Case 20-34114 Document 1367 Filed in TXSB on 08/30/21 Page ...

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PRO SE - ADVERSARY COMPLAINT FOR INJUNCTIVE RELIEF, CIVIL PENALTIES, RESTITUTION, AND OTHER EQUITABLE RELIEF - 1

Confidential

Sebastian Miralles Acuña Av. Paseo de la Reforma 246, floor 41, Cuauhtémoc, Mexico City 06600 [email protected] +52 (55) 18776252 August 30th, 2021

BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS

SEBASTIAN MIRALLES ACUÑA,

Plaintiff,

vs.

VALARIS PLC, LUMINUS MANAGEMENT LLC, AND DOES 1 THROUGH 50, INCLUSIVE,

Defendants

Case No.: 20-34114

PRO SE - ADVERSARY COMPLAINT FOR INJUNCTIVE RELIEF, CIVIL PENALTIES, RESTITUTION, AND OTHER EQUITABLE RELIEF

Case 20-34114 Document 1367 Filed in TXSB on 08/30/21 of 133

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INTRODUCTION

1. This is an adversary proceeding brought by the right of Plaintiff Sebastian Miralles Acuña

(“Plaintiff”) against the Defendant Valaris PLC (“Valaris” or “The Company”), Luminus Management LLC

(“Luminus”) and Does 1-50 (collectively, “Defendants”), to request compensatory damages, treble exemplary

damages and equitable relief pursuant the Defendants violation of 11 U.S.C. § 1123(a)(4), 18 U.S. Code § 152

(1)(2)(3)(6)(7)(9), as well as other varied violations. To request under 11 U.S. Code § 1144 for equitable relief, or a

revocation of the Plan Confirmation pertaining to the Valaris Chapter 11 procedure. As well as to alert the Court of

the actions here described so it may the act in a Sua Ponte basis as it deems fit.

JURISDICTION

2. The United States Bankruptcy Court for the Southern District of Texas (the “Court”) has

jurisdiction over this matter pursuant to 28 U.S.C. § 1334, as this case involves questions of bankruptcy law.

3. This Court also has jurisdiction pursuant to 28 U.S.C. § 157, and 11 U.S.C § 1144as the Plaintiff

seeks equitable relief and compensation for broad violations of 18 U.S.C. § 152(1)(2)(3)(6)(7)(9), 11 U.S.C. §

1123(a)(4), all major matters considered by the Court.

VENUE

4. Venue is proper under 28 U.S.C. § 1408 and 28 U.S.C. § 1409.

PARTIES

5. Defendant Valaris PLC et al is the world´s largest provider of offshore contract drilling services

to the international oil and gas industry. The Company was founded in April 2019 after the merger of ENSCO plc

(“ENSCO”) and Rowan Companies plc (“Rowan”), two of the main offshore drilling companies worldwide. Currently,

Valaris counts with a diverse rig fleet consisting of ultra-deepwater drillships, versatile semisubmersibles and modern

shallow-water jackups capable of meeting a wide spectrum of customers’ well program requirements. The company

owns 60 rigs in total, making it the world's largest fleet.

6. Defendant Luminus Management LLC is an investment management firm founded in 2002 by

Jonathan Barret with offices in New York, NY and Houston, TX.


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7. Plaintiff Sebastian Miralles Acuña, a Mexican national, is the Founder and Managing Partner of

Tempest Capital, a private equity investment management firm. Relevant to the case, Mr. Miralles began his career

as a forensic finance professional with Kroll, Inc.

NATURE OF THIS ACTION

8. This is an action brought pursuant to flagrant violations of Title 18 U.S. Code § 152 (6)(9), 11

U.S.C. § 1123(a)(4) and 11 U.S.C. § 1126(b)(1), among others.

9. Plaintiff seeks injunctive relief, compensatory damages, punitive damages, equitable relief, and

his reasonable attorneys’ fees and litigation expenses as remedies for Defendants’ violations of Federal and Texas

statutory laws.

STANDING

10. Plaintiff was an investor for 152,900 shares of Valaris that purchased at a cost basis of

US$960,612 which he mostly accumulated during the month of September 2019. Since 2016 he was an active investor

in the predecessor entities of ENSCO and Atwood Oceanics Inc (“Atwood”). His investment was predicated on the

Company’s representation that the Fair Market Value of their assets was in excess of $13 billion (after already having

gone through fair market value impairment testing, and the company reporting $23.9 Billion in Replacement Value)

while having approximately $6.5 billion in financial liabilities. At the same time, Valaris management represented

that they had ample liquidity, available for at least 2 years of operation. During this period, the company traded at a

pricing band of approximately $1 billion in equity value. The Plaintiff has currently been assigned a pari-passu

ownership interest in Warrants for 7% of the value of the restructured entity, Valaris LTD, as determined by the Plan.

As outlined below, Mr. Miralles and other Class 13 unsecured Creditors had consequential economic interest vested

in Valaris at the time it was plunged into bankruptcy through Fraud upon the Court. He still retains consequential

economic interest in the Company, which he seeks to protect through equitable relief under the provisions of 11 U.S.

Code § 1144, 11 U.S. Code § 105(a), and 11 U.S. Code § 1142 (b).


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STATEMENT OF FACTS

A. Defendant’s Bankruptcy Case

11. On August 19, 2020, Valaris and certain of its direct and indirect subsidiaries filed a voluntary

petition for reorganization under Chapter 11 of the U.S. Bankruptcy Code. During the bankruptcy process, Lazard,

which was originally the investment banker hired by Valaris for the task of raising equity, was hired again for the

Bankruptcy process. Lazard performed a valuation based on management guidance. Based on this valuation Valaris

claimed an impairment of over ~ 90% of the value of its already previously impaired assets, valuing Property Plant &

Equipment at a mere $1.2B, within less than 3 months of the last independent fair value opinions provided by the

Company´s investor presentation (See Exhibit C). The independent fair value opinions came from by DNB Markets,

Morgan Stanley, Scotiabank, SpareBank and Wells Fargo as required by the debt indentures of the Creditors and

assigned a replacement cost of such assets at $23.9 billion1 and $9.9 billion in fully impaired fair market value.

Additionally, on the previously mentioned investor presentation Valaris claimed it had 2 years of liquidity available

as of February 2020. This 90% impairment, together with the claim of an industrial accident, that was fully insured,

were used by Valaris´s Management to plunge the company into bankruptcy.

12. Management´s and Lazard´s valuation were never updated to reflect oil markets fully recovering,

and exploration contracting at significantly higher levels than in December 2020, while Lazard lists an Effective

Valuation Date of March 30, 2020 (The effective valuation date for the Plan under 26 CFR § 1.430(g)-1).

