of the Transaction Date and measurement period
adjustments were recorded throughout the measurement period as provisional amounts were finalized.

Consideration

As a result of the Rowan Transaction, Rowan shareholders received 2.75 Legacy Valaris Class A Ordinary shares for each share of
Rowan Class A ordinary share, representing a value of $43.67 per Rowan share based on a closing price of $15.88 per Legacy Valaris share on
April 10, 2019, the last trading day before the Transaction Date. Total consideration delivered in the Rowan Transaction consisted of 88.3
million Legacy Valaris shares with an aggregate value of $1.4 billion, inclusive of $2.6 million for the estimated fair value of replacement
employee equity awards. Upon closing of the Rowan Transaction, we effected a consolidation (being a reverse stock split under English law)
where every four existing Class A ordinary shares, each with a nominal value of $0.10, were consolidated into one Class A ordinary share, each
with a nominal value of $0.40 (the "Reverse Stock Split"). All Legacy Valaris share and per share data included in this report have been
retroactively adjusted to reflect the Reverse Stock Split.

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 Bargain Purchase Gain (Predecessor)

The estimated fair values assigned to assets acquired net of liabilities assumed exceeded the consideration transferred, resulting in a
bargain purchase gain at the Transaction date of $712.8 million primarily driven by the decline in our Legacy Valaris share price from $33.92
to $15.88 between the last trading day prior to the announcement of the Rowan Transaction and the Transaction Date. Measurement period
adjustments were recorded to reflect new information obtained about facts and circumstances existing as of the Transaction Date and did not
result from subsequent intervening events. The measurement period adjustments reflect changes in the estimated fair values of certain assets
and liabilities, primarily related to long-lived assets, deferred income taxes and uncertain tax positions. The adjustments recorded resulted in a
$75.8 million decline to the bargain purchase gain during 2019, resulting in a net bargain purchase gain of $637.0 million included in Other,
net, in our Consolidated Statements of Operations for the year ended December 31, 2019 (Predecessor). Additionally, adjustments resulted in a
$6.3 million decline to the bargain purchase gain during the first quarter of 2020, which is included in Other, net, in our Consolidated
Statements of Operations for the year ended December 31, 2020 (Predecessor).

Transaction-related costs (Predecessor)

Transaction-related costs were expensed as incurred and consisted of various advisory, legal, accounting, valuation and other
professional or consulting fees totaling $18.0 million for the year ended December 31, 2019 (Predecessor). These costs were included in
General and administrative expense in our Consolidated Statements of Operations.

Revenues and Losses of Rowan

The amount of revenues and net losses of Rowan that are included from the Transaction Date to December 31, 2019 in the Company's
Consolidated Statements of Operations for the Year ended December 31, 2019 (Predecessor) were $448.0 million and $122.7 million,
respectively.

Unaudited Pro Forma Impact of the Rowan Transaction (Predecessor)

The following unaudited supplemental pro forma results present consolidated information as if the Rowan Transaction was completed
on January 1, 2019. The pro forma results include, among others, (1) the amortization associated with acquired intangible assets and liabilities,
(2) a reduction in depreciation expense for adjustments to property and equipment, (3) the amortization of premiums and discounts recorded on
Rowan's debt, (iv) removal of the historical amortization of unrealized gains and losses related to Rowan's pension plans and (v) the
amortization of basis differences in assets and liabilities of ARO. The pro forma results do not include any potential synergies or non-recurring
charges that may result directly from the Rowan Transaction.

(unaudited) Twelve Months Ended

(in millions, except per share amounts) December 31, 2019(1)
Revenues $ 2,240.5
Net loss $ (997.8)
Earnings per share - basic and diluted $ (3.82)

(1) Pro forma net loss and loss per share were adjusted to exclude an aggregate $108.1 million of transaction related and integration costs
incurred during the year ended December 31, 2019. Additionally, pro forma net loss and loss per share exclude the measurement period
adjustments and estimated gain on bargain purchase of $637.0 million recognized during the year ended December 31, 2019
(Predecessor).

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6. EQUITY METHOD INVESTMENT IN ARO

Background

ARO, a company that owns and operates offshore drilling rigs in Saudi Arabia, was formed and commenced operations in 2017
pursuant to the terms of an agreement entered into by Rowan and Saudi Aramco to create a 50/50 joint venture ("Shareholder Agreement").
Pursuant to the Rowan Transaction, Valaris acquired Rowan's interest in ARO making Valaris a 50% partner. As of December 31, 2021, ARO
owns seven jackup rigs, has ordered two newbuild jackup rigs and leases seven rigs from us through bareboat charter arrangements (the "Lease
Agreements") whereby substantially all operating costs are incurred by ARO. At December 31, 2021, all of the leased rigs were operating under
three-year drilling contracts, or related extensions, with Saudi Aramco. The seven rigs owned by ARO, previously purchased from Rowan and
Saudi Aramco, are currently operating under contracts with Saudi Aramco for an aggregate 15 years provided that the rigs meet the technical
and operational requirements of Saudi Aramco.

The Lease Agreements with ARO originally provided for a fixed per day bareboat charter amount over the term of the lease, calculated
based on a split of projected earnings over the lease term. However, in December 2020, the Shareholder Agreement was amended ("December
Amendment") such that the per day bareboat charter amount in the associated lease agreements is subject to adjustment based on actual
performance of the respective rig and that a cash payment based on actual results will be due at the end of the lease term or, if sooner,
termination. The Company, as lessor, accounts for these arrangements as operating leases. The December Amendment resulted in a
modification of the leases and as a result we began accounting for lease revenue using the variable rate as opposed to a fixed rental amount. Our
results of operations for the year ended December 31, 2020 (Predecessor) reflect the impact of the lease modification on our rental revenues to
reflect cumulative results through that period.

In connection with our 50/50 joint venture, we have a potential obligation to fund ARO for newbuild jackup rigs. ARO has plans to
purchase 20 newbuild jackup rigs over an approximate 10-year period. In January 2020, ARO ordered the first two newbuild jackups, each with
a shipyard price of $176.0 million. The first rig is expected to be delivered in the fourth quarter of 2022 and the second rig is expected either
late in the fourth quarter of 2022 or in the first quarter of 2023. ARO is expected to place orders for two additional newbuild jackups in 2022.
The joint venture partners intend for the newbuild jackup rigs to be financed out of available cash from ARO's operations and/or funds
available from third-party debt financing. ARO paid a 25% down payment from cash on hand for each of the newbuilds ordered in January
2020 and is actively exploring financing options for remaining payments due upon delivery. In the event ARO has insufficient cash from
operations or is unable to obtain third-party financing, each partner may periodically be required to make additional capital contributions to
ARO, up to a maximum aggregate contribution of $1.25 billion from each partner to fund the newbuild program. Each partner's commitment
shall be reduced by the actual cost of each newbuild rig, on a proportionate basis.

The joint venture partners agreed that Saudi Aramco, as a customer, will provide drilling contracts to ARO in connection with the
acquisition of the newbuild rigs. The initial contracts provided by Saudi Aramco for each of the newbuild rigs will be for an eight-year term.
The day rate for the initial contracts for each newbuild rig will be determined using a pricing mechanism that targets a six-year payback period
for construction costs on an EBITDA basis. The initial eight-year contracts will be followed by a minimum of another eight years of term, re-
priced in three-year intervals based on a market pricing mechanism.

Upon establishment of ARO, Rowan entered into (1) an agreement to provide certain back-office services for a period of time until
ARO develops its own infrastructure (the "Transition Services Agreement"), and (2) an agreement to provide certain Rowan employees through
secondment arrangements to assist with various onshore and offshore services for the benefit of ARO (the "Secondment Agreement"). These
agreements remained in place subsequent to the Rowan Transaction. Pursuant to these agreements, we or our seconded employees provide
various services to ARO, and in return, ARO provides remuneration for those services. From time to time, we may also sell equipment or
supplies to ARO. During the quarter ended June 30, 2020, almost all remaining employees

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seconded to ARO became employees of ARO. Additionally, our services to ARO under the Transition Services Agreement were completed as
of December 31, 2020.

Summarized Financial Information

The operating revenues of ARO presented below reflect revenues earned under drilling contracts with Saudi Aramco for the seven
ARO-owned jackup rigs as well as the rigs leased from us.

Contract drilling expense is inclusive of the bareboat charter fees for the rigs leased from us. Cost incurred under the Secondment
Agreement are included in Contract drilling expense and General and administrative, depending on the function to which the seconded
employee's service related. Substantially all costs incurred under the Transition Services Agreement are included in General and administrative.
See additional discussion below regarding these related-party transactions.

Summarized financial information for ARO is as follows (in millions):

Year Ended Year Ended April 11, 2019 -
December 31, 2021 December 31, 2020 December 31, 2019
Revenues $ 470.6 $ 549.4 $ 410.5
Operating expenses
Contract drilling (exclusive of depreciation) 362.3 388.2 280.2
Depreciation 65.2 54.8 40.3
General and administrative 17.8 24.2 27.1
Operating income 25.3 82.2 62.9
Other expense, net 13.4 26.7 28.6
Provision for income taxes 7.9 14.2 9.7
Net income $ 4.0 $ 41.3 $ 24.6

December 31, 2021 December 31, 2020

Cash and cash equivalents $ 270.8 $ 237.7
Other current assets 135.0 120.9
Non-current assets 775.8 804.0
Total assets $ 1,181.6 $ 1,162.6

Current liabilities $ 79.9 $ 70.8

Non-current liabilities 956.7 950.8
Total liabilities $ 1,036.6 $ 1,021.6

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 Equity in Earnings of ARO

We account for our interest in ARO using the equity method of accounting and only recognize our portion of ARO's net income,
adjusted for basis differences as discussed below, which is included in Equity in earnings (losses) of ARO in our Consolidated Statements of
Operations. ARO is a variable interest entity; however, we are not the primary beneficiary and therefore do not consolidate ARO. Judgments
regarding our level of influence over ARO included considering key factors such as each partner's ownership interest, representation on the
board of managers of ARO and ability to direct activities that most significantly impact ARO's economic performance, including the ability to
influence policy-making decisions. Our investment in ARO would be assessed for impairment if there are changes in facts and circumstances
that indicate a loss in value may have occurred. If a loss were deemed to have occurred and this loss was determined to be other than
temporary, the carrying value of our investment would be written down to fair value and an impairment recorded.

We have an equity method investment in ARO that was recorded at its estimated fair value as of the Transaction Date. We computed
the difference between the fair value of ARO's net assets and the carrying value of those net assets in ARO's U.S. GAAP financial statements
("basis differences") on that date. These basis differences primarily relate to ARO's long-lived assets and the recognition of intangible assets
associated with certain of ARO's drilling contracts that were determined to have favorable terms as of the Transaction Date. Additionally, in
fresh start accounting, we have recorded our investment in ARO at its estimated fair value as of the Effective Date. Basis differences on that
date primarily related to ARO's long-lived assets.

Basis differences are amortized over the remaining life of the assets or liabilities to which they relate and are recognized as an
adjustment to the equity in earnings (losses) of ARO in our Consolidated Statements of Operations. The amortization of those basis differences
are combined with our 50% interest in ARO's net income. A reconciliation of those components is presented below (in millions):
Successor Predecessor
Eight Months Four Months April 11, 2019 -
Ended December Ended April 30, Year Ended December 31,
31, 2021 2021 December 31, 2020 2019
50% interest in ARO net income (loss) $ (4.0) $ 6.0 $ 20.7 $ 12.3
Amortization of basis differences 10.1 (2.9) (28.5) (24.9)
Equity in earnings (losses) of ARO $ 6.1 $ 3.1 $ (7.8) $ (12.6)

Related-Party Transactions

Revenues recognized by us related to the Lease Agreements, Transition Services Agreement and Secondment Agreement are as follows
(in millions):
Successor Predecessor
Eight Months Four Months
Ended December Ended April 30, Year Ended April 11, 2019 -
31, 2021 2021 December 31, 2020 December 31, 2019
Lease revenue $ 35.4 $ 21.7 $ 52.2 $ 58.2
Secondment revenue 1.5 1.1 21.6 49.9
Transition Services revenue — — 1.3 17.3
Total revenue from ARO (1) $ 36.9 $ 22.8 $ 75.1 $ 125.4

(1) All of the revenues presented above are included in our Other segment in our segment disclosures. See "Note 17- Segment Information"
for additional information.

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 Amounts receivable from ARO related to the items above totaled $12.1 million and $21.6 million as of December 31, 2021 (Successor)
and December 31, 2020 (Predecessor), respectively, and are included in Accounts receivable, net, on our Consolidated Balance Sheets.

We had $10.8 million and $38.3 million of contract liabilities and Accounts payable, respectively, related to the Lease Agreements as
of December 31, 2021 (Successor). As of December 31, 2020 (Predecessor), we had $30.9 million of contract liabilities related to the Lease
Agreements and no Accounts payable to ARO. The per day bareboat charter amount in the Lease Agreements is subject to adjustment based on
actual performance of the respective rig and as such contract liabilities related to the Lease Agreements are subject to adjustment during the
lease term. Upon completion of the lease term, such amount becomes a payable to or a receivable from ARO.

During 2017 and 2018, Rowan contributed cash to ARO in exchange for 10-year shareholder notes receivable based on a one-year
LIBOR rate, set as of the end of the year prior to the year applicable, plus two percent. As of December 31, 2021 (Successor) and December 31,
2020 (Predecessor) the carrying amount of the long-term notes receivable from ARO was $249.1 million and $442.7 million respectively. The
notes receivable were adjusted to fair value as of the Effective Date. The discount to the principal amount of $442.7 million is being amortized
using the effective interest method to interest income over the remaining terms of the notes. The Shareholders’ Agreement prohibits the sale or
transfer of the shareholder note to a third-party, except in certain limited circumstances. During the year ended December 31, 2020
(Predecessor), we recorded $10.2 million of employee benefit obligations against our long-term notes receivable from ARO. Interest is
recognized as interest income in our Consolidated Statements of Operations. During the eight months ended December 31, 2021 (Successor),
interest totaled $27.8 million of which $20.8 million pertains to non-cash amortization of discount on the shareholder notes. During the four
months ended April 30, 2021 (Predecessor), interest totaled $3.5 million. Interest totaled $18.3 million for the year ended December 31, 2020
(Predecessor) and $16.8 million for the period from April 11, 2019 - December 31, 2019 (Predecessor). Interest amounts due were collected
prior to the end of the year and we had no interest receivable from ARO as of December 31, 2021 (Successor) and December 31, 2020
(Predecessor).

Maximum Exposure to Loss

The following table summarizes the total assets and liabilities as reflected in our Consolidated Balance Sheets as well as our maximum
exposure to loss related to ARO (in millions). Our maximum exposure to loss is limited to (1) our equity investment in ARO; (2) the carrying
amount of our shareholder notes receivable; and (3) other receivables and contract assets from ARO, partially offset by contract liabilities as
well as payables to ARO.
Successor Predecessor
December 31, 2021 December 31, 2020
Total assets $ 348.1 $ 585.2
Less: total liabilities 49.1 30.9
Maximum exposure to loss $ 299.0 $ 554.3

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7. FAIR VALUE MEASUREMENTS

The following fair value hierarchy table categorizes information regarding our financial assets and liabilities measured at fair value on a
recurring basis (in millions):
Quoted Prices in Significant
Active Markets Other Significant
for Observable Unobservable
Identical Assets Inputs Inputs
(Level 1) (Level 2) (Level 3) Total
As of December 31, 2020
(Predecessor)
Supplemental executive retirement plan
assets $ 22.6 $ — $ — $ 22.6
Total financial assets $ 22.6 $ — $ — $ 22.6

Supplemental Executive Retirement Plan Assets

Our supplemental executive retirement plans (the "SERP") are non-qualified plans that provided eligible employees an opportunity to
defer a portion of their compensation for use after retirement. The SERP was frozen to the entry of new participants in November 2019 and to
future compensation deferrals as of January 1, 2020. Assets held in a rabbi trust maintained for the SERP were marketable securities measured
at fair value on a recurring basis using Level 1 inputs and were included in Other assets, net, on our Consolidated Balance Sheet as of
December 31, 2020 (Predecessor). The fair value measurements of assets held in the SERP were based on quoted market prices. Pursuant to the
plan of reorganization, the assets held in the rabbi trust maintained for the SERP were liquidated upon the Effective Date and used to satisfy the
claims of creditors. Effective July 1, 2021, we amended the SERP to provide for quarterly credits of an interest equivalent based upon the rate
of interest paid on ten-year United States treasury notes in November of the immediately preceding calendar year and the participant plan
balances as of the first day of such quarter. Net unrealized gains of $1.2 million, $3.2 million and $5.0 million from marketable securities held
in our SERP were included in Other, net, in our Consolidated Statements of Operations for the four months ended April 30, 2021 (Predecessor),
the year ended December 31, 2020 (Predecessor) and the year ended December 31, 2019 (Predecessor), respectively.

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 Other Financial Instruments

The carrying values and estimated fair values of our debt instruments were as follows (in millions):
Successor Predecessor
December 31, 2021 December 31, 2020
Carrying Estimated Carrying Estimated
Value Fair Value (1) Fair
Value Value
Secured first lien notes due 2028 $ 545.3 $ 575.7 $ — $ —
6.875% Senior notes due 2020 — — 122.9 8.6
4.70% Senior notes due 2021 — — 100.7 4.5
4.875% Senior notes due 2022 — — 620.8 32.9
3.00% Exchangeable senior notes due 2024 (2) — — 849.5 76.5
4.50% Senior notes due 2024 — — 303.4 13.7
4.75% Senior notes due 2024 — — 318.6 18.8
8.00% Senior notes due 2024 — — 292.3 12.9
5.20% Senior notes due 2025 — — 333.7 12.7
7.375% Senior notes due 2025 — — 360.8 20.9
7.75% Senior notes due 2026 — — 1,000.0 44.0
7.20% Debentures due 2027 — — 112.1 5.7
7.875% Senior notes due 2040 — — 300.0 21.0
5.40% Senior notes due 2042 — — 400.0 23.6
5.75% Senior notes due 2044 — — 1,000.5 38.0
5.85% Senior notes due 2044 — — 400.0 26.0
Amounts borrowed under Revolving Credit Facility (3) — — 581.0 581.0
Total debt $ 545.3 $ 575.7 $ 7,096.3 $ 940.8
Less : Liabilities Subject to Compromise (4) — — 7,096.3 940.8
Total long-term debt $ 545.3 $ 575.7 $ — $ —

(1) The carrying amount of debt instruments at December 31, 2020 represents the Predecessor's outstanding borrowings as of the Petition
Date and are classified as Liabilities Subject to Compromise in our Consolidated Balance Sheet as of December 31, 2020.
(2)
For the Predecessor, the 3% exchangeable senior notes due 2024 (the "2024 Convertible Notes") were exchangeable into cash, our Class
A ordinary shares or a combination thereof. The 2024 Convertible Notes were separated, at issuance, into their liability and equity
components on our Consolidated Balance Sheet. The equity component was initially recorded to additional paid-in capital and as a debt
discount and the discount was being amortized to interest expense over the life of the instrument. The carrying amount at December 31,
2020 represented the aggregate principal amount of these notes as of the Petition Date and was classified as Liabilities Subject to
Compromise in our Consolidated Balance Sheet as of December 31, 2020. The Predecessor discontinued accruing interest on these
notes as of the Petition Date. The equity component was $220.0 million and was classified as Additional Paid-in Capital as of
December 31, 2020. On the Effective Date, in accordance with the plan of reorganization, all outstanding obligations under the 2024
Convertible Notes were cancelled and the equity component was written off to retained earnings.
(3) In addition to the amount borrowed above, the Predecessor had $27.0 million in undrawn letters of credit issued under the Revolving
Credit Facility as of December 31, 2020. On the Effective Date, in accordance with the plan of reorganization, all undrawn letters of
credit issued under the Revolving Credit Facility were collateralized pursuant to the terms of the Revolving Credit Facility.

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 (4) As discussed in “Note 2 - Chapter 11 Proceedings” and “Note 3 - Fresh Start Accounting,” since the Petition Date and through the
Effective Date, the Company operated as a debtor-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with
the provisions of the Bankruptcy Code. Accordingly, all of our long-term debt obligations were presented as Liabilities Subject to
Compromise in our Consolidated Balance Sheet as of December 31, 2020 (Predecessor). All unamortized debt discounts, premiums or
issuance costs related to our long-term debt obligations were written off to reorganization items as of the Petition Date in 2020.
Additionally, we discontinued accruing interest on our indebtedness as of the Petition Date.

The estimated fair values of the Successor's First Lien Notes and the Predecessor's Senior Notes were determined using quoted market
prices, which are level 1 inputs. As of December 31, 2021 (Successor), the estimated fair value of our long-term notes receivable from ARO
was $266.7 million and was estimated by using an income approach to value the forecasted cash flows attributed to the notes receivable using a
discount rate based on comparable yield with a country-specific risk premium.

The estimated fair values of our cash and cash equivalents, restricted cash, accounts receivable and trade payables approximated their
carrying values as of December 31, 2021 (Successor) and December 31, 2020 (Predecessor).

8. PROPERTY AND EQUIPMENT

Property and equipment consisted of the following (in millions):

Successor Predecessor
December 31, December 31,
2021 2020
Drilling rigs and equipment $ 886.9 $ 12,584.4
Work-in-progress 35.6 446.1
Other 34.5 178.8
$ 957.0 $ 13,209.3

Concurrent with our emergence from bankruptcy, we adopted fresh start accounting and adjusted the carrying value of our property and
equipment to estimated fair value which included an adjustment to reconcile to our reorganization value. See "Note 3 - Fresh Start Accounting"
for more information.

Work-in-progress as of December 31, 2020 (Predecessor) primarily consisted of approximately $418 million related to the construction
of ultra-deepwater drillships VALARIS DS-13 and VALARIS DS-14.

Impairment of Long-Lived Assets

Predecessor

During the four months ended April 30, 2021, we recorded an aggregate pre-tax, non-cash impairment with respect to certain floaters of
$756.5 million. During the year ended December 31, 2020 and the year ended December 31, 2019, we recorded an aggregate pre-tax, non-cash
impairment with respect to certain floaters, jackups and spare equipment of $3.6 billion and $98.4 million, respectively. These pre-tax non-cash
impairments are included in Loss on impairment in our Consolidated Statements of Operations.

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Assets held-for-use

On a quarterly basis, we evaluate the carrying value of our property and equipment to identify events or changes in circumstances
("triggering events") that indicate the carrying value may not be recoverable. For rigs whose carrying values are determined not to be
recoverable, we record an impairment for the difference between their fair values and carrying values.

Predecessor

During the first quarter of 2021, as a result of challenging market conditions for certain of our floaters, we revised our near-term
operating assumptions which resulted in a triggering event for purposes of evaluating impairment. We determined that the estimated
undiscounted cash flows were not sufficient to recover the carrying values for certain rigs and concluded they were impaired as of March 31,
2021.

Based on the asset impairment analysis performed as of March 31, 2021, we recorded a pre-tax, non-cash loss on impairment in the first
quarter for certain floaters totaling $756.5 million. We measured the fair value of these assets to be $26.0 million at the time of impairment by
applying either an income approach, using projected discounted cash flows or estimated sales price. These valuations were based on
unobservable inputs that require significant judgments for which there is limited information, including, in the case of an income approach,
assumptions regarding future day rates, utilization, operating costs and capital requirements. In instances where we applied an income
approach, forecasted day rates and utilization took into account current market conditions and our anticipated business outlook.

During the first quarter of 2020, the COVID-19 global pandemic and the response thereto negatively impacted the macro-economic
environment and global economy. Global oil demand fell sharply at the same time global oil supply increased as a result of certain oil
producers competing for market share which lead to a supply glut. As a consequence, Brent crude oil fell from around $60 per barrel at year-
end 2019 to around $20 per barrel as of mid-April 2020. These adverse changes and impacts to our customer's capital expenditure plans in the
first quarter resulted in further deterioration in our forecasted day rates and utilization for the remainder of 2020 and beyond. As a result, we
concluded that a triggering event had occurred, and we performed a fleet-wide recoverability test. We determined that our estimated
undiscounted cash flows were not sufficient to recover the carrying values of certain rigs and concluded they were impaired as of March 31,
2020.

Based on the asset impairment analysis performed as of March 31, 2020, we recorded a pre-tax, non-cash loss on impairment in the first
quarter with respect to certain floaters, jackups and spare equipment totaling $2.8 billion. We measured the fair value of these assets to be
$72.3 million at the time of impairment by applying either an income approach, using projected discounted cash flows, or estimated sales price.
These valuations were based on unobservable inputs that require significant judgments for which there is limited information, including, in the
case of an income approach, assumptions regarding future day rates, utilization, operating costs and capital requirements. In instances where we
applied an income approach, forecasted day rates and utilization took into account then current market conditions and our anticipated business
outlook at that time, both of which had been impacted by the adverse changes in the business environment observed during the first quarter of
2020.

During the second quarter of 2020, given the anticipated sustained market impacts arising from the decline in oil price and demand late
in the first quarter, we revised our long-term operating assumptions which resulted in a triggering event for purposes of evaluating impairment
and we performed a fleet-wide recoverability test. As a result, we recorded a pre-tax, non-cash impairment with respect to two floaters and
spare equipment totaling $817.3 million. We measured the fair value of these assets to be $69.0 million at the time of impairment by applying
an income approach or estimated scrap value. These valuations were based on unobservable inputs that require significant judgments for which
there is limited information including, in the case of the income approach, assumptions regarding future day rates, utilization, operating costs
and capital requirements.

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 During 2019, together with the Rowan Transaction, and as a result of the evaluation of the strategy of the combined fleet, we
determined that a triggering event occurred resulting in the performance of a fleet-wide recoverability test. We determined that estimated
undiscounted cash flows were sufficient to cover the rigs carrying values and concluded that no impairments were necessary.

Assets held-for-sale and Assets sold

Our business strategy has been to focus on ultra-deepwater floater and premium jackup operations and de-emphasize other assets and
operations that are not part of our long-term strategic plan or that no longer meet our standards for economic returns. We continue to focus on
our fleet management strategy in light of the composition of our rig fleet. While taking into account certain restrictions on the sales of assets
under our Indenture dated April 30, 2021 (the “Indenture”), as part of our strategy, we may act opportunistically from time to time to monetize
assets to enhance stakeholder value and improve our liquidity profile, in addition to reducing holding costs by selling or disposing of lower-
specification or non-core rigs. To this end, we continually assess our rig portfolio and actively work with our rig broker to market certain rigs.
See “Note 9 – Debt" for additional details on restrictions on the sales of assets.

On a quarterly basis, we assess whether any rig meets the criteria established for held-for-sale classification on our balance sheet. All
rigs classified as held-for-sale are recorded at fair value, less costs to sell. We measure the fair value of our assets held-for-sale by applying a
market approach based on unobservable third-party estimated prices that would be received in exchange for the assets in an orderly transaction
between market participants or a negotiated sales price. We reassess the fair value of our held-for-sale assets on a quarterly basis and adjust the
carrying value, as necessary.

Successor

In accordance with our business strategy described above, we sold VALARIS 22, VALARIS 37, VALARIS 100 and VALARIS 142,
resulting in a pre-tax gain of $20.7 million during the eight months ending December 31, 2021 (Successor).

Predecessor

During the second quarter of 2020, we classified the following rigs as held-for-sale: VALARIS 8500, VALARIS 8501, VALARIS
8502, VALARIS DS-3, VALARIS DS-5, VALARIS DS-6 and VALARIS 105. The carrying value of these rigs was reduced to fair value, less
costs to sell, based on their estimated sales price, and we recorded a pre-tax, non-cash loss on impairment totaling $15.0 million. These rigs
were subsequently sold during the third quarter of 2020. During the third quarter of 2020, we classified VALARIS 8504, VALARIS 84 and
VALARIS 88 as held-for-sale. The fair value, less costs to sell, based on each rig's estimated sales price, was in excess of the respective
carrying value. As a result, we concluded that there was no impairment of these rigs. These rigs were sold during the fourth quarter of 2020.
During the fourth quarter of 2020, we classified our Australia office building as held-for-sale. The fair value, less cost to sale, of this asset was
determined to be in excess of the carrying value and we concluded that there was no impairment for the asset.

Our Australia office building had a remaining aggregate carrying value of $2.3 million and is included in Other current assets, on our
Consolidated Balance Sheet as of December 31, 2020. The office was subsequently sold in the first quarter of 2021 and we recognized an
immaterial pre-tax gain during the four months ended April 30, 2021 (Predecessor).

During the third quarter of 2019, we decided to retire VALARIS 5006 and classified the rig as held-for-sale. We recognized a pre-tax,
non-cash loss on impairment of $88.2 million, which represented the difference between the carrying value of the rig and related assets and
their estimated fair value, less costs to sell. We subsequently sold the rig during the fourth quarter of 2019.

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 During the fourth quarter of 2019, we classified VALARIS 6002, VALARIS 68 and VALARIS 70 as held-for-sale. With the exception
of VALARIS 70, we determined that the fair value, less costs to sell, based on each rig's estimated sales price, was in excess of the respective
carrying value. Therefore, we concluded that there was no impairment for VALARIS 6002 and VALARIS 68. For VALARIS 70, we
recognized a pre-tax impairment charge of $10.2 million. VALARIS 6002 and VALARIS 68 were subsequently sold in the first quarter of 2020
and VALARIS 70 was sold in the second quarter of 2020.

VALARIS 101 was sold and resulted in a gain of $5.3 million during the four months ended April 30, 2021 (Predecessor).

9. DEBT

The carrying value of our debt as of December 31, 2021 (Successor) and 2020 (Predecessor) consisted of the following (in millions):
Successor Predecessor
2021 2020(1)
Secured first lien notes due 2028 $ 545.3 $ —
6.875% Senior notes due 2020 — 122.9
4.70% Senior notes due 2021 — 100.7
4.875% Senior notes due 2022(2) — 620.8
3.00% Exchangeable senior notes due 2024 — 849.5
4.50% Senior notes due 2024 — 303.4
4.75% Senior notes due 2024(2) — 318.6
8.00% Senior notes due 2024 — 292.3
5.20% Senior notes due 2025 — 333.7
7.375% Senior notes due 2025(2) — 360.8
7.75% Senior notes due 2026 — 1,000.0
7.20% Debentures due 2027 — 112.1
7.875% Senior notes due 2040 — 300.0
5.40% Senior notes due 2042(2) — 400.0
5.75% Senior notes due 2044 — 1,000.5
5.85% Senior notes due 2044(2) — 400.0
Amounts drawn under the Revolving Credit Facility (3) — 581.0
Total debt $ 545.3 $ 7,096.3
Less: Liabilities Subject to Compromise — 7,096.3
Less: current maturities — —
Total long-term debt $ 545.3 $ —

(1) The carrying amounts above represent the aggregate principal amount of Senior Notes outstanding as well as outstanding borrowings
under our Revolving Credit Facility as of the Petition Date and are classified as Liabilities Subject to Compromise in our Consolidated
Balance Sheet as of December 31, 2020 (Predecessor). We discontinued accruing interest on our indebtedness following the Petition
Date and all accrued interest as of the Petition Date is classified as Liabilities Subject to Compromise in our Consolidated Balance
Sheet as of December 31, 2020 (Predecessor). Additionally, we incurred a net non-cash charge of $447.9 million to write off any
unamortized debt discounts, premiums and issuance costs, including the amounts related to the 2024 Convertible Notes discussed
below, which is included in Reorganization items, net on our Consolidated Statements of Operations for the year ended December 31,

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 2020 (Predecessor). On the Effective Date, in accordance with the plan of reorganization, all outstanding obligations under the
Predecessor's Senior Notes, including the 2024 Convertible Notes, and the Revolving Credit Facility were cancelled and the holders
thereunder received their pro rata share of certain Common Shares issued on the Effective Date. See below and "Note 2 - Chapter 11
Proceedings" for additional information.
(2) These senior notes were acquired in the Rowan Transaction.
(3)
In addition to the amount borrowed above, we had $27.0 million in undrawn letters of credit issued under the Revolving Credit Facility.

Indenture

On the Effective Date, in accordance with the plan of reorganization and Backstop Commitment Agreement, dated August 18, 2020 (as
amended, the "BCA"), the Company consummated the rights offering of the First Lien Notes and associated shares in an aggregate principal
amount of $550.0 million. In accordance with the BCA, certain holders of senior notes claims and certain holders of claims under the
Revolving Credit Facility who provided backstop commitments received the backstop premium in an aggregate amount equal to $50.0 million
in First Lien Notes and 2.7%of the Common Shares on the Effective Date. The Debtors paid a commitment fee of $20.0 million, in cash prior to
the Petition Date, which was loaned back to the reorganized company upon emergence. Therefore, upon emergence the Debtors received
$520 million in cash in exchange for a $550 million note, which includes the backstop premium. See “Note 2 – Chapter 11 Proceedings” for
additional information.

