Commitments And Contingencies (Tables)

12 Months Ended

Dec. 31, 2019

Commitments and Contingencies Disclosure [Abstract]

The following table summarizes the estimated timing of our remaining contractual payments of our rigs under construction as of December 31, 2019 for our rigs under construction and (in millions):



	2020		2021		2022		Thereafter		Total⁽¹⁾
VALARIS DS-13⁽²⁾	$	—	$	83.9	$	—	$	—	$	83.9
VALARIS DS-14⁽²⁾	—		—		165.0		—		165.0
	$	—	$	83.9	$	165.0	$	—	$	248.9


⁽¹⁾	Total commitments are based on fixed-price shipyard construction contracts, exclusive of costs associated with project management, commissioning and systems integration testing. Total commitments also exclude holding costs and interest.

Based on our current projections, excluding integration-related capital expenditures, we expect capital expenditures during 2020 to approximate $160 million for newbuild construction, rig enhancement projects and minor upgrades and improvements. Approximately $30 million of our projected capital expenditures is reimbursable by our customers. Depending on market conditions and opportunities, we may reduce our planned expenditures or make additional capital expenditures to upgrade rigs for customer requirements or acquire additional rigs.

⁽²⁾

During the third quarter of 2019, we entered into amendments to our construction agreements with the shipyard for VALARIS DS-13 and VALARIS DS-14 to provide for, among other things, two-year extensions of the delivery date of each rig in exchange for payment of all accrued holding costs through March 31, 2019, totaling approximately $23 million. The new delivery dates for the VALARIS DS-13 and VALARIS DS-14 are September 30, 2021 and June 30, 2022, respectively. We can elect to request earlier delivery in certain circumstances. The interest rate on the final milestone payments increased from 5% to 7% per annum from October 1, 2019, for the VALARIS DS-13, and from July 1, 2020, for the VALARIS DS-14, until the actual delivery dates. The final milestone payments and interest are due at the new delivery dates (or, if accelerated, the actual delivery dates) and are estimated to be approximately $313.3 million in aggregate for both rigs, inclusive of interest, assuming we take delivery on the new delivery dates. In lieu of making the final milestone payments, we have the option to take delivery of the rigs and issue a promissory note for each rig to the shipyard owner for the amount due. If we issue the promissory note to the shipyard owner, we would also be required to provide a guarantee from Valaris plc.

Upon delivery, the remaining milestone payments and accrued interest thereon may be financed through a promissory note with the shipyard for each rig. The promissory notes will bear interest at a rate of 9% per annum with a maturity date of December 30, 2022 and will be secured by a mortgage on each respective rig. The remaining milestone payments for VALARIS DS-13 and VALARIS DS-14 are included in the table above in the period in which we expect to take delivery of the rig. However, we may elect to execute the promissory notes and defer payment until December 2022.