B. Modification to Cooperation and Support Agreement - August 28th, 2020 – 8K

13. Valaris offered the largest equity holder (Luminus Management, LLC) special compensation to

agree to not purse its interests as equity holder. The Material Definitive Agreement from Valaris SEC 8-K filed on

August 28th, 2020 (the “Agreement”) in the form of a modification of the existing Cooperation and Support Agreement

that existed between Valaris and Luminus (See Exhibit A). In fact, the Agreement was a de-facto Prepetition

Restructuring Support Agreement. In exchange for signing this joinder, the Agreement allowed Luminus to purchase

10% of the Company´s outstanding indebtedness held by the Creditor at the then prevailing price of cents on the dollar,

1 Valaris, Investor Presentation, February 2020, pg. 27, https://s23.q4cdn.com/956522167/files/doc_presentations/2020/01/02032020-Valaris-Investor-Presentation.pdf (last visited Aug. 11, 2021).


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in exchange for this consideration, Luminus has enjoined to refrain from exercising any rights as equity holders.

Through the joinder Luminus, as debtor, accepted the RSA in direct impact to other equity holders. The Parties

involved further agreed to withhold said Agreement from the Court, unless specifically mandated. It is notable that

this Agreement was negotiated, by Trustee, the Debtor in Possession, and necessarily was known by the Creditors

Committee.

C. Materially Inconsistent valuations of PP&E across different fillings

14. Valaris stated in their SEC filings that it performed quarterly recoverability tests of its entire

fleet, based on fair market values, impairing the book value of PP&E for any changes in market conditions. That is to

say, Valaris was representing to the market that its Book Value was already priced to Fair Market Value.

15. The fair market value of PP&E given by the lender´s third party independent appraisers2, the

Company´s SEC filings (10-Ks & 10-Qs), and the one presented to court by Lazard3 for bankruptcy (BK) differ

materially within a short period of time. Lazard valuation of PP&E, which was ratified when the bankruptcy plan was

confirmed, and the PP&E value of the 1Q21 filing, differ by 8.5x within a 28-day period.

2 Valaris, Investor Presentation, February 2020, pg. 27, https://s23.q4cdn.com/956522167/files/doc_presentations/2020/01/02032020-Valaris-Investor-Presentation.pdf (last visited Aug. 11, 2021). 3 Valaris, Disclosure Statement, December 2020, pg. 437, https://cases.stretto.com/public/X088/10396/PLEADINGS/1039612162080000000061.pdf (last visited Aug. 11, 2021).

9,10010,950

1,182

10,083

Lender´sThird- Party

(MD&A Feb-20)

10-K 2020(FYE 2020)

Lazard BKValuation

(Mar-2021)

1Q21(Mar-2021)

Inconsistent PP&E Fair Market Value(US$ MM)

1,182

10,083

March 3rd, 2021 (Lazard@ BK Confirmation Plan)

March 31st, 2021(First 10-Q 2021)

Variation of PP&E Fair Market Value within March 2021

(US$ MM)

89.2% Loss


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16. ASC 820-10-05 states that the objective of a fair value measurement is to estimate the price at

which an orderly transaction to sell or transfer the asset would take place between market participants at the

measurement date under current market conditions.

17. Impairment is calculated by reference to fair value. One of the most important considerations to

measure the fair value of non-financial assets is the “highest and best use”. This is a valuation concept that represents

the use of an asset by market participants that would maximize the value of the asset or asset group, or maximize its

sale. Valaris book value of PP&E presented in the 2020 10K, 1Q21 and 10Q´s materially differs from the one

presented to court by Lazard, which doesn´t fairly represent market conditions. Said values differ by ~10x. The

Company is in effect declaring one Fair Market Value to the Court, while at the same time consistently presented

different Fair Market Values to the SEC and the broader investment public.

D. Inconsistent Impairment Tests

18. ENSCO and Rowan were merged on April 14, 2019, as a result, both entities were subject to

Valaris extensive valuation exercises, and impairment tests throughout 2019. However, Rowan assets were subject to

an impairment of 0.8% for 1Q20, whereas Ensco assets were subject to an impairment of 23.0% for 1Q204.

19. Rowan assets were valued for the first quarter of 2020 at $2,989 million and had an impairment

of $26 million. While Ensco assets were valued at $12,137 million and had an impairment of $2,808 million. The

above-mentioned represents a 28x greater impairment for Rowan PP&E than for Ensco PP&E.

4 Valaris, 1Q20 Report, March 2020, p.13, https://s23.q4cdn.com/956522167/files/doc_financials/2020/q1/VAL-3.31.2020-10Q-FINAL.pdf (last visited Aug. 11, 2021).

0.8%

23.0%

Rowan Assets Ensco Assets

Impairment % of Valaris PP&E 1Q20


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20. Impairment valuation testing was not being performed uniformly to substantially the same assets,

in direct violation of U.S. GAAP ASC 360-10.

21. It is worth noting that at the time Rowan bondholders had an active dispute with Valaris. This

may have created an incentive for presenting a higher valuation. Demonstrating a pattern for willingly modifying the

fair market value of assets as convenient for management and the Company.

E. Conflicted Plan Valuation by Lazard

22. In its Engagement Letter for the fairness opinion for the Plan, Lazard was held out as

independent and free of conflicts, despite having previously provided capital markets services to Valaris shareholders

during 20195, knowing the Company´s financial information and being aware of previous valuations. Lazard´s

compensation during Valaris bankruptcy was approximately $39 million, considerably more than the customary

compensation received for raising equity, which on average is 50 to 100 basis points over the equity raised.

23. The average Gross PP&E estimated by five independent analysts is US$9.4B, with a replacement

value of US$23.9B, as presented in the February 2020 Valaris investor presentation6 (See Exhibit C). Third-Party

5 Valaris ,Proxy Materials DEFA14A, December 2019, https://d18rn0p25nwr6d.cloudfront.net/CIK-0000314808/7c1caf10-59ed-4472-a7db-4567b29f7c6d.pdf (last visited Aug. 11, 2021). 6 Valaris, Investor Presentation, February 2020, pg. 27, https://s23.q4cdn.com/956522167/files/doc_presentations/2020/01/02032020-Valaris-Investor-Presentation.pdf (last visited Aug. 11, 2021).

Gross Asset Value Estimates (In US$B for Feb-20)

Analyst 1 10.1 Analyst 2 9.7 Analyst 3 9.5 Analyst 4 9.1 Analyst 5 8.9

Avg. provided by analysts of $9.4B Analyst Gross Asset Value Estimates include

DNB Markets, Morgan Stanley, Scotiabank, SpareBank and Wells Fargo

25.5 23.9

9.4

1.2 1.2 1.2

Constuction Cost ReplacementCost

Gross AssetValue

Independent Analysts Valuations of PP&E presented in Feb-20 MD&A vs Lazard

Valuation(US$B)

MD&A (Feb-20) Lazard Net PP&E


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independent appraisers selected by Valaris´s lenders gave a ~8x higher valuation to PP&E than the one presented by

Lazard7 in Bankruptcy.