The First Lien Notes were issued pursuant to the Indenture, among Valaris Limited, certain direct and indirect subsidiaries of Valaris
Limited as guarantors, and Wilmington Savings Fund Society, FSB, as collateral agent and trustee (in such capacities, the “Collateral Agent”).

The First Lien Notes are guaranteed, jointly and severally, on a senior basis, by certain of the direct and indirect subsidiaries of the
Company. The First Lien Notes and such guarantees are secured by first-priority perfected liens on 100% of the equity interests of each
Restricted Subsidiary directly owned by the Company or any guarantor and a first-priority perfected lien on substantially all assets of the
Company and each guarantor of the First Lien Notes, in each case subject to certain exceptions and limitations. The following is a brief
description of the material provisions of the Indenture and the First Lien Notes.

The First Lien Notes are scheduled to mature on April 30, 2028. Interest on the First Lien Notes accrues, at our option, at a rate of: (i)
8.25% per annum, payable in cash; (ii) 10.25% per annum, with 50% of such interest to be payable in cash and 50% of such interest to be paid
in kind; or (iii) 12% per annum, with the entirety of such interest to be paid in kind. Interest is due semi-annually in arrears on May 1 and
November 1 of each year and shall be computed on the basis of a 360-day year of twelve 30-day months. The first cash interest payment was
made on November 1, 2021.

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 At any time prior to April 30, 2023, the Company may redeem up to 35% of the aggregate principal amount of the First Lien Notes at a
redemption price of 104% up to the net cash proceeds received by the Company from equity offerings provided that at least 65% of the
aggregate principal amount of the First Lien Notes remains outstanding and provided that the redemption occurs within 120 days after such
equity offering of the Company. At any time prior to April 30, 2023, the Company may redeem the First Lien Notes at a redemption price of
104% plus a “make-whole” premium. On or after April 30, 2023, the Company may redeem all or part of the First Lien Notes at fixed
redemption prices (expressed as percentages of the principal amount), plus accrued and unpaid interest, if any, to, but excluding, the redemption
date. The Company may also redeem the First Lien Notes, in whole or in part, at any time and from time to time on or after April 30, 2026 at a
redemption price equal to 100% of the principal amount plus accrued and unpaid interest, if any, to, but excluding, the applicable redemption
date. Notwithstanding the foregoing, if a Change of Control (as defined in the Indenture, with certain exclusions as provided therein) occurs,
the Company will be required to make an offer to repurchase all or any part of each note holder’s notes at a purchase price equal to 101% of the
aggregate principal amount of First Lien Notes repurchased, plus accrued and unpaid interest to, but excluding, the applicable date.

The Indenture contains covenants that limit, among other things, the Company’s ability and the ability of the guarantors and other
restricted subsidiaries, to: (i) incur, assume or guarantee additional indebtedness; (ii) pay dividends or distributions on equity interests or
redeem or repurchase equity interests; (iii) make investments; (iv) repay or redeem junior debt; (v) transfer or sell assets; (vi) enter into sale and
lease back transactions; (vii) create, incur or assume liens; and (viii) enter into transactions with certain affiliates. These covenants are subject
to a number of important limitations and exceptions.

The Indenture also provides for certain customary events of default, including, among other things, nonpayment of principal or interest,
breach of covenants, failure to pay final judgments in excess of a specified threshold, failure of a guarantee to remain in effect, failure of a
collateral document to create an effective security interest in collateral, with a fair market value in excess of a specified threshold, bankruptcy
and insolvency events, cross payment default and cross acceleration, which could permit the principal, premium, if any, interest and other
monetary obligations on all the then outstanding First Lien Notes to be declared due and payable immediately.

The Company incurred $5.2 million in issuance costs in association with the First Lien Notes that are being amortized into interest
expense over the expected life of the notes using the effective interest method.

Predecessor Debtor in Possession Financing

On September 25, 2020, following approval by the Bankruptcy Court, the Debtors entered into the Debtor-in-Possession ("DIP") Credit
Agreement (the "DIP Credit Agreement"), by and among the Company and certain wholly owned subsidiaries of the Company, as borrowers,
the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent and security trustee, in an aggregate amount not
to exceed $500.0 million that will be used to finance, among other things, the ongoing general corporate needs of the Debtors during the course
of the Chapter 11 Cases and to pay certain fees, costs and expenses associated with the Chapter 11 Cases. As of the Effective Date, there were
no borrowings outstanding against our DIP facility and there were no DIP claims payable subsequent to, or that otherwise survived, the
Effective Date. The DIP Credit Agreement terminated on the Effective Date.

As of December 31, 2020 (Predecessor), we had no borrowings outstanding against our DIP Facility.

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 Predecessor Senior Notes

The commencement of the Chapter 11 Cases was considered an event of default under each series of our senior notes and all
obligations thereunder were accelerated. However, any efforts to enforce payment obligations related to the acceleration of our debt were
automatically stayed as a result of the filing of the Chapter 11 Cases. Accordingly, the $6.5 billion in aggregate principal amount outstanding
under the Senior Notes as well as $201.9 million in associated accrued interest as of the Petition Date were classified as Liabilities Subject to
Compromise in our Consolidated Balance Sheets as of December 31, 2020 (Predecessor). On the Effective Date, pursuant to the plan of
reorganization, each series of our senior notes were cancelled and the holders thereunder received the treatment as set forth in the plan of
reorganization. The below paragraphs in this section contain further details about the inception or purchase of each of the Predecessor Senior
Notes that were cancelled.

As a result of the Rowan Transaction, we acquired the following senior notes issued by Rowan Companies, LLC (formerly Rowan
Companies, Inc.) ("RCI") and guaranteed by Rowan: (1) $201.4 million in aggregate principal amount of 7.875% unsecured senior notes due
2019, which were repaid at maturity in August 2019, (2) $620.8 million in aggregate principal amount of 4.875% 2022 Notes (the "4.875%
2022 Notes"), (3) $398.1 million in aggregate principal amount of 4.75% 2024 Notes (the "4.75% 2024 Notes"), (4) $500.0 million in
aggregate principal amount of 7.375% 2025 Notes (the "7.375% 2025 Notes"), (5) $400.0 million in aggregate principal amount of 2042 Notes
(the "2042 Notes"), and (6) $400.0 million in aggregate principal amount of 5.85% 2044 Notes (the "5.85% 2044 Notes"). On February 3,
2020, Rowan and RCI transferred substantially all their assets on a consolidated basis to Valaris plc, Valaris plc became the obligor on the
notes and Rowan and RCI were relieved of their obligations under the notes and the related indenture.

On January 26, 2018, we issued $1.0 billion aggregate principal amount of unsecured 7.75% senior notes due 2026 (the "2026 Notes")
at par, net of $16.5 million in debt issuance costs. Interest on the 2026 Notes was payable semiannually on February 1 and August 1 of each
year.

During 2017, we exchanged $332.0 million aggregate principal amount of unsecured 8.00% senior notes due 2024 (the “8 % 2024
Notes”) for certain amounts of our outstanding senior notes due 2019, 2020 and 2021. Interest on the 8% 2024 Notes was payable semiannually
on January 31 and July 31 of each year.

During 2015, we issued $700.0 million aggregate principal amount of unsecured 5.20% senior notes due 2025 (the “2025 Notes”) at a
discount of $2.6 million and $400.0 million aggregate principal amount of unsecured 5.75% senior notes due 2044 (the “New 2044 Notes”) at a
discount of $18.7 million in a public offering. Interest on the 2025 Notes was payable semiannually on March 15 and September 15 of each
year. Interest on the New 2044 Notes was payable semiannually on April 1 and October 1 of each year.

During 2014, we issued $625.0 million aggregate principal amount of unsecured 4.50% senior notes due 2024 (the "2024 Notes") at a
discount of $0.9 million and $625.0 million aggregate principal amount of unsecured 5.75% senior notes due 2044 (the "Existing 2044 Notes")
at a discount of $2.8 million. Interest on the 2024 Notes and the Existing 2044 Notes was payable semiannually on April 1 and October 1 of
each year. The Existing 2044 Notes together with the New 2044 Notes, the "2044 Notes", were treated as a single series of debt securities under
the indenture governing the notes.

During 2011, we issued $1.5 billion aggregate principal amount of unsecured 4.70% senior notes due 2021 (the “2021 Notes”) at
a discount of $29.6 million in a public offering. Interest on the 2021 Notes was payable semiannually on March 15 and September 15 of each
year.

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 Upon consummation of our acquisition of Pride International LLC ("Pride") during 2011, we assumed outstanding debt comprised of
$900.0 million aggregate principal amount of unsecured 6.875% senior notes due 2020, $300.0 million aggregate principal amount of
unsecured 7.875% senior notes due 2040 (collectively, the "Pride Notes"), and $500.0 million aggregate principal amount of unsecured 8.5%
senior notes due 2019 (collectively, with the Pride Notes, the "Acquired Notes"). Valaris plc fully and unconditionally guaranteed the
performance of all Pride obligations with respect to the Acquired Notes.

Certain of these senior notes allowed us to redeem these senior notes, either in whole in part, subject to the payment of certain “make
whole” premiums. The indentures governing these senior notes contained customary events of default, including failure to pay principal or
interest on such notes when due, among others. The indenture also contained certain restrictions, including, among others, restrictions on our
ability and the ability of our subsidiaries to create or incur secured indebtedness, enter into certain sale/leaseback transactions and enter into
certain merger or consolidation transactions.

Predecessor Debentures Due 2027

During 1997, Ensco International Incorporated issued $150.0 million of unsecured 7.20% Debentures due 2027 (the "Debentures").
Interest on the Debentures was payable semiannually on May 15 and November 15 of each year. We may redeem the Debentures, in whole or
in part, at any time prior to maturity, at a price equal to 100% of their principal amount, plus accrued and unpaid interest and a "make-whole"
premium. During 2009, Valaris plc entered into a supplemental indenture to unconditionally guarantee the principal and interest payments on
the Debentures.

The Debentures and the indenture pursuant to which the Debentures were issued also contained customary events of default, including
failure to pay principal or interest on the Debentures when due, among others. The indenture also contained certain restrictions, including,
among others, restrictions on our ability and the ability of our subsidiaries to create or incur secured indebtedness, enter into certain
sale/leaseback transactions and enter into certain merger or consolidation transactions.

Predecessor 2024 Convertible Notes

In December 2016, Ensco Jersey Finance Limited, a wholly-owned subsidiary of Valaris plc, issued $849.5 million aggregate principal
amount of 3.00% convertible senior notes due 2024 (the "2024 Convertible Notes") in a private offering. The 2024 Convertible Notes are fully
and unconditionally guaranteed, on a senior, unsecured basis, by Valaris plc. Under the terms of the agreement, we had the option to settle our
2024 Convertible Notes in cash, shares or a combination thereof for the aggregate amount due upon conversion. However, the commencement
of the Chapter 11 Cases on August 19, 2020, constituted an event of default under the 2024 Convertible Notes. Any efforts to enforce payment
obligations under the 2024 Convertible Notes, including any rights to require the repurchase by the Company of the 2024 Convertible Notes
upon the NYSE delisting of the Class A ordinary shares, were automatically stayed as a result of the filing of the Chapter 11 Cases.
Accordingly, the aggregate principal amount of 2024 Convertible Notes outstanding as well as associated accrued interest as of the Petition
Date were classified as Liabilities Subject to Compromise in our Consolidated Balance Sheet as of December 31, 2020 (Predecessor). On the
Effective Date, pursuant to the plan of reorganization, all outstanding obligations under the 2024 Convertible Notes, were cancelled and the
holders thereunder received the treatment as set forth in the plan of reorganization.

If our average share price had exceeded the exchange price during a respective Predecessor reporting period, an assumed number of
shares required to settle the conversion obligation in excess of the principal amount would have been included in our denominator for the
computation of diluted EPS using the treasury stock method. See "Note 1 - Description of the Business and Summary of Significant Accounting
Policies" for additional information regarding the impact to our EPS.

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 Interest on the 2024 Convertible Notes was payable semiannually on January 31 and July 31 of each year. The 2024 Convertible Notes
will mature on January 31, 2024, unless exchanged, redeemed or repurchased in accordance with their terms prior to such date. Holders may
exchange their 2024 Convertible Notes at their option any time prior to July 31, 2023 only under certain circumstances set forth in the indenture
governing the 2024 Convertible Notes. On or after July 31, 2023, holders may exchange their 2024 Convertible Notes at any time. The
exchange rate was 17.8336 shares per $1,000 principal amount of notes, representing an exchange price of $56.08 per share, and was subject to
adjustment upon certain events. The 2024 Convertible Notes may not be redeemed by us except in the event of certain tax law changes.

The 2024 Convertible Notes were separated, at issuance, into their liability and equity components on our Consolidated Balance Sheet.
The equity component was initially recorded to additional paid-in capital and as a debt discount and the discount was being amortized to
interest expense over the life of the instrument. The carrying amount of the liability component was initially calculated by measuring the
estimated fair value of a similar liability that did not include an associated conversion feature. The carrying amount of the equity component
representing the conversion feature was initially determined by deducting the fair value of the liability component from the principal amount of
the 2024 Convertible Notes. The difference between the carrying amount of the liability and the principal amount has been amortized to interest
expense over the term of the 2024 Convertible Notes, together with the coupon interest, resulting in an effective interest rate of approximately
8.00% per annum. The carrying amount of the 2024 Convertible Notes at December 31, 2020 (Predecessor) represented the aggregate principal
amount of these notes as of the Petition Date and are classified as Liabilities Subject to Compromise in our Consolidated Balance Sheet as of
December 31, 2020 (Predecessor). The equity component was $220.0 million at December 31, 2020 (Predecessor) and remained in Additional
paid-in capital. The equity component was not remeasured if we continued to meet certain conditions for equity classification. On the Effective
Date, in accordance with the plan of reorganization, all outstanding obligations under the 2024 Convertible Notes were cancelled and the equity
component was written off to retained earnings.

The costs related to the issuance of the 2024 Convertible Notes were initially allocated to the liability and equity components based on
their relative fair values. Issuance costs attributable to the liability component were amortized to interest expense over the term of the notes and
the issuance costs attributable to the equity component were recorded to Additional paid-in capital on our Consolidated Balance Sheet.

During the years ended December 31, 2020 and 2019 (Predecessor), we recognized $16.1 million and $25.5 million, respectively,
associated with coupon interest. Amortization of debt discount and issuance costs were $21.4 million and $32.5 million for the years ended
December 31, 2020 and 2019 (Predecessor), respectively. We discontinued accruing interest on these notes as of the Petition Date.
Additionally, we incurred a net non-cash charge of $128.8 million to write off $119.5 million of unamortized debt discount and $9.3 million of
unamortized debt issuance costs related to these notes, which is included in Reorganization items, net on our Consolidated Statements of
Operations the year ended December 31, 2020 (Predecessor).

The indenture governing the 2024 Convertible Notes contained customary events of default, including failure to pay principal or
interest on such notes when due, among others. The indenture also contained certain restrictions, including, among others, restrictions on our
ability and the ability of our subsidiaries to create or incur secured indebtedness, enter into certain sale/leaseback transactions and enter into
certain merger or consolidation transactions.

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 The 2021 Notes, 4.875% 2022 Notes, 4.75% 2024 Notes, 8.00% 2024 Notes, 2024 Notes, 2025 Notes, 7.375% 2025 Notes, 2026
Notes, 2042 Notes, 5.85% 2044 Notes, Existing 2044 Notes, the Pride Notes, the Debentures and 2024 Convertible Notes" together are the
"Senior Notes".

Tender Offers and Open Market Repurchases (Predecessor)

In early March 2020, we repurchased $12.8 million of the 2021 Notes outstanding on the open market for an aggregate purchase price
of $9.7 million, excluding accrued interest, with cash on hand. As a result of the transaction, we recognized a pre-tax gain of $3.1 million, net
of discounts in Other, net, in the Consolidated Statements of Operations.

On June 25, 2019, we commenced cash tender offers for certain series of our senior notes. The tender offers expired on July 23, 2019,
and we repurchased $951.8 million of our outstanding senior notes for an aggregate purchase price of $724.1 million. As a result of the
transaction, we recognized a pre-tax gain from debt extinguishment of $194.1 million, net of discounts, premiums and debt issuance costs in
other, net, in the Consolidated Statements of Operations.

Our tender offers and open market repurchases are summarized in the following table (in millions):
Predecessor
Aggregate Principal
Amount Aggregate
Repurchased Repurchase Price(1)
Year Ended December 31, 2020
4.70% Senior notes due 2021 $ 12.8 $ 9.7

Year Ended December 31, 2019

4.50% Senior notes due 2024 $ 320.0 $ 240.0
4.75% Senior notes due 2024 79.5 61.2
8.00% Senior notes due 2024 39.7 33.8
5.20% Senior notes due 2025 335.5 250.0
7.375% Senior notes due 2025 139.2 109.2
7.20% Senior notes due 2027 37.9 29.9
$ 951.8 $ 724.1

(1) Excludes accrued interest paid to holders of the repurchased senior notes.

Predecessor Revolving Credit Facility

Effective upon closing of the Rowan Transaction, our revolving credit facility was $1.6 billion.

The commencement of the Chapter 11 Cases resulted in an event of default under our Revolving Credit Facility. However, the ability of
the lenders to exercise remedies in respect of the Revolving Credit Facility was stayed upon commencement of the Chapter 11 Cases.
Accordingly, the $581.0 million of outstanding borrowing as well as accrued interest as of the Petition Date were classified as Liabilities
Subject to Compromise in our Consolidated Balance Sheet as of December 31, 2020 (Predecessor). On the Effective Date, pursuant to the plan
of reorganization, the Revolving Credit Facility was cancelled and the holders thereunder received the treatment as set forth in the plan of
reorganization.

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 Prior to the Effective Date, pursuant to the plan of reorganization, all undrawn letters of credit issued under the Revolving Credit
Facility were collateralized pursuant to the terms of the Revolving Credit Facility.

Interest Expense

Interest expense totaled $31.0 million and $2.4 million for the eight months ended December 31, 2021 (Successor) and the four months
ended April 30, 2021 (Predecessor), respectively. Interest expense totaled $290.6 million and $428.3 million for the years ended December 31,
2020 and 2019 (Predecessor), respectively, which was net of capitalized interest of $1.3 million and $20.9 million associated with newbuild rig
construction and other capital projects. The contractual interest expense on the outstanding Senior Notes and the Revolving Credit Facility was
in excess of recorded interest expense by $132.9 million and $140.7 million for the four months ended April 30, 2021 (Predecessor) and for the
year ended December 31, 2020 (Predecessor), respectively. This excess contractual interest was not included as interest expense on our
Consolidated Statements of Operations, as the Company discontinued accruing interest on the unsecured senior notes and Revolving Credit
Facility subsequent to the Petition Date. We discontinued making interest payments on our unsecured senior notes beginning in June 2020.

10. DERIVATIVE INSTRUMENTS

Our functional currency is the U.S. dollar. As is customary in the oil and gas industry, a majority of our revenues are denominated in
U.S. dollars; however, a portion of the revenues earned and expenses incurred by certain of our subsidiaries are denominated in currencies other
than the U.S. dollar. These transactions are remeasured in U.S. dollars based on a combination of both current and historical exchange rates.
We previously used derivatives to reduce our exposure to various market risks, primarily foreign currency exchange rate risk.

The commencement of the Chapter 11 Cases constituted a termination event with respect to the Company’s derivative instruments,
which permitted the counterparties of our derivative instruments to terminate their outstanding contracts. The exercise of these termination
rights are not stayed under the Bankruptcy Code and the counterparties elected to terminate their outstanding derivatives with us in September
2020 for an aggregate settlement of $3.6 million which was recorded as a gain in Contract drilling expense in our Consolidated Statements of
Operations for the year ended December 31, 2020 (Predecessor). As a result, we no longer had derivative assets or liabilities on our
Consolidated Balance Sheet as of December 31, 2020 (Predecessor). During the four months ended April 30, 2021 (Predecessor) and eight
months ended December 31, 2021 (Successor), we did not enter into derivative contracts; therefore, we do not have derivative assets or
liabilities on our Consolidated Balance Sheet as of December 31, 2021(Successor).

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 Historically we have utilized cash flow hedges to hedge forecasted foreign currency denominated transactions, primarily to reduce our
exposure to foreign currency exchange rate risk associated with contract drilling expenses and capital expenditures denominated in various
currencies. Gains and losses, net of tax, on derivatives designated as cash flow hedges included in our Consolidated Statements of Operations
and comprehensive loss were as follows (in millions):
Gain (Loss) Recognized in Other Comprehensive
Income ("OCI")
on Derivatives
(Effective Portion)
Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended December Ended April 30, December 31, December 31,
31, 2021 2021 2020 2019
Foreign currency forward contracts — — (5.4) 1.6
Total $ — $ — $ (5.4) $ 1.6

(Gain) Loss Reclassified from

AOCI into Income
(Effective Portion)(1)
Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended December Ended April 30, December 31, December 31,
31, 2021 2021 2020 2019
Interest rate lock contracts(2) $ — $ — $ — $ 1.9
Foreign currency forward contracts(3) — (5.6) (11.6) 6.4
Total $ — $ (5.6) $ (11.6) $ 8.3

(1) Changes in the fair value of cash flow hedges are recorded in AOCI. Amounts recorded in AOCI associated with cash flow hedges are
subsequently reclassified into contract drilling expense, depreciation or interest expense as earnings are affected by the underlying
hedged forecasted transaction.
(2) Losses on interest rate lock derivatives reclassified from AOCI into income were included in Interest expense, net, in our Consolidated
Statements of Operations.
(3) During the four months ended April 30, 2021 (Predecessor), $5.6 million of gains were reclassified from AOCI into Loss on
impairment in our Consolidated Statements of Operations in connection with the impairment of certain rigs. During the year ended
December 31, 2020 (Predecessor), $2.0 million of losses were reclassified from AOCI into Contract drilling expense and $13.6 million
of gains were reclassified from AOCI into Depreciation expense in our Consolidated Statements of Operations. During the year ended
December 31, 2019 (Predecessor), $7.3 million of losses were reclassified from AOCI into Contract drilling expense and $0.9 million
of gains were reclassified from AOCI into Depreciation expense in our Consolidated Statements of Operations.

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 We have net assets and liabilities denominated in numerous foreign currencies and use various methods to manage our exposure to
foreign currency exchange rate risk. We predominantly structure our drilling contracts in U.S. dollars, which significantly reduces the portion
of our cash flows and assets denominated in foreign currencies. Historically, we have occasionally entered into derivatives that hedged the fair
value of recognized foreign currency denominated assets or liabilities but did not designate such derivatives as hedging instruments. In these
situations, a natural hedging relationship generally existed whereby changes in the fair value of the derivatives offset changes in the fair value
of the underlying hedged items. As of December 31, 2021 (Successor) and December 31, 2020 (Predecessor) we did not have open derivative
contracts to hedge against this risk.

Net losses of $0.2 million and $6.4 million associated with our derivatives not designated as hedging instruments were included in
Other, net, in our Consolidated Statements of Operations for the years ended December 31, 2020 and 2019 (Predecessor), respectively.

11. SHAREHOLDERS' EQUITY

Activity in our various shareholders' equity accounts for the eight months ended December 31, 2021 (Successor), the four months
ended April 30, 2021 (Predecessor) and the years ended December 31, 2020 (Predecessor) and 2019 (Predecessor) were as follows (in millions,
except per share amounts):
Additional Retained Non-
Par Paid-in Earnings Treasury controlling
Shares Value Capital Warrants (Deficit) AOCI Shares Interest
BALANCE, December 31, 2018 (Predecessor) 115.2 $ 46.2 $ 7,225.0 $ — $ 874.2 $ 18.2 $ (72.2) $ (2.6)
Net income (loss) — — — — (198.0) — — 5.8
Dividends paid ($0.04 per share) — — — — (4.5) — — —
Equity issuance in connection with the
Rowan Transaction 88.0 35.2 1,367.5 — — — 0.1 —
Net changes in pension and other
postretirement benefits — — — — — (21.7) — —
Distributions to noncontrolling interests — — — — — — — (4.5)
Equity issuance cost — — (0.6) — — — — —
Shares issued under share-based
compensation plans, net 2.7 1.1 (1.3) — — — (0.7) —
Repurchase of shares — — — — — — (4.5) —
Share-based compensation cost — — 37.2 — — — — —
Net other comprehensive income — — — — — 9.7 — —
BALANCE, December 31, 2019 (Predecessor) 205.9 82.5 8,627.8 — 671.7 6.2 (77.3) (1.3)
Net loss — — — — (4,855.5) — — (2.1)
Net changes in pension and other
postretirement benefits — — — — — (76.5) — —
Purchase of noncontrolling interests — — (7.2) — — — — —
Distributions to noncontrolling interests — — — — — — — (0.9)
Shares issued under share-based
compensation plans, net 0.2 0.1 (1.9) — — — 2.0 —
Repurchase of shares — — — — — — (0.9) —
Share-based compensation cost — — 21.2 — — — — —
Net other comprehensive loss — — — — — (17.6) — —

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 Additional Retained Non-
Par Paid-in Earnings Treasury controlling
Shares Value Capital Warrants (Deficit) AOCI Shares Interest
BALANCE, December 31, 2020
(Predecessor) 206.1 82.6 8,639.9 — (4,183.8) (87.9) (76.2) (4.3)
Net income (loss) — — — — (4,467.0) — — 3.2
Shares issued under share-based
compensation plans, net — — (0.7) — — — 0.7 —
Net changes in pension and other
postretirement benefits — — — — — 0.1 — —
Share-based compensation cost — — 4.8 — — — — —
Net other comprehensive loss — — — — — (5.6) — —
Cancellation of Predecessor equity (206.1) (82.6) (8,644.0) — 8,650.8 93.4 75.5 —
Issuance of Successor Common Shares and
Warrants 75.0 0.8 1,078.7 16.4 — — — —
BALANCE, April 30, 2021 (Predecessor) 75.0 0.8 1,078.7 16.4 — — — (1.1)

BALANCE, May 1, 2021 (Successor) 75.0 0.8 1,078.7 16.4 — — — (1.1)

Net income (loss) — — — — (33.0) — — 3.8
Net changes in pension and other
postretirement benefits — — — — — (9.1) — —
Share-based compensation cost — — 4.3 — — — —
BALANCE, December 31, 2021 (Successor) 75.0 $ 0.8 $ 1,083.0 $ 16.4 $ (33.0) $ (9.1) $ — $ 2.7

In connection with the Rowan Transaction on April 11, 2019, we issued 88.3 million Class A ordinary shares with an aggregate value
of $1.4 billion. See "Note 5 - Rowan Transaction" for additional information.

Valaris Limited Share Capital

As of the Effective Date, the authorized share capital of Valaris Limited is $8.5 million divided into 700 million Common Shares of a
par value of $0.01 each and 150 million preference shares of a par value of $0.01.

Issuance of Common Shares

On the Effective Date, pursuant to the plan of reorganization, we issued 75 million Common Shares.

Cancellation of Predecessor Equity and Issuance of Warrants

On the Effective Date and pursuant to the plan of reorganization, the Legacy Valaris Class A ordinary shares were cancelled and the
Company issued 5,645,161 Warrants to the former holders of the Company's equity interests outstanding prior to the Effective Date. The
Warrants are exercisable for one Common Share per Warrant at an initial exercise price of $131.88 per Warrant, in each case as may be
adjusted from time to time pursuant to the applicable warrant agreement. The Warrants are exercisable for a period of seven years and will
expire on April 29, 2028. The exercise of these Warrants into Common Shares would have a dilutive effect to the holdings of Valaris Limited's
existing shareholders.

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 Management Incentive Plan

In accordance with the plan of reorganization, Valaris Limited adopted the MIP as of the Effective Date and authorized and reserved
8,960,573 Common Shares for issuance pursuant to equity incentive awards to be granted under the MIP, which may be in the form of
incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, dividend equivalents and
cash awards or any combination thereof. See "Note 12 - Share Based Compensation" for information on equity awards granted under the MIP
subsequent to the Effective Date.

12. SHARE BASED COMPENSATION

On the Effective Date and pursuant to the plan of reorganization, all of the Predecessor's ordinary shares were cancelled. In accordance
with the plan of reorganization, all agreements, instruments and other documents evidencing, relating or otherwise connected with any of
Legacy Valaris' equity interests outstanding prior to the Effective Date, including all equity-based awards, were cancelled. Therefore, any
Predecessor remaining long-term incentive plans were cancelled, including Legacy Valaris's 2018 Long-Term Incentive Plan (the "2018 LTIP")
as well as plans assumed in the Rowan Transaction ("Rowan LTIP") and in connection with the Atwood Merger (the “Atwood LTIP”, and
together with the 2018 LTIP and the Rowan LTIP, the "Legacy LTIPs"). See "Note 2 - Chapter 11 Proceedings" for additional information.

In accordance with the plan of reorganization, Valaris Limited adopted the MIP as of the Effective Date and authorized and reserved
8,960,573 Common Shares for issuance pursuant to equity incentive awards to be granted under the MIP, which may be in the form of
incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, dividend equivalents and
cash awards or any combination thereof. As of December 31, 2021, there were 7,493,135 shares available for issuance under the MIP.

Non-Vested Share Awards, Cash-Settled Awards and Non-employee Director Awards

Successor Awards

Under the Company's MIP, time-based restricted stock unit awards were granted to certain employees and senior officers which vest
ratably over a three year period from the date of grant. The grant-date fair value per share for these time-based restricted stock awards was
equal to the closing price of the Company's stock on the grant date. For senior officers, delivery of the shares underlying vested restricted stock
awards is deferred until the third anniversary of the date of grant.

Non-employee directors received a one-time grant of time-based restricted awards upon our emergence from the Chapter 11 Cases
which vest ratably over a three year period from the date of grant. Additionally, non-employee directors received an annual grant of time-based
restricted awards which vest in full on the earlier of the first anniversary of the grant date or the next annual meeting of shareholders following
the grant. Non-employee directors are permitted to elect to receive deferred share awards which can be settled and delivered at the vesting date,
six-month anniversary following the termination of the director's service or a specific pre-determined date.

During the eight months ended December 31, 2021 (Successor), 1.1 million share unit awards were granted to our employees and non-
employee directors pursuant to the MIP. No cash-settled awards were granted during this period under the MIP.

Our non-vested share awards do not have voting or participating rights as the dividend equivalent provided for in the award agreement
is forfeitable (except in certain limited circumstances) and further our debt agreements limit our ability to pay dividends and none have been
declared. Compensation expense for share awards is measured at fair value on the date of grant and recognized on a straight-line basis over the
requisite service period (usually the vesting period). Our compensation cost is reduced for forfeited awards in the period in which the
forfeitures occur.

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 Predecessor Awards

The Predecessor granted share awards and share units (collectively "share awards") and share units to be settled in cash ("cash-settled
awards"), which generally vested at a rate of 33% per year, as determined by the compensation committee of Legacy Valaris' Board of
Directors at the time of grant. Additionally, non-employee directors were permitted to elect to receive deferred share awards. Deferred share
awards vested at the earlier of the first anniversary of the grant date or the next annual meeting of shareholders following the grant but were not
to be settled until the director terminated service from the Board. Deferred share awards were to be settled in cash, shares or a combination
thereof at the discretion of the compensation committee.

During the four months ended April 30, 2021 (Predecessor), no share unit awards or cash-settled awards were granted.

Predecessor's non-vested share awards had voting and dividend rights effective on the date of grant, and the non-vested share units had
dividend rights effective on the date of grant. Compensation expense for share awards was measured at fair value on the date of grant and
recognized on a straight-line basis over the requisite service period (usually the vesting period). Compensation expense for cash-settled awards
was remeasured each quarter with a cumulative adjustment to compensation cost during the period based on changes in the Legacy Valaris
share price. Compensation cost was also reduced for forfeited awards in the period in which the forfeitures occurred.

As discussed above, in accordance with the plan of reorganization, the unvested awards of employees, senior executive officers and
non-employee directors remaining on the Effective Date were cancelled for no consideration.

The following table summarizes share award and cash-settled award compensation expense recognized
(in millions):
Successor Predecessor
Eight Months
Ended Four Months Year Ended Year Ended
December 31, Ended April December 31, December 31,
2021 30, 2021 2020 2019
Contract drilling $ 1.6 $ 2.4 $ 10.7 $ 22.1
General and administrative 2.0 2.4 9.2 17.4
3.6 4.8 19.9 39.5
Tax benefit (0.2) (0.5) (1.8) (2.5)
Total $ 3.4 $ 4.3 $ 18.1 $ 37.0

As of December 31, 2021, there was $19.9 million of total estimated unrecognized compensation cost related to Successor share
awards, which has a weighted-average remaining vesting period of 1.7 years.

