Valaris Limited has reported net income of $113 million in the second quarter compared to a net loss of $40 million in the first quarter of the year.

The Bermudian-based offshore drilling services company said revenues increased to $413 million from $318 million in the first quarter.

The increase was primarily due to a $51 million fee related to the termination of a contract for drillship Valaris DS-11, as well as higher utilisation and average day rates for both the floater and jack-up fleets.

Contract drilling expense increased to $362 million in the second quarter from $331 million in the first quarter.

Other income increased to $149 million from $9 million in the first quarter.

Second quarter other income included a gain on sale of assets of $135 million primarily related to the sale of jack-ups Valaris 113, 114 and 36 as well as additional proceeds received in the current quarter on the sale of a rig in a prior year, compared to a $2 million gain on sale of assets related to the sale of jack-up Valaris 67 in the first quarter.

Floater revenues increased to $188 million from $100 million in the first quarter.

Jack-up revenues increased to $186 million from $181 million in the first quarter.

President and chief executive officer Anton Dibowitz said revenue efficiency was 97 per cent during the second quarter and 98 per cent through the first half of the year, a period in which several rigs commenced new contracts following reactivations or shipyard projects.

He added: “The fundamental outlook for our industry remains constructive, with spot Brent crude prices above $100 per barrel for most of the past five months and two-year and five-year forward prices above $80 per barrel and $70 per barrel, respectively. As a result, we continue to see an increase in both contracting and tendering activity across both floater and jack-up markets.”