24. The conflicted Lazard valuation shows a +US$8B discrepancy in valuation of PP&E not

congruent with the ones presented in the Company´s filings and with the valuations prepared by the independent

appraisers hired under the bond indentures prior to bankruptcy. It is notable that these independent appraisals were

endorsed and accepted by the Creditors as of December 2019, but these same Creditors claimed these assets to be

essentially worthless a few months later.

25. Additionally, the high number of awarded and extended contracts announced in the latest 2 fleet

status reports by Valaris8 demonstrate that the company was quickly recovering. Contracts in this industry take

upwards of 6 months to multi-year periods to negotiate. Management guidance did not reflect this in either the

valuation, nor in the representations made to the Court. The Lazard valuation opinion letter specifically states that

they did not try to challenge Management assumptions, nor did they perform any valuation of the physical assets. This

7 Valaris, Disclosure Statement, December 2020, pg. 437, https://cases.stretto.com/public/X088/10396/PLEADINGS/1039612162080000000061.pdf (last visited Aug. 11, 2021). 8 Valaris, Fleet Status Report, August 2021, https://s23.q4cdn.com/956522167/files/doc_news/2021/08/8.2.2021-Valaris-Fleet-Status-Report.pdf (last visited Aug. 11, 2021).

8 9

1210

13

16 16

5

2123

10,919 10,919

12,874

12,616

15,097

10,96110,083

1,182

0

2000

4000

6000

8000

10000

12000

14000

16000

0

5

10

15

20

25

Feb-16 Dec-16 Jul-17 Oct-17 Jul-18 Oct-18 Jul-19 Apr-20 Mar-21 May-21 Aug-21

Contracts Awarded per Fleet Report

Ensco Rowan Valaris 10-K PP&E Book Value Lazard Valuation

Ensco & Rowan

Merger


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is in violation of the Uniform Standards of Professional Appraisal Practice (USPAP) as commonly used in the United

States. The nature of this conflicted relationship is implicitly recognized by the Defendants and Lazard in the strongly

worded Indemnitee Letter that was requested by Lazard as part of its acceptance of the Engagement

26. Amongst other surprising choices, the ARO notes were valued at a significant discount despite

the counter-party being Sauid Aramco, one of the world’s largest companies that enjoys a pristine credit rating of A

assigned by Fitch. Hence, Lazard´s valuation was based in flawed management guidance that didn´t fairly represent

the going concern value of the company. The US$8.2B loss in value is not congruent with market conditions.

27. When using DCF to value assets, FASB ASC Topic 852 paragraph 852-10-05-10 mentions that

“The reorganization value generally approximates fair value of the entity before considering liabilities and

approximates the amount a willing buyer would pay for the assets of the entity immediately after the restructuring¨.

Lazard´s valuation did not meet this standard. The value did not fairly represent the going concern fair market value

of the assets that a willing buyer would pay after restructuring since the UFCFs were not appropriately calculated.

28. The abovementioned, deems invalid the Balance Sheet Test argument that the company was

insolvent due to its liabilities exceeding its assets.

F. Management’s Motives to Profit From A Bankruptcy Process

29. As a result of the reorganization plan, a management incentive plan was put in motion, in which

an ESOP of 10% was established for management9. In terms of bankruptcy valuation (BK) of equity, ESOP would

represent $244.8 million; on a book value valuation, it would represent $437.0 million; and in terms of replacement

value of assets, ESOP would represent management profiting $2.3 billion (10% of $23.9 billion of PP&E at

replacement value). Replacement value of equity is 9.5x is higher than the BK.

9 Valaris, Disclosure Statement, December 2020, pg. 28 https://reorg-research.com/pdf/3266692_join.pdf (last visited Aug. 11, 2021).


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30. Lazard´s valuation was made with management guidance. Under the Plan, Management had up

to $2.3B of potential personal gains by taking the Company into bankruptcy. This provides for compelling profit

motive to question the independence and fairness of Management´s inputs used for the preparation of the Bankruptcy

It is notable that despite this windfall ESOP. CEO Tom Burke, CFO Jonathan Baksht, and General Counsel Michael

T. McGuinty have all stepped down

G. Sale of Assets of the Estate Below Fair Market Value

31. On July 2020, Valaris declared it had sold ENSCO 8500 and EENSCO 8501 to Space

Exploration Technologies Corp (“SpaceX”). The rigs were relatively young by industry standards, and had cost more

than $650 million in 2008/09. They were sold for $3.5 million each; a sum reportedly below the scrap value of the

244.8 437.5

2,390.0

BK Valuation 10-K 2020 Equity @Replacement Value

Management ESOP equivalents(US$MM)

0.53%

10%

Pre-bankruptcy ownership Post-bankruptcyownership

Management beneficial ownership (ESOP %)


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rigs which Bassoe Offshore estimated at between $28-36 million each10. This is approximately 1% of their build cost,

and 10% of the valuation estimated by third parties at the time.

32. The sale was reported by Valaris to have been made directly to SpaceX to transform the rigs

into rocket launching platforms. However, the sale was actually a self-declared affiliate of SpaceX, Lone Star Mineral

Development LLC (“Lone Star”)11. Lone Star is an Oil and Gas Exploration company with permit OPERATOR NO.

507234 from the Texas Railroad Commission12. It was incorporated on June 23, 2020; shortly before the transfer13. It

is worth noting that LS Power Development LLC (“LS Power”), the self-declared parent entity of Luminus, owns

EVgo Inc. (“EVgo”)14 a major supplier for Tesla Inc. (“Tesla”) , which shares clear ownership links to SpaceX, and

presumably Lone Star Mineral Development, LLC.