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 The following tables summarizes the value of share awards and cash-settled awards granted and vested:
Share Awards
Successor Predecessor
Eight Months
Ended Four Months Year Ended Year Ended
December 31, Ended April December 31, December 31,
2021 30, 2021 2020 2019
Weighted-average grant-date fair value of share awards granted (per
share) (1) $ 26.07 $ — $ 3.07 $ 11.50
Total fair value of share awards vested during the period (in millions) (2) $ — $ 0.02 $ 3.26 $ 17.70
(1)
During the four months ended April 30, 2021 (Predecessor), no share unit awards were granted.
(2)
No share awards vested during the eight months ended December 31, 2021 (Successor).

Cash-Settled Awards
Successor Predecessor
Eight Months
Ended Four Months Year Ended Year Ended
December 31, Ended April December 31, December 31,
2021 30, 2021 2020 2019
Weighted-average grant-date fair value of share awards granted (per
share) (1) $ — $ — $ 0.75 $ —
Total fair value of share awards vested during the period (in millions)
(2) $ — $ — $ 0.22 $ 3.50
(1)
During the eight months ended December 31, 2021 (Successor), four months ended April 30, 2021 (Predecessor) and year ended
December 31, 2019 (Predecessor) no cash-settled awards were granted.
(2) During the eight months ended December 31, 2021 (Successor), no cash-settled awards were vested.

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 The following table summarizes share awards and cash-settled awards activity for the four months ended April 30, 2021 (Predecessor)
and eight months ended December 31, 2021 (Successor) (shares in thousands):
Share Awards Cash-settled Awards
Weighted- Weighted-
Average Average
Grant-Date Grant-Date
Awards Fair Value Awards Fair Value
Share awards and cash-settled awards as of
December 31, 2020 (Predecessor) 2,982 $ 16.40 311 $ 22.74
Vested (195) 16.93 (25) 11.35
Forfeited (295) 32.98 (5) 29.18
Cancelled (2,492) 14.25 (281) 23.65
Share awards and cash-settled awards as of
April 30, 2021 (Predecessor) — $ — — $ —
Share awards and cash-settled awards as of
May 1, 2021 (Successor) — $ — — $ —
Granted 1,050 26.07 — —
Forfeited (192) 25.02 — —
Share awards and cash-settled awards as of
December 31, 2021 (Successor) 858 $ 26.30 — $ —

Performance Awards

Successor Awards

Under the Company's MIP, performance awards may be issued to our senior executive officers. The 2021 performance awards are
allocated based on three performance goals and subject to achievement of those performance goals based on (a) designated share price hurdles
whereby our closing stock price must equal or exceed certain market price targets for ninety consecutive trading days (the "Market-Based
Objectives"); (b) relative return on capital employed ("ROCE") as compared to a specified peer group, all as defined in the award agreements
(the "ROCE Objective"), and (c) specified strategic goals as established by a committee of the Board of Directors (the "Strategic Goal
Objective" and together with the ROCE Objective, the "Performance-Based Objectives"). Awards are payable in equity following a three-year
performance period and subject to attainment of relative Market-Based Objectives and Performance-Based Objectives ranging from 0% to
150% of target performance under such objectives.

Performance awards generally vest at the end of a three-year measurement period based on attainment of performance goals. The
estimated probable outcome of attainment of the specified performance goals is based primarily on relative performance over the requisite
performance period. Any subsequent changes in this estimate as it relates to the Performance-Based Objectives are recognized as a cumulative
adjustment to compensation cost in the period in which the change in estimate occurs. Compensation cost for the Market-Based Objectives is
recognized as long as the requisite service period is completed and will not be reversed even if the Market-Based Objectives are never satisfied.
Compensation expense for performance awards is recognized over the requisite service period using the accelerated method and is reduced for
forfeited awards in the period in which the forfeitures occur.

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 The fair value of the 2021 performance awards granted during the eight months ended December 31, 2021 (Successor) are measured on
the date of grant. The grant-date fair value per unit for the portion of the performance awards related to Performance-Based Objectives was
equal to the closing price of the Company's stock on the grant date. The portion of these awards that were based on the Company's achievement
of Market-based Objectives were valued at the date of grant using a Monte Carlo simulation with the following weighted average assumptions
for the grants made over the eight months ended December 31, 2021:

Expected price volatility 61 %

Expected dividend yield —
Risk-free interest rate 0.73 %

The expected price volatility assumption is estimated using market data for certain peer companies during periods in which our own
trading history is limited. As our trading history increases, it will bear greater weight in determining our expected price volatility assumption.

The following table summarizes the performance award activity for the eight months ended December 31, 2021 (Successor) (shares in
thousands):

Weighted Average
Grant Date Fair
Awards Value Price
Balance as of May 1, 2021 (Successor) — —
Granted - Market-Based Objectives (1) 984 12.09
Granted - Performance-Based Objectives (1) 328 27.44
Total Granted 1,312 15.93
Forfeited - Market-Based Objectives (527) 11.04
Forfeited - Performance-Based Objectives (176) 25.02
Total Forfeited (703) 14.54
Balance as of December 31, 2021 (Successor) 609 17.53

(1) The number of awards granted reflects the shares that would be granted if the target level of performance were to be achieved. The
number of shares actually issued after considering forfeitures may range from zero to 913,585.

During the eight months ended December 31, 2021 (Successor), we recognized of $0.7 million of compensation expense for
performance awards, which was included in General and administrative expense in our Consolidated Statements of Operations.

As of December 31, 2021, there was $13.0 million of total estimated unrecognized compensation cost related to share awards, which
has a weighted-average remaining vesting period of 2.6 years.

Predecessor Awards

Under the 2018 LTIP, performance awards were permitted to be issued to senior executive officers. The 2019 performance awards were
subject to achievement of specified performance goals based on both relative and absolute total shareholder return ("TSR"). The 2020
performance awards were forfeited in exchange for cash-based incentive and retention awards.

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 The performance goals were determined by a committee of the Board of Directors and the awards were payable in cash upon attainment
of relative performance goals.

Performance awards generally vest at the end of a three-year measurement period based on attainment of performance goals.
Performance awards granted during 2019 were classified as liability awards, all with compensation expense recognized over the requisite
service period. The estimated probable outcome of attainment of the specified performance goals was based primarily on relative performance
over the requisite performance period. Any subsequent changes in this estimate were recognized as a cumulative adjustment to compensation
cost in the period in which the change in estimate occurred.

The aggregate grant-date fair value of performance awards granted during 2019 was $6.7 million. Subsequent to issuance, the 2020
performance awards were forfeited. The aggregate fair value of performance awards vested during 2020 and 2019 (Predecessor) totaled $5.2
million and $2.2 million, respectively.

During the years ended December 31, 2020 and 2019 (Predecessor) we recognized $1.0 million and $3.2 million of compensation
expense for performance awards, respectively, which was included in General and administrative expense in our Consolidated Statements of
Operations. No compensation expense was recognized in connection with these awards during the four months ended April 30, 2021
(Predecessor), or the eight months ended December 31, 2021 (Successor) as per the terms of these awards no amount could be or can be earned
due to the TSR provisions of the award. While this award was not cancelled in accordance with the plan of reorganization, it has no value.

Share Appreciation Rights

Predecessor Awards

Share Appreciation Rights ("SARs") granted to employees generally became exercisable in 33% increments over a three-year period
and, to the extent not exercised, expired on the tenth anniversary of the date of grant. The exercise price of SARs granted under the Rowan
LTIP equals the excess of the market value of the underlying shares on the date of exercise over the market value of the shares on date of grant
multiplied by the number of shares covered by the SAR. The Predecessor had accounted for SARs as equity awards. No SARs had been
granted since 2013 under the Rowan LTIP. As of December 31, 2020, SARs granted to purchase 426,049 shares were outstanding under the
Rowan LTIP. During the four months ended April 30, 2021 (Predecessor), 106,408 of SARs expired unexercised, and as discussed above, in
accordance with the plan of reorganization, the remaining outstanding SARs were cancelled.

Share Option Awards

Predecessor Awards

Share option awards granted to employees generally became exercisable in 25% increments over a four-year period or 33% increments
over a three-year period or 100% after a four-year period and, to the extent not exercised, expired on either the seventh or tenth anniversary of
the date of grant. The exercise price of options granted under the 2018 LTIP equaled the market value of the underlying shares on the date of
grant. Excluding options assumed under the Atwood LTIP and Rowan LTIP, no options have been granted since 2011. As of December 31,
2020, options granted to purchase 318,377 shares were outstanding under the Legacy LTIPs. As discussed above, in accordance with the plan
of reorganization, these outstanding options were cancelled.

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13. PENSION AND OTHER POST-RETIREMENT BENEFITS

Prior to the Rowan Transaction, Rowan established various defined-benefit pension plans and a post-retirement health and life
insurance plan that provide benefits upon retirement for certain full-time employees. The defined-benefit pension plans include: (1) the Rowan
Pension Plan; (2) Restoration Plan of Rowan Companies, Inc. (the “Rowan SERP”); (3) the Norway Onshore Plan; and (4) the Norway
Offshore Plan. The Retiree Life & Medical Supplemental Plan of Rowan Companies, Inc. (the “Retiree Medical Plan”) provides post-
retirement health and life insurance benefits. On November 27, 2017, Rowan purchased annuities to cover post-65 retiree medical benefits for
current retirees as of the purchase date. The annuity purchase settled post-65 medical benefits (i.e., Health Reimbursement Account, or “HRA”,
amounts) for affected participants, with the insurer taking responsibility for all benefit payments on and after January 1, 2019.
As a result of the Rowan Transaction, we assumed these plans and obligations, which were remeasured as of the Transaction Date.
Each of the plans has a benefit obligation that exceeds the fair value of plan assets. The most significant of the assumed plans is the Rowan
Pension Plan. Prior to the Transaction Date, Rowan amended the Rowan Pension Plan to freeze the plan as to any future benefit accruals. As a
result, eligible employees no longer receive pay credits in the pension plan and newly hired employees are not eligible to participate in the
pension plan.

Effective July 1, 2021, we amended the SERP to provide for quarterly credits of an interest equivalent based upon the rate of interest
paid on ten-year United States treasury notes in November of the immediately preceding calendar year and the participant plan balances as of
the first day of such quarter and began accounting for this plan as a defined benefit plan.

The following table presents the changes in benefit obligations and plan assets for the eight months ended December 31, 2021
(Successor), the four months ended April 30, 2021 (Predecessor) and the year ended December 31, 2020 (Predecessor) and the funded status
and weighted-average assumptions used to determine the benefit obligation at the measurement date (dollars in millions):

Successor Predecessor
Eight Months Ended December 31,
2021 Four Months Ended April 30, 2021 Year Ended December 31, 2020
Pension Other Pension Other Pension Other
Benefits Benefits Total Benefits Benefits Total Benefits Benefits Total
Projected benefit obligation:
BALANCE at the beginning of the period $ 826.1 $ 14.8 $ 840.9 $ 886.7 $ 15.9 $ 902.6 $ 832.4 $ 16.1 $ 848.5
Interest cost 15.3 0.3 15.6 6.5 0.1 6.6 24.9 0.5 25.4
Service cost — — — — — — .1 — 0.1
Actuarial loss (gain) 20.6 (4.2) 16.4 (55.0) (1.0) (56.0) 97.8 (0.1) 97.7
Plan settlements (25.9) — (25.9) — — — (6.6) — (6.6)
Plan curtailments — — — — — — (3.3) — (3.3)
Plan amendments 0.2 — 0.2 — — — — — —
Benefits paid (25.7) (0.3) (26.0) (12.1) (0.2) (12.3) (58.6) (0.6) (59.2)
Net transfer in/(out) (including the
effect of any business
combinations/divestitures) 17.3 5.0 22.3 — — — — — —
BALANCE at the end of the period $ 827.9 $ 15.6 $ 843.5 $ 826.1 $ 14.8 $ 840.9 $ 886.7 $ 15.9 $ 902.6

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Plan assets
Fair value, at the beginning
of the period $ 652.0 $ — $ 652.0 $ 603.1 $ — $ 603.1 $ 598.9 $ — $ 598.9
Actual return 31.8 — 31.8 38.5 — 38.5 57.9 — 57.9
Employer contributions 2.4 — 2.4 22.5 — 22.5 11.5 — 11.5
Plan settlements (25.9) — (25.9) — — — (6.6) — (6.6)
Benefits paid (25.7) — (25.7) (12.1) — (12.1) (58.6) — (58.6)
Fair value, at the end of the
period $ 634.6 $ — $ 634.6 $ 652.0 $ — $ 652.0 $ 603.1 $ — $ 603.1
Net benefit liabilities $ 193.3 $ 15.6 $ 208.9 $ 174.1 $ 14.8 $ 188.9 $ 283.6 $ 15.9 $ 299.5

Amounts recognized in
Consolidated Balance Sheet:
Accrued liabilities $ (3.8) $ (1.1) $ (4.9) $ (1.4) $ (1.4) $ (2.8) $ (1.5) $ (1.4) $ (2.9)
Other liabilities (long-term) (189.5) (14.5) (204.0) (172.7) (13.4) (186.1) (282.1) (14.5) (296.6)
Net benefit liabilities $ (193.3) $ (15.6) $ (208.9) $ (174.1) $ (14.8) $ (188.9) $ (283.6) $ (15.9) $ (299.5)

Accumulated contributions in
excess of (less than) net
periodic benefit cost $ (180.0) $ (19.8) $ (199.8) $ (174.1) $ (14.8) $ (188.9) $ (179.6) $ (15.8) $ (195.4)

Amounts not yet reflected in

net periodic benefit cost:
Actuarial gain (loss) (13.1) 4.2 (8.9) — — — (104.0) $ (0.1) (104.1)
Prior service credit (cost) (0.2) — (0.2) — — — — — —
Total accumulated other
comprehensive income (loss) $ (13.3) $ 4.2 $ (9.1) $ — $ — $ — $ (104.0) $ (0.1) $ (104.1)
Net benefit liabilities $ (193.3) $ (15.6) $ (208.9) $ (174.1) $ (14.8) $ (188.9) $ (283.6) $ (15.9) $ (299.5)

Weighted-average
assumptions:
Discount rate 2.73 % 2.72 % 2.84 % 2.73 % 2.30 % 2.19 %
Cash balance interest credit rate 3.05 % N/A 2.94 % N/A 2.94 % N/A

The unfunded obligation increased by $20.0 million as of December 31, 2021 when compared to the unfunded obligation as of
April 30, 2021. The increase was primarily attributable to the unfunded obligation under the SERP, having a balance of $16.2 million at
December 31, 2021, which was transferred in as of July 1, 2021. Additionally, a decline in the discount rate and the impact of updated census
data contributed to the increase in the unfunded obligation in the amount of $9.2 million and $13.2 million, respectively. This was partially
offset by higher than expected return on plan assets of $7.1 million, and employer contributions of $2.4 million during the eight months ended
December 31, 2021.

The unfunded obligation decreased by $110.6 million as of April 30, 2021 when compared to the unfunded obligation as of
December 31, 2020. The decrease was primarily attributable to the remeasurement of the pension and other post-retirement benefit plans at the
Effective Date in fresh start accounting of $82.7 million due to an increase in the discount rate and higher than expected return on plan assets of
approximately$56 million and $26 million, respectively. See "Note 3 - Fresh Start Accounting" for more information on the remeasurement of
the pension and other post-retirement benefit plans. Additionally, employer contributions of $22.5 million made during the four months ended
April 30, 2021 (Predecessor) drove a further decline in the unfunded obligation.

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 The projected benefit obligations for pension benefits in the preceding table reflect the actuarial present value of benefits accrued based
on services rendered to date assuming the actual or assumed expected date of separation for retirement.

The accumulated benefit obligations, which are presented below for all plans in the aggregate at December 31, 2021 and 2020, are
based on services rendered to date, but exclude the effect of future salary increases (in millions):
Successor Predecessor
2021 2020
Accumulated benefit obligation $ 843.5 $ 902.6

The components of net periodic pension, retiree medical cost and the weighted-average assumptions used to determine net periodic
pension and retiree medical cost were as follows (dollars in millions):
Successor Predecessor
Four Months
Eight Months Ended Ended April 30, Year Ended April 11, 2019 -
December 31, 2021 2021 December 31, 2020 December 31, 2019
Service cost (1) $ — $ — 0.1 1.5
Interest cost (2) 15.6 6.6 25.4 21.3
Expected return on plan assets (2) (24.7) (12.1) (36.5) (27.1)
Curtailment gain recognized (2) — — (3.3) —
Settlement (gain) loss recognized (2) 0.4 — (0.3) —
Amortization of net loss (2) — 0.1 — —
Net periodic pension and retiree medical
cost (income) $ (8.7) $ (5.4) $ (14.6) $ (4.3)
Discount rate 2.84 % 2.30 % 3.16 % 3.82 %
Expected return on assets 6.03 % 6.03 % 6.48 % 6.70 %
Cash balance interest credit rate 2.94 % 2.94 % 3.29 % 3.29 %

(1)
Included in Contract drilling and General and administrative expense in our Consolidated Statements of Operations.
(2)
Included in Other, net, in our Consolidated Statements of Operations.

Settlement accounting is necessary when actual lump sums paid during a fiscal year exceed the sum of the service cost and interest cost
for the year. The settlement threshold was reached for the Rowan Pension Plan and we recognized a settlement charge of $0.4 million in our
Consolidated Statements of Operations during the eight months ended December 31, 2021 (Successor).

In March 2021, the American Rescue Plan Act of 2021 ("ARPA-21") was passed. ARPA-21 provides funding relief for U.S. qualified
pension plans which should lower pension contribution requirements over the next few years. As a result, we did not make contributions to
certain plans in 2021. However, we currently expect to contribute approximately $3.8 million to our pension plans and to directly pay other
post-retirement benefits of approximately $1.2 million in 2022. These amounts represent the minimum contributions we are required to make
under relevant statutes. We do not expect to make contributions in excess of the minimum required amounts.

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 The pension plans' investment objectives for fund assets are: to achieve over the life of the plans a return equal to the plans' expected
investment return or the inflation rate plus 3%, whichever is greater, to invest assets in a manner such that contributions are minimized and
future assets are available to fund liabilities, to maintain liquidity sufficient to pay benefits when due, and to diversify among asset classes so
that assets earn a reasonable return with an acceptable level of risk. The plans employ several active managers with proven long-term records in
their specific investment discipline.

Target allocations among asset categories and the fair value of each category of plan assets as of December 31, 2021 and 2020,
classified by level within the fair value hierarchy are presented below. The plans will reallocate assets in accordance with the allocation targets,
after giving consideration to the expected level of cash required to pay current benefits and plan expenses (dollars in millions):
Quoted prices in
active markets for Significant Significant
identical assets observable inputs unobservable inputs
Target range Total (Level 1) (Level 2) (Level 3)
December 31, 2021 (Successor)
Equities: 53% to 69%
U.S. large cap 22% to 28% $ 173.7 $ — $ 173.7 $ —
U.S. small cap 4% to 10% 44.7 — 44.7 —
International all cap 21% to 29% 159.1 — 159.1 —
International small cap 2% to 8% 41.7 — 41.7 —
Real estate equities 0% to 13% 63.5 — 63.5 —
Fixed income: 25% to 35%
Aggregate 9% to 19% 73.1 — 73.1 —
Core plus 9% to 19% 74.3 74.3 — —
Cash and equivalents 0% to 10% 4.5 4.5 — —
Group annuity contracts — — — —
Total $ 634.6 $ 78.8 $ 555.8 $ —

December 31, 2020 (Predecessor)

Equities: 53% to 69%
U.S. large cap 22% to 28% $ 151.9 $ — $ 151.9 $ —
U.S. small cap 4% to 10% 48.1 — 48.1 —
International all cap 21% to 29% 158.5 — 158.5 —
International small cap 2% to 8% 37.0 — 37.0 —
Real estate equities 0% to 13% 53.5 — 53.5 —
Fixed income: 25% to 35%
Aggregate 9% to 19% 74.3 — 74.3 —
Core plus 9% to 19% 75.8 75.8 — —
Cash and equivalents 0% to 10% 4.0 4.0 — —
Group annuity contracts — — — —
Total $ 603.1 $ 79.8 $ 523.3 $ —

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 Assets in the U.S. equities category include investments in common and preferred stocks (and equivalents such as American Depository
Receipts and convertible bonds) and may be held through separate accounts, commingled funds or an institutional mutual fund. Assets in the
international equities category include investments in a broad range of international equity securities, including both developed and emerging
markets, and may be held through a commingled or institutional mutual fund. The real estate category includes investments in pooled and
commingled funds whose objectives are diversified equity investments in income-producing properties. Each real estate fund is intended to
provide broad exposure to the real estate market by property type, geographic location and size and may invest internationally. Securities in
both the aggregate and core plus fixed income categories include U.S. government, corporate, mortgage- and asset-backed securities and
Yankee bonds, and both categories target an average credit rating of “A” or better at all times. Individual securities in the aggregate fixed
income category must be investment grade or above at the time of purchase, whereas securities in the core plus category may have a rating of
“B” or above. Additionally, the core plus category may invest in non-U.S. securities. Assets in the aggregate and core plus fixed income
categories are held primarily through a commingled fund and an institutional mutual fund, respectively. Group annuity contracts are invested in
a combination of equity, real estate, bond and other investments in connection with a pension plan in Norway.

The following is a description of the valuation methodologies used for the pension plan assets as of December 31, 2021:

• Fair values of all U.S. equity securities, the international all cap equity securities and aggregate fixed income securities categorized as
Level 2 were held in commingled funds which were valued daily based on a net asset value.

• Fair value of international small cap equity securities categorized as Level 2 were held in a limited partnership fund which was valued
monthly based on a net asset value.

• The real estate equities categorized as Level 2 were held in two accounts (a commingled fund and a limited partnership). The assets in
the commingled fund were valued monthly based on a net asset value and the assets in the limited partnership were valued quarterly
based on a net asset value.

• Cash and equivalents categorized as Level 1 were valued at cost, which approximates fair value.

• Fair value of mutual fund investments in core plus fixed income securities categorized as Level 1 were based on quoted market prices
which represent the net asset value of shares held.

To develop the expected long-term rate of return on assets assumption, we considered the current level of expected returns on risk-free
investments (primarily government bonds), the historical level of the risk premium associated with the plan's other asset classes and the
expectations for future returns of each asset class. The expected return for each asset class was then weighted based upon the current asset
allocation to develop the expected long-term rate of return on assets assumption for the plan, which increased to 6.26% at December 31, 2021
(Successor) from 6.03% at December 31, 2020 (Predecessor).

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 Estimated future annual benefit payments from plan assets are presented below. Such amounts are based on existing benefit formulas
and include the effect of future service (in millions):

Other Post-
Pension Benefits Retirement Benefits
Year ended December 31,
2022 $ 42.7 $ 1.2
2023 42.3 1.2
2024 42.3 1.2
2025 41.8 1.1
2026 41.2 1.0
2027 through 2030 200.2 4.2

Savings Plans

We have savings plans, (the Ensco Savings Plan, the Valaris Multinational Savings Plan, the Valaris Limited Retirement Plan and the
frozen RDIS International Savings Plan), which cover eligible employees as defined within each plan. During 2020, the plan assets of the
legacy Rowan savings plans (the Rowan Companies, Inc. Savings & Investment Plan and the Rowan Drilling UK Pension Scheme) were
transferred to the Ensco Savings Plan and the Valaris Limited Retirement Plan, respectively. The Ensco Savings Plan includes a 401(k) savings
plan feature, which allows eligible employees to make tax-deferred contributions to the plans. The Valaris Limited Retirement Plan allows
eligible employees to make tax-deferred contributions to the plan. Contributions made to the Valaris Multinational Savings Plan may or may
not qualify for tax deferral based on each plan participant's local tax requirements.

Historically, we made matching cash contributions to the plans. The legacy Ensco plans previously matched 100% of the amount
contributed by the employee up to a maximum of 5% of eligible salary, where the legacy Rowan plans also provided up to a 5% match of
eligible salary; however, depending on the plan and the tier, the match percentage could vary. Matching contributions totaled $8.8 million and
$18.7 million for the years ended December 31, 2020 and 2019 (Predecessor), respectively. Effective August 1, 2020, in light of the then
current economic environment, we suspended employer matching contributions for the Ensco Savings Plan and the Valaris Multinational
Savings Plan. In addition, effective December 1, 2020, the matching contributions in the Valaris Limited Retirement Plan were
reduced. Employer contributions were reinstated effective January 1, 2022 whereby 100% of the amount contributed by the employee is
matched up to a maximum of 4% of eligible salary.

14. INCOME TAXES

We generated profits of $253.4 million and $373.1 million, losses of $51.0 million and profits of $39.0 million before income taxes in
the U.S. for the eight months ended December 31, 2021 (Successor), the four months ended April 30, 2021 (Predecessor), the years ended
December 31, 2020 and 2019 (Predecessor), respectively. We generated losses of $245.2 million, $4.8 billion, $5.1 billion and $102.8 million
before income taxes in non-U.S. jurisdictions for the eight months ended December 31, 2021 (Successor), the four months ended April 30,
2021 (Predecessor), the years ended December 31, 2020 and 2019 (Predecessor), respectively.

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 The components of our provision for income taxes are summarized as follows (in millions):
Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended Ended April December 31, December 31,
December 31, 30, 2021 2020 2019
2021
Current income tax expense (benefit):
U.S. $ 5.5 $ — $ (135.3) $ 31.3
Non-U.S. 53.2 34.4 (18.4) 73.2
58.7 34.4 (153.7) 104.5
Deferred income tax expense (benefit):
U.S. (6.6) — (92.9) 19.7
Non-U.S. (14.7) (18.2) (12.8) 4.2
(21.3) (18.2) (105.7) 23.9
Total income tax expense (benefit) $ 37.4 $ 16.2 $ (259.4) $ 128.4

U.S. Tax Reform and CARES Act

The U.S. Tax Cuts and Jobs Act ("U.S. tax reform") was enacted on December 22, 2017 and introduced significant changes to U.S.
income tax law, effective January 1, 2018. Due to the timing of the enactment of U.S. tax reform and the complexity involved in applying its
provisions, the U.S. Treasury Department continued finalizing rules associated with U.S. tax reform during 2018 and 2019. During 2019, we
recognized a tax expense of $13.8 million associated with final rules issued related to U.S. tax reform.

The U.S. Coronavirus Aid, Relief, and Economic Security Act (the "CARES Act") was enacted on March 27, 2020 and introduced
various corporate tax relief measures into law. Among other things, the CARES Act allows net operating losses ("NOLs") generated in 2019
and 2020 to be carried back to each of the five preceding years. During 2020, we recognized a tax benefit of $122.1 million associated with the
carryback of NOLs to recover taxes paid in prior years.

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 Deferred Taxes

The components of deferred income tax assets and liabilities are summarized as follows (in millions):
Successor Predecessor
December 31, December 31,
2021 2020
Deferred tax assets:
Net operating loss carryforwards $ 2,293.5 $ 2,272.2
Property and equipment 1,361.6 —
Foreign tax credits 105.7 171.2
Interest limitation carryforwards 74.8 221.2
Employee benefits, including share-based compensation 51.2 81.6
Premiums on long-term debt 9.7 115.7
Other 15.4 6.8
Total deferred tax assets 3,911.9 2,868.7
Valuation allowance (3,829.0) (2,787.7)
Net deferred tax assets 82.9 81.0
Deferred tax liabilities:
Property and equipment — (40.9)
Other (14.5) (11.2)
Total deferred tax liabilities (14.5) (52.1)
Net deferred tax asset $ 68.4 $ 28.9

The realization of substantially all of our deferred tax assets is dependent upon generating sufficient taxable income during future
periods in various jurisdictions in which we operate. Realization of certain of our deferred tax assets is not assured. We recognize a valuation
allowance for deferred tax assets when it is more-likely-than-not that the benefit from the deferred tax asset will not be realized. The amount of
deferred tax assets considered realizable could increase or decrease in the near-term if our estimates of future taxable income change.

As of December 31, 2021 (Successor), we had gross deferred tax assets of $2.3 billion relating to $10.0 billion of NOL carryforwards,
$105.7 million of U.S. foreign tax credits (“FTCs”), and $74.8 million of U.S. and Luxembourg interest limitation carryforwards, which can be
used to reduce our income taxes payable in future years. NOL carryforwards, which were generated in various jurisdictions worldwide, include
$9.1 billion that do not expire and $807.5 million that will expire, if not utilized, between 2022 and 2040. Deferred tax assets for NOL
carryforwards as of December 31, 2021 (Successor) include $1.4 billion, $599.2 million, $76.4 million, and $56.4 million pertaining to NOL
carryforwards in Luxembourg, the United States, Switzerland, and the U.K., respectively. The U.S. FTCs expire between 2022 and 2026.
Interest limitation carryforwards generally do not expire. Additionally, as a result of our emergence from bankruptcy, the utilization of certain
U.S. deferred tax assets including, but not limited to, NOL carryforwards, FTCs, and interest limitation carryforwards is limited to $0.5 million
annually. We have recognized a $3.8 billion valuation allowance as of December 31, 2021 on deferred tax assets relating to those assets for
which we are not more likely than not to realize due to the inability to generate sufficient taxable income in the period and/or of the character
necessary to use the benefit of the deferred tax assets.

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 Certain components of deferred tax assets and liabilities as of December 31, 2021 (Successor) have changed significantly from
December 31, 2020 (Predecessor) due to the impacts of fresh start accounting, Switzerland tax reform, and other tax attribute reductions
resulting from restructurings due to and in connection with the emergence from bankruptcy. During the eight months ended December 31,
2021, we recognized a $9.8 million deferred tax benefit associated with changes in deferred tax asset valuation allowances. Given current
industry conditions and recent historical losses, we do not project reliable future income other than from existing drilling contracts and other
known sources of future income. If industry conditions improve, which is generally evidenced by increased contract backlog and increased
contract day rates, we may rely on projected taxable income from future drilling contracts for the recognition of deferred tax assets.

Effective Tax Rate

Valaris Limited, the Successor Company and our parent company, is domiciled and resident in Bermuda. Our subsidiaries conduct
operations and earn income in numerous countries and are subject to the laws of taxing jurisdictions within those countries. The income of our
non-Bermuda subsidiaries is not subject to Bermuda taxation as there is not an income tax regime in Bermuda. Valaris plc, the Predecessor
Company and our former parent company, was domiciled and resident in the U.K. The income of our non-U.K. subsidiaries was generally not
subject to U.K. taxation.

Income tax rates and taxation systems in the jurisdictions in which our subsidiaries conduct operations vary and our subsidiaries are
frequently subjected to minimum taxation regimes. In some jurisdictions, tax liabilities are based on gross revenues, statutory deemed profits or
other factors, rather than on net income, and our subsidiaries are frequently unable to realize tax benefits when they operate at a loss.
Accordingly, during periods of declining profitability, our income tax expense may not decline proportionally with income, which could result
in higher effective income tax rates. Furthermore, we will continue to incur income tax expense in periods in which we operate at a loss.

Our drilling rigs frequently move from one taxing jurisdiction to another to perform contract drilling services. In some instances, the
movement of drilling rigs among taxing jurisdictions will involve the transfer of ownership of the drilling rigs among our subsidiaries. As a
result of frequent changes in the taxing jurisdictions in which our drilling rigs are operated and/or owned, changes in profitability levels and
changes in tax laws, our annual effective income tax rate may vary substantially from one reporting period to another.

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 Our consolidated effective income tax rate for the eight months ended December 31, 2021 (Successor), the four months ended April 30,
2021 (Predecessor), the year ended December 31, 2020 (Predecessor) and the year ended December 31, 2019 (Predecessor), respectively,
differs from the Bermuda and U.K. statutory income tax rates as follows:
Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended December Ended April 30, December 31, December 31,
31, 2021 2021 2020 2019
Bermuda (Successor)/ U.K. (Predecessor) statutory income
tax rate — % 19.0 % 19.0 % 19.0 %
Asset impairments — (3.2) (12.5) (31.0)
Non-Bermuda (Successor) taxes 376.0 — — —
Non-U.K. (Predecessor) taxes — 1.0 (2.8) (280.9)
Resolution of prior year items 387.9 (0.4) 1.8 12.3
Switzerland Tax Reform (188.3) — — —
Valuation allowance (119.5) (1.8) (1.5) (145.1)
U.S. tax reform and U.S. CARES Act — — 2.4 (21.6)
Bargain purchase gain — — — 189.7
Debt repurchases — — — 48.7
Other — (15.0) (1.3) 7.6
Effective income tax rate 456.1 % (0.4)% 5.1 % (201.3) %

Our eight months ended December 31, 2021 (Successor) consolidated effective income tax rate includes $15.3 million associated with
the impact of various discrete items, including $30.7 million income tax expense associated with changes in liabilities for unrecognized tax
benefits and resolution of other prior period tax matters, offset by $15.4 million of tax benefit related to deferred taxes associated with
Switzerland tax reform.

Our four months ended April 30, 2021 (Predecessor) consolidated effective income tax rate included $2.2 million associated with the
impact of various discrete items, including $21.5 million of income tax expense associated with changes in liabilities for unrecognized tax
benefits and resolution of other prior period tax matters, offset by $19.3 million of tax benefit related to fresh start accounting adjustments.

Our 2020 consolidated effective income tax rate includes a $322.4 million tax benefit associated with the impact of various discrete tax
items, including restructuring transactions, impairments of rigs and other assets, implementation of the U.S. CARES Act, changes in liabilities
for unrecognized tax benefits associated with tax positions taken in prior years, rig sales, reorganization items and the resolution of other prior
period tax matters.

Our 2019 consolidated effective income tax rate includes $2.3 million associated with the impact of various discrete tax items,
including $28.3 million of tax expense associated with final rules related to U.S. tax reform, gains on repurchase of debt and settlement
proceeds, partially offset by $26.0 million of tax benefit related to restructuring transactions, changes in liabilities for unrecognized tax benefits
associated with tax positions taken in prior years and other resolutions of prior year tax matters and rig sales.

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 Excluding the impact of the aforementioned discrete tax items, our consolidated effective income rates for the eight months ended
December 31, 2021 (Successor) and the four months ended April 30, 2021 (Predecessor) were 387.7% and (12.9)%, respectively. Excluding the
impact of the aforementioned discrete tax items, our consolidated effective income tax rates for the years ended December 31, 2020 and 2019
(Predecessor) were (7.6)% and (14.6)%, respectively. The changes in our consolidated effective income tax rate excluding discrete tax items
during the three-year period result primarily from changes in the relative components of our earnings from the various taxing jurisdictions in
which our drilling rigs are operated and/or owned and differences in tax rates in such taxing jurisdictions.

As discussed in "Note 9 - Debt", on February 3, 2020, Rowan and RCI transferred substantially all their assets and liabilities to Valaris
plc and Valaris plc became the obligor on the 4.875% 2022 Notes, 2042 Notes, 7.375% 2025 Notes, 4.75% 2024 Notes and 5.85% 2044 Notes.
We recognized a tax benefit of $66.0 million during the year ended December 31, 2020 in connection with this transaction.

Unrecognized Tax Benefits

Our tax positions are evaluated for recognition using a more-likely-than-not threshold, and those tax positions requiring recognition are
measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon effective settlement with a taxing authority
that has full knowledge of all relevant information.

As of December 31, 2021 (Successor), we had $234.3 million of unrecognized tax benefits, of which $212.2 million was included in
Other liabilities on our Consolidated Balance Sheet, $21.1 million, which is associated with tax positions taken in tax years with NOL
carryforwards, was presented as a reduction of deferred tax assets and $1.0 million was presented as a reduction of long-term income tax
receivable.

As of December 31, 2020 (Predecessor), we had $237.7 million of unrecognized tax benefits, of which $213.0 million was included in
Other liabilities on our Consolidated Balance Sheet, $20.7 million, which is associated with tax positions taken in tax years with NOL
carryforwards, was presented as a reduction of deferred tax assets and $4.0 million was presented as a reduction of long-term income tax
receivable.

If recognized, $208.9 million of the $234.3 million unrecognized tax benefits as of December 31, 2021 (Successor) would impact our
consolidated effective income tax rate. A reconciliation of the beginning and ending amount of unrecognized tax benefits for the eight months
ended December 31, 2021 (Successor), the four months ended April 30, 2021 (Predecessor) and the year ended December 31, 2020
(Predecessor), respectively (in millions):
Successor Predecessor
Eight Months Four Months Year Ended
Ended Ended April December 31,
December 31, 30, 2021 2020
2021
Balance, beginning of period $ 235.4 $ 237.7 $ 296.7
Increase in unrecognized tax benefits as a result of tax positions taken during prior
years 33.8 2.9 22.4
Lapse of applicable statutes of limitations (20.2) (0.2) (13.2)
Impact of foreign currency exchange rates (10.5) (17.6) 9.0
Increases in unrecognized tax benefits as a result of tax positions taken during the
current year 6.9 12.6 12.8
Settlements with taxing authorities (6.6) — (0.7)
Decreases in unrecognized tax benefits as a result of tax positions taken during prior
years (4.5) — (89.3)
Balance, end of period $ 234.3 $ 235.4 $ 237.7

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 Accrued interest and penalties totaled $108.0 million and $73.1 million as of December 31, 2021 (Successor) and 2020 (Predecessor),
respectively, and were included in Other liabilities on our Consolidated Balance Sheets. We recognized a net expense of $21.3 million,
$13.5 million, $13.8 million and $5.7 million associated with interest and penalties during the eight months ended December 31, 2021
(Successor), the four months ended April 30, 2021 (Predecessor), the years ended December 31, 2020 and 2019 (Predecessor), respectively.
Interest and penalties are included in Current income tax expense in our Consolidated Statements of Operations.

Three of our subsidiaries file U.S. tax returns and the tax returns of one or more of these subsidiaries is under exam for years 2009 to
2012 and for 2015, 2017 and subsequent years. None of these examinations are expected to have an impact on the Company's consolidated
results of operations and cash flows. Tax years as early as 2005 remain subject to examination in the other major tax jurisdictions in which we
operated.

Statutes of limitations applicable to certain of our tax positions lapsed during the eight months ended December 31, 2021 (Successor),
the four months ended April 30, 2021 (Predecessor), the years ended December 31, 2020 and 2019 (Predecessor), resulting in net income tax
benefits, inclusive of interest and penalties, of $17.9 million, $0.2 million, $4.3 million and $5.3 million, respectively.

Absent the commencement of examinations by tax authorities, statutes of limitations applicable to certain of our tax positions will lapse
during 2022. Therefore, it is reasonably possible that our unrecognized tax benefits will decline during the next 12 months by $4.0 million,
inclusive of $1.4 million of accrued interest and penalties, all of which would impact our consolidated effective income tax rate if recognized.

Tax Assessments

Predecessor

During 2019, the Luxembourg tax authorities issued aggregate tax assessments totaling approximately €142.0 million (approximately
$161.5 million converted using the current period-end exchange rates) related to tax years 2014, 2015 and 2016 for several of Rowan's
Luxembourg subsidiaries. We recorded a liability for uncertain tax positions of €93.0 million (approximately $105.7 million converted using
the current period-end exchange rates) in purchase accounting related to these assessments. During the first quarter of 2020, in connection with
the administrative appeals process, the tax authority withdrew assessments of €142.0 million (approximately $161.5 million converted using the
current period-end exchange rates), accepting the associated tax returns as previously filed. Accordingly, we de-recognized previously accrued
liabilities for uncertain tax positions and net wealth taxes of €79.0 million (approximately $89.8 million converted using the current period-end
exchange rates) and €2.0 million (approximately $2.3 million converted using the current period-end exchange rates), respectively. The de-
recognition of amounts related to these assessments was recognized as a tax benefit during the three-month period ended March 31, 2020 and is
included in Changes in operating assets and liabilities on the Consolidated Statements of Cash Flows for the year ended December 31, 2020
(Predecessor). On December 31, 2021, we de-recognized the remaining liability for uncertain tax position balance of €14.0 million
(approximately $15.9 million converted using the current period-end exchange rates) upon the lapse of the applicable statute of limitations.

During 2019, the Australian tax authorities issued aggregate tax assessments totaling approximately A$101 million (approximately
$73.4 million converted at current period-end exchange rates) plus interest related to the examination of certain of our tax returns for the years
2011 through 2016. During the third quarter of 2019, we made a A$42 million payment (approximately $29 million at then-current exchange
rates) to the Australian tax authorities to litigate the assessment. We have an $18.0 million liability for unrecognized tax benefits relating to
these assessments as of December 31, 2021 (Successor). We believe our tax returns are materially correct as filed, and we are vigorously
contesting these assessments. Although the outcome of such assessments and related administrative proceedings cannot be predicted with
certainty, we do not expect these matters to have a material adverse effect on our financial position, operating results and cash flows.

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 Undistributed Earnings

Dividend income received by Valaris Limited from its subsidiaries is exempt from Bermuda taxation. We do not provide deferred taxes
on undistributed earnings of certain subsidiaries because our policy and intention is to reinvest such earnings indefinitely. As of December 31,
2021 (Successor), the aggregate undistributed earnings of the subsidiaries for which we maintain a policy and intention to reinvest earnings
indefinitely totaled $279.5 million. Should we make a distribution from these subsidiaries in the form of dividends or otherwise, we would be
subject to additional income taxes. The unrecognized deferred tax liability related to these undistributed earnings was not practicable to
estimate as of December 31, 2021 (Successor).

15. COMMITMENTS AND CONTINGENCIES

Prior to our chapter 11 filing, we had contractual commitments for the construction of VALARIS DS-13 and VALARIS DS-14. On
February 26, 2021, we entered into amended agreements with the shipyard that became effective upon our emergence from bankruptcy. The
amendments provide for, among other things, an option construct whereby the Company has the right, but not the obligation, to take delivery of
either or both rigs on or before December 31, 2023. Under the amended agreements, the purchase price for the rigs are estimated to be
approximately $119.1 million for the VALARIS DS-13 and $218.3 million for the VALARIS DS-14, assuming a December 31, 2023 delivery
date. Delivery can be requested any time prior to December 31, 2023 with a downward purchase price adjustment based on predetermined
terms. If the Company elects not to purchase the rigs, the Company has no further obligations to the shipyard. The amended agreements
removed any parent company guarantee.

Indonesian Well-Control Event

In July 2019, a well being drilled offshore Indonesia by one of our jackup rigs experienced a well-control event requiring the cessation
of drilling activities. In February 2020, the rig resumed operations. Indonesian authorities initiated an investigation into the event and have
contacted the customer, us and other parties involved in drilling the well for additional information. We cooperated with the Indonesian
authorities. We cannot predict the scope or ultimate outcome of this investigation. If the Indonesian authorities determine that we violated local
laws in connection with this matter, we could be subject to penalties including environmental or other liabilities, which may have a material
adverse impact on us.

ARO Funding Obligations

In connection with our 50/50 joint venture, we have a potential obligation to fund ARO for newbuild jackup rigs. ARO has plans to
purchase 20 newbuild jackup rigs over an approximate 10-year period. In January 2020, ARO ordered the first two newbuild jackups, each with
a shipyard price of $176.0 million. The first rig is expected to be delivered in the fourth quarter of 2022 and the second rig is expected either
late in the fourth quarter of 2022 or in the first quarter of 2023. ARO is expected to place orders for two additional newbuild jackups in 2022.
The joint venture partners intend for the newbuild jackup rigs to be financed out of available cash from ARO's operations and/or funds
available from third-party debt financing. ARO paid a 25% down payment from cash on hand for each of the newbuilds ordered in January
2020 and is actively exploring financing options for remaining payments due upon delivery. In the event ARO has insufficient cash from
operations or is unable to obtain third-party financing, each partner may periodically be required to make additional capital contributions to
ARO, up to a maximum aggregate contribution of $1.25 billion from each partner to fund the newbuild program. Each partner's commitment
shall be reduced by the actual cost of each newbuild rig, on a proportionate basis.

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 The joint venture partners agreed that Saudi Aramco, as a customer, will provide drilling contracts to ARO in connection with the
acquisition of the newbuild rigs. The initial contracts provided by Saudi Aramco for each of the newbuild rigs will be for an eight-year term.
The day rate for the initial contracts for each newbuild rig will be determined using a pricing mechanism that targets a six-year payback period
for construction costs on an EBITDA basis. The initial eight-year contracts will be followed by a minimum of another eight years of term, re-
priced in three-year intervals based on a market pricing mechanism.

Other Matters

In addition to the foregoing, we are named defendants or parties in certain other lawsuits, claims or proceedings incidental to our
business and are involved from time to time as parties to governmental investigations or proceedings, including matters related to taxation,
arising in the ordinary course of business. Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty and
the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, we do not expect
these matters to have a material adverse effect on our financial position, operating results and cash flows.

In the ordinary course of business with customers and others, we have entered into letters of credit to guarantee our performance as it
relates to our drilling contracts, contract bidding, customs duties, tax appeals and other obligations in various jurisdictions. Letters of credit
outstanding as of December 31, 2021 (Successor) totaled $36.5 million and are issued under facilities provided by various banks and other
financial institutions. Obligations under these letters of credit are not normally called, as we typically comply with the underlying performance
requirement. As of December 31, 2021 (Successor), we had collateral deposits in the amount of $31.1 million with respect to these agreements.

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16. LEASES

We have operating leases for office space, facilities, equipment, employee housing and certain rig berthing facilities. For all asset
classes, except office space, we account for the lease component and the non-lease component as a single lease component. Our leases have
remaining lease terms of less than one year to nine years, some of which include options to extend.

We evaluate the carrying value of our right-of-use assets on a periodic basis to identify events or changes in circumstances, such as
lease abandonment, that indicate that the carrying value of such right-of-use assets may be impaired.

The components of lease expense are as follows (in millions):

Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended December Ended April 30, December 31, December 31,
31, 2021 2021 2020 2019
Long-term operating lease cost $ 12.9 $ 9.1 $ 23.3 $ 29.5
Short-term operating lease cost 15.3 7.0 19.2 12.2
Sublease income (0.3) (0.1) (2.3) (2.4)
Total operating lease cost $ 27.9 $ 16.0 $ 40.2 $ 39.3

Supplemental balance sheet information related to our operating leases is as follows (in millions, except lease term and discount rate):
Successor Predecessor
December 31, 2021 December 31, 2020
Operating lease right-of-use assets $ 20.5 $ 35.8

Current lease liability $ 10.0 $ 15.7

Long-term lease liability 12.5 21.6
Total operating lease liabilities $ 22.5 $ 37.3

Weighted-average remaining lease term (in years) 4.8 4.3

Weighted-average discount rate (1) 7.27 % 8.24 %

(1) Represents our estimated incremental borrowing cost on a secured basis for similar terms as the underlying leases.

During the eight months ended December 31, 2021 (Successor) and during the four months ended April 30, 2021 (Predecessor), cash
paid for amounts included in the measurement of our operating lease liabilities were $11.7 million and $7.1 million, respectively. For the years
ended December 31, 2020 and 2019 (Predecessor), cash paid for amounts included in the measurement of our operating lease liabilities were
$23.5 million and $29.9 million, respectively.

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 Maturities of lease liabilities as of December 31, 2021 (Successor) were as follows (in millions):

2022 $ 11.3
2023 3.1
2024 2.2
2025 2.0
2026 2.0
Thereafter 6.8
Total lease payments $ 27.4
Less imputed interest (4.9)
Total $ 22.5

Predecessor

On October 28, 2020, the Bankruptcy Court approved the rejection of certain unexpired office leases and related subleases. The various
lease rejections were effective as of September 30, 2020 and October 31, 2020. We recorded an estimated allowed claim of $4.4 million and
recognized an expense in Reorganization items, net on our Consolidated Statements of Operations for the year ended December 31, 2020
(Predecessor). Also, during the year ended December 31, 2020 (Predecessor), in connection with the office lease rejections, we reduced our
right-of-use asset by a total of $10.5 million and lease liability by a total of $20.4 million and recognized a net gain in Reorganization items of
$9.8 million which includes the write off of associated leasehold improvements. Additionally, in connection with the lease rejections, during
the year ended December 31, 2020 (Predecessor), we amended the terms of the lease for our corporate headquarters in Houston, Texas. The
amendment reduced the associated right-of-use asset by $6.4 million and lease liability by $10.4 million and we recognized a net gain in
Reorganization items of $1.7 million which includes the write-off of associated leasehold improvements during the year ended December 31,
2020 (Predecessor).

During the year ended December 31, 2019 (Predecessor), we recorded lease impairments of $5.6 million related to the impairment of
the right-of-use assets associated with an office space and a leased yard facility that were abandoned due to the consolidation of certain
corporate offices and leased facilities.

17. SEGMENT INFORMATION

Our business consists of four operating segments: (1) Floaters, which includes our drillships and semisubmersible rigs, (2) Jackups, (3)
ARO and (4) Other, which consists of management services on rigs owned by third-parties and the activities associated with our arrangements
with ARO under the Lease Agreements, the Secondment Agreement and the Transition Services Agreement. Floaters, Jackups and ARO are
also reportable segments.

Upon emergence, we ceased allocation of our onshore support costs included within Contract drilling expenses to our operating
segments for purposes of measuring segment operating income (loss) and as such, those costs are included in “Reconciling Items”. We have
adjusted the historical periods to conform with current period presentation. Further, General and administrative expense and Depreciation
expense incurred by our corporate office are not allocated to our operating segments for purposes of measuring segment operating income
(loss) and are included in "Reconciling Items." Substantially all of the expenses incurred associated with our Transition Services Agreement are
included in General and administrative under "Reconciling Items" in the table set forth below. We measure segment assets as Property and
equipment, net.

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 The full operating results included below for ARO are not included within our consolidated results and thus deducted under
"Reconciling Items" and replaced with our equity in earnings of ARO. See "Note 6 - Equity Method Investment in ARO" for additional
information on ARO and related arrangements.

Segment information for the eight months ended December 31, 2021 (Successor), the four months ended April 30, 2021 (Predecessor), the
years ended December 31, 2020 and 2019 (Predecessor), respectively are presented below (in millions).

Eight Months Ended December 31, 2021 (Successor)

Reconciling Consolidated
Floaters Jackups ARO Other Items Total
Revenues $ 254.5 $ 487.1 $ 307.1 $ 93.4 $ (307.1) $ 835.0
Operating expenses
Contract drilling (exclusive of
depreciation) 250.7 365.2 246.2 38.9 (172.3) 728.7
Depreciation 31.0 32.0 44.2 2.8 (43.9) 66.1
General and administrative — — 13.6 — 44.6 58.2
Equity in earnings of ARO — — — — 6.1 6.1
Operating income (loss) $ (27.2) $ 89.9 $ 3.1 $ 51.7 $ (129.4) $ (11.9)
Property and equipment, net $ 408.2 $ 401.9 $ 730.6 $ 46.0 $ (695.8) $ 890.9
Capital expenditures $ 26.0 $ 23.7 $ 41.8 $ — $ (41.3) $ 50.2

Four Months Ended April 30, 2021 (Predecessor)

Reconciling Consolidated
Floaters Jackups ARO Other Items Total
Revenues $ 115.7 $ 232.4 $ 163.5 $ 49.3 $ (163.5) $ 397.4
Operating expenses
Contract drilling (exclusive of
depreciation) 106.5 175.0 116.1 19.9 (73.7) 343.8
Loss on impairment 756.5 — — — — 756.5
Depreciation 72.1 69.7 21.0 14.8 (18.0) 159.6
General and administrative — — 4.2 — 26.5 30.7
Equity in earnings of ARO — — — — 3.1 3.1
Operating income (loss) $ (819.4) $ (12.3) $ 22.2 $ 14.6 $ (95.2) $ (890.1)
Property and equipment, net $ 419.3 $ 401.4 $ 730.7 $ 50.5 $ (692.8) $ 909.1
Capital expenditures $ 3.3 $ 5.4 $ 14.9 $ — $ (14.9) $ 8.7

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 Year Ended December 31, 2020 (Predecessor)
Reconciling Consolidated
Floaters Jackups ARO Other Items Total
Revenues $ 505.8 $ 765.3 $ 549.4 $ 156.1 $ (549.4) $ 1,427.2
Operating expenses
Contract drilling (exclusive of
depreciation) 566.1 659.5 388.2 82.8 (226.2) 1,470.4
Loss on impairment 3,386.2 254.3 — 5.7 — 3,646.2
Depreciation 262.8 217.2 54.8 44.8 (38.8) 540.8
General and administrative — — 24.2 — 190.4 214.6
Other operating income 118.1 — — — — 118.1
Equity in losses of ARO — — — — (7.8) (7.8)
Operating income (loss) $ (3,591.2) $ (365.7) $ 82.2 $ 22.8 $ (482.6) $ (4,334.5)
Property and equipment, net $ 6,413.4 $ 3,912.6 $ 736.2 $ 577.9 $ (679.6) $ 10,960.5
Capital expenditures $ 25.1 $ 58.9 $ 136.1 $ — $ (126.3) $ 93.8

Year Ended December 31, 2019 (Predecessor)

Reconciling Consolidated
Floaters Jackups ARO Other Items Total
Revenues $ 1,014.4 $ 834.6 $ 410.5 $ 204.2 $ (410.5) $ 2,053.2
Operating expenses
Contract drilling (exclusive of
depreciation) 785.0 711.3 280.2 111.0 (79.7) 1,807.8
Loss on impairment 88.2 10.2 — — 5.6 104.0
Depreciation 362.3 203.3 40.3 25.5 (21.7) 609.7
General and administrative — — 27.1 — 161.8 188.9
Equity in losses of ARO — — — — (12.6) (12.6)
Operating income (loss) $ (221.1) $ (90.2) $ 62.9 $ 67.7 $ (489.1) $ (669.8)
Property and equipment, net $ 10,073.1 $ 4,322.7 $ 650.7 $ 620.9 $ (570.5) $ 15,096.9
Capital expenditures $ 31.4 $ 184.6 $ 27.5 $ — $ (16.5) $ 227.0

Information about Geographic Areas

As of December 31, 2021 (Successor), our Floaters segment consisted of 11 drillships, four dynamically positioned semisubmersible
rigs and one moored semisubmersible rig deployed in various locations. Our Jackups segment consisted of 33 jackup rigs which were deployed
in various locations and our Other segment consisted of seven jackup rigs which are leased to our 50/50 joint venture with Saudi Aramco.

As of December 31, 2021 (Successor), the geographic distribution of our and ARO's drilling rigs was as follows:
Floaters Jackups Other Total Valaris ARO
North & South America 6 6 — 12 —
Europe & the Mediterranean 6 12 — 18 —
Middle East & Africa 2 8 7 17 7
Asia & Pacific Rim 2 7 — 9 —
Total 16 33 7 56 7

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 We provide management services in the U.S. Gulf of Mexico on two rigs owned by a third party not included in the table above.

We are a party to contracts whereby we have the option to take delivery of two drillships, VALARIS DS-13 and VALARIS DS-14, that
are not included in the table above.

ARO has ordered two newbuild jackups which are under construction in the Middle East that are not included in the table above.

For purposes of our long-lived asset geographic disclosure, we attribute assets to the geographic location of the drilling rig or operating
lease, in the case of our right-of-use assets, as of the end of the applicable year. For new construction projects, assets are attributed to the
location of future operation if known or to the location of construction if the ultimate location of operation is undetermined.

Information by country for those countries that account for more than 10% of our long-lived assets, was as follows (in millions):
Long-lived Assets
Successor Predecessor
December 31, December 31, December 31,
2021 2020 2019
United States $ 152.1 $ 1,811.9 $ 2,972.4
Spain 145.8 2,122.6 3,012.4
United Kingdom 142.4 2,584.0 1,210.5
Saudi Arabia 75.2 1,183.7 1,259.3
Other countries(1) 395.9 3,294.1 6,700.4
Total $ 911.4 $ 10,996.3 $ 15,155.0
(1) Other countries includes countries where individually we had long-lived assets representing less than 10% of total long-lived assets

18. SUPPLEMENTAL FINANCIAL INFORMATION

Consolidated Balance Sheet Information

Accounts receivable, net, consisted of the following (in millions):

Successor Predecessor
December 31, 2021 December 31, 2020
Trade $ 296.8 $ 260.1
Income tax receivables 151.1 190.6
Other 12.7 14.7
460.6 465.4
Allowance for doubtful accounts (16.4) (16.2)
$ 444.2 $ 449.2

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 Other current assets consisted of the following (in millions):
Successor Predecessor
December 31, 2021 December 31, 2020
Prepaid taxes $ 44.4 $ 32.9
Deferred costs 26.9 17.4
Prepaid expenses 23.1 43.4
Materials and supplies — 279.4
Other 23.4 13.4
$ 117.8 $ 386.5

Other assets consisted of the following (in millions):

Successor Predecessor
December 31, 2021 December 31, 2020
Tax receivables $ 64.8 $ 66.8
Deferred tax assets 59.7 21.9
Right-of-use assets 20.5 35.8
Supplemental executive retirement plan assets — 22.6
Other 31.0 29.1
$ 176.0 $ 176.2

Accrued liabilities and other consisted of the following (in millions):

Successor Predecessor
December 31, 2021 December 31, 2020
Personnel costs $ 64.6 $ 95.6
Income and other taxes payable 45.7 50.8
Deferred revenue 45.8 57.6
Lease liabilities 10.0 15.7
Accrued interest 7.6 —
Other 22.5 30.7
$ 196.2 $ 250.4

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 Other liabilities consisted of the following (in millions):
Successor Predecessor
December 31, 2021 December 31, 2020
Unrecognized tax benefits (inclusive of interest and penalties) $ 320.2 $ 286.1
Pension and other post-retirement benefits 204.0 296.6
Intangible liabilities — 50.4
Customer payable — 35.5
Other 56.9 93.8
$ 581.1 $ 762.4

Accumulated other comprehensive income (loss) consisted of the following (in millions):
Successor Predecessor
December 31, 2021 December 31, 2020
Pension and other post-retirement benefits $ (9.1) $ (98.2)
Currency translation adjustment — 6.5
Derivative instruments — 5.6
Other — (1.8)
$ (9.1) $ (87.9)

Consolidated Statements of Operations Information

Repair and maintenance expense related to continuing operations was as follows (in millions):
Successor Predecessor
Eight Months
Ended Four Months Year Ended Year Ended
December 31, Ended April 30, December 31, December 31,
2021 2021 2020 2019
Repair and maintenance expense $ 76.3 $ 48.4 $ 200.4 $ 303.7

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 Other, net, consisted of the following (in millions):
Successor Predecessor
Eight Months
Ended Four Months Year Ended Year Ended
December 31, Ended April 30, December 31, December 31,
2021 2021 2020 2019
Net gain on sale of property $ 21.2 $ 6.0 $ 11.8 $ 1.8
Net periodic pension income, excluding service cost 8.7 5.4 14.6 5.8
Currency transaction adjustments 8.1 13.4 (11.0) (7.4)
Gain on bargain purchase and measurement period adjustments — — (6.3) 637.0
Gain on extinguishment of debt — — 3.1 194.1
SHI settlement — — — 200.0
Settlement of legal dispute — — — (20.3)
Other income (expense) 0.1 1.1 3.8 (4.8)
$ 38.1 $ 25.9 $ 16.0 $ 1,006.2

Consolidated Statements of Cash Flows Information

Our restricted cash of $35.9 million at December 31, 2021 (Successor) consists primarily of $31.1 million of collateral on letters of
credit. See "Note 15 - Commitments and Contingencies" for more information regarding our letters of credit.

Net cash used in operating activities attributable to the net change in operating assets and liabilities was as follows (in millions):
Successor Predecessor
Eight Months
Ended Four Months Year Ended Year Ended
December 31, Ended April 30, December 31, December 31,
2021 2021 2020 2019
(Increase) decrease in accounts receivable $ (18.3) $ 23.2 $ 53.3 $ 29.5
(Increase) decrease in other assets (48.4) 27.3 (63.8) (56.6)
Increase (decrease) in liabilities 77.0 18.0 (11.5) (25.4)
$ 10.3 $ 68.5 $ (22.0) $ (52.5)

Cash paid for interest and income taxes was as follows (in millions):
Successor Predecessor
Eight Months Four Months Year Ended Year Ended
Ended December Ended April 30, December 31, December 31,
31, 2021 2021 2020 2019
Interest, net of amounts capitalized $ 22.8 $ — $ 190.0 $ 410.0
Income taxes 29.1 12.8 78.9 107.6

During the eight months ended December 31, 2021 (Successor) and during the four months ended April 30, 2021 (Predecessor), there
was no capitalized interest. Capitalized interest totaled $1.3 million and $20.9 million during the years ended December 31, 2020 and 2019
(Predecessor), respectively.

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 Accruals for capital expenditures totaling $9.3 million and $6.5 million as of December 31, 2021 (Successor) and April 30, 2021
(Predecessor), respectively, were excluded from Investing activities in our Consolidated Statements of Cash Flows. Additionally, accruals for
capital expenditures totaling $5.4 million and $16.3 million as of December 31, 2020 and 2019 (Predecessor), respectively, were excluded from
Investing activities in our Consolidated Statements of Cash Flows.

Amortization, net, includes amortization of deferred mobilization revenues and costs, deferred capital upgrade revenues, intangible
amortization and other amortization.

Other adjustments to reconcile net loss to net cash used in operating activities includes provisions for inventory reserves, bad debt
expense, and other items.

Concentration of Risk

We are exposed to credit risk relating to our receivables from customers, our cash and cash equivalents, and at times, investments.
Previously, our use of derivatives in connection with the management of foreign currency exchange rate risk also subjected us to credit risk. We
mitigate our credit risk relating to receivables from customers, which consist primarily of major international, government-owned and
independent oil and gas companies, by performing ongoing credit evaluations. We also maintain reserves for potential credit losses, which
generally have been within our expectations. We mitigate our credit risk relating to cash and investments by focusing on diversification and
quality of instruments.

We mitigated our credit risk relating to counterparties of our previous derivatives through a variety of techniques, including transacting
with multiple, high-quality financial institutions, thereby limiting our exposure to individual counterparties and by entering into International
Swaps and Derivatives Association, Inc. ("ISDA") Master Agreements, which included provisions for a legally enforceable master netting
agreement, with our derivative counterparties. The terms of the ISDA agreements may also have included credit support requirements, cross
default provisions, termination events or set-off provisions. Legally enforceable master netting agreements reduce credit risk by providing
protection in bankruptcy in certain circumstances and generally permitting the closeout and netting of transactions with the same counterparty
upon the occurrence of certain events. See "Note 10 - Derivative Instruments" for additional information on our previous derivative activity.

Consolidated revenues by customer were as follows:

Successor Predecessor
Eight Months Four Months
Ended December Ended April 30, Year Ended Year Ended
31, 2021 2021 December 31, 2020 December 31, 2019
BP (1) 11 % 14 % 11 % 9 %
Total(2) 9 % — % 8 % 16 %
Other 80 % 86 % 81 % 75 %
100 % 100 % 100 % 100 %

(1) During the eight months ended December 31, 2021(Successor), 21% of the revenues provided by BP were attributable to our Floaters
segment, 20% of the revenues provided by BP were attributable to our Jackups segment and the remaining were attributable to our
managed rigs.

During the four months ended April 30, 2021 (Predecessor), 37% of the revenues provided by BP were attributable to our Floaters
segment, 17% of the revenues provided by BP were attributable to our Jackups segment and the remaining were attributable to our
managed rigs.

173
 For the year ended December 31, 2020 (Predecessor), 30% of the revenues provided by BP were attributable to our Floaters segment,
19% were attributable to our Jackups segment, and 51% of the revenues were attributable to our managed rigs.

For the year ended December 31, 2019 (Predecessor), 41% of the revenues provided by BP were attributable to our Jackups segment,
16% of the revenues were attributable to our Floaters segment and 43% of the revenues were attributable to our managed rigs.
(2)
During the eight months ended December 31, 2021 (Successor), all of the revenues provided by Total were attributable to the Floaters
segment.

For the years ended December 31, 2020 and 2019 (Predecessor), 71% and 93% of the revenues provided by Total were attributable to
the Floaters segment and the remainder was attributable to the Jackup segment.

For purposes of our geographic disclosure, we attribute revenues to the geographic location where such revenues are earned.
Consolidated revenues by region were as follows (in millions):
Successor Predecessor
Eight Months
Ended Four Months Year Ended Year Ended
December 31, Ended April 30, December 31, December 31,
2021 2021 2020 2019
United Kingdom(1) $ 185.2 $ 75.7 $ 211.3 $ 213.1
Norway(1) 123.9 73.3 188.5 39.2
U.S. Gulf of Mexico(2) 109.9 74.4 241.4 301.0
Saudi Arabia(3) 92.3 53.6 200.8 313.4
Mexico(4) 77.8 44.3 112.1 73.0
Angola(5) 19.4 20.5 86.3 284.0
Other 226.5 55.6 386.8 829.5
$ 835.0 $ 397.4 $ 1,427.2 $ 2,053.2

(1) During the eight months ended December 31, 2021 (Successor), four months ended April 30, 2021 (Predecessor) and for the years
ended December 31, 2020 and 2019 (Predecessor) all revenues earned in the United Kingdom and Norway were attributable to our
Jackups segment.
(2) During the eight months ended December 31, 2021 (Successor), 48% and 1% of the revenues earned in the U.S. Gulf of Mexico, were
attributable to our Floaters segment and Jackups segment, respectively. The remaining revenues were attributable to our managed rigs.
During the four months ended April 30, 2021 (Predecessor), 64% of the revenues earned in the U.S. Gulf of Mexico, were attributable
to our Floaters segment. The remaining revenues were attributable to our managed rigs.