33. Within this context, it is worth mentioning that Valaris also sold 3 young drill ships for scrap

2010-built Valaris DS-3, 2011-built Valaris DS-5 and 2012-built Valaris DS-6. These had an estimated value of

between $40-54 million each but were sold for just $6 million apiece15. These drill ships had an initial value of

approximately $2.25 billion when acquired from Pride International Inc. (“Pride International”)16. This represents a

discount of about a 99.9% to build value, and an 88% discount over third-party valuation estimates. As of Aug 23rd,

2021, over a year since the sale, Valaris DS-6 still has its EIS transponder active and is listed as anchored at Karystos,

Greece.17

10 Teresa Wilkie, Asset valuations become even more confusing as rig owners sacrifice rigs to stay afloat, March 2, 2021 https://www.bassoe.no/asset-valuations-become-even-more-confusing-as-rig-owners-sacrifice-rigs-to-stay-afloat/news/195/ (last visited, Aug 23, 2021) 11 Michael Sheetz, CNBC, SpaceX bought two former Valaris oil rigs to build floating launchpads for its Starship rocket, January 2021, https://www.cnbc.com/2021/01/19/spacex-bought-former-valaris-oil-rigs-to-build-starship-launchpads.html (last visited Aug. 11, 2021).0 12 Sergio Chapa, Bloomberg , Musk Wins SpaceX Starbase Land Dispute in Texas Regulator Vote, August 2021, https://www.bloomberg.com/news/articles/2021-08-03/musk-wins-spacex-starbase-land-dispute-in-texas-regulator-vote (last visited Aug. 11, 2021). 13 https://opencorporates.com/companies/us_tx/0803663368 (last visited Aug. 13, 2021). 14 EvGo, Press Release, January 2020 https://www.evgo.com/press-release/ls-power-completes-acquisition-of-evgo/ (last visited Aug. 11, 2021). 15 Teresa Wilkie, Asset valuations become even more confusing as rig owners sacrifice rigs to stay afloat, March 2, 2021 https://www.bassoe.no/asset-valuations-become-even-more-confusing-as-rig-owners-sacrifice-rigs-to-stay-afloat/news/195/ (last visited, Aug 23, 2021) 16 Jason Jiang, Valaris scraps three young drillships originally ordered for $2.25bn, https://splash247.com/valaris-scraps-three-young-drillships-originally-ordered-for-2-25bn/ (last visited Aug. 23, 2021) 17 MarineTraffic, https://www.marinetraffic.com/en/ais/details/ships/shipid:713294/mmsi:613003625/imo:9535929/vessel:ENSCO_DS_6/_:b0edca5205294abed72d158197ed5657 (last visited Aug 23, 2021)


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H. Reasonable Questions Regarding Background of Counterparties

34. Some individuals, and entities involved have in the past been linked to previous highly contested

bankruptcy practices and been linked to questionable business practices that raise legitimate questions on their

character, and good faith.

35. Jonathan Barrett is the Founder and CEO of Luminus Management LLC, the largest shareholder

of Valaris and which betrayed the interests of shareholders by accepting compensation in order to join the RSA as

debt in Valaris´s Material Definitive Agreement from August 28th, 2020. Mr. Barret began his career working with

NYC based investment management firm, J. Epstein & Co. (From highly questionable investor Jeffrey Epstein) and

Ossa Properties (an affiliate Real Estate company) rising to the level of CFO18.

36. Moreover, Jonathan Barrett shared the same legal address of 301 E. 66th St. as Epstein19. Which

according to court filings, that building served to host Epstein´s associates, businesses, employees, and girlfriends.

Jonathan Barret´s brother, Anthony, is the current president of Ossa Properties, owned by Jeffrey Epstein´s brother

Mark. Ossa properties owns the majority of the units in the mysterious 301 E. 66th St. building20.

37. Luminus is a declared affiliate of LS Power. Despite these links, Mr. Barrett is now listed as a

Managing Director within LS Power. LS power itself has been previously investigated for fraudulent conveyance of

assets in the following bankruptcy cases: Dynegy21, Mirant, GenOn / NRG. LS Power founder Mikhail Segal began

his career as a non-descript “Soviet official” and as Managing Director of The Energy Systems Company

(“ENESCO”)22. The first recorded public transaction of ENESCO was alongside Pagnotti Enterprises, a firm linked

to the Bufalino crime family via founder mafia boss Louis Pagnotti23. Court documents show the transaction included

allegations of bankruptcy fraud.

18 LittleSis, Data Base https://littlesis.org/person/172917-Jonathan_Barrett# (last visited Aug. 11, 2021). 19 ICIJ - Offshore Leaks https://offshoreleaks.icij.org/nodes/80039116?e=true (last visited Aug. 11, 2021). 20 Gabrielle Bluestone, Business Insider, Inside the mysterious Manhattan apartment building on East 66th Street, where underage models, lawyers, and key players in Jeffrey Epstein’s sex-trafficking circle all live. Ex-Israeli Prime Minister Ehud Barak is a frequent visitor, August 2019, https://www.businessinsider.com/the-nyc-building-at-the-center-of-jeffrey-epsteins-web-2019-8?r=MX&IR=T (last visited Aug. 11, 2021). 21 Dynegy Holdings LLC, Ch. 11 Case, March 2012, https://www.sec.gov/Archives/edgar/data/1105055/000110465912018950/a12-6988_1ex99d1.htm (last visited Aug. 11, 2021). 22 LS Power, Founder´s Biography https://www.lspower.com/mike-segal/ (last visited Aug. 11, 2021). 23 Matter of Fa Potts and Co., Inc., 93 B.R. 62 (E.D. Pa. 1988), https://law.justia.com/cases/federal/district-courts/BR/93/62/2005353/


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38. Before officially contemplating bankruptcy, a Cooperation agreement was made on January 24th,

2020 between Luminus and Valaris, appointing Richard Katz as key man of the Finance Committee. Mr. Katz was

hired as a financial advisor despite there being no record of him holding such a license. Mr. Katz, and his firm Torque

Point Advisors, LLC (“Torque”), which specializes in bankruptcies were hired to “improve performance” and

represent the interest of equity. However, during August 2020, Mr. Katz was receiving class 9 (General unsecured

claims) and class 10 (Newbuild claims) notifications, when in theory he was hired for class 13. These simultaneous

representations fall within the well-established precedents of conflict of interest as outlined in Re Rusty Jones.

39. Richard Katz was a partner in Cantor-Katz Collateral Monitor LLC (“Cantor-Katz”), which was

involved in the bankruptcy of Puerto Rico. In that situation they were being represented by Schulte Roth & Zabel LLP,

the same firm that represented Luminus in the Cooperation Agreement. Aurelius Capital Management LP (“Aurelius”)

lobbied for the appointment of a new Board which incorporated Cantor-Katz. Aurelius is one of the creditors for

Valaris, and was also one of the creditors in the Puerto Rico bankruptcy.

40. A similar situation to Mr. Katz’s conflict was also present in the Engagement of Kirkland &

Ellis LLP (“Kirkland & Ellis”). In the August 18, 2020 Declaration of Jonahtan Baksht, CFO in support of the Chapter

11 Petitions, it is stated that in late 2019 and early 2020, the Debtors engaged Kirkland & Ellis LLP to provide advice

pertaining to out-of-court liability management transactions to reduce leverage and capture discount. By the very

nature of the Engagement, this was in the benefit of Shareholders, representing Creditors in the bankruptcy would

seem to also fall within the well-established precedents for conflicts of interests as argued in Re Rusty Jones.