For the years ended December 31, 2020 and 2019 (Predecessor), 55% and 46% of the revenues earned in the U.S. Gulf of Mexico,
respectively, were attributable to our Floaters segment, 11% and 28% of the revenues were attributable to our Jackups segment, for the
respective periods, and the remaining revenues were attributable to our managed rigs.
(3) During the eight months ended December 31, 2021(Successor) and four months ended April 30, 2021 (Predecessor), 60% and 57% of
the revenues earned in Saudi Arabia, respectively were attributable to our Jackups segment. The remaining revenues were attributable
to our Other segment and relates to our rigs leased to ARO and certain revenues related to our Secondment Agreement.

174
 For the years ended December 31, 2020 and 2019 (Predecessor), 63% and 65% of the revenues earned in Saudi Arabia, respectively, were
attributable to our Jackups segment. The remaining revenues were attributable to our Other segment and related to our rigs leased to
ARO and certain revenues related to our Secondment Agreement and Transition Services Agreement.
(4)
During the eight months ended December 31, 2021 (Successor), 52% of the revenues earned in Mexico were attributable to our Jackups
segment and the remaining revenues were attributable to our Floaters segment. During the four months ended April 30, 2021
(Predecessor), 51% of the revenues earned in Mexico were attributable to our Jackups segment and the remaining revenues were
attributable to our Floaters segment.

For the year ended December 31, 2020 (Predecessor), 54% of the revenues earned in Mexico were attributable to our Floaters segment
and the remaining revenues were attributable to our Jackups segment. For the year ended December 31, 2019 (Predecessor), all
revenues earned in Mexico were attributable to our Floaters segment.
(5) During
the eight months ended December 31, 2021 (Successor) and the four months ended April 30, 2021 (Predecessor), all the revenues
earned in Angola were attributable to our Floaters Segment.

For the years ended December 31, 2020 and 2019 (Predecessor), 84% and 87% of the revenues earned in Angola, respectively, were
attributable to our Floaters segment and the remaining revenues were attributable to our Jackups segment.

19. RELATED PARTIES

See "Note 6 - Equity Method Investment in ARO" for information in our equity method investment in ARO and associated related
party transactions.

Mr. Joseph Goldschmid is a director of the Company and an employee of T. Rowe Price as of December 29, 2021 when his employer,
Oakhill Advisors, was acquired by T. Rowe Price. T. Rowe Price provides administrative services for the Company's 401(k) Plan. As the
employer matching contributions to the Company's 401(k) Plan were suspended during the Successor Period and the administrative fees are
borne by the participants of the plan, no amounts were included in the Company's expenses during the eight months ended December 31, 2021
or payables as of December 31, 2021.

Mr. Deepak Munganahalli is a director of the Company and is also the cofounder and a current employee of Joulon. The Company
regularly does business with several subsidiaries and affiliates of Joulon, which provide goods and services to the Company, including asset
management services, structural engineering services, rig repair services, engineering services and high pressure equipment, inspection
services, riser related services (including storage, inspection, preservation and repair), and rig stacking and maintenance arrangements. We
incurred expense of $8.8 million during the eight months ended December 31, 2021 related to these goods and services and have a payable to
them of $2.5 million as of December 31, 2021.

175
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

CONCLUSION REGARDING THE EFFECTIVENESS OF DISCLOSURE CONTROLS AND PROCEDURES

Based on their evaluation as of the end of the period covered by this Annual Report on Form 10-K, our management, with the
participation of our Chief Executive Officer and Interim Chief Financial Officer, has concluded that our disclosure controls and procedures, as
defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act, are effective.

Evaluation of Disclosure Controls and Procedures – We have established disclosure controls and procedures to ensure that the
information required to be disclosed by us in the reports that we file under the Exchange Act is recorded, processed, summarized and reported
within the time periods specified in SEC rules and forms and that such information is accumulated and made known to the officers who certify
the Company’s financial reports and to other members of senior management and the Board of Directors as appropriate to allow timely
decisions regarding required disclosure.

Changes in Internal Controls – During the quarter ended December 31, 2021 there were no changes in our internal control over
financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

See "Item 8. Financial Statements and Supplementary Data" for Management's Report on Internal Control Over Financial Reporting.

Item 9B. Other Information

Not applicable.

176
 PART III

Item 10. Directors, Executive Officers and Corporate Governance

The information required by this item with respect to our directors, corporate governance matters, committees of the Board of Directors
and Section 16(a) of the Exchange Act is contained in our Proxy Statement for the Annual General Meeting of Shareholders ("Proxy
Statement") to be filed with the SEC not later than 120 days after the end of our fiscal year ended December 31, 2021 and incorporated herein
by reference.

The information required by this item with respect to our executive officers is set forth in "Executive Officers" in Part I of this Annual
Report on Form 10-K.

The guidelines and procedures of the Board of Directors are outlined in our Corporate Governance Policy. The committees of the Board
of Directors operate under written charters adopted by the Board of Directors. The Corporate Governance Policy and committee charters are
available on our website at www.valaris.com in the Governance Documents section and are available in print without charge by contacting our
Investor Relations Department.

We have a Code of Conduct that applies to all directors and employees, including our principal executive officer, principal financial
officer and principal accounting officer. The Code of Conduct is available on our website at www.valaris.com in the Governance Documents
section and is available in print without charge by contacting our Investor Relations Department. We intend to disclose any amendments to or
waivers from our Code of Conduct by posting such information on our website. Our Proxy Statement contains governance disclosures,
including information on our Code of Conduct, our Corporate Governance Policy, the director nomination process, shareholder director
nominations, shareholder communications to the Board of Directors and director attendance at the Annual General Meeting of Shareholders.

Item 11. Executive Compensation

The information required by this item is contained in our Proxy Statement and incorporated herein by reference.

177
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Shareholder Matters

Equity Compensation Plan Information

The following table summarizes certain information related to our compensation plans under which our shares are authorized for
issuance as of December 31, 2021:

Number of securities
remaining available for
Number of securities future issuance under
to be issued upon Weighted-average equity compensation
exercise of exercise price of plans (excluding
outstanding options, outstanding options, securities reflected
Plan category warrants and rights warrants and rights in column (a))(1)
(a) (b)(1) (c)
Equity compensation
plans approved by
security holders — $ — —
Equity compensation
plans not approved by
security holders (2) 1,467,438 — 7,493,135
Total 1,467,438 $ — 7,493,135

(1) Restricted share units and restricted shares do not have an exercise price and, thus, are not reflected in this column.
(2) The number of awards granted for performance awards reflect the shares that would be granted if the target level of performance were
to be achieved.

Additional information required by this item is included in our Proxy Statement and incorporated herein by reference.

Item 13. Certain Relationships and Related Transactions, and Director Independence

The information required by this item is contained in our Proxy Statement and incorporated herein by reference.

Item 14. Principal Accounting Fees and Services

The information required by this item is contained in our Proxy Statement and incorporated herein by reference.

178
 PART IV

Item 15. Exhibits, Financial Statement Schedules

(a) The following documents are filed as part of this report:

1. Financial Statements
Reports of Independent Registered Public Accounting Firm (KPMG LLP, Houston, Texas, Auditor Firm ID: 185) 88
Consolidated Statements of Operations 93
Consolidated Statements of Comprehensive Income 94
Consolidated Balance Sheets 95
Consolidated Statements of Cash Flows 96
Notes to Consolidated Financial Statements 97

2. Exhibits

Exhibit
Number Exhibit
2.1 Fourth Amended Joint Chapter 11 Plan of Reorganization of Valaris plc and its Debtor Affiliates Pursuant to Chapter 11 of the
Bankruptcy Code (incorporated by reference to Exhibit A of Order Confirming the Debtor's Fourth Amended Joint Chapter 11
Plan of Reorganization, filed as Exhibit 99.1 to the Registrant's Current Report on Form 8-K filed on March 5, 2021, File No .
001-08097).
3.1 Memorandum of Association of Valaris Limited (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on
Form 8-K filed on April 30, 2021, File No. 18097).
3.2 Bye-laws of Valaris Limited (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K filed on
April 30, 2021, File No. 1-8097).
4.1 Indenture, dated as of April 30, 2021, among Valaris Limited, the guarantors listed therein, and Wilmington Savings Fund
Society, FSB as collateral agent and trustee (including the form of First Lien Note attached thereto) (incorporated by reference to
Exhibit 4.1 to the Registrant’s Current Report on Form 8-K filed on April 30, 2021, File No. 1-8097).
4.2 First Supplemental Indenture, dated as of July 6, 2021, among Valaris Limited, Alpha South Pacific Holding Company, and
Wilmington Savings Fund, FSB as collateral agent and trustee (incorporated by reference to Exhibit 4.2 to the Company’s
Amendment No. 9 to the Registration Statement on Form S-1 filed on July 7, 2021, File No. 333-257022).
4.4* Second Supplemental Indenture, dated as of January 12, 2022, among Valaris Limited, Valaris United LLC, and Wilmington
Savings Fund, FSB as collateral agent and trustee.
4.5 Warrant Agreement, dated as of April 30, 2021, by and between Valaris Limited and Computershare Inc. and Computershare
Trust Company, N.A. (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on April
30, 2021, File No. 1-8097).
4.6* Description of the Company’s Common Shares.
4.7* Description of the Company’s Warrants.
10.1 Rowan Asset Transfer and Contribution Agreement, dated as of November 21, 2016, between Rowan Rex Limited and Saudi
Aramco Development Company (incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report filed on Form
10-Q on August 1, 2019, File No. 1-8097).

179
10.2 Amendment No. 1 to Rowan Asset Transfer and Contribution Agreement, dated as of October 17, 2017, by and between Saudi
Aramco Development Company, Rowan Rex Limited and Saudi Aramco Rowan Offshore Drilling Company (incorporated by
reference to Exhibit 2.1 to the Registrant’s Quarterly Report filed on Form 10-Q on August 1, 2019, File No. 1-8097).
10.3 Shareholders’ Agreement dated 21 November 2016 (G) between Saudi Aramco Development Company and Rowan Rex Limited
Relating to the Offshore Drilling Joint Venture (incorporated by reference to Exhibit 10.38 to the Registrant’s Quarterly Report
filed on Form 10-Q on August 1, 2019, File No. 1-8097).
10.4 Amendment No. 1 to the Shareholders' Agreement dated December 18, 2017 between Saudi Aramco Development Company,
Rowan Rex Limited and ARO (incorporated by reference to Exhibit 10.17 to the Registrant's Annual Report filed on Form 10-K on
March 2, 2021).
10.5 Amendment No. 2 to the Shareholders' Agreement dated June 28, 2018 between Saudi Aramco Development Company, Rowan
Rex Limited, ARO and Mukamala Oil Field Services Limited (incorporated by reference to Exhibit 10.18 to the Registrant's
Annual Report filed on Form 10-K on March 2, 2021).
10.6 Amendment No. 3 to the Shareholders' Agreement dated August 13, 2020 between Rowan Rex Limited, Mukamala Oil Field
Services Limited and ARO (incorporated by reference to Exhibit 10.19 to the Registrant's Annual Report filed on Form 10-K on
March 2, 2021)
10.7 Amendment No. 4 to the Shareholders' Agreement dated December 1, 2020 between Rowan Rex Limited, ARO and Mukamala Oil
Field Services Limited (incorporated by reference to Exhibit 10.20 to the Registrant's Annual Report filed on Form 10-K on March
2, 2021)
+10.8 ENSCO Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1, 2004) (incorporated by
reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter ended September 30, 2003, File No. 1-
8097).
+10.9 Amendment No. 1 to the ENSCO Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1, 2004),
dated March 11, 2008 (incorporated by reference to Exhibit 10.1 to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2008, File No. 1-8097).
+10.10 Amendment No. 2 to the ENSCO Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1, 2004),
dated November 4, 2008 (incorporated by reference to Exhibit 10.57 to the Registrant's Annual Report on Form 10-K for the year
ended December 31, 2008, File No. 1-8097).
+10.11 Amendment No. 3 to the ENSCO Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1, 2004),
dated August 4, 2009 (incorporated by reference to Exhibit 10.2 to the Registrant's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2009, File No. 1-8097).
+10.12 Amendment No. 4 to the ENSCO Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1, 2004),
dated December 22, 2009 (incorporated by reference to Exhibit 10.10 to the Registrant's Current Report on Form 8-K filed on
December 23, 2009, File No. 1-8097).
+10.13 Amendment No. 5 to the Ensco Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1, 2004),
dated May 14, 2012 (incorporated by reference to Exhibit 10.8 to the Registrant's Current Report on Form 8-K filed on May 15,
2012, File No. 1-8097).
+10.14 Amendment No. 6 to the ENSCO Supplemental Executive Retirement Plan (as Amended and Restated Effective January 1, 2004),
effective as of July 1, 2021, by ENSCO International Incorporated (incorporated by reference to Exhibit 10.7 to the Registrant’s
Quarterly Report filed on Form 10-Q on August 3, 2021, File No. 1-8097).
+10.15 ENSCO 2005 Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1, 2005), dated November 4,
2008 (incorporated by reference to Exhibit 10.56 to the Registrant's Annual Report on Form 10-K for the year ended December 31,
2008, File No. 1-8097).
+10.16 Amendment No. 1 to the ENSCO 2005 Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1,
2005), dated August 4, 2009 (incorporated by reference to Exhibit 10.3 to the Registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2009, File No. 1-8097).

180
+10.17 Amendment No. 2 to the ENSCO 2005 Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1,
2005), dated November 3, 2009 (incorporated by reference to Exhibit 10.31 to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 2009, File No. 1-8097).
+10.18 Amendment No. 3 to the ENSCO 2005 Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1,
2005), dated December 22, 2009 (incorporated by reference to Exhibit 10.8 to the Registrant's Current Report on Form 8-K filed
on December 23, 2009, File No. 1-8097).
+10.19 Amendment No. 4 to the Ensco 2005 Supplemental Executive Retirement Plan (As Amended and Restated Effective January 1,
2005), dated May 14, 2012 (incorporated by reference to Exhibit 10.10 to the Registrant's Current Report on Form 8-K filed on
May 15, 2012, File No. 1-8097).
+10.20 Amendment No. 5 to the Ensco 2005 Amended and Restated Supplemental Executive Retirement Plan (As Amended and Restated
Effective January 1, 2005), dated May 21, 2013 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report on
Form 8-K filed on May 24, 2013, File No. 1-8097).
+10.21 Amendment No. 6 to the ENSCO 2005 Supplemental Executive Retirement Plan (as amended and restated effective January 1,
2005), dated December 19, 2019. (incorporated by reference to Exhibit 10.28 to the Registrant's Annual Report on Form 10-K for
the year ended December 31, 2019, File No. 1-8097).
+10.22 Amendment No. 7 to the ENSCO 2005 Supplemental Executive Retirement Plan (as Amended and Restated Effective January 1,
2005), effective as of July 1, 2021, by ENSCO International Incorporated (incorporated by reference to Exhibit 10.8 to the
Registrant’s Quarterly Report filed on Form 10-Q on August 3, 2021, File No. 1-8097).
+10.23 ENSCO 2005 Benefit Reserve Trust, effective January 1, 2005 (incorporated by reference to Exhibit 99.3 to the Registrant's
Current Report on Form 8-K filed on January 5, 2005, File No. 1-8097).
+10.24 Restoration Plan of Rowan Companies, Inc. (as amended and restated effective January 1, 2013), incorporated by reference to
Exhibit 10.7 to Rowan's Annual Report on Form 10-K for the year ended December 31, 2016 (File No. 1-5491).
+10.25 Valaris Cash Incentive Plan (incorporated by reference to Exhibit 10.8 to the Registrant's Quarterly Report filed on Form 10-Q on
July 30, 2020, File No. 1-8097)

+10.26 Restructuring Support Agreement, dated August 18, 2020 (incorporated by reference to Exhibit 10.1 to the Registrant’s Current
Report filed on Form 8-K on August 19, 2020, File No. 1-8097).
+10.27 Backstop Commitment Agreement, dated August 18, 2020, by and among the company and the commitment parties named therein
(incorporated by reference to Exhibit 10.2 to the Registrant's Current Report filed on Form 8-K on August 19, 2020, File No. 1-
8097).
+10.28 Amendment to Restructuring Support Agreement and Backstop Commitment Agreement dated as of September 10, 2020
(incorporated by reference to Exhibit 10.1 to the Registrant's Current Report filed on Form 8-K on September 11, 2020, File No. 1-
8097).
+10.29 Second Amendment to Restructuring Support Agreement, by and among Valaris plc, its Affiliate Debtors and the noteholders party
thereto, dated as of February 5, 2021 (incorporated by reference to Exhibit 10.1 to the Registrant's Current Report filed on Form 8-
K on February 8, 2021, File No. 1-8097).
+10.30 Third Amendment to Backstop Commitment Agreement, by and among Valaris plc, its Affiliate Debtors and the Commitment
Parties, dated as of February 5, 2021 (incorporated by reference to Exhibit 10.2 to the Registrant's Current Report filed on Form 8-
K on February 8, 2021, File No. 1-8097).
+10.31 Settlement Agreement dated September 14, 2021, among ENSCO Global Resources Limited, Thomas Burke and Valaris Limited
(incorporated by reference to Exhibit 10.1 to the Registrant’s Quarterly Report on Form 10-Q filed on November 2, 2021, File No.
1-8097).
+10.32 Separation and Release Agreement, dated September 15, 2021, between Jonathan Baksht and Valaris (incorporated by reference to
Exhibit 10.2 to the Registrant’s Quarterly Report on Form 10-Q filed on November 2, 2021, File No. 1-8097).

181
+10.33 Interim CFO Letter Agreement, dated August 18, 2021, between Darin Gibbins and Valaris (incorporated by reference to Exhibit
10.4 to the Registrant’s Quarterly Report on Form 10-Q filed on November 2, 2021, File No. 1-8097).
+10.34 Form of Valaris Limited 2021 Management Incentive Plan (incorporated by reference to Exhibit 10.4 to the Registrant’s Current
Report on Form 8-K filed on April 30, 2021, File No. 1-8097).
+10.35 Form of PSU Award Agreement (incorporated by reference to Exhibit 10.5 to the Registrant’s Quarterly Report on Form 10-Q
filed on November 2, 2021, File No. 1-8097).
+10.36 Form of Deferred RSU Award Agreement (incorporated by reference to Exhibit 10.6 to the Registrant’s Quarterly Report on
Form 10-Q filed on November 2, 2021, File No. 1-8097).
+10.37 Form of Director RSU Agreement (incorporated by reference to Exhibit 10.7 to the Registrant’s Quarterly Report on Form 10-Q
filed on November 2, 2021, File No. 1-8097).
+10.38 Form of Change in Control Severance Agreement for Executive Officers (incorporated by reference to Exhibit 10.1 to the
Registrant's Quarterly Report on Form 10-Q filed on April 28, 2016, File No. 1-8097).
10.39 Equity Registration Rights Agreement, dated as of April 30, 2021, by and among Valaris Limited and the holders party thereto
(incorporated by reference to Exhibit 10.2 to the Registrant’s Current Report on Form 8-K filed on April 30, 2021, File No. 1-
8097).
10.40 Notes Registration Rights Agreement, dated as of April 30, 2021, by and among Valaris Limited and the holders party thereto
(incorporated by reference to Exhibit 10.3 to the Registrant’s Current Report on Form 8-K filed on April 30, 2021, File No. 1-
8097).
10.41 Support Agreement, dated as of December 9, 2021, among Valaris Limited, Famatown Financial Limited and the other parties
thereto (incorporated by reference to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K filed on December 10, 2021,
File No. 1-8097).
+10.42 Executive Severance Plan of Valaris Limited (incorporated by reference to Exhibit 10.5 to the Registrant’s Current Report on
Form 8-K filed on April 30, 2021, File No. 1-8097).
10.43* Employment Agreement, effective as of December 8, 2021, by and between Anton Dibowitz, Ensco Corporate Resources LLC
and Valaris Limited.
10.44* Cash Retention Letter (Gilles Luca) effective as of August 18, 2021
10.45* Amendment to Cash Retention Letter (Gilles Luca) effective as of January 20, 2022.
*21.1 Subsidiaries of the Registrant.
*22.1 List of Guarantor Subsidiaries and Affiliate Securities Pledged as Collateral
*23.1 Consent of Independent Registered Public Accounting Firm.
*31.1 Certification of the Chief Executive Officer of Registrant pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2 Certification of the Chief Financial Officer of Registrant pursuant to Rule 13a-14 or 15d-14 of the Securities Exchange Act of
1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**32.1 Certification of the Chief Executive Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
**32.2 Certification of the Chief Financial Officer of Registrant pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
*101.INS XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are
embedded within the Inline XBRL document.
*101.SCH Inline XBRL Taxonomy Extension Schema Document
*101.CAL Inline XBRL Taxonomy Extension Calculation Linkbase Document

182
*101.DEF Inline XBRL Taxonomy Extension Definition Linkbase Document
*101.LAB Inline XBRL Taxonomy Extension Label Linkbase Document
*101.PRE Inline XBRL Taxonomy Extension Presentation Linkbase Document

*104 The cover page of our Annual Report on Form 10-K for the fiscal year ended December 31, 2021, formatted in Inline XBRL
(included with Exhibit 101 attachments).

* Filed herewith.
** Furnished herewith.
+ Management contracts or compensatory plans and arrangements required to be filed as exhibits pursuant to Item 15(b) of this
report.

Certain agreements relating to our long-term debt have not been filed as exhibits as permitted by paragraph (b)(4)(iii)(A) of Item 601 of
Regulation S-K since the total amount of securities authorized under any such agreements do not exceed 10% of our total assets on a
consolidated basis. Upon request, we will furnish to the SEC all constituent agreements defining the rights of holders of our long-term debt not
filed herewith.

Item 16. Form 10-K Summary

None.

183
 SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized, on February 22, 2022.
Valaris Limited
(Registrant)

By /s/ ANTON DIBOWITZ

Anton Dibowitz
Director, President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in
the capacities and on the date indicated.

Signatures Title Date

/s/ DARIN GIBBINS Interim Chief Financial Officer and Vice President, February 22, 2022
Darin Gibbins Investor Relations and Treasurer

/s/ DICK FAGERSTAL

Director February 22, 2022
Dick Fagerstal

/s/ JOSEPH GOLDSCHMID

Director February 22, 2022
Joseph Goldschmid
/s/ ELIZABETH D. LEYKUM
Chair of the Board February 22, 2022
Elizabeth D. Leykum
/s/ DEEPAK MUNGANAHALLI
Director February 22, 2022
Deepak Munganahalli

/s/ JAMES W. SWENT, III

Director February 22, 2022
James W. Swent, III
/s/ COLLEEN W. GRABLE Controller (principal accounting officer) February 22, 2022
Colleen W. Grable

184
 Exhibit 4.4

SECOND SUPPLEMENTAL INDENTURE

Valaris Limited

and

the Guarantors named herein

SENIOR SECURED FIRST LIEN NOTES DUE 2028

SECOND SUPPLEMENTAL INDENTURE

Dated as of January 12, 2022,

WILMINGTON SAVINGS FUND SOCIETY, FSB,

As Trustee and First Lien Collateral Agent

 This SECOND SUPPLEMENTAL INDENTURE, dated as of January 12, 2022, (this “Supplemental Indenture”) is among
Valaris Limited, an exempted company incorporated under the laws of Bermuda with registration number 56245, (the “Company”),
Valaris United LLC, Delaware limited liability company and a subsidiary of the Company (the “Guaranteeing Subsidiary”) and
Wilmington Savings Fund Society, FSB, as trustee and as first lien collateral agent (the “Trustee”).

RECITALS

WHEREAS, the Company, the Guarantors and the Trustee entered into an Indenture, dated as of April 30, 2021 (as amended
by that certain First Supplemental Indenture dated as of July 6, 2021, the “Indenture”), providing for the issuance of the Company’s
Senior Secured First Lien Notes due 2028 (the “Notes”);

WHEREAS, the Indenture provides that under certain circumstances the Guaranteeing Subsidiary shall execute and deliver to
the Trustee a supplemental indenture pursuant to which the Guaranteeing Subsidiary shall become a Guarantor;

WHEREAS, Section 9.01(i) of the Indenture provides that the Company, the Guarantors and the Trustee may amend or
supplement the Indenture in order to add any additional Guarantor with respect to the Notes, without the consent of the Holders of the
Notes; and

WHEREAS, all acts and things prescribed by the Indenture, by law and by the Certificate of Incorporation, Articles of
Association and the Bylaws (or comparable constituent documents) of the Company and of the Trustee necessary to make this
Supplemental Indenture a valid instrument legally binding on the Company and the Trustee, in accordance with its terms, have been
duly done and performed;

NOW, THEREFORE, to comply with the provisions of the Indenture and in consideration of the above premises, the
Company, the Guaranteeing Subsidiary and the Trustee covenant and agree for the equal and proportionate benefit of the respective
Holders of the Notes as follows:

Section 1. Capitalized Terms. Capitalized terms used herein without definition shall have the meanings ascribed to them in the
Indenture.

Section 2. Relation to Indenture. This Supplemental Indenture is supplemental to the Indenture and does and shall be deemed
to form a part of, and shall be construed in connection with and as part of, the Indenture for any and all purposes.
Section 3. Effectiveness of Supplemental Indenture. This Supplemental Indenture shall become effective immediately upon its
execution and delivery by each of the Company, the Guaranteeing Subsidiary and the Trustee.

Section 4. Agreement to Guarantee. The Guaranteeing Subsidiary hereby agrees, by its execution of this Supplemental
Indenture, to be bound by the provisions of the Indenture applicable to Guarantors to the extent provided for and subject to the
limitations therein, including Article 10 thereof.

Section 5. Ratification of Obligations. Except as specifically modified herein, the Indenture and the Notes are in all respects
ratified and confirmed (mutatis mutandis) and shall remain in full force and effect in accordance with their terms.
 Exhibit 4.4

Section 6. The Trustee. Except as otherwise expressly provided herein, no duties, responsibilities or liabilities are assumed, or
shall be construed to be assumed, by the Trustee by reason of this Supplemental Indenture. This Supplemental Indenture is executed
and accepted by the Trustee subject to all the terms and conditions set forth in the Indenture with the same force and effect as if those
terms and conditions were repeated at length herein and made applicable to the Trustee with respect hereto. The Trustee makes no
representation as to the validity or sufficiency of this Supplemental Indenture.

Section 7. Governing Law. THIS SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Section 8. Counterparts. The parties may sign any number of copies of this Supplemental Indenture. Each signed copy shall be
an original, but all of such executed copies together shall represent the same agreement. Signature of the parties hereto transmitted by
facsimile or PDF shall be deemed to be their original signatures for all purposes.

[Signatures on following pages]

 IN WITNESS WHEREOF, the parties hereto have caused this Supplemental Indenture to be duly executed, all as of the date
first written above.

COMPANY:

VALARIS LIMITED

By: /s/ Darin Gibbins

Name: Darin Gibbins
Title: Interim Chief Financial Officer and VP –
Investor Relations & Treasurer

[Signature Page to Second Supplemental Indenture]

GUARANTEEING SUBSIDIARY:

VALARIS UNITED LLC

By: /s/ Christian Ochoa

Name: Christian Ochoa
Title: Vice President and Treasurer

[Signature Page to Second Supplemental Indenture]

WILMINGTON SAVINGS FUND SOCIETY, FSB, as
Trustee and First Lien Collateral Agent

By: /s/ Geoffrey J. Lewis

Name: Geoffrey J. Lewis
Title: Vice President
 [Signature Page to Second Supplemental Indenture]
Exhibit 4.6

Description of the Company’s Common Shares

Registered Under Section 12 of the Exchange Act of 1934

The following description of the common shares of a par value of $0.01 each (the “Common Shares”) of Valaris Limited (“Valaris”
or the “Company”) summarizes certain provisions of the Company’s memorandum of association (the “Memorandum”) and bye-laws
(the “Bye-laws”). Such summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to,
all of the provisions of the Memorandum and Bye-laws, copies of which have been filed as Exhibits 3.1 and 3.2 to our Annual Report
on Form 10-K.

Voting Rights
The holders of Common Shares are entitled to one vote per Common Share. The Bye-laws do not provide for cumulative voting.

There are no limitations imposed by Bermuda law or the Bye-laws on the right of nonresident shareholders to hold or vote their
Common Shares.

If at any time there is more than one class of shares, the rights attaching to any class, unless otherwise provided for by the terms of
issue of the relevant class, may be varied either: (i) with the consent in writing of the holders of 75% of the issued and outstanding
shares of that class; or (ii) with the sanction of a resolution passed by a majority of the votes cast at a general meeting of the relevant
class of shareholders at which a quorum consisting of at least two persons holding or representing one-third of the issued and
outstanding shares of the relevant class is present. The Bye-laws provide that the rights conferred upon the holders of the shares of any
class or series issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the shares of
that class or series, be deemed to be varied by the creation or issue of further shares ranking pari passu therewith.

Under Bermuda law, some matters, such as altering the Memorandum or the Bye-laws, changing the name of Valaris and the
voluntarily winding up of Valaris, require the approval of shareholders by a resolution passed by the affirmative vote of shares
carrying not less than a majority of the total voting rights of all issued and outstanding shares

Quorum for General Meetings

The quorum for general meetings of shareholders is the presence of shareholders who, present in person (which, in the case of a
corporate shareholder shall include being present by a representative) or by proxy, together represent at least fifty percent of the total
voting rights of all issued and outstanding Voting Shares (as defined in the Bye-laws). Pursuant to Bermuda law, the matters set out
below require the presence of at least two persons holding or representing more than one-third of the issued and outstanding shares of
Valaris or the class of shares to be varied:

• the amalgamation or merger with entities (other than with certain affiliated entities); and

• the variation of share rights (as noted above).

Dividends
Subject to any rights and restrictions of any other class or series of shares, the Board of Directors of the Company (the “Board”) may,
from time to time, declare dividends on the shares issued and authorize payment of the dividends. The Board may declare that any
dividend be paid to the members wholly or partly in cash or in specie.

Valaris may not declare or pay a dividend, or make a distribution out of contributed surplus, if there are reasonable grounds for
believing that (i) the Company is, or would after the payment be, unable to pay its liabilities as they become due; or (ii) the realizable
value of the Company’s assets would thereby be less than its liabilities. “Contributed surplus” is defined for purposes of section 54 of
the Companies Act 1981 of Bermuda (the “Companies Act”) to include the proceeds arising from donated shares, credits resulting
from the redemption or conversion of shares at less than the amount set up as nominal capital and donations of cash and other assets to
the Company.

Capitalization of Profits and Reserves

Pursuant to the Bye-laws, the Board may (i) capitalize any part of the amount of Valaris’ share premium or other reserve accounts or
any amount credited to our profit and loss account or otherwise available for distribution by applying such sum in paying up unissued
shares to be allotted as fully paid bonus shares pro-rata (except in connection with the conversion of shares) to the shareholders; or (ii)
capitalize any sum standing to the credit of a reserve account or sums otherwise available for dividend or distribution by paying up in
full, partly paid or nil paid shares of those shareholders who would have been entitled to such sums if they were distributed by way of
dividend or distribution.

Liquidation

In the event of Valaris’ liquidation, dissolution or winding up, the holders of Common Shares are entitled to share equally and ratably
in Valaris’ assets, if any, remaining after the payment of all of its debts and liabilities, subject to any liquidation preference on any
issued and outstanding preference shares of the Company.

No Sinking Fund

The Common Shares have no sinking fund provisions.

No Liability for Further Calls or Assessments

The Common Shares are duly and validly issued, fully paid and non-assessable.
No Preemptive Rights

Holders of Common Shares have no preemptive or preferential right to purchase any securities of Valaris.

Redemption and Conversion

The Common Shares are not convertible into shares of any other class or series or be subject to redemption either by Valaris or the
holder of the shares.

Repurchase

Under the Bye-laws, Valaris may purchase any issued Common Shares in the circumstances and on the terms as are agreed by Valaris
and the holder of the shares whether or not Valaris has
made a similar offer to all or any other of the holders of Common Shares. Such repurchase may not be made if, on the date on which
the repurchase is to be effected, there are reasonable grounds for believing that Valaris is, or after the repurchase, will be unable to pay
its liabilities as they fall due.

Restrictions on Transfer

Subject to the rules of the New York Stock Exchange and any other stock exchange on which the Common Shares may be listed, the
Board may refuse to register a transfer unless all applicable consents, authorizations, and permissions are obtained for any government
body or agency in Bermuda.
Anti-Takeover Provisions

General

The Bye-laws have provisions that could have an anti-takeover effect. These provisions are intended to enhance the ability of the
Board to deal with unsolicited takeover attempts by increasing the likelihood of continuity and stability in the composition of the
Board. These provisions could have the effect of discouraging transactions that may involve an actual or threatened change of control
of Valaris.

Number of Directors

The Bye-laws provide that the Board will consist of not less than three directors nor more than fifteen directors, the exact number to be
set from time to time by the Board.

Advance Notice Provisions

The Bye-laws establish an advance notice procedure that must be followed by shareholders if they wish to propose business or
nominate candidates for election as directors at an annual general meeting of shareholders. The Bye-laws provide generally that, if a
shareholder desires to propose business or nominate a candidate for election as a director at an annual general meeting, then such
shareholder must give notice not less than 90 days nor more than 120 days prior to the anniversary of the last annual general meeting.
The notice must contain specified information concerning the shareholder submitting the proposal.

Removal of Directors
The Bye-laws provide that a director may only be removed, with cause, by the shareholders and that notice of the shareholders
meeting convened to remove the director must be given to the director. The notice must contain a statement of the intention to remove
the director and must be served on the director not less than fourteen days before the meeting. The director is entitled to attend the
meeting and be heard on the motion for his or her removal.

Written resolutions

Shareholders may pass resolutions by way of written consent of shareholders in the following manner:

(a) where the matters which are the subject of the resolutions have not previously been approved by the Board, at the time
they are signed by all the shareholders, who at the date that the notice of the written resolution is given, would be entitled to attend,
vote and pass a resolution at a general meeting of the Company; or
 (b) where the matters which are the subject of the resolutions have previously been approved by the Board, at the time they
are signed by the requisite voting majority required by applicable law or the Bye-laws by those shareholders, who at the date that the
notice of the written resolution is given, would be entitled to attend, vote and pass a resolution at a general meeting of the Company.

Amalgamations and Mergers

The amalgamation or merger of a Bermuda company with another company or corporation (other than certain affiliated companies)
requires the amalgamation or merger agreement to be approved by the Board and by the shareholders. Unless the company’s bye-laws
provide otherwise, the approval of 75% of the shareholders voting at such meeting is required to approve the amalgamation or merger
agreement, and the quorum for such meeting must be two persons holding or representing more than one-third of the issued shares of
the company.

Under Bermuda law, in the event of an amalgamation or merger of a Bermuda company with another company or corporation, a
shareholder of the Bermuda company who did not vote in favor of the amalgamation or merger and who is not satisfied that fair value
has been offered for such shareholder’s shares may, within one month of notice of the shareholders meeting, apply to the Supreme
Court of Bermuda to appraise the fair value of those shares.

Shareholder Suits

Class actions and derivative actions are generally not available to shareholders under Bermuda law. The Bermuda courts, however,
would ordinarily be expected to permit a shareholder to commence an action in the name of a company to remedy a wrong to the
company where the act complained of is alleged to be beyond the corporate power of the company or illegal, or would result in the
violation of the company’s memorandum of association or bye-laws. Furthermore, consideration would be given by a Bermuda court
to acts that are alleged to constitute a fraud against the minority shareholders or, for instance, where an act requires the approval of a
greater percentage of the company’s shareholders than that which actually approved it.

When the affairs of a company are being conducted in a manner which is oppressive or prejudicial to the interests of some part of the
shareholders, one or more shareholders may apply to the Supreme Court of Bermuda, which may make such order as it sees fit,
including an order regulating the conduct of the company’s affairs in the future or ordering the purchase of the shares of any
shareholders by other shareholders or by the company.

Access to Books and Records and Dissemination of Information

Members of the general public have a right to inspect the public documents of a company available at the office of the Registrar of
Companies in Bermuda. These documents include the company’s memorandum of association, including its objects and powers, and
certain alterations to the memorandum of association. The shareholders have the additional right to inspect the bye-laws of the
company, minutes of general meetings of the shareholders and the company’s audited financial statements, which must be presented to
the annual general meeting. The register of members of a company is also open to inspection by shareholders and by members of the
general public without charge. The register of members is required to be open for inspection for not less than two hours in any
business day (subject to the ability of a company to close the register of members for not more than thirty days in a year). A company
is required to maintain its share register in Bermuda but may, subject to the provisions of the Companies Act, establish a branch
register outside of Bermuda. A company is required to keep at its registered office a register of directors and officers that is open for
inspection for not less than two hours in any business day by members of the public without charge. A company is also required to file
with the Registrar
of Companies in Bermuda a list of its directors to be maintained on a register, which register will be available for public inspection
subject to such conditions as the Registrar may impose and on payment of such fee as may be prescribed. Bermuda law does not,
however, provide a general right for shareholders to inspect or obtain copies of any other corporate records.

Protection of Minorities

Under Bermuda law, members of a company are entitled to have the affairs of the company conducted in accordance with general law
and in particular with the company’s Memorandum and Bye-laws.
Under the general rule known as the rule in Foss v Harbottle, which is recognized in Bermuda, a court will generally refuse to interfere
in the management of a company at the instance of a minority of its members who are dissatisfied with the conduct of the company’s
affairs by the majority or by Board. The fundamental proposition of Bermuda law is that a minority member cannot sue for a wrong
done to the company or bring proceedings to rectify an internal irregularity in circumstances where the majority can lawfully ratify the
same.

Every member is, however, entitled to have the affairs of the company conducted properly according to law. As such, if those who
control the company have persistently disregarded the requirements of company law or the provisions of the company’s Memorandum
or Bye-laws, the court will grant relief. In general, the exceptions to the Foss v Harbottle rule are as follows:

(i) the act complained of is ultra vires or illegal and not capable of ratification by the majority;

(ii) the act complained of constitutes a fraud on the minority where the wrongdoers control the company;

(iii) the act complained of constitutes an infringement of individual rights of members, such as the right to vote, pre-emption
rights, etc.; and

(iv) where the company has not complied with provisions requiring that the relevant act be approved by a special or
extraordinary majority of the members.

Where the act complained of is not ultra vires or illegal then a member cannot take action himself because it is an action which is
capable of ratification by a majority of the members. However, if the claim by the members is that the directors have carried on an act
which is ultra vires or illegal, then the member has a right of action on behalf of himself or herself and others to sue the directors with
any damages awarded going to the company itself.
Where the perpetrators of the act which constitutes the fraud against the minority are themselves in control of the company or where a
resolution which requires a special or extraordinary majority has only been passed with a simple majority, it is open to the aggrieved
member to take an action in his or her own name. While it is generally for the company to bring action against its directors for
wrongdoing, it is recognized that the company may be prevented from doing so where the wrongdoers have effective control of the
company.

Any member of a company is entitled to complain that the affairs of the company are being conducted or have been conducted in a
manner oppressive or unfairly prejudicial to the interests of the members or some number of them, and petition the Bermuda court to
seek either a winding-up order or an alternative remedy if a winding-up order would be unfairly prejudicial to them. In considering
whether to wind up a company, the Bermuda court will consider whether it is “just and equitable” to do so.
A statutory right of action is conferred on subscribers of shares in a company against persons, including directors and officers,
responsible for the issue of a prospectus in respect of loss or damage suffered by reason of an untrue statement therein, but this confers
no right of action against the company itself. In addition, such company, as opposed to its members, may take action against its
officers including directors, for breach of their statutory and fiduciary duty to act honestly and in good faith with a view to the best
interests of the company and to exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable
circumstances.

The Companies Act also provides that the Minister of Finance of Bermuda may at any time appoint one or more inspectors to
investigate the affairs of an exempted company and to report on them in such manner as the Minister may direct. The inspector shall,
on the completion of his investigation, report to the Minister and shall send copies of such reports to the company. However, no other
person shall be informed of the nature or contents of the report save at the request of the company or on the direction of the Minister.
Upon examining the inspector’s report, the Minister may require the company to take such measures as he may consider necessary in
relation to its affairs or direct the Registrar of Companies in Bermuda to petition the Bermuda court for the winding up of the
company.

Taxation

Under present Bermuda law, no Bermuda withholding tax on dividends or other distributions, or any Bermuda tax computed on profits
or income or on any capital asset, gain or appreciation will be payable by an exempted company or its operations, and there is no
Bermuda tax in the nature of estate duty or inheritance tax applicable to shares, debentures or other obligations of the company held by
non-residents of Bermuda. Furthermore, a company may apply to the Minister of Finance of Bermuda for an assurance, under the
Exempted Undertakings Tax Protection Act 1966 of Bermuda, that no such taxes shall be so applicable to it or any of its operations
until 31 March 2035, although this assurance will not prevent the imposition of any Bermuda tax payable in relation to any land in
Bermuda leased or let to the company or to persons ordinarily resident in Bermuda.

Stamp Duty

An exempted company is exempt from all stamp duties except on transactions involving “Bermuda property”. This term relates,
essentially, to real and personal property physically situated in Bermuda, including shares in local companies (as opposed to exempted
companies). Transfers of shares and warrants in all exempted companies are exempt from Bermuda stamp duty.

Winding Up
A company may be wound up by the Bermuda court on application presented by the company itself, its creditors (including contingent
or prospective creditors) or its contributories. The Bermuda court has authority to order winding up in a number of specified
circumstances including where it is, in the opinion of the Bermuda court, just and equitable to do so.

A company may be wound up voluntarily when the members so resolve in general meeting, or, in the case of a limited duration
company, when the period fixed for the duration of the company by its memorandum expires, or the event occurs on the occurrence of
which the memorandum provides that the company is to be dissolved. In the case of a voluntary winding up, the company shall, from
the commencement of the winding up, cease to carry on its business, except so far as may be required for the beneficial winding up
thereof.
Where, on a voluntary winding up, a majority of directors make a statutory declaration of solvency, the winding up will be deemed a
“members’ voluntary winding up”. In any case where such declaration has not been made, the winding up will be deemed a “creditors’
voluntary winding up”.

In the case of a members’ voluntary winding up of a company, the company in general meeting must appoint one or more liquidators
within the period prescribed by the Companies Act for the purpose of winding up the affairs of the company and distributing its assets.
If the liquidator is at any time of the opinion that the company will not be able to pay its debts in full in the period stated in the
directors’ declaration of solvency, he is obliged to summon a meeting of creditors and lay before the meeting a statement of the assets
and liabilities of the company.
As soon as the affairs of the company are fully wound up via a members’ voluntary winding up, the liquidator must make up an
account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of,
and thereupon call a general meeting of the company for the purposes of laying before it the account, and giving any explanation
thereof. This final general meeting shall be called by advertisement in an appointed newspaper, published at least one month before
the meeting. Within one week after the meeting the liquidator shall notify the Registrar of Companies in Bermuda that the company
has been dissolved and the Registrar shall record that fact in accordance with the Companies Act.

In the case of a creditors’ voluntary winding up of a company, the company must call a meeting of the creditors of the company to be
summoned for the day, or the next day following the day, on which the meeting of the members at which the resolution for voluntary
winding up is to be proposed is held. Notice of such meeting of creditors must be sent at the same time as notice is sent to members. In
addition, the company must cause a notice to appear in an appointed newspaper on at least two occasions.

The creditors and the members at their respective meetings may nominate a person to be liquidator for the purposes of winding up the
affairs of the company and distributing the assets of the company, provided that if the creditors and the members nominate different
persons, the person nominated by the creditors shall be the liquidator. If no person is nominated by the creditors, the person (if any)
nominated by the members shall be liquidator. The creditors at the creditors’ meeting may also appoint a committee of inspection
consisting of not more than five persons.

If a creditors’ voluntary winding up continues for more than one year, the liquidator is required to summon a general meeting of the
company and a meeting of the creditors at the end of each year and must lay before such meetings an account of his or her acts and
dealings and of the conduct of the winding up during the preceding year.

As soon as the affairs of the company are fully wound up via a creditors’ voluntary winding up, the liquidator must make up an
account of the winding up, showing how the winding up has been conducted and the property of the company has been disposed of,
and thereupon call a general meeting of the company and a meeting of the creditors for the purposes of laying the account before the
meetings, and giving any explanation thereof. Each such meeting shall be called by advertisement in an appointed newspaper,
published at least one month before the meeting. Within one week after the date of the meetings, or if the meetings are not held on the
same date, after the date of the later meeting, the liquidator is required to send to the Registrar of Companies in Bermuda a copy of the
account and make a return to him or her in accordance with the Companies Act. The company will be deemed to be dissolved on the
expiration of three months from the registration by the Registrar of Companies in Bermuda of the account and the return. However, a
Bermuda court may, on the application of the liquidator or of some other person who
appears to the court to be interested, make an order deferring the date at which the dissolution of the company is to take effect for such
time as the court thinks fit.
 Exhibit 4.7

Description of the Company’s Warrants to Purchase Common Shares

Registered Under Section 12 of the Exchange Act of 1934

The following description of the warrants (the “Warrants”) of Valaris Limited (“Valaris” or the “Company”) summarizes certain
provisions of the Warrant Agreement, dated as of April 30, 2021, with Computershare Inc. and Computershare Trust Company, N.A.
(the “Warrant Agreement”), which has been filed as Exhibit 4.3 to our Annual Report on Form 10-K.

On April 30, 2021, pursuant to the Warrant Agreement, the Company issued 5,645,161 Warrants exercisable for 5,645,161 common
shares of par value of $0.01 each of the Company (the “Common Shares”).

The Warrants are exercisable from the date of issuance until 5:01 p.m., Eastern Time, on April 29, 2028, at which time all unexercised
Warrants will expire and the rights of the holders of such Warrants to purchase Common Shares will terminate. The Warrants are
initially exercisable for one Common Share per Warrant at an initial exercise price of $131.88 per Warrant (the “Exercise Price”).

Pursuant to the Warrant Agreement, no holder of a Warrant, by virtue of holding or having a beneficial interest in a Warrant, has the
right to vote, receive dividends, receive notice as shareholders with respect to any meeting of shareholders for the election of Valaris’
directors or any other matter, or exercise any rights whatsoever as a shareholder of Valaris unless, until and only to the extent such
holders become holders of record of shares of Common Shares issued upon settlement of Warrants.

The number of Common Shares for which a Warrant is exercisable, and the Exercise Price, are subject to adjustment from time to time
upon the occurrence of certain events, such as: (1) share splits, reverse share splits, share dividends or share repurchases to holders of
Common Shares or (2) a reclassification in respect of Common Shares.
 Exhibit 10.43

EMPLOYMENT AGREEMENT
This Employment Agreement (this “Agreement”), entered into effective as of December 8, 2021 (the “Effective Date”), is
made by and among (i) Ensco Corporate Resources LLC (the “Employer”), (ii) Valaris Limited, a Bermuda exempted company
(“Valaris”, and together with its subsidiaries, the “Company”) and (iii) Anton Dibowitz (“Executive”) (collectively referred to herein
as the “Parties”).
1. Employment.

(a) Term. Executive’s term of employment under this Agreement (“Term”) shall be for the period beginning the Effective Date
and ending on the date this Agreement is terminated as provided in Section 3.

(b) Position and Duties. During the Term, the Employer shall employ Executive. Executive shall serve as President and Chief
Executive Officer of Valaris and, subject to any required election by Valaris’ stockholders, as a member of the Board of
Directors of Valaris (the “Board”), with such responsibilities, duties and authority as are consistent with the position of
President and Chief Executive Officer or as may otherwise from time to time be agreed to by Executive and the Board.
Executive will not receive any additional compensation for his service on the Board. Executive shall devote substantially all of
Executive’s working time and efforts to the business and affairs of the Company (which shall include service to its affiliates)
and shall not engage in outside business activities without the consent of the Board, provided that Executive shall be permitted
to (i) manage Executive’s personal, financial and legal affairs and (ii) participate in trade associations, in each case, subject to
compliance with this Agreement and provided that such activities do not materially interfere with Executive’s duties and
responsibilities hereunder. Executive agrees that Executive shall not accept a position as a member of the board of directors of
any other company or organization without first obtaining written consent of the Board. Executive further agrees to observe
and comply in all material respects with the rules and policies of the Company as adopted by the Company from time to time
and applicable to Valaris’ executive officers and directors generally, in each case as amended from time to time, as set forth in
writing, and as delivered or made available to Executive, including but not limited to the Company’s Corporate Governance
Policy and Code of Conduct (each, a “Policy”).

(c) Indemnification. During and after the Term, Executive shall be entitled to the indemnification, expense advancement and
related rights set forth in any Indemnification Agreement previously entered into between Executive and Valaris, provided that
any such indemnification shall be subject to any applicable law restricting such indemnities, from time to time in force. In
addition, the Company will procure and maintain director’s and officer’s liability insurance which includes Executive as a
named or additional insured with coverage no less favorable than provided to other executive officers and directors of Valaris.

2. Compensation and Related Matters. During the Term, Executive will be entitled to the following:

(a) Base Salary. Executive’s initial base salary shall be $950,000 per annum (the “Base Salary”). The Employer shall pay the Base
Salary in accordance with its customary payroll practices, and the Base Salary shall be pro-rated for any partial year of
employment hereunder. Executive’s Base Salary shall be reviewed at least annually by the Compensation Committee of the
Board (the “Compensation Committee”) and may be

1
 adjusted from time to time by the Compensation Committee or the Board, provided, however, that the Base Salary may not be
reduced without Executive’s express consent.

(b) Annual Bonus. Executive shall be eligible to participate in an annual short-term incentive bonus plan that is similar in all
material respects to that applicable to other executive officers of Valaris. Commencing January 1, 2022, Executive’s annual
incentive compensation under such incentive program (“Annual Bonus”) shall be targeted at 115% of Executive’s Base Salary
(the “Target Annual Bonus”), with the expectation that the bonus will scale upward and downward based on actual
performance, as determined by the Board or the Compensation Committee and dependent on performance goals that are
established by the Board or the Compensation Committee annually. The actual amount of any Annual Bonus that will be paid
to Executive each year, if any, will be calculated based on the level of achievement of the performance goals established by the
Company under the incentive program for the year in question and the terms of the incentive program. Executive’s target
annual bonus for 2021 shall remain at a target of 110% of an annualized $855,000 base salary level, which will be earned
under Valaris’ second half 2021 bonus program and will be pro-rated for his period of employment during the 2021 fiscal year.
The payment of any Annual Bonus pursuant to the incentive program shall be subject to Executive’s continued employment
with the Company through the date of payment, except as otherwise provided in Section 4 below.

(c) Long-Term Incentives. Executive shall be eligible to participate in and will receive awards under Valaris’ long-term incentive
award plans and programs as in effect from time to time at a level and on terms commensurate with his position as President
and Chief Executive Officer of the Company (the “LTIP Awards”). The LTIP Awards shall be granted subject to the terms and
conditions of the applicable plans and individual award agreements to be entered into between Valaris and Executive.

(d) Benefits. Executive shall be eligible to participate in the employee benefit plans, programs and arrangements offered by the
Company to similarly situated employees (including medical, dental and defined contribution retirement plans).

(e) Vacation. Executive shall be entitled to 4 weeks of paid vacation in addition to usual locally-recognized public holidays. Any
vacation shall be taken at the reasonable and mutual convenience of the Company and Executive.

(f) Business Expenses. The Company shall reimburse Executive for all reasonable travel and other business expenses incurred by
Executive in the performance of Executive’s duties to the Company in accordance with the Company’s expense reimbursement
policy, which shall not be less favorable than the expense reimbursement policy applicable to other executive officers of
Valaris.

(g) Key Person Insurance. At any time during the Term, the Company shall have the right to insure the life of Executive for the
Company’s sole benefit. The Company shall have the right to determine the amount of insurance and the type of policy.
Executive shall reasonably cooperate with the Company in obtaining such insurance by submitting to physical examinations,
by supplying all information reasonably required by any insurance carrier, and by executing all necessary documents
reasonably required by any insurance carrier, provided that any information provided to an insurance company or broker shall
not be provided to the Company without the prior written authorization of Executive. Executive shall incur no financial
obligation by executing any required document, and shall have no interest in any such policy unless Executive elects to acquire
such policy upon Termination. To the extent permitted under the terms of the applicable policy, Executive shall have the right
to acquire any Key Person Insurance acquired by the

2
 Company upon Termination by providing notice to the Company and paying any required premiums, in which case Company
shall reasonably cooperate with Executive in effecting the transfer. In the event the Key Man Insurance is not transferrable, to
the extent permitted under the terms of such policy, Executive shall have the right to designate the beneficiary of such policy
by giving notice to the Company

3. Termination. Executive’s employment hereunder may be terminated by the Employer upon approval of the Board, or by
Executive, as applicable, prior to expiration of the Term, without any breach of this Agreement under the following circumstances:

(a) Circumstances.
(i) Death. Executive’s employment hereunder shall terminate upon Executive’s death.

(ii) Disability. If Executive has incurred a Disability, as defined in Section 11.(c) below, the Employer may terminate
Executive’s employment.

(iii) Termination for Cause. The Employer may terminate Executive’s employment for Cause, as defined in Section 11.(a)
below.

(iv) Termination without Cause. The Employer may terminate Executive’s employment without Cause.

(v) Resignation for Good Reason. Executive may resign and terminate Executive’s employment with the Employer for Good
Reason, as defined in Section 11.(d) below.

(vi) Resignation Without Good Reason. Executive may resign Executive’s employment with the Employer for any reason other
than Good Reason or for no reason.

(b) Notice of Termination. Any termination of Executive’s employment by the Employer or by Executive under this Section 3
(other than termination pursuant to paragraph (a)(i)) shall be communicated by a written notice to the other party hereto (i)
indicating the specific termination provision in this Agreement relied upon, (ii) setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated, if
applicable, and (iii) specifying a Date of Termination which, if submitted by Executive in a resignation without Good Reason
or by Company in a termination without Cause, shall be at least 60 days following the date of such notice (a “Notice of
Termination”); provided, however, that in the event that Executive delivers a Notice of Termination to the Employer, the
Employer may, in its sole discretion, elect to instruct Executive to cease all duties for Company and pay him for any part of the
60-day Notice period. A Notice of Termination for Cause submitted by the Employer may provide for a Date of Termination
on the date Executive receives the Notice of Termination, or any date thereafter elected by the Employer in its sole discretion.
The failure by the Employer or Executive to set forth in the Notice of Termination any fact or circumstance which contributes
to a showing of Cause or Good Reason shall not waive any right of such Party hereunder or preclude such Party from asserting
such fact or circumstance in enforcing such Party’s rights hereunder.

(c) Company Obligations upon Termination. Upon termination of Executive’s employment pursuant to any of the circumstances
listed in Section 3, Executive (or Executive’s estate) shall be entitled to receive pursuant to this Agreement the sum of: (i) all
earned but unpaid Base Salary through the Date of Termination prorated for any partial period of employment, payable in
accordance with the Employer’s customary payroll practices and the requirements of applicable law; (ii) any benefits to which
Executive has a vested

3
 entitlement as of the date of termination, payable in accordance with the terms of any applicable benefit plan or as otherwise
required by law; (iii) any accrued but unused vacation, payable in a lump sum with Executive’s final pay check or as otherwise
required by law; and (iv) payment of any approved but not yet reimbursed business expenses incurred prior to the Date of
Termination, payable in accordance with applicable policies of the Company. Except as otherwise expressly required by law or
as specifically provided herein, all of Executive’s rights to salary, severance, benefits, bonuses and other compensatory
amounts hereunder (if any) shall cease upon the termination of Executive’s employment hereunder. In the event that
Executive’s employment is terminated by the Employer for any reason, Executive’s sole and exclusive remedy shall be to
receive the payments and benefits described in this Section 3.(c) or Section 4, as applicable.
(d) Deemed Resignations. Upon termination of Executive’s employment for any reason, Executive shall be deemed to have
resigned from the Board and all offices and directorships, if any, then held with the Company or its affiliates. Executive agrees
that Executive will execute any resignation letters or other instruments reasonably requested by the Company in connection
with the foregoing and he hereby irrevocably appoints the Company to be his attorney to execute any documents and do any
things and generally to use his name for the purpose of giving the Company or its nominee the full benefit of this clause.

4. Severance Payments.

(a) Termination for Cause, Death, Disability or Resignation Without Good Reason. If Executive’s employment shall terminate as a
result of Executive’s death pursuant to Section 3.(a)(i) or Disability pursuant to Section 3.(a)(ii), pursuant to Section 3.(a)(iii)
for Cause, or pursuant to Section 3.(a)(vi) for Executive’s resignation without Good Reason, then Executive shall not be
entitled to any payments or benefits, except as provided in Section 3.(c); however, if Executive’s employment is terminated
due to death pursuant to Section 3.(a)(i) or Disability pursuant to Section 3.(a)(ii), Executive or Executive’s estate as applicable
shall also be entitled to payment of a lump sum equal to a pro-rated portion (based on the number of days Executive was
employed by the Employer during the year in which the Date of Termination occurs) of Executive’s Target Annual Bonus for
the year during which the termination of employment occurs.

(b) Termination without Cause or Resignation for Good Reason. If Executive’s employment terminates without Cause pursuant to
Section 3.(a)(iv) or pursuant to Section 3.(a)(v) due to Executive’s resignation for Good Reason, then, subject to Executive
signing within the period of time set forth therein, and not revoking, a release of claims substantially in the form attached as
Exhibit A to this Agreement (as amended to reflect any changes in applicable law) (the “Release”), and Executive’s continued
compliance with Sections 6 and 7, Executive shall receive, in addition to payments and benefits set forth in Section 3.(c), the
following:
(i) an amount in cash, payable in a lump sum promptly and in all events within 30 days following the date on which the
Release becomes effective and irrevocable (or if the period in which such Release may become effective and irrevocable
spans two calendar years, in the later calendar year), equal to 2.00 multiplied by the sum of (A) Executive’s Base Salary
plus (ii) Executive’s Target Annual Bonus for the year during which the termination of employment occurs;

(ii) an amount in cash, payable by the Employer in a lump sum promptly and in all events within 30 days following the date on
which the Release becomes effective and

4
 irrevocable (or if the period in which such Release could become effective and irrevocable spans two calendar years, in the
later calendar year), equal to a pro-rated portion (based on the number of days Executive was employed by the Employer
during the year in which the Date of Termination occurs) of Executive’s Target Annual Bonus for the year during which
the termination of employment occurs; provided, however, that the foregoing shall not prevent Executive from receiving
any bonus previously earned for any performance period completed prior to termination;

(iii) subject to Executive’s timely election of continuation coverage under COBRA or other applicable law, the Employer shall
maintain continued group health plan coverage following the Date of Termination under any of the Company’s medical,
dental and vision plans that covered Executive immediately before the Date of Termination, for Executive and his eligible
dependents, for a period of up to 18 months following the Date of Termination. During this period, Executive shall be
responsible for paying any contributions toward the cost of such coverages at active employee rates and the Employer shall
(either directly or through reimbursement) subsidize the difference between such rates and any applicable premiums,
whether under COBRA or otherwise; provided, that if the continued coverage contemplated hereunder would be
discriminatory and would result in the imposition of excise taxes or other liabilities on the Company for failure to comply
with any requirements of the Patient Protection and Affordable Care Act of 2010, as amended, and the Health Care and
Education Reconciliation Act of 2010, as amended (to the extent applicable), or other applicable law, the Employer will
provide Executive with a cash payment equal to the employer-portion of any COBRA premiums, inclusive of any taxes
thereon, for the remainder of the 18-month period. Following such 18-month period, Executive shall be responsible for the
full cost associated with any continued coverage, whether under COBRA, any insurance policy conversion rights or
otherwise. The Employer’s obligation to provide subsidized continuation coverage under this Agreement shall immediately
terminate if Executive becomes eligible for group medical coverage provided by another employer. Executive shall give
prompt notice to the Employer if he becomes eligible for group medical coverage offered by another employer during the
18-month period referenced in this section.

(iv) Executive shall be eligible to receive Company-provided outplacement services for up to 12 months following the Date of
Termination.

(v) The Employer, as determined in its sole discretion, shall reimburse Executive for any legal fees actually incurred by or on
behalf of Executive in connection with the execution of the Release up to a maximum amount of $10,000.

(c) Survival. Notwithstanding anything to the contrary in this Agreement, the provisions of Sections 4 through 10 and Section 12
will survive the termination of Executive’s employment pursuant to Section 3.
5. Parachute Payments.

(a) Notwithstanding any contrary provision in this Agreement, if Executive is a “disqualified individual” (as defined in Section
280G of the Internal Revenue Code of 1986, as amended, and the regulations and guidance promulgated thereunder (the
“Code”)), and the amounts that would otherwise be paid to Executive under this Agreement together with any other payments
or benefits that Executive has a right to receive from the Company and affiliated entities required to be aggregated in
accordance with Q/A-10 and Q/A-46 of Treas. Reg. §1.280G-l (collectively, the “Payments”) would constitute a “parachute
payment” (as defined in Section 280G of the Code), the Payments shall be

5
 either (i) reduced (but not below zero) so that the aggregate present value of such Payments shall be $1.00 less than three times
Executive’s “base amount” (as defined in Section 280G of the Code) (the “Safe Harbor Amount”) and so that no portion of
such Payments shall be subject to the excise tax imposed by Section 4999 (the “Excise Tax”); or (ii) paid in full, whichever
produces the better net after-tax result for Executive (taking into account any applicable Excise Tax and any applicable federal,
state and local income and employment taxes).

(b) The reduction of Payments, if applicable, shall be made by reducing, first, severance amounts to be paid in cash hereunder in
the order in which such payments would be paid or provided (beginning with such payment or benefit that would be made last
in time and continuing, to the extent necessary, through to such payment or benefit that would be made first in time) and
second, by reducing any other cash payments that would be payable to Executive outside of this Agreement which are valued
in full for purposes of Code Section 280G in a similar order (last to first), any third, by reducing any equity acceleration
hereunder of awards which are valued in full for purposes of Section 280G of the Code in a similar order (last to first), and
finally, by reducing any other Payment in a similar order (last to first). Notwithstanding the foregoing, all such reductions shall
be made in a manner that complies with Section 409A to the extent determined appropriate by the Board.

(c) All determinations regarding the application of this Section 5 shall be made by an accounting firm with experience in
performing calculations regarding the applicability of Section 280G of the Code and the Excise Tax selected by the Company
and acceptable to Executive (“Independent Advisors”), a copy of which report and all worksheets and background materials
relating thereto shall be provided to Executive. For purposes of determining whether and the extent to which the Payments will
be subject to the Excise Tax, (i) no portion of the Payments the receipt or enjoyment of which Executive shall have waived at
such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code shall be
taken into account; (ii) no portion of the Payments shall be taken into account which, in the opinion of the Independent
Advisors, does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by
reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Payments shall be taken
into account which, in the opinion of Independent Advisors, constitutes reasonable compensation for services actually
rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the “base amount” (as defined in Section
280G(b)(3) of the Code) allocable to such reasonable compensation; and (iii) the value of any non-cash benefit or any deferred
payment or benefit included in the Payments shall be determined by the Independent Advisors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code. The costs of obtaining such determination and all related fees and
expenses (including related fees and expenses incurred in any later audit) shall be borne solely by the Company.

6. Non-Solicitation; Unfair Competition; and Non-Disparagement. Executive acknowledges that the Company has provided, and
during the Term the Company will provide, Executive with Confidential Information (as defined below). Ancillary to the rights
provided to Executive in this Agreement, Executive’s continued employment with the Company during the Term (subject to earlier
termination as provided herein), the Company’s provision of Confidential Information, Executive’s agreements regarding the use
of same, and in order to protect the value of any Confidential Information, the Company and Executive agree to the following
provisions against unfair competition, which Executive acknowledges represent a fair balance of the Company’s rights to protect
their business and Executive’s right to pursue employment:

6
 (a) Executive shall not, at any time during the Restriction Period (as defined below), directly or indirectly engage in, have any
equity interest in, or manage, provide services to or operate any person, firm, corporation, partnership or business (whether as
director, officer, employee, agent, representative, partner, security holder, consultant, independent contractor, or otherwise)
that is primarily engaged in the business of providing contracted offshore drilling rigs in any country (or its territorial waters)
in which the Company (i) has offices, establishes offices or has definitive plans to locate an office, or (ii) has provided offshore
oil and gas drilling services in the 24 preceding months and in each case which competes with those parts of the business of the
Company with which Executive was involved to a material extent or for which he was responsible during the preceding 12
months. Nothing herein shall prohibit Executive from being a passive owner of less than 5% of the outstanding equity interest
of any entity, so long as Executive has no active participation in the business of such entity.