41. Further, days before Valaris filed for bankruptcy, Millennium Management LLC (“Millenium”)

purchased 8,766,778 Class A Ordinary Shares or 4.4% of the Class A Ordinary Shares outstanding24. Millennium

bought just below 8,974,359 shares, the limit for which Valaris requested a stay from the Court. Asking the parties

that any transaction above it needed to be filed with the Court. Through its senior management, the SEC has found

Millennium, has engaged multiple times in market manipulation25.

24 Valaris, SC13 Form, August 2020, https://sec.report/Document/0001487118-20-000002/ (last visited Aug. 11, 2021). 25 Secutiries and Exchange Commission, Press Release, 2005 https://www.sec.gov/news/press/2005-170.htm (last visited Aug. 11, 2021).


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G. Naked Short Selling and Market Manipulation

42. The presence of Valaris stock in the SEC Fail-to-Deliver list as one of the most highly shorted

stock in the US markets26, seems to indicate possible naked short selling. Naked Short Selling is illegal unless it is

done by market makers on a Bona Fide basis. Naked short selling drastically distorted the price of Valaris and

invalidates share price as an argument for bankruptcy. As evidence by the recent GameStop Corp. squeeze, naked

short selling is a relevant event in the market, that artificially distorts the value of shares.

43. In 2020, Valaris traded at an average short interest of 28% and 56% adjusting for free float as

adjusted by Morningstar. This is which indicates latent naked short selling distorting the share price. On the other

hand, Days to Cover in the first quarter of 2020 was above 8. Potential naked short selling distorted the price of the

stock. Invalidating it as an argument that was presented by the Creditors to the Courts.

Count 1

Bribery & Fraud Upon the Court

44. Lenders co-opted the process of Chapter 11 by offering the largest equity holder (Luminus

Management, LLC) what can best be described as a sweetheart deal. The Material Definitive Agreement was a de-

facto Prepetition Restructuring Support Agreement where valuable Consideration was both offered and received. The

26 Securities and Exchange Commission, Fails to Deliver VAL, https://sec.report/fails.php?tc=VAL (last visited Aug. 11, 2021).


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Court does not need to debate the value of said Consideration. That this Consideration was both valuable and desirable

can be reasonably gleamed by the fact the parties had failed to reach an agreement prior to its offering. It is thus

reasonable to assume, that prior to the Agreement, Luminus believed by its own criteria there was value in its equity,

and that said Agreement provided superior value in the form of 10% interest of the restructured entity. In exchange

for signing this joinder, the Agreement allowed Luminus to purchase 10% of the Company´s outstanding indebtedness

held by Creditor at the then prevailing price of cents on the dollar. Luminus in turn was enjoined from exercising any

rights as equity holder. Through the joinder, Luminus, as debtor, accepted the RSA in direct impact to other equity

holders. This may also be considered a violation of Duty of Loyalty and Fiduciary Duty owed by the Luminus Board

Member to other Shareholders under both US and UK Company law.

45. The offering and receiving of Consideration for forbearing to act in a case under Title 11 falls

neatly within the definition of the Bribery provision of Bankrupcty Fraud as defined under 18 U.S. Code § 152 (6).

Further, that this Consideration was only offered to Luminus within the Class violated 11 U.S.C. § 1123(a)(4) as seen

In re Combustion Eng’g, Inc., 391 F. 3d 190, 239 (3d Cir 2004). This also defeats any argument that the Consideration

was a normal part of negotiation of an RSA.

46. Defendants further conspired to withhold knowledge of said agreement from the Bankruptcy

Court, tainting the proceedings in a clear violation of Title 18 U.S. Code § 152 (1)(2)(8). This was only compounded

when several of the parties, such as the Trustee, and the Debtor in Possession became Officers of the Court upon the

Chapter 11 filing that came immediately after. This became a more serious case of Title 18 U.S. Code § 152 (1)(9).

To this regard it is important to remember that Courts have repeatedly determined that willfully withholding relevant

information on the state of the affairs is also considered as Concealment, see Tully. United States Court of Appeals,

First Circuit. May 4, 1987. 818 F.2d 106 (1st Cir. 1987) & United States v. Turner, 725 F.2d 1154. Furthermore, the

Pre-Petition nature of the act is also indicative of Bad Faith as seen in Marrama v. Citizens Bank of Mass. Malicious

intent is further evidenced since the Trustee was advised through this entire process by some of the most experienced

bankruptcy attorneys practicing within the United States who are well versed on the law, had ample resources at their

disposal, and were amply rewarded with fees of $11,115,997.50.

47. A further indication of Fraud and Fraudulent Intent is indicated by the appointment of Mr. Katz

by Luminus as Board Representative. Mr. Katz was held out to be a restructuring professional that would help the


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firm improve its finances, but in fact is a seasoned bankruptcy professional. This may have been an indication of intent

under 18 U.S. Code § 157 (7) to defeat a future Chapter 11 process. This is further compounded by the inherent conflict

of interest of Mr. Katz receiving notifications for multiple classes of creditors in contravention of well-established

practice, as considered in akin trust situations In re Rusty Jones, Inc.

48. The facts surrounding the Agreement are a matter of public record. There can be no doubt on its

basic provisions. Its multiple violations of 18 U.S. Code § 157 are self-evident. By itself, it satisfies the Preponderance

of the Evidence standards as for bankruptcy fraud as established in Grogan v. Garner and reaffirmed in Tenn-Fla

Partners v. First Union National Bank of Florida. The violations committed were highly pernicious, and involved

Officers of the Court, and qualify as Fraud Upon the Court as defined by Demjanjuk v. Petrovsky, 10 F.3d 338 (6th

Cir. 1993)

1. On the part of an officer of the court;

2. That is directed to the "judicial machinery" itself;

3. That is intentionally false, wilfully blind to the truth, or is in reckless disregard for the truth;

4. That is a positive averment or is concealment when one is under a duty to disclose;

5. That deceives the court.

49. The actions outlined clearly meet the standards set for the Revocation of an Order of

Confirmation as per 11 U.S. Code § 1144.

Count 2

Misstatements and Confirmation of Inequitable Plan

50. The parties conspiring to withhold said information caused the Courts to, unbeknownst, confirm

a Plan that was not Equitable to Class 13 securities, did not follow absolute priority principle, after a solicitation that

was tainted through willfully withholding adequate disclosures, in violation of 11 U.S.C. § 1123(a)(4) and 11 U.S.C.

§ 1126(b)(1)(2) respectively.