(b) Executive shall not, at any time during the Restriction Period, directly or indirectly, solicit, divert or take away from the
Company, business opportunities with any Customer.

(c) Executive shall not, at any time during the Restriction Period, directly or indirectly, divert or take away any acquisition or other
business opportunity that the Company is pursuing or with respect to which the Company has expended material efforts to
identify or pursue.

(d) Executive shall not, at any time during the Restriction Period, directly or indirectly, contact or solicit, for the purpose of hiring,
or hire any employee of the Company or any person employed by the Company at any time during the 12-month period
immediately preceding the Date of Termination.

(e) Executive shall not, at any time during the Restriction Period, directly or indirectly, induce or otherwise encourage any
employee of the Company to leave the employment of the Company.

(f) Executive shall not, at any time during the Restriction Period, directly or indirectly, induce any supplier, distributor,
representative or agent of the Company to terminate or adversely modify its relationship with the Company and with whom or
which Executive, or any person who reported directly to him, had material dealings during the 12-month period immediately
preceding the Date of Termination.

(g) Executive shall not, at any time during and after the Term, disparage the Company in any way that could adversely affect the
goodwill, reputation or business relationships of the Company with the public generally, or with its customers, suppliers or
employees. The Company shall instruct its directors and executive officers not to disparage the Executive in any way that
could adversely affect the Executive’s goodwill, reputation or business relationships. Notwithstanding the foregoing, no party
shall be restricted by this provision from (i) responding truthfully to inquiries by law enforcement officials and governmental
agencies or otherwise as required by law or (ii) providing truthful statements to correct or clarify disparaging comments.

(h) In the event the terms of this Section 6 shall be determined by any court of competent jurisdiction to be unenforceable by
reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too
extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be
enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other
respects as to which it may be enforceable, all as determined by such court in such action.

7
 (i) As used in this Section 6, (i) the term “Company” shall include Valaris and its current and future affiliates (ii) the term
“Restriction Period” shall mean the period beginning on the Effective Date, and ending on the date 24 months following the
Date of Termination, and (iii) the word “Customer” shall include any person, firm, company or entity who or which at any time
during the 12 months prior to the Date of Termination (A) was provided with goods or services by the Company; or (B) was in
the habit of dealing with the Company, other than in a de minimis way; and in each case with whom or which Executive, or
any person who reported directly to him, had material dealings at any time during the 12 months prior to the Date of
Termination.
7. Nondisclosure of Proprietary Information.

(a) Except in connection with the faithful performance of Executive’s duties hereunder or pursuant to Section 7.(c), (d), (e), or (f)
Executive shall, in perpetuity, maintain in confidence and shall not directly, indirectly or otherwise, use, disseminate, disclose
or publish, or use for Executive’s benefit or the benefit of any person, firm, corporation or other entity (other than the
Company) any confidential or proprietary information or trade secrets of or relating to the Company (including, without
limitation, business plans, business strategies and methods, acquisition targets, intellectual property in the form of patents,
trademarks and copyrights and applications therefor, ideas, inventions, works, discoveries, improvements, information,
documents, formulae, practices, processes, methods, developments, source code, modifications, technology, techniques, data,
programs, other know-how or materials, owned, developed or possessed by the Company, whether in tangible or intangible
form, information with respect to the Company’s operations, processes, products, inventions, business practices, finances,
principals, vendors, suppliers, customers, potential customers, marketing methods, costs, prices, contractual relationships,
regulatory status, litigation or investigations, prospects and compensation paid to employees or other terms of employment)
(collectively, the “Confidential Information”), or deliver to any person, firm, corporation or other entity any document, record,
notebook, computer program or similar repository of or containing any such Confidential Information. The Parties hereby
stipulate and agree that, as between them, any item of Confidential Information is important, material and confidential and
affects the successful conduct of the businesses of the Company (and any successor or assignee of the Company).
Notwithstanding the foregoing, Confidential Information shall not include (i) any information legally acquired by or otherwise
becoming known to Executive from or through any party other that the Company or its affiliates (which party Executive
reasonably believes is not bound by any confidentiality obligation to the Company), or (ii) information that has been published
in a form generally available to the public or is publicly available or has become public knowledge prior to the date Executive
proposes to disclose or use such information, provided, that such publishing or public availability or knowledge of the
Confidential Information shall not have resulted from Executive directly or indirectly breaching Executive’s obligations under
this Section 7.(a) or any other similar provision by which Executive is bound, or from any third-party breaching a provision
similar to that found under this Section 7.(a). For the purposes of the previous sentence, Confidential Information will not be
deemed to have been published or otherwise disclosed merely because individual portions of the information have been
separately published, but only if material features comprising such information have been published or become publicly
available.

(b) Upon termination of Executive’s employment for any reason, Executive will promptly deliver to the Company all
correspondence, drawings, manuals, letters, notes, notebooks, reports, programs, plans, proposals, financial documents, or any
other documents or property concerning the Company’s customers, business plans, marketing strategies,

8
 products, property or processes. In addition, upon termination of Executive’s employment for any reason, Executive shall
return to the Company all property of the Company provided to Executive by the Company, or otherwise in the custody,
possession or control of Executive (including, but not limited to, computers, computer equipment, office equipment, cell
phone, keys, passcards, calling cards, credit cards, rolodexes, tapes, software, computer files, marketing and sales materials,
and any other record, document or piece of equipment belonging to the Company. Following termination of employment,
Executive will not retain any copies of the Company’s property, including any copies existing in electronic form, which are in
Executive’s possession or control.

(c) Executive may respond to a lawful and valid subpoena or other legal process but shall give the Company the earliest possible
notice thereof, shall, as much in advance of the return date as possible, make available to the Company and its counsel the
documents and other information sought and shall assist such counsel at Company’s expense in resisting or otherwise
responding to such process, in each case to the extent permitted by applicable laws or rules.

(d) Nothing in this Agreement shall prohibit Executive from (i) disclosing information and documents when required by law,
subpoena or court order (subject to the requirements of Section 7.(c) above), (ii) disclosing information and documents to
Executive’s attorney, financial or tax adviser for the purpose of securing legal, financial or tax advice, (iii) disclosing
Executive’s post-employment restrictions in this Agreement in confidence to any potential new employer, or (iv) retaining, at
any time, Executive’s personal correspondence, Executive’s calendar, Executive’s personal contacts and documents related to
Executive’s own personal benefits, entitlements and obligations.

(e) Nothing in this Agreement shall prohibit Executive from reporting possible violations of federal law or regulation to any
governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities
Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or any other whistleblower protection provisions of
any law or regulation (including the right to receive an award for information provided to any such government agencies).

(f) 18 U.S.C. § 1833(b) provides: “An individual shall not be held criminally or civilly liable under any federal or state trade
secret law for the disclosure of a trade secret that—(A) is made—(i) in confidence to a federal, state or local government
official, either directly or indirectly, or to an attorney; and (ii) solely for the purpose of reporting or investigating a suspected
violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made
under seal.” Nothing in this Agreement is intended to conflict with 18 U.S.C. § 1833(b) or create liability for disclosures of
trade secrets that are expressly allowed by 18 U.S.C. § 1833(b). Accordingly, the parties hereto have the right to disclose in
confidence trade secrets to federal, state and local government officials, or to an attorney, for the sole purpose of reporting or
investigating a suspected violation of law. The parties hereto also have the right to disclose trade secrets in a document filed in
a lawsuit or other proceeding, but only if the filing is made under seal and protected from public disclosure.

8. Inventions. All rights to discoveries, inventions, improvements and innovations (including all data and records pertaining thereto)
related to the business of the Company, whether or not patentable, copyrightable, registrable as a trademark, or reduced to writing,
that Executive may discover, invent or originate during the Term, either alone or with others and whether or not during working
hours or by the use of the facilities of the Company (“Inventions”), shall be the exclusive property of the Company. Executive
shall promptly disclose all Inventions to the Company, shall execute at the request of the Company any

9
 assignments or other documents the Company may deem reasonably necessary to protect or perfect its rights therein, and shall
assist the Company, upon reasonable request and at the Company’s expense, in obtaining, defending and enforcing their rights
therein. Executive hereby appoints the Company as Executive’s attorney-in-fact to execute on Executive’s behalf any assignments
or other documents reasonably deemed necessary by the Company to protect or perfect its rights to any Inventions.

9. Injunctive Relief. It is recognized and acknowledged by Executive that a breach of the covenants contained in Sections 6, 7 and 8
will cause irreparable damage to Company and their goodwill, the exact amount of which will be difficult or impossible to
ascertain, and that the remedies at law for any such breach will be inadequate. Accordingly, Executive agrees that in the event of a
breach of any of the covenants contained in Sections 6, 7 and 8, in addition to any other remedy which may be available at law or
in equity, the Company will be entitled to specific performance and injunctive relief without the requirement to post bond.

10. Assignment and Successors. The Company may assign its rights and obligations under this Agreement to any of its affiliates or to
any successor to all or substantially all of the business or the assets of the Company (by merger or otherwise), and may assign or
encumber this Agreement and its rights hereunder as security for indebtedness of the Company and its affiliates. This Agreement
shall be binding upon and inure to the benefit of the Company, Executive and their respective successors, assigns, personnel and
legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable. None of Executive’s rights
or obligations may be assigned or transferred by Executive, other than Executive’s rights to payments hereunder, which may be
transferred only by will or operation of law. Notwithstanding the foregoing, Executive shall be entitled, to the extent permitted
under applicable law and applicable Company plans or policies, to select and change a beneficiary or beneficiaries to receive
compensation hereunder following Executive’s death by giving written notice thereof to the Company.

11. Certain Definitions.

(a) Cause. “Cause” for termination by the Company of Executive’s employment mean:

(i) the willful and continued failure of Executive to perform substantially Executive’s duties and obligations (other than any
such failure resulting from bodily injury or disease or any other incapacity due to mental or physical illness) after a written
demand for substantial performance is delivered to Executive by the Board, which demand specifically identifies the
manner in which the Board believes that Executive has not substantially performed Executive’s duties and, if such breach is
capable of cure, Executive fails to cure same within thirty (30) days after receiving such demand;

(ii) gross misconduct by Executive;

(iii) the willful and material breach by Executive of any Policies, including the Valaris Code of Conduct, which, if such breach
is capable of cure, remains uncured thirty (30) days following Executive’s receipt of notice of same; or

(iv) the conviction of Executive by a court of competent jurisdiction, from which conviction no further appeal can be taken, of
a crime punishable by imprisonment.

(b) Date of Termination. “Date of Termination” means (i) if Executive’s employment is terminated by Executive’s death, the date
of Executive’s death; (ii) if Executive’s employment is terminated pursuant to Section 3.(a)(ii) – (vi) either the date indicated
in

10
 the Notice of Termination or the date specified by the Company pursuant to Section 3.(b), whichever is earlier.

(c) Disability. “Disability” shall occur upon Executive becoming eligible for disability benefits under the Employer’s long-term
disability plan, or, if earlier, upon Executive becoming eligible for Social Security disability benefits.

(d) Good Reason. “Good Reason” shall mean the occurrence of any of the following without Executive’s express written consent:

(i) a reduction in Executive’ Base Salary or Target Annual Bonus;

(ii) a material diminution in Executive’s authority, duties or responsibilities;
(iii) Valaris’ removal of Executive from the Board or failure to nominate Executive to the Board (other than in connection with
a termination by the Company for Cause, or a result of death or Disability, and it being understood that a failure of Valaris’
shareholders to re-elect Executive to the Board will not constitute Good Reason hereunder);

(iv) a relocation of Executive’s primary place of employment to a location that increases Executive’s normal commute by more
than 35 miles; or

(v) any other action or inaction that constitutes a material breach by the Company of its obligations under this Agreement or
any other agreement between the Company and Executive;

provided, however, that Executive may not resign his employment for Good Reason unless: (y) Executive shall provide notice
to the Board of the event alleged to constitute Good Reason within 90 days of Executive’s discovery of the occurrence of such
event, and (z) the Company shall have the opportunity to remedy the alleged Good Reason event within 30 days from receipt
of notice of such allegation. If the Company does not cure the circumstance giving rise to Good Reason, Executive must
terminate his employment with the Company within 30 days following the end of the 30-day cure period described in clause
(z) above in order for his termination to be considered a termination for Good Reason.

12. Miscellaneous Provisions.

(a) Governing Law; Jurisdiction. This Agreement shall be governed, construed, interpreted and enforced in accordance with its
express terms, and otherwise in accordance with the substantive laws of Texas without reference to the principles of conflicts
of law of Texas. Any suit or proceeding arising under this Agreement shall be brought solely in a federal or state court sitting
in the State of Texas, except for any suit or proceeding seeking an equitable remedy hereunder, which may be brought in any
court of competent jurisdiction. By Executive’s execution hereof, Executive hereby consents and irrevocably submits to the
jurisdiction of the federal and state courts having general jurisdiction over the State of Texas, and agrees that any process in
any suit or proceeding commenced in such courts under this Agreement may be served upon Executive personally, by certified
mail, return receipt requested, or by courier service, with the same full force and effect as if personally served upon Executive
in the county in which Executive is employed. Each of the parties waives any claim that any such jurisdiction is not a
convenient forum for any such suit or proceeding and any defense of lack of jurisdiction with respect thereto.

11
 (b) Validity. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain in full force and effect.

(c) Clawback. To the extent required by applicable law or any applicable securities exchange listing standards, or as otherwise
determined by the Board (or a committee thereof), amounts paid or payable under this Agreement or any other compensation
arrangement of the Company or its affiliates shall be subject to the provisions of any applicable clawback policies or
procedures adopted by the Company, which clawback policies or procedures may provide for forfeiture and/or recoupment of
amounts paid or payable under this Agreement or any other compensation arrangement of the Company or its affiliates.
(d) Cooperation. Executive agrees at the Company’s sole expense to make himself available as reasonably practical with respect
to, and to use reasonable efforts to cooperate in conjunction with, the transition of duties and any litigation or investigation
arising from events that occurred during Executive’s employment with or engagement by the Company (whether such
litigation or investigation is then pending or subsequently initiated) involving the Company or any affiliate thereof, including
preparing to provide testimony if so requested by the Company. Nothing contained herein shall require Executive to waive any
applicable privilege or immunity.

(e) Notices. Any notice, request, claim, demand, document and other communication hereunder to any Party shall be effective
upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by facsimile or certified or registered
mail, postage prepaid, as follows:

(i) If to the Company, the General Counsel at its headquarters,

(ii) If to Executive, at the last address that the Company has in its personnel records for Executive, or

(iii) At any other address as any Party shall have specified by notice in writing to the other Party.

(f) Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all
of which together will constitute one and the same Agreement. Signatures delivered by facsimile or .pdf shall be deemed
effective for all purposes.

(g) Entire Agreement. The terms of this Agreement are intended by the Parties to be the final expression of their agreement with
respect to the subject matter hereof and supersede all prior understandings and agreements, whether written or oral. The Parties
further intend that this Agreement shall constitute the complete and exclusive statement of their terms and that no extrinsic
evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this
Agreement.

(h) Amendments; Waivers. This Agreement may not be modified, amended, or terminated except by an instrument in writing,
signed by Executive and a duly authorized officer of Company. By an instrument in writing similarly executed, Executive or a
duly authorized officer of the Company may waive compliance by the other Party with any specifically identified provision of
this Agreement that such other Party was or is obligated to comply with or perform; provided, however, that such waiver shall
not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no

12
 delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or
power provided herein or by law or in equity.

(i) Construction. This Agreement shall be deemed drafted equally by both the Parties. Its language shall be construed as a whole
and according to its fair meaning. Any presumption or principle that the language is to be construed against any Party shall not
apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation.
Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context
clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary, (i) the plural includes the singular
and the singular includes the plural; (ii) “and” and “or” are each used both conjunctively and disjunctively; (iii) “any,” “all,”
“each,” or “every” means “any and all,” and “each and every”; (iv) “includes” and “including” are each “without limitation”;
(v) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to
any particular paragraph, subparagraph, section or subsection; and (vi) all pronouns and any variations thereof shall be deemed
to refer to the masculine, feminine, neuter, singular or plural as the identity of the entities or persons referred to may require.

(j) Legal Fees. The Employer shall reimburse Executive for up to a maximum of $20,000 in legal fees actually incurred by or on
behalf of Executive in connection with the negotiation and execution of this Agreement. If it shall be necessary or desirable for
Executive to retain legal counsel or incur other costs and expenses in connection with enforcement of Executive’s rights under
this Agreement, the Company shall pay (or Executive shall be entitled to recover from the Company, as the case may be)
Executive’s reasonable attorneys’ fees and cost and expenses incurred in connection with enforcement of his rights (including
the enforcement of any arbitration award in court), if the action relates to Executive’s employment with the Company and if a
final decision in connection with at least one material issue of the litigation (or arbitration) is issued in Executive’s favor by an
arbitrator or a court of competent jurisdiction.

(k) Enforcement. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws
effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the
remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or
unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable
provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable.

(l) Withholding. The Company shall be entitled to withhold from any amounts payable under this Agreement any federal, state,
local or foreign withholding or other taxes or charges which the Company is required to withhold whether in the US or any
other relevant jurisdiction. The Company shall be entitled to rely on an opinion of counsel if any questions as to the amount or
requirement of withholding shall arise. In addition, Executive shall cooperate with the Company following any termination of
Executive’s employment for any reason in satisfaction of the Company’s and Executive’s relative tax obligations hereunder
and, if applicable, under the Company’s Expatriate Assignment Policy.

(m)Section 409A.

13
 (i) General. The intent of the Parties is that the payments and benefits under this Agreement comply with or be exempt from
Section 409A and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance
therewith.

(ii) Separation from Service. Notwithstanding anything in this Agreement to the contrary, any compensation or benefits
payable under this Agreement that is considered nonqualified deferred compensation under Section 409A and is designated
under this Agreement as payable upon Executive’s termination of employment shall be payable only upon Executive’s
“separation from service” with the Company within the meaning of Section 409A (a “Separation from Service”).
(iii) Specified Employee. Notwithstanding anything in this Agreement to the contrary, if Executive is determined by the
Company in good faith at the time of Executive’s Separation from Service to be a “specified employee” for purposes of
Section 409A, to the extent any portion of the benefits to which Executive is entitled under this Agreement upon such
Separation from Service constitute a “deferral of compensation” within the meaning of Section 409A and which do not
otherwise qualify under the exemptions under Treas. Reg. § 1.409A-1 (including without limitation, the short-term deferral
exemption and the permitted payments under Treas. Reg. § 1.409A-1(b)(9)(iii)(A)), such portion of Executive’s benefits
shall not be provided to Executive prior to the earlier of (i) the expiration of the six-month period measured from the date
of Executive’s Separation from Service with the Company or (ii) the date of Executive’s death. Upon the first business day
following the expiration of the applicable Section 409A period, all payments deferred pursuant to the preceding sentence
shall be paid in a lump sum to Executive (or Executive’s estate or beneficiaries), and any remaining payments due to
Executive under this Agreement shall be paid as otherwise provided herein.

(iv) Expense Reimbursements, Legal Fees. To the extent that any reimbursements or payment of legal fees under this
Agreement are subject to Section 409A, any such reimbursements or payment payable to Executive shall be paid to
Executive no later than December 31 of the year following the year in which the expense or payment was incurred;
provided, that Executive submits Executive’s reimbursement or payment request, as the case may be, promptly following
the date the expense is incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year, other than medical expenses referred to in Section 105(b) of the Code, and
Executive’s right to reimbursement or payment under this Agreement will not be subject to liquidation or exchange for
another benefit.

(v) Installments. Executive’s right to receive any installment payments under this Agreement, including without limitation any
continuation salary payments that are payable on Company payroll dates, shall be treated as a right to receive a series of
separate payments and, accordingly, each such installment payment shall at all times be considered a separate and distinct
payment as permitted under Section 409A. Except as otherwise permitted under Section 409A, no payment hereunder shall
be accelerated or deferred unless such acceleration or deferral would not result in additional tax or interest pursuant to
Section 409A.

(n) Data Protection. Executive acknowledges that the Company will from time to time process data that relates to him for the
purposes of the administration and management of its employees and its business, for compliance with applicable procedures,
laws and regulations, and for other legitimate purposes. Executive has a duty to comply with the

14
 Company’s data protection policy at all times and to keep all personal information that he has access to as part of his
employment secure. Executive must notify the Board or such other person stipulated by the Company immediately on
becoming aware of a data security breach. Failure to do so may lead to disciplinary action up to and including termination for
Cause.

13. Executive Acknowledgement. Executive acknowledges that Executive has read and understands this Agreement, is
fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Company other than
those contained in writing herein, and has entered into this Agreement freely based on Executive’s own judgment.
[Signature Page Follows]

15
 The Parties have executed this Agreement as of the Effective Date set forth above.

Valaris Limited

By: /s/ Elizabeth Leykum_______________

Name: Elizabeth Leykum
Title: Chair of the Board

Ensco Corporate Resources LLC

By: /s/ Darin Gibbins___________________

Name: Darin Gibbins
Title: Vice President

Anton Dibowitz

/s/ Anton Dibowitz___________________

[Signature Page to Employment Agreement]

16
 Exhibit A

Form of Separation and Release Agreement

This Release Agreement (this “Release Agreement”) is entered into as of the date set forth below by Anton Dibowitz, an
individual (“Employee”). Capitalized terms used herein that are not otherwise defined shall have the meaning ascribed to such terms in
the Employment Agreement (the “Employment Agreement”) between the Employee, Ensco Corporate Resources LLC, and Valaris
Limited, a Bermuda exempted company (together with its subsidiaries, the “Company”).
WHEREAS, Employee has been employed by the Company as its President and Chief Executive Officer;

WHEREAS, Employee’s employment with the Company will terminate effective as of [__________] (the “Termination
Date”);

WHEREAS, Employee is eligible to receive the severance payments and benefits set forth on Appendix A attached hereto (the
“Severance Benefits”) in accordance with and subject to the terms of the Employment Agreement; and

WHEREAS, Employee’s receipt of the Severance Benefits is subject to Employee’s execution and non-revocation of a release
of claims, and the Company and Employee desire to enter into this Release Agreement upon the terms set forth herein.

NOW, THEREFORE, in consideration of the covenants undertaken and the releases contained in this Release Agreement,
and in consideration of the obligations of the Company to pay the Severance Benefits (conditioned upon this Release Agreement),
Employee and the Company agree as follows:

1. Release. Employee, on behalf of himself, his descendants, dependents, heirs, executors, administrators, assigns, and
successors, and each of them, hereby acknowledges full and complete satisfaction of the Company’s obligations to him and covenants
not to sue and fully releases and discharges the Company and each of its direct and indirect parents, subsidiaries and affiliates, past
and present, as well as its and their trustees, directors, officers, members, managers, partners, agents, attorneys, insurers, employees,
stockholders, representatives, assigns, and successors, past and present, and each of them, hereinafter together and collectively referred
to as the “Releasees.” with respect to and from any and all claims, wages, demands, rights, liens, agreements or contracts (written or
oral), covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders and
liabilities of whatever kind or nature in law, equity or otherwise (each, a “Claim”), which he now owns or holds or he has at any time
heretofore owned or held or may in the future hold as against any of said Releasees arising out of or in any way connected with
Employee’s service as an officer, director, employee, member or manager of any Releasee or Employee’s separation from his position
as an officer, director, employee, manager and/or member, as applicable, of any Releasee, whether known or unknown, suspected or
unsuspected, resulting from any act or omission by or on the part of said Releasees, or any of them, committed or omitted prior to the
date of this Release Agreement including, without limiting the generality of the foregoing, any Claim under Title VII of the Civil
Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Americans with Disabilities Act, the Family
and Medical Leave Act of 1993, or any other federal, state or local law, regulation, or ordinance, or any Claim for severance pay,
bonus, sick leave, holiday pay, vacation pay, life insurance, health or medical insurance or any other fringe benefit, workers’
compensation or disability; provided however, that the foregoing release shall not apply to any obligation of the Company to
Employee pursuant to or with respect to any of the

A-1
following: (1) any right to indemnification that Employee may have pursuant to the Company’s Bylaws or the Company’s corporate
charter or under any written indemnification agreement with the Company (or any corresponding provision of any subsidiary or
affiliate of the Company) with respect to any loss, damages or expenses (including but not limited to attorneys’ fees to the extent
otherwise provided) that Employee may in the future incur with respect to his service as an employee, officer or director of the
Company or any of its subsidiaries or affiliates; (2) any rights that Employee may have to insurance coverage for such losses, damages
or expenses under any Company (or subsidiary or affiliate) directors and officers liability insurance policy; (3) any rights to continued
group health plan coverage that Employee may have under COBRA; or (4) any rights to payment of benefits that Employee may have
under a retirement plan sponsored or maintained by the Company that is intended to qualify under Section 401(a) of the Internal
Revenue Code of 1986, as amended. In addition, this release does not cover any Claim that cannot be so released as a matter of
applicable law. Employee acknowledges and agrees that he has received any and all leave and other benefits that he has been and is
entitled to pursuant to the Family and Medical Leave Act of 1993.

2. Acknowledgment of Payment of Wages and Offset. Employee acknowledges that he has received all amounts owed for
his regular and usual salary (including, but not limited to, any bonus or other wages), and usual benefits through the date of this
Release Agreement. The Severance Benefits shall, however, be subject to setoff, counterclaim, recoupment, defense or other right
which the Company may have against Employee and shall, to the extent permitted by applicable law, be reduced by the amount of any
(i) severance pay or acceleration of benefits under any other agreement with, or plan, program, or policy of, the Company (if any) and
(ii) other payments that the Company may otherwise be compelled to pay to Employee under applicable law (other than amounts owed
for his regular and usual salary including, but not limited to, any bonus or other wages, and usual benefits through the Termination
Date).

3. ADEA Waiver. Employee expressly acknowledges and agrees that by entering into this Release Agreement, Employee
is waiving any and all rights or Claims that he may have arising under ADEA and the Older Worker Benefits Protection Act
(“OWBPA”), which have arisen on or before the date of execution of this Release Agreement. Employee further expressly
acknowledges and agrees that:

(A) Employee is hereby advised in writing by this Release Agreement to consult with an attorney before
signing this Release Agreement;

(B) Employee has voluntarily chosen to enter into this Release Agreement and has not been forced or
pressured in any way to sign it;

(C) Employee was given a copy of this Release Agreement on [__________] and informed that he had
[forty-five (45) / twenty-one (21)] days within which to consider this Release Agreement and that if he wished to
execute this Release Agreement prior to expiration of such [45 / 21]-day period, he should execute the Endorsement
attached hereto;

(D) Employee was informed that he had seven (7) days following the date of execution of this Release
Agreement in which to revoke this Release Agreement, and this Release Agreement will become null and void if
Employee elects revocation during that time. Any revocation must be in writing and must be received by the Company
during the seven-day revocation period. In the event that Employee exercises his right of revocation, neither the
Company nor Employee will have any obligations under this Release Agreement;

2
 (E) Nothing in this Release Agreement prevents or precludes Employee from challenging or seeking a
determination in good faith of the validity of this waiver under the ADEA or the OWBPA, nor does it impose any
condition precedent, penalties or costs from doing so, unless specifically authorized by federal law.

4. No Transferred Claims. Employee warrants and represents that the Employee has not heretofore assigned or transferred
to any person not a party to this Release Agreement any released matter or any part or portion thereof and he shall defend, indemnify
and hold the Company and each of its affiliates harmless from and against any claim (including the payment of attorneys’ fees and
costs actually incurred whether or not litigation is commenced) based on or in connection with or arising out of any such assignment
or transfer made, purported or claimed.
5. Severability. It is the desire and intent of the parties hereto that the provisions of this Release Agreement be enforced to
the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought.
Accordingly, if any particular provision of this Release Agreement shall be adjudicated by a court of competent jurisdiction to be
invalid, prohibited or unenforceable under any present or future law, such provision, as to such jurisdiction, shall be ineffective,
without invalidating the remaining provisions of this Release Agreement or affecting the validity or enforceability of such provision in
any other jurisdiction; furthermore, in lieu of such invalid or unenforceable provision there will be added automatically as a part of this
Release Agreement, a legal, valid and enforceable provision as similar in terms to such invalid or unenforceable provision as may be
possible. Notwithstanding the foregoing, if such provision could be more narrowly drawn so as not to be invalid, prohibited or
unenforceable in such jurisdiction, it shall, as to such jurisdiction, be so narrowly drawn, without invalidating the remaining provisions
of this Release Agreement or affecting the validity or enforceability of such provision in any other jurisdiction.

6. Counterparts. This Release Agreement may be executed in separate counterparts, each of which is deemed to be an
original and all of which taken together constitute one and the same agreement.

7. Governing Law. THIS RELEASE AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN

ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ANY CHOICE OF LAW OR
CONFLICTING PROVISION OR RULE (WHETHER OF THE STATE OF TEXAS OR ANY OTHER JURISDICTION) THAT
WOULD CAUSE THE LAWS OF ANY JURISDICTION OTHER THAN THE STATE OF TEXAS TO BE APPLIED. IN
FURTHERANCE OF THE FOREGOING, THE INTERNAL LAW OF THE STATE OF TEXAS, WILL CONTROL THE
INTERPRETATION AND CONSTRUCTION OF THIS RELEASE AGREEMENT, EVEN IF UNDER SUCH JURISDICTION’S
CHOICE OF LAW OR CONFLICT OF LAW ANALYSIS, THE SUBSTANTIVE LAW OF SOME OTHER JURISDICTION
WOULD ORDINARILY APPLY.
8. Amendment and Waiver. The provisions of this Release Agreement may be amended and waived only with the prior
written consent of the Company and Employee, and no course of conduct or failure or delay in enforcing the provisions of this Release
Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Release
Agreement or any provision hereof.

9. Descriptive Headings. The descriptive headings of this Release Agreement are inserted for convenience only and do
not constitute a part of this Release Agreement.

10. Construction. Where specific language is used to clarify by example a general statement contained herein, such
specific language shall not be deemed to modify, limit or

3
restrict in any manner the construction of the general statement to which it relates. The language used in this Release Agreement shall
be deemed to be the language chosen by the parties to express their mutual intent, and no rule of strict construction shall be applied
against any party.

11. Restrictive Covenants. The Employee acknowledges and agrees that he shall continue to be obligated to comply with the
terms of any restrictive covenant, intellectual property, or confidentiality agreement that Employee executed in connection with
Employee’s employment with the Company, including Sections 6, 7 and 8 of the Employment Agreement.

12. Nouns and Pronouns. Whenever the context may require, any pronouns used herein shall include the corresponding
masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice-versa.

13. Legal Counsel. Each party recognizes that this is a legally binding contract and acknowledges and agrees that they have
had the opportunity to consult with legal counsel of their choice. Employee acknowledges and agrees that he has read and understands
this Release Agreement completely, is entering into it freely and voluntarily, and has been advised to seek counsel prior to entering
into this Release Agreement and he has had ample opportunity to do so.

14. Entire Agreement. The Employment Agreement and this Release Agreement set forth the entire agreement of the
parties and fully supersede and replace any and all prior agreements, promises, representations, or understandings, written or oral,
between the Company and Employee that relate to the subject matter hereof. This Release Agreement may be amended or modified
only by a written instrument identified as an amendment hereto that is executed by both parties.

This Release Agreement may not be executed prior to the Termination Date. The undersigned has read and understands the
consequences of this Release Agreement and voluntarily signs it. The undersigned declares under penalty of perjury under the laws of
the State of Texas that the foregoing is true and correct.

EXECUTED this _____ day of __________________, 20___, at ___________________.

“Employee”

____________________________________
Anton Dibowitz

4
 ENDORSEMENT

I, [_______________], hereby acknowledge that I was given [45/21] days to consider the foregoing Release Agreement and
voluntarily chose to sign the Release Agreement prior to the expiration of the [45/21]-day period.

I declare under penalty of perjury under the laws of the United States and the State of Texas that the foregoing is true and
correct.
EXECUTED this _____ day of __________________, 20___, at ___________________.

Anton Dibowitz

5
 Appendix A

Severance Benefits
6

Exhibit 10.44
August 18, 2021

Gilles Luca

Dear Gilles,

In recognition of your continued efforts and key role, Valaris Limited (“Valaris”) is pleased to award you a cash-based retention
award in the aggregate amount of USD $1,500,000 (the “Retention Award”) subject to the terms and conditions set forth in this
letter agreement (this “Agreement”).