51. 11 U.S.C. § 1123(a)(4) provides that a for a Plan to be Confirmed must be Equitable and “provide

the same treatment for each claim…in a particular class, unless the holder of a particular claim…agrees to a less


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favorable treatment of such particular claim…” This requirement has been interpreted to mean that similarly situated

claims must receive the same treatment under a plan. See, e.g. and In re Combustion Eng’g, Inc., 391 F. 3d 190, 239

(3d Cir 2004). Clearly Luminus received an economic interest that was not only greater than other Class 13 equity

holders, but even greater than other class of creditors with higher seniority. Such practices has been subject to judicial

denunciation by the Supreme Court for over 120 years. See, Louisville Trust Co. v. Louisville, New Albany & Chicago

Railway Co.

52. U.S.C. § 1126(b)(1) provides for the solicitation of a Plan to be deemed accepted, such

acceptance is subject to the adequacy of disclosures, a standard that was clearly willfully not met. This was affirmed

in Re Tully. United States Court of Appeals, First Circuit. May 4, 1987. 818 F.2d 106 (1st Cir. 1987)., Re Michelson,

which also specifically address that disclosure outside of the Bankruptcy process as being insufficient. Anything

otherwise would violate the Good Faith assumption that underlies the functioning of the Courts, as it would transfer

the burden of vigilance to the Creditors, and transform the role of the Court from being a court of Equity to an

unworkable corporate game of cat and mouse. This was eloquently summarized in Re Tully.

"debtor cannot, merely by playing ostrich and burying his head deeply enough in the sand, disclaim all

responsibility for statements which he has made under oath"

52. Further compounding matters were the affirmations at the Confirmation hearing by the

Defendant, and Trustee that the Plan was proposed under Good Faith, Equitable, and followed the Absolute Priority

Principle, when they knew, or should have known this was false. This deceit too falls under the provisions for the

standard of Fraud Upon the Court and is codified under 18 U.S.C. § 152(3).


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Count 3

Fraudulent Conveyance

53. The Sale of Enesco 8500 and Enesco 8501 were clearly made under a willful misrepresentation

by Valaris who necessarily knew that the purchasing entity was Lone Star Mineral Development, LLC. Not only were

these sold for the ludicrous sum of 1% build cost, but even a 90% discount to the then existing depressed market

valuation. This amount is purportedly even below scrap value of the rigs. Such a discount is hard to understand by any

reasonable means. It only compounds matters, that there are documented business links between Valaris’ largest

shareholder at the time, and the receiving party of the property, the same shareholder who was bribed to not present

itself at the Confirmation hearing. This is the very definition of Concealment as per United States v. Turner, 725 F.2d

1154, and would fall under 18 U.S.C. § 152 (1)(7).

54. Lone Star Mineral Development, SpaceX, and its Officers may have further participated in a

violation of 18 U.S.C. § 152 (7) by receiving property from the Estate at what was evidently a price below its market

value, and by issuing public press releases with apparent misstatement as to the ultimate recipient and ultimate use of

the rigs at a time when Valaris had already publicly declared its intention to file for Chapter 11.

55. There is less information available on the sale of Valaris DS-3, Valaris DS-5, and Valaris DS-6.

Their sale at a discount of about a 99.9% to build value, and an 88% discount over third-party valuation estimates also

raises reasonable questions as to whether Valaris was fulfilling its fiduciary duty to protect the value of the Estate.

56. While Fraudulent Conveyance in and by itself does not meet the standards for Fraud Upon the

Court, it should be taken as an additional potential factor for the Court to consider when evaluating the extent of the

elements of Bankruptcy Fraud present in the case.

CONSIDERATIONS ON TIMING

57. The following Adversial Pleading is being filed within the 180 day limit from Plan Confirmation

established in 11 U.S.C § 1144. Despite the Plaintiff following the Court filings, he did not find out about the

Agreement until after the Plan Confirmation had occurred. The Defendants argued against the establishment of an

Equity Committee. The Defendants argued it would have been both overly costly and damaging to the Estate, and that

Creditor Committee and Trustee would already tasked with safeguarding the best-interest of all parties. This begs the


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question of how individual equity holders would have been expected shoulder said overly burdensome responsibility

for which Kirkland & Ellis charged the Estate $20,412,981.50. At the same time, Shareholders had every right to

expect that the Defendants were acting in good faith in his supervision and was acting in the benefit of all parties

involved. The Defendants should not be allowed to argue in their benefit the delays that were caused by their own act

of Concealment, and their willful hindrance of the Court, as per In re Tully, United States v. Turner, and In re

Michelson.

CONSIDERATION ON DAMAGES

58. The Plaintiff was greatly and measurably harmed by the actions of the Defendant that led to his

participation being eliminated and exchanged for deeply Out-of-the-Money Warrants. Unfortunately, the Defendants

through their inconsistent financial disclosures, conflicted valuations and general willful disregard for truth have

created a situation where it is extremely difficult to fairly determine the value of the Estate, both prior to and after

their actions. The Plaintiff had his firm, Tempest Capital, SC, prepare an exemplary Valuation Exercise (Exhibit D).

The Valuation of the firm is highly sensitive to inputs pertaining to Day Rates and Utilization. Estimates for Enterprise

Value of the Firm range from $49.2 billion to $7.4 billion. On a fully unlevered basis, this approximately would equate

to a range from to $48.61 to $321.54 per share; a range not inconsistent to where Valaris and component entities traded

in the prior decade. This is also consistent with the Enterprise Value of a Company whose 2020 10K still reported

$10.1 billion in PP&E, and that had purported to have $23.9 billion in Replacement Value of Assets. The Company

currently trades at $28.39 per share. However, this uncertainty does not render the calculation of damages impossible

as established under Eastman Co. v. Southern Photo Co., 273 U.S. 359, 379 (1927)

“Damages are not rendered uncertain because they cannot be calculated with absolute exactness.

It is sufficient if a reasonable basis of computation is afforded, although the result be only approximate." This, we

think, was a correct statement of the applicable rules of law. Furthermore, a defendant whose wrongful conduct has

rendered difficult the ascertainment of the precise damages suffered by the plaintiff, is not entitled to complain that

they cannot be measured with the same exactness and precision as would otherwise be possible.”

58. The Defendant proposes to use Book Value of Equity as of the 2019 10K with the Company’s

financial position as of December 31, 2019. Said document was compiled proximate to the Rowan & ENSCO merger


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and reflected extensive valuations and impairment testing. Furthermore, the estimates of PP&E were stated to be

derived from the fair value opinions issued by five independent appraisers, in addition to the valuation impairment

test that the external auditor, KPMG was obligated to perform under US GAAP. This would seem to provide a

reasonable alternative to cut through the uncertainty and is based on the public affirmations made by Valaris under

which the Defendant invested.

60. The Book Value as of December 31, 2019 was $9,310.9 million with 197.3 million shares

outstanding. This equates to a Book Value per Share of approximately $47.20 per share. Mr. Miralles’ 152,900 shares

would be worth $7,216,295.20. This sum is the best proximate estimate for the fair market value of the property prior

to the fraudulent conduct and would constitute adequate Compensatory Damages. This methodology is codified in

BVS-III (II)(A) Asset-Based Approach to Business Valuation of the American Society of Appraisers, and substantially

congruent to the Balance Sheet Test applied by Bankruptcy Courts.

61. In addition, the current situation merits Exemplary Damages as per the criteria set in Walker v.

Sheldon, 10 N.Y.2d 401 (N.Y. 1961) as a deterrence to fraud when a high degree of moral turpitude is present and

when the conduct in question is aimed at the public generally, involves a high degree of moral culpability, and rises

to a level of "such wanton dishonesty as to imply a criminal indifference to civil obligations”. When considering this

BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996) complements that Exemplary Damages must consider "the

degree of reprehensibility of the defendant's conduct," the "ratio to the actual harm," and the disparity between "the

punitive damages award and the civil or criminal penalties that could be imposed for comparable misconduct." As

argued, the acts committed by the Defendants can be accurately categorized as Fraud Upon de Court representing an

offense directed to the "judicial machinery itself”. Elements of bad-faith and malicious intent, including acts with

criminal penalties, have been amply documented in the Defendant’s exposition. That these acts were executed by well-

established bankruptcy investors, and legal practitioners is a further factor to consider. Should this conduct become

prevalent practice, it would significantly hinder the proper functioning of the Bankruptcy Courts. The acts merit the

highest level of condemnation that this Court can extend.

61. When considering the ratio to the actual harm, the Supreme Court has largely argued for a

guideline of not more than four times damages, See BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996), and

three times damages in cases of bankruptcy fraud, See Cohen v. de la Cruz, 523 U.S. 213 (1998). The request of Treble


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Damages for the Defendant is perfectly aligned the nefarious nature of the acts, as well as with well-established

practice of the Courts.

63. The resulting treble multiple of said Compensatory and Exemplary Damages is $21,648,885.60.

This amount is not Material to the size of the Estate, would not affect the going concern of Restructured Valaris, and

would not harm the Innocent Parties who may have purchased shares since the Confirmation of the Plan.

CONCLUSION

64. Valaris was plunged into bankruptcy by a tangled web of conflicted relationships,

misrepresentations, fraudulent conveyance of assets, and outright Fraud Upon the Court. These parties colluded to

show the Company was insolvent, when in fact the last Independent Value Opinions showed it had significant positive

equity and would pass any reasonable Balance Sheet Test. In the worst-case scenario, and only after believing the

representations from Management regarding short-term liquidity constraints, the entity would have been a Solvent

Debtor granting a strong residual interest to Junior Unsecured Creditors and Shareholders.

65. Bankruptcy relief is intended for the honest, but unfortunate debtor approaching the Court with

Clean Hands. It is well established that Bankruptcy should not be a conduit for a fraudulent discharge of Creditors.

(“Since the Code limits the opportunity for a completely unencumbered new beginning to the honest but unfortunate

debtor by exempting certain debts from discharge, it is unlikely that Congress would have fashioned a proof standard

that favored an interest in giving the perpetrators of fraud a fresh start over an interest in protecting the victims of

fraud. Requiring the creditor to establish by a preponderance of the evidence that his claim is not dischargeable reflects

a fair balance between these conflicting interests.)

Grogan v. Garner, 498 U.S. 279 (1991)

66. The proper remedy contemplated in the Code for this situation is a Revocation of the

Confrimation Order under 11 U.S.C § 1144 with Fraud and Fraud Upon the Court being amply shown on a

Preponderance of Evidence standard as contemplated in Grogan v. Garner. This would give other Shareholders the

right to a proper hearing under a Process managed by an independent Trustee designated by the US Trustee.

67. Unfortunately, this remedy, while amply justified under the current circumstances needs to be

carefuly considered by the Court, that must evaluate if it is still feasible to “unscramble the egg” without potential to


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harm entities having acquired rights in good faith reliance of the order. The Plaintiff is not blind to this conundrum,

and its impact.

68. This requires the Court to use its broad powers in 11 U.S. Code § 105(a) and 11 U.S. Code §

1142 (b) as a Court of Equity to seek alternative remedies to remedy bad faith, and abuse of process. Such a position

is amply documented in Marrama v. Citizens Bank of Massachusetts, Re Tully, and by this very Court which stated

“Bankruptcy courts are courts of equity and rely on the good faith of parties to function efficiently” in re Thomas,

66. The request for Damages has precedent in Re Trico Marine Services where the Court ruled, in

response to the Defendant’s motion, that it could not vacate the confirmation order, but granted the Plaintiffs leave to

amend their complaint to assert damage claims, whereby exercising its right to provide equitable relief.

67. The Plaintiff expresses a preference that damages be awarded in cash given the amount sought

is not material to the Estate, would not materially affect the premises under which new investors participated in Good-

Faith, nor would it endanger the potential solvency of Restructured Valaris.

68. Alternatively, the Plaintiff posits that damages could be assigned in the form of additional units

of the Warrants in Restructured Valaris at the current OTC market price. Valaris has repeatedly represented to the

Court and the Investment Public that said Warrants are deep-out-of-the-money, and worthless. The strike price on said

Warrants is set at the price that would make Secured Creditors whole. Restructured Valaris investors have no factual

basis to claim that said Warrants transfer value that they were represented was theirs, and their assignment would

respect the Absolute Priority of Claims. This would appear to be an equitable settlement in the case of a Solvent

Debtor, and draws from common law precedents prior to the current Code.

69. The Plaintiff is a firm believer that investor trust is paramount to the well-functioning of financial

markets. The emblematic nature of this case deserves to be heard, as it would help set a precedent for the market and

would further the public good.

PRAYER FOR RELIEF

WHEREFORE Plaintiff prays for the entry of judgment against Defendant as follows:

1. Provide Equitable Tolling as necessary for the Court to fully evaluate the evidence provided.


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2. Determine that the Plan was procured by fraud, in a degree of Fraud Upon the Court, which

justifies the Revocation criteria set out in 11 U.S.C § 1144,

3. That the Court determine that the Plan was not Equitable and did not comply with 11 U.S. Code

§ 1123.

4. Enjoin the Court’s broad powers under 11 U.S. Code § 105(A) for modification and

implementation of the Plan to provide equitable relief for compensatory damages, and treble

exemplary damages in the amount of $21,648,885.60 in favor of the Plaintiff,

3. For costs of suit herein incurred; and

4. For such other actions, and further relief, as this Court deems just and proper acting on a Sua

Ponte basis.