The Retention Award will be paid to you in three equal semi-annual installments of USD $500,000 each, less applicable taxes and
withholdings, subject to your continued employment with Valaris or its subsidiaries through the applicable payment date except as
otherwise provided below. The first installment of the Retention Award will be paid to you within 30 days following February 15,
2022, with the second installment payable within 30 days following August 15, 2022, and the final installment payable within 30
days following February 15, 2023.

Notwithstanding the foregoing, in the event your employment is terminated by Valaris and its subsidiaries without Cause (as
defined in the Valaris Executive Severance Plan) or as a result of your death or Disability (as defined in the Valaris Executive
Severance Plan), any unpaid portion of the Retention Award will accelerate in full and be paid to you in a single lump sum, less
applicable taxes and withholdings, within 60 days following the date of such termination. For the avoidance of doubt, any unpaid
portion of the Retention Award will be forfeited if your employment with the Company is terminated for Cause (as defined in the
Valaris Executive Severance Plan) or as a result of your resignation for any reason.

This letter agreement and the rights and obligations hereunder will be governed by and construed in accordance with the laws of
the state of Texas without reference to any jurisdiction’s principles of conflicts of law and reflects the parties entire understanding
and agreement with regard to the foregoing.

We thank you for your ongoing efforts and support and look forward to your many future contributions.
Sincerely,

/s/ Anton
Dibowitz________________________
Name: Anton Dibowitz
Title: Director
 Exhibit 10.45

January 10, 2022

Gilles Luca

Dear Gilles,

You were previously awarded a cash-based retention award in the aggregate amount of USD $1,500,000 (the “Retention
Award”) subject to the terms and conditions set forth in a letter agreement dated August 18, 2021 (the “Agreement”). This letter
agreement revises the payment terms for the first installment of the Retention Award as set forth in the Agreement.

Notwithstanding anything to the contrary in the Agreement, the first installment of the Retention Award will be paid to you within 30
days following July 1, 2022, with the second installment payable within 30 days following August 15, 2022, and the final
installment payable within 30 days following February 15, 2023.

All other terms and conditions of the Agreement remain in full force and effect.

We thank you for your continued contributions and support of the Company’s business.
Sincerely,

/s/ Anton
Dibowitz________________________
Name: Anton Dibowitz
Title: Chief Executive Officer
ACKNOWLEDGED AND AGREED:

/s/ Gilles Luca__________________________

Name: Gilles Luca
 Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Valaris Limited Subsidiaries as of December 31, 2021

Company Name Jurisdiction

Alpha Achiever Company Cayman Islands
Alpha Admiral Company Cayman Islands
Alpha Archer Company Cayman Islands
Alpha Aurora Company Cayman Islands
Alpha International Drilling Company S.A.R.L. Luxembourg
Alpha Leasing Drilling Limited Mauritius
Alpha Mako Company Cayman Islands
Alpha Manta Company Cayman Islands
Alpha Offshore Drilling (S) Pte. Ltd. Singapore
Alpha Offshore Drilling Services Company Cayman Islands
Alpha Offshore Drilling Services Company (Ghana) Limited Ghana
Alpha Offshore International Leasing Limited England and Wales
Alpha Orca Company Cayman Islands
ATLANTIC MARITIME SERVICES LLC Delaware
Atlantic Maritime Services LLC (Trinidad Branch) Trinidad
Atwood Advantage S.à r.l. Luxembourg
Atwood Australian Waters Drilling Pty Ltd Western Australia
Atwood Malta Holding Company Limited Malta
Atwood Oceanics (M) Sdn. Bhd. Malaysia
Atwood Oceanics Australia Pty. Limited Western Australia
Atwood Oceanics Leasing Limited Labuan FT
Atwood Oceanics Malta Limited Malta
Atwood Oceanics Pacific Limited Cayman Islands
Atwood Offshore Drilling Limited Hong Kong
Aurora Offshore Services Gmbh Germany
C.A. Foravep, Forasol Venezuela de Perforaciones Venezuela
Clearways Offshore Drilling Sdn. Bhd. Malaysia
Durand Maritime S.A.S. France
Durand Maritime SAS (Mexico Branch) Mexico
ENSCO (Bermuda) Limited Bermuda
Ensco (Myanmar) Limited Republic of Myanmar
Ensco (Thailand) Limited Thailand
ENSCO Arabia Company Limited Saudi Arabia
ENSCO Asia Company LLC Texas
ENSCO Asia Pacific Pte. Limited Singapore
ENSCO Australia Pty. Limited Western Australia
ENSCO Capital Limited Cayman Islands
ENSCO Corporate Resources LLC Delaware
ENSCO de Venezuela, S.R.L. Venezuela
Ensco Deepwater Drilling Limited England and Wales
Ensco Deepwater USA II LLC Delaware
ENSCO Development Limited Cayman Islands
Ensco do Brasil Petróleo e Gás Ltda. Brazil
ENSCO Drilling (Caribbean) Inc. (Venezuela Branch) Venezuela
ENSCO Drilling Company (Nigeria) Ltd. Nigeria
ENSCO Drilling Company LLC Delaware
ENSCO Drilling Mexico LLC Delaware
Ensco Endeavors Limited Cayman Islands
Ensco France S.A.S. France
ENSCO Gerudi (M) Sdn. Bhd. Malaysia
ENSCO Global GmbH Switzerland
Ensco Global II Ltd. Cayman Islands
 Exhibit 21.1

ENSCO Global Resources Limited England and Wales

Ensco Holdco Limited England and Wales
ENSCO Holding Company Delaware
ENSCO Holland B.V. Netherlands
Ensco Holland B.V. (Malta Branch) Malta
ENSCO Incorporated Texas
Ensco Intercontinental GmbH Switzerland
ENSCO International Incorporated Delaware
Ensco International Management GP LLC Delaware
Ensco International Management LP LLC Delaware
ENSCO Investments LLC Nevada
ENSCO Labuan Limited Labuan FT
Ensco Mexico Services, S. de R.L. de C.V. Mexico
Ensco North America LLC Delaware
Ensco Ocean 1 Company Cayman Islands
Ensco Ocean 2 Company Cayman Islands
ENSCO Oceanics Company LLC Delaware
ENSCO Oceanics International Company (Abu Dhabi Branch) Abu Dhabi
ENSCO Oceanics International Company (Brunei Branch) Brunei
ENSCO Oceanics International Company (Dubai Branch) Dubai
ENSCO Offshore International Company (Tunisia Branch) Tunisia
ENSCO Offshore International Holdings Limited Cayman Islands
Ensco Offshore International LLC Delaware
ENSCO Offshore LLC Delaware
Ensco Offshore Petróleo e Gás Ltda. Brazil
Ensco Offshore Services LLC Delaware
ENSCO Offshore U.K. Limited England and Wales
ENSCO Overseas Limited Cayman Islands
ENSCO Services Limited England and Wales
ENSCO Services LLC Delaware
Ensco South Pacific LLC Delaware
Ensco Transcontinental I LLC Nevada
Ensco Transcontinental I LP England and Wales
Ensco Transcontinental II LLC Nevada
Ensco Transcontinental II LP England and Wales
Ensco Transnational I Ltd. (Ivory Coast Branch) Ivory Coast
Ensco Transnational Limited (Ghana Branch) Ghana
ENSCO U.K. Limited England and Wales
Ensco UK Drilling Limited England and Wales
Ensco UK Drilling Limited (Israel Branch) Israel
Ensco Universal Holdings I Ltd. Cayman Islands
Ensco Universal Holdings II Ltd. Cayman Islands
ENSCO Universal Limited England and Wales
ENSCO Worldwide GmbH Switzerland
EnscoRowan Ghana Drilling Limited Ghana
Foradel SDN B.H.D. Malaysia
Forasub B.V. Netherlands
Great White Shark Limited Gibraltar
Green Turtle Limited Gibraltar
International Technical Services LLC Delaware
Manatee Limited Malta
Manta Ray Limited Malta
Marine Blue Limited Gibraltar
Ocean Deep Drilling ESV Nigeria Limited Nigeria
Offshore Drilling Services LLC Delaware
Offshore Drilling Services LLC (Mexico Branch) Mexico
P.T. ENSCO Sarida Offshore Indonesia
Petroleum International Pte. Ltd. Singapore
 Exhibit 21.1

Pride Arabia Co. Ltd. Saudi Arabia

Pride Foramer (Sucursal de Angola) Angola
Pride Foramer S.A.S. France
Pride Foramer SAS (Mexico Branch) Mexico
Pride Forasol Drilling Nigeria Ltd. Nigeria
Pride Forasol S.A.S. France
Pride Global II Ltd. (Egypt Branch) Egypt
Pride Global Offshore Nigeria Limited Nigeria
Pride International LLC Delaware
Pride International Management Company LP Texas
PT Alpha Offshore Drilling Indonesia
PT Pentawood Offshore Drilling Indonesia
Ralph Coffman Limited Gibraltar
Ralph Coffman Luxembourg S.à r.l. Luxembourg
RCI International, Inc. Cayman Islands
RD International Services Pte. Ltd. Singapore
RDC Arabia Drilling, Inc. (Bahrain Regional Branch Office) Bahrain
RDC Arabia Drilling, Inc. (Saudi Arabia Branch Office) Saudi Arabia
RDC Holdings Luxembourg S.à r.l. Luxembourg
RDC Malta Limited Malta
RDC Offshore Luxembourg S.à r.l. Luxembourg
RDC Offshore Malta Limited Malta
Rowan 350 Slot Rigs, LLC Delaware
Rowan Angola Limitada Angola
Rowan California S.à r.l. Luxembourg
Rowan Companies Limited England and Wales
Rowan Companies, LLC Delaware
Rowan Deepwater Drilling (Gibraltar) Limited Gibraltar
Rowan Drilling (Gibraltar) Limited Gibraltar
Rowan Drilling (Gibraltar) Limited (Indonesia PE) Indonesia
Rowan Drilling (Trinidad) Limited Cayman Islands
Rowan Drilling (Trinidad) Limited - Trinidad Branch Trinidad
Rowan Drilling (U.K.) Limited Scotland
Rowan Drilling (U.K.) Limited (Turkey Branch Office) Turkey
Rowan Drilling Cyprus Limited Cyprus
Rowan Drilling Services Limited Gibraltar
Rowan Drilling Services Limited (Qatar Branch Office) Qatar
Rowan Drilling Services Nigeria Limited Nigeria
Rowan Drilling, S. De R.L. De C.V. Mexico
Rowan Egypt Petroleum Services L.L.C. Egypt
Rowan Finance, LLC Delaware
Rowan Financial Holdings S.à r.l. Luxembourg
Rowan Finanz S.à r.l. Luxembourg
Rowan Finanz S.à.r.l. Delaware (U.S. Branch) Delaware
Rowan Global Drilling Services Limited Gibraltar
Rowan Holdings Luxembourg S.à r.l. Luxembourg
Rowan Holdings Luxembourg S.à.r.l. Delaware (U.S. Branch) Delaware
Rowan International Rig Holdings S.à r.l. Luxembourg
Rowan Marine Services, LLC Texas
Rowan MIddle East, Inc. (Saudi Arabia Branch) Saudi Arabia
Rowan N-Class (Gibraltar) Limited Gibraltar
Rowan No. 1 Limited England and Wales
Rowan No. 2 Limited England
Rowan Norway Limited (FKA Rowan (Gibraltar) Limited) Gibraltar
Rowan Norway Limited (Norway Branch) Norway
Rowan Offshore (Gibraltar) Limited Gibraltar
Rowan Offshore Luxembourg S.à r.l. Luxembourg
Rowan Offshore Luxembourg S.à r.l. - Dubai Branch UAE
 Exhibit 21.1

Rowan Relentless Luxembourg S.à r.l. Luxembourg

Rowan Reliance Luxembourg S.à r.l. Luxembourg
Rowan Renaissance Luxembourg S.à r.l. Luxembourg
Rowan Resolute Luxembourg S.à r.l. Luxembourg
Rowan Rex Limited Cayman Islands
Rowan Rigs S.à r.l. Luxembourg
Rowan Rigs S.à r.l. (New Zealand Branch) New Zealand
Rowan Rigs S.a.r.l. (Ghana Branch Office) Ghana
Rowan Rigs S.a.r.l. (Suriname Branch Office) Suriname
Rowan Services LLC Delaware
Rowan Standard Ghana Limited Ghana
Rowan US Holdings (Gibraltar) Limited Gibraltar
Rowan, S. de R.L. de C.V. Mexico
Rowandrill Labuan Limited Labuan
Rowandrill Malaysia Sdn. Bhd. Malaysia
Rowandrill, LLC Texas
Rowandrill, LLC (Mexico Branch) Mexico
Saudi Aramco Rowan Offshore Drilling Company Saudi Arabia
SKDP 1 Limited Cyprus
SKDP 2 Limited Cyprus
SKDP 3 Limited Cyprus
Societe Maritime de Services "SOMASER" S.A.S. France
Sonamer Perfuracoes Ltd, (Sucursal em Angola) Angola
Swiftdrill Malta Malta
Swiftdrill Offshore Drilling Services Company Cayman Islands
Valaris Holdco 1 Limited Bermuda
Valaris Holdco 2 Limited Bermuda
Valaris Limited Bermuda
Valaris United LLC Delaware
 Exhibit 22.1

List of Guarantor Subsidiaries and Affiliate Securities Pledged as Collateral

As of the date hereof, the Senior Secured First Lien Notes due 2028 (the “Notes”) issued by Valaris Limited, a Bermuda exempted company (“Valaris”), are fully and
unconditionally guaranteed by each of the following subsidiaries of Valaris (the “Guarantors”).

State or Other Jurisdiction of

Guarantor Incorporation or Organization
Alpha Achiever Company Cayman Islands
Alpha Admiral Company Cayman Islands
Alpha Archer Company Cayman Islands
Alpha Aurora Company Cayman Islands
Alpha Offshore Drilling Services Company Cayman Islands
Alpha Orca Company Cayman Islands
Alpha South Pacific Holding Company Cayman Islands
Atlantic Maritime Services LLC Delaware (USA)
Atwood Australian Waters Drilling Pty Limited Australia
Atwood Oceanics Australia Pty Limited Australia
Atwood Oceanics Pacific Limited Cayman Islands
Atwood Offshore Drilling Limited Hong Kong
Atwood Offshore Worldwide Limited Cayman Islands
ENSCO (Barbados) Limited Cayman Islands
Ensco (Myanmar) Limited Myanmar
ENSCO Arabia Co. Ltd. Saudi Arabia
ENSCO Asia Company LLC Texas (USA)
ENSCO Asia Pacific Pte. Limited Singapore
Ensco Associates Company Cayman Islands
ENSCO Australia Pty. Limited Australia
ENSCO Capital Limited Cayman Islands / United Kingdom
ENSCO Corporate Resources LLC Delaware (USA)
Ensco Deepwater Drilling Limited England and Wales (UK)
ENSCO Deepwater USA II LLC Delaware (USA)
ENSCO Development Limited Cayman Islands
Ensco do Brasil Petróleo e Gás Ltda. Brazil
Ensco Drilling I Ltd. Cayman Islands
ENSCO Drilling Mexico LLC Delaware (USA)
Ensco Endeavors Limited Cayman Islands / United Kingdom
ENSCO Global GmbH Switzerland
Ensco Global II Ltd. Cayman Islands
ENSCO Global Investments LP England and Wales (UK)
Ensco Global IV Ltd British Virgin Islands
ENSCO Global Limited Cayman Islands / United Kingdom
ENSCO Global Resources Limited England and Wales (UK)
Ensco Holdco Limited England and Wales (UK)
ENSCO Holding Company Delaware (USA)
Ensco Holdings I Ltd. Cayman Islands
Ensco Incorporated Texas (USA)
Ensco Intercontinental GmbH Switzerland
ENSCO International Incorporated Delaware (USA)
Ensco International Ltd. British Virgin Islands / United Kingdom
ENSCO Investments LLC Nevada (USA) / United Kingdom
Ensco Jersey Finance Limited Jersey / United Kingdom
ENSCO Limited Cayman Islands
 Exhibit 22.1

Ensco Management Corp British Virgin Islands

ENSCO Maritime Limited Bermuda
Ensco Mexico Services S.de R.L. Mexico
Ensco Ocean 2 Company Cayman Islands
ENSCO Oceanics LLC Delaware (USA)
ENSCO Oceanics International Company Cayman Islands
ENSCO Offshore Company Delaware (USA)
ENSCO Offshore International Company Cayman Islands
ENSCO Offshore International Holdings Limited Cayman Islands / United Kingdom
ENSCO Offshore International Inc. Marshall Islands
Ensco Offshore International LLC Delaware (USA)
Ensco Offshore Petróleo e Gás Ltda. Brazil
ENSCO Offshore U.K. Limited England and Wales (UK)
ENSCO Overseas Limited Cayman Islands
ENSCO Services Limited England and Wales (UK)
Ensco Transcontinental II LP England and Wales (UK)
Ensco Transnational I Limited Cayman Islands
Ensco Transnational III Limited Cayman Islands
ENSCO U.K. Limited England and Wales (UK)
Ensco UK Drilling Limited England and Wales (UK)
Ensco Universal Holdings I Ltd. Cayman Islands / United Kingdom
Ensco Universal Holdings II Ltd. Cayman Islands / United Kingdom
ENSCO Universal Limited England and Wales (UK)
Ensco Vistas Limited Cayman Islands
Ensco Worldwide GmbH Switzerland
EnscoRowan Ghana Drilling Limited Ghana
Great White Shark Limited Gibraltar
Green Turtle Limited Gibraltar
International Technical Services LLC Delaware (USA)
Manatee Limited Malta
Manta Ray Limited Malta
Marine Blue Limited Gibraltar
Offshore Drilling Services LLC Delaware (USA)
Pacific Offshore Labor Company Cayman Islands
Petroleum International Pte. Ltd. Singapore
Pride Global II Ltd British Virgin Islands
Pride International LLC Delaware (USA)
Pride International Management Co. LP Texas (USA)
Ralph Coffman Cayman Limited Cayman
Ralph Coffman Limited Gibraltar
Ralph Coffman Luxembourg S.à r.l. Luxembourg
RCI International, Inc. Cayman Islands
RD International Services Pte. Ltd. Singapore
RDC Arabia Drilling, Inc. Cayman Islands
RDC Holdings Luxembourg S.à r.l. Luxembourg
RDC Malta Limited Malta
RDC Offshore Luxembourg S.à r.l. Luxembourg
RDC Offshore Malta Limited Malta
RoCal Cayman Limited Cayman Islands
Rowan 240C#3, Inc. Cayman Islands
Rowan Companies Limited England and Wales (UK)
Rowan Companies, LLC Delaware (USA)
Rowan Drilling (Gibraltar) Limited Gibraltar
 Exhibit 22.1

Rowan Drilling (Trinidad) Limited Cayman Islands

Rowan Drilling (U.K.) Limited Scotland (UK)
Rowan Drilling Services Limited Gibraltar
Rowan Financial Holdings S.à r.l. Luxembourg
Rowan International Rig Holdings S.à r.l. Luxembourg
Rowan Marine Services LLC Texas (USA)
Rowan N-Class (Gibraltar) Limited Gibraltar
Rowan No. 1 Limited England and Wales (UK)
Rowan No. 2 Limited England and Wales (UK)
Rowan Norway Limited Gibraltar
Rowan Offshore (Gibraltar) Limited Gibraltar
Rowan Offshore Luxembourg S.à r.l. Luxembourg
Rowan Rigs S.à r.l. Luxembourg
Rowan S. de R.L. de C.V. Mexico
Rowan Services LLC Delaware (USA)
Rowan US Holdings (Gibraltar) Limited Gibraltar
Rowandrill, LLC Texas (USA)
Valaris Holdco 1 Limited Bermuda
Valaris Holdco 2 Limited Bermuda
Valaris United LLC Delaware (USA)

Concurrently with the issuance of the Notes, Valaris and certain of its subsidiaries entered into pledge and collateral agreements. Pursuant to the terms of these
agreements, the Notes are secured on a first-priority basis by a pledge of the equity interests of the Guarantors and affiliates listed below.

Affiliate Pledgee Class of Security Percentage Pledged

Alpha Achiever Company Ordinary Shares 100.00%
Alpha Admiral Company Ordinary Shares 100.00%
Alpha Archer Company Ordinary Shares 100.00%
Alpha Aurora Company Ordinary Shares 100.00%
Alpha Falcon Drilling Company Ordinary Shares; Class A Shares 100.00%
Alpha Int’l Drilling Company S.à r.l Ordinary Shares 100.00%
Alpha Mako Company Ordinary Shares 100.00%
Alpha Manta Company Ordinary Shares 100.00%
Alpha Offshore Drilling (S) Pte Ltd. Ordinary Shares 100.00%
Alpha Offshore Drilling Services Company Ordinary Shares 100.00%
Alpha Offshore International Leasing Limited Ordinary Shares 100.00%
Alpha Orca Company Ordinary Shares 100.00%
Alpha South Pacific Holding Company Ordinary Shares 100.00%
Atlantic Maritime Services LLC Units 100.00%
Atwood Advantage S.à r.l. Ordinary Shares 100.00%
Atwood Beacon S.à r.l. Ordinary Shares 100.00%

Atwood Drilling LLC Ordinary Shares 100.00%

Atwood Hunter LLC Ordinary Shares 100.00%
Atwood Malta Holding Company Limited Class A Shares > 99.00%
Atwood Oceanics Drilling Mexico S. de R.L. de C.V. Partnership Interest 99.00%
Atwood Oceanics Global Limited Ordinary Shares 100.00%

Atwood Oceanics Pacific Limited Ordinary Shares; Class A Shares 100.00%

 Exhibit 22.1

Atwood Offshore Labor Company Ordinary Shares 100.00%

Atwood Offshore Worldwide Limited Ordinary Shares; Class A Shares 64.12%
Drillquest Offshore Company Ordinary Shares 100.00%
ENSCO (Barbados) Limited Ordinary Shares 100.00%
ENSCO (Bermuda) Limited Ordinary Shares 100.00%
Ensco (Myanmar) Limited Ordinary Shares 100.00%
Ensco (Thailand) Limited Ordinary Shares 100.00%
ENSCO Arabia Company Limited Percentage Ownership Interest 100.00%
Ensco Asia Company LLC Units 100.00%
Ensco Asia Pacific Pte. Limited Ordinary Shares 100.00%
Ensco Associates Company Ordinary Shares 100.00%
ENSCO Australia Pty Limited Ordinary Shares 100.00%
Ensco Capital Limited Ordinary Shares 100.00%
Ensco Corporate Resources LLC Ordinary Shares 100.00%
ENSCO de Venezuela, S.R.L. Ordinary Shares 100.00%
ENSCO Deepwater Drilling Limited Ordinary Shares 100.00%
Ensco Deepwater USA II LLC Non-Assessable Member Units 100.00%
Ensco do Brasil Petróleo e Gás Ltda. Quotas 100.00%
ENSCO Drilling (Caribbean), Inc. Ordinary Shares 100.00%
Ensco Drilling Company (Nigeria) Limited Ordinary Shares 100.00%
ENSCO Drilling Company LLC Ordinary Shares 100.00%
Ensco Drilling I Ltd. Ordinary Shares 100.00%
ENSCO Drilling Mexico LLC Units 100.00%
Ensco Endeavors Limited Ordinary Shares 100.00%
ENSCO Gerudi (M) Sdn. Bhd. Ordinary Shares 49.00%
ENSCO Global GmbH Percentage Ownership Interest 100.00%
Ensco Global II Ltd. Ordinary Shares 100.00%
ENSCO Global Investment LP Partnership Interests 95.00%
ENSCO Global IV Ltd. Shares 100.00%
Ensco Global Limited Ordinary Shares 100.00%
Ensco Global Resources Limited Ordinary Shares 100.00%
Ensco Holdco Limited Ordinary Shares 100.00%
ENSCO Holding Company Shares 100.00%
Ensco Holdings I Ltd. Ordinary Shares 100.00%
Ensco Holland B.V. Ordinary Shares 100.00%
ENSCO Incorporated Common Stock 100.00%
ENSCO Intercontinental GmbH Percentage Ownership Interest 100.00%
Ensco International Incorporated Common Stock 100.00%
Ensco International Ltd. Ordinary Shares 100.00%
Ensco Investments LLC Ordinary Shares 100.00%
ENSCO Labuan Limited Ordinary Shares 100.00%
ENSCO Limited Ordinary Shares 100.00%
ENSCO Maritime Limited Ordinary Shares 100.00%
Ensco Mexico Services, S. de R.L. de C.V. Partnership Interests 100.00%
Ensco North America LLC Percentage Ownership Interest 100.00%
ENSCO Ocean 1 Company Ordinary Shares 88.29%
ENSCO Ocean 2 Company Ordinary Shares 100.00%
ENSCO Oceanics Company LLC Units 100.00%
Ensco Oceanics International Company Ordinary Shares 100.00%
Ensco Offshore Company Ordinary Shares 100.00%
ENSCO Offshore International Company Ordinary Shares 100.00%
 Exhibit 22.1

ENSCO Offshore International Holdings Limited Ordinary Shares 100.00%

ENSCO Offshore International Inc. Registered Shares 100.00%
Ensco Offshore International LLC Percentage Ownership Interest 100.00%
Ensco Offshore Petróleo e Gás Ltda. Quotas 100.00%
Ensco Offshore Services LLC Units 100.00%
ENSCO Offshore U.K. Limited Ordinary Shares 100.00%
ENSCO Overseas Limited Ordinary Shares 100.00%
Ensco Services Limited Ordinary Shares 100.00%
ENSCO Services LLC Units 100.00%
Ensco South Pacific LLC Percentage Ownership Interest 100.00%
Ensco Transcontinental I LLC Ordinary Shares 100.00%
Ensco Transcontinental II LLC Ordinary Shares 100.00%
Ensco Transnational I Ltd. Ordinary Share 100.00%
Ensco Transnational II Ltd. Ordinary Share 100.00%
Ensco Transnational III Ltd. Ordinary Share 100.00%
Ensco Transnational Limited Ordinary Shares 100.00%
ENSCO U.K. Limited Ordinary Shares 100.00%
Ensco UK Drilling Limited Ordinary Shares 100.00%
Ensco Universal Holdings I Ltd. Ordinary Shares 100.00%
ENSCO Universal Holdings II Ltd. Ordinary Shares 6.25%
ENSCO Universal Limited Ordinary Shares 100.00%
Ensco Vistas Limited Ordinary Shares 100.00%
ENSCO Worldwide GmbH Ordinary Shares 100.00%
Ensco Worldwide Holdings Ltd. Ordinary Shares 100.00%
Forasub B.V. Ordinary Shares 100.00%
Great White Shark Limited Ordinary Shares 100.00%
Green Turtle Limited Ordinary Shares 100.00%
Manatee Limited Ordinary Shares 100.00%
Manta Ray Limited Ordinary Shares 100.00%
Offshore Drilling Services LLC Units 100.00%
P.T. ENSCO Sarida Offshore Ordinary Shares 49.00%
Pride Arabia Co. Ltd. Ordinary Shares 25.00%
Pride Global II Ltd. Shares 100.00%
Pride Global Offshore Nigeria Limited Ordinary Shares 100.00%
Pride International LLC Shares 100.00%
Ralph Coffman Cayman Limited N/A (Uncertificated) 100.00%
Ralph Coffman Luxembourg S.à r.l. Percentage Ownership Interests 100.00%
RD International Services Pte. Ltd. Shares 100.00%
RDC Arabia Drilling, Inc. Ordinary Shares 100.00%
RDC Holdings Luxembourg S.à r.l. Percentage Ownership Interest 100.00%
RDC Malta Limited Ordinary Shares 100.00%
RDC Offshore Luxembourg S.à r.l. Percentage Ownership Interest 100.00%
RDC Offshore Malta Limited Percentage Ownership Interest 100.00%
Rowan Angola Limitada Percentage Ownership Interest 100.00%
Rowan California S.à r.l. Percentage Ownership Interest 100.00%
Rowan Deepwater Drilling (Gibraltar) Limited Ordinary Shares 100.00%
 Exhibit 22.1

Rowan do Brasil Servicos de Perfuracao Ltda. Percentage Ownership Interest > 99.00%
Rowan Drilling (Gibraltar) Limited Ordinary Shares 100.00%
Rowan Drilling (Trinidad) Limited Ordinary Shares 100.00%
Rowan Drilling (U.K.) Limited Ordinary Shares 100.00%
Rowan Drilling Cyprus Limited Ordinary Shares 100.00%
Rowan Drilling Services Limited Ordinary Shares 100.00%
Rowan Drilling Services Nigeria Limited Ordinary Shares 100.00%
Rowan Egypt Petroleum Services L.L.C. Quotas 50.00%
Rowan Finanz S.à r.l. Percentage Ownership Interest 100.00%
ROWAN Global Drilling Services Limited Ordinary Shares 100.00%
Rowan Holdings Luxembourg S.à r.l. Percentage Ownership Interest 100.00%
Rowan International Rig Holdings S.à r.l. Ordinary Shares 100.00%
Rowan Marine Services LLC LLC Interests 100.00%
Rowan Middle East, Inc. Rowan Middle East, Inc. 100.00%
Rowan N-Class (Gibraltar) Limited Ordinary Shares 100.00%
Rowan No. 2 Limited Shares 100.00%
Rowan North Sea, Inc. Ordinary Shares 100.00%
Rowan Norway Limited (FKA Rowan (Gibraltar) Limited) Ordinary Shares 100.00%
Rowan Offshore (Gibraltar) Limited Ordinary Shares 100.00%
Rowan Offshore Luxembourg S.à r.l. Shares 100.00%
Rowan Relentless Luxembourg S.à r.l. Percentage Ownership Interest 100.00%
Rowan Reliance Luxembourg S.à r.l. Percentage Ownership Interest 100.00%
Rowan Renaissance Luxembourg S.à r.l. Percentage Ownership Interest 100.00%
Rowan Resolute Luxembourg S.à r.l. Percentage Ownership Interest 100.00%
Rowan Rex Limited (Cayman) Ordinary Shares 100.00%
Rowan Rigs S.à r.l. Percentage Ownership Interest 100.00%
Rowan Services LLC Percentage Ownership Interest 100.00%
Rowan Standard Ghana Limited Ordinary Shares 49.00%
Rowan US Holdings (Gibraltar) Limited Ordinary Shares 73.86%
Rowan, S. de R.L. de C.V. Social Part 99.00%
Rowandrill Labuan Limited Ordinary Shares 100.00%
Rowandrill Malaysia Sdn. Bhd. Ordinary Shares 49.00%
Swiftdrill Offshore Drilling Services Company Ordinary Shares 100.00%
Valaris Holdco 1 Limited Ordinary Shares 100.00%
Valaris Holdco 2 Limited Ordinary Shares 100.00%
Valaris United LLC Shares 100.00%
 Consent of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders

Valaris Limited:

We consent to the incorporation by reference in the registration statements (No. 333-257022) on Form S-1 and (No. 333-256126) on Form S-8
of our reports dated February 22, 2022, with respect to the consolidated financial statements of Valaris Limited and the effectiveness of internal
control over financial reporting.

/s/ KPMG LLP

Houston, Texas
February 22, 2022
 Exhibit 31.1

CERTIFICATION

I, Anton Dibowitz, certify that:

1. I have reviewed this report on Form 10-K of Valaris Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting.
Dated: February 22, 2022

/s/ Anton Dibowitz

Anton Dibowitz
Director, President and Chief Executive Officer
 Exhibit 31.2

CERTIFICATION

I, Darin Gibbins, certify that:

1. I have reviewed this report on Form 10-K of Valaris Limited;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period
covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material
respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined
in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
and 15d-15(f)) for the registrant and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us
by others within those entities, particularly during the period in which this report is being prepared;
b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under
our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most
recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial
reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent
functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud whether or not material, that involves management or other employees who have a significant role in the registrant's internal
control over financial reporting.
Dated: February 22, 2022

/s/ Darin Gibbins

Darin Gibbins
Interim Chief Financial Officer and
VP — Investor Relations & Treasurer
 Exhibit 32.1

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Valaris Limited (the "Company") on Form 10-K for the period ending December 31, 2021 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"), I, Anton Dibowitz, Director, President and Chief Executive
Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act of 2002, that, to my
knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.

/s/ Anton Dibowitz

Anton Dibowitz
Director, President and Chief Executive Officer
February 22, 2022
 Exhibit 32.2

CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Annual Report of Valaris Limited (the "Company") on Form 10-K for the period ending December 31, 2021 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"), I, Darin Gibbins, Interim Chief Financial Officer and VP —
Investor Relations & Treasurer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to § 906 of the Sarbanes-Oxley Act
of 2002, that, to my knowledge:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations
of the Company.

/s/ Darin Gibbins

Darin Gibbins
Interim Chief Financial Officer and VP — Investor
Relations & Treasurer
February 22, 2022