Finally, I beg the Court’s indulgence for any mistakes made in Good Faith that may have arisen

from my lack of legal training.

Dated: August 29th, 2021 Respectfully submitted,

Sebastian Miralles Acuña, CFA & CAIA


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Table of Authorities

Statutes

11 U.S. Code § 102(1)(B)(i)(ii)

(1)“after notice and a hearing”, or a similar phrase—authorizes an act without an actual hearing if such

notice is given properly and if—(i) such a hearing is not requested timely by a party in interest; or

(ii)there is insufficient time for a hearing to be commenced before such act must be done, and the court

authorizes such act;

11 U.S. Code § 105(a)

The court may issue any order, process, or judgment that is necessary or appropriate to carry out the

provisions of this title. No provision of this title providing for the raising of an issue by a party in interest

shall be construed to preclude the court from, sua sponte, taking any action or making any determination

necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process.

11 U.S.C. § 1123(a)(4)

provide the same treatment for each claim or interest of a particular class, unless the holder of a particular

claim or interest agrees to a less favorable treatment of such particular claim or interest.

18 U.S.C. § 152(1)

knowingly and fraudulently conceals from a custodian, trustee, marshal, or other officer of the court charged

with the control or custody of property, or, in connection with a case under title 11, from creditors or the

United States Trustee, any property belonging to the estate of a debtor;

18 U.S.C. § 152(2)

knowingly and fraudulently makes a false oath or account in or in relation to any case under title 11;

18 U.S.C. § 152(3)

knowingly and fraudulently makes a false declaration, certificate, verification, or statement under penalty of

perjury as permitted under section 1746 of title 28, in or in relation to any case under title 11;

18 U.S.C. § 152(6)


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(knowingly and fraudulently gives, offers, receives, or attempts to obtain any money or property,

remuneration, compensation, reward, advantage, or promise thereof for acting or forbearing to act in any

case under title 11;

18 U.S.C. § 152 (7)

in a personal capacity or as an agent or officer of any person or corporation, in contemplation of a case

under title 11 by or against the person or any other person or corporation, or with intent to defeat the

provisions of title 11, knowingly and fraudulently transfers or conceals any of his property or the property

of such other person or corporation;

18 U.S.C. § 152(9)

after the filing of a case under title 11, knowingly and fraudulently withholds from a custodian, trustee,

marshal, or other officer of the court or a United States Trustee entitled to its possession, any recorded

information (including books, documents, records, and papers) relating to the property or financial affairs

of a debtor,

11 U.S.C. § 1123(a)(4)

Notwithstanding any otherwise applicable nonbankruptcy law, a plan shall—provide the same treatment for

each claim or interest of a particular class, unless the holder of a particular claim or interest agrees to a less

favorable treatment of such particular claim or interest;

11 U.S. Code § 1142 (b)

The court may direct the debtor and any other necessary party to execute or deliver or to join in the execution

or delivery of any instrument required to effect a transfer of property dealt with by a confirmed plan, and to

perform any other act, including the satisfaction of any lien, that is necessary for the consummation of the

plan.

11 U.S.C § 1144

On request of a party in interest at any time before 180 days after the date of the entry of the order of

confirmation, and after notice and a hearing, the court may revoke such order if and only if such order was

procured by fraud.

11 U.S.C. § 1126(b)(1)


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the solicitation of such acceptance or rejection was in compliance with any applicable nonbankruptcy law,

rule, or regulation governing the adequacy of disclosure in connection with such solicitation

11 U.S.C. § 1126(b)(2)

if there is not any such law, rule, or regulation, such acceptance or rejection was solicited after disclosure

to such holder of adequate information, as defined in section 1125(a) of this title.

11 U.S.C. 1129(b)(2)(B)(ii)

The holder of any claim or interest that is junior to the claims of such class will not receive or retain under

the plan on account of such junior claim or interest any property, except that in a case in which the debtor

is an individual, the debtor may retain property included in the estate under section 1115, subject to the

requirements of subsection (a)(14) of this section.

17 C.F.R. § 240.10(b)

To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make

the statements made, in the light of the circumstances under which they were made, not misleading

18 U.S. Code § 157

A person who, having devised or intending to devise a scheme or artifice to defraud and for the purpose of

executing or concealing such a scheme or artifice or attempting to do so.

17 C.F.R. § 240.10(c)

To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit

upon any person, in connection with the purchase or sale of any security.


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Confidential

Cases

Grogan v. Garner, 498 U.S. 279 (1991)

Courts should apply the "preponderance of the evidence" standard when dealing in bankruptcy cases.

In re Tully. United States Court of Appeals, First Circuit. May 4, 1987. 818 F.2d 106 (1st Cir. 1987)

Holding that the bankruptcy code forbids a debtor from obtaining a discharge if the debtor made inaccurate

representations to the court as a result of willfully ignoring relevant information because a "debtor cannot,

merely by playing ostrich and burying his head deeply enough in the sand, disclaim all responsibility for

statements which he has made under oath"

Tenn-Fla Partners v. First Union National Bank of Florida, 229 B.R. 720 (W.D. Tenn. 1999)

Finding that, when determining whether to revoke confirmation procured due to fraud in a Chapter 11 case

pursuant to Section 1144, the proper evidentiary standard was preponderance of the evidence, not clear and

convincing evidence

United States v. Turner, 725 F.2d 1154

Finding that withholding knowledge or preventing disclosure or recognition is included in the definition of

concealment.

In re Michelson, 141 B.R. 715 (Bankr. E.D. Cal. 1992)

Considering the "accuracy of disclosure" as "an issue that must be addressed at the confirmation hearing"

in revoking the order confirming a plan of reorganization for fraud on the court.

Demjanjuk v. Petrovsky, 10 F.3d 338 (6th Cir. 1993)

Holding that "only actions that actually subvert the judicial process can be the basis for upsetting otherwise

settled decrees" on the basis of fraud on the court.

Bank of America Nat. Trust and Sav. Assn. v. 203 North LaSalle Street Partnership, 526 U.S. 434 (1999)

A plan may be found to be fair and equitable if "the holder of any claim ... junior to the claims of such class

will not receive or retain under the plan on account of such junior claim ... any property." § 1129(b)(2)(B)(ii).

Under this "absolute priority rule," the Bank argued, the plan could not be confirmed as a cramdown because

the Debtor's old equity holders would receive property even though the Bank's unsecured deficiency claim

would not be paid in full.


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Confidential

Louisville Trust Co. v. Louisville, New Albany & Chicago Railway Co., 174 U.S. 674 (1899)

This is based upon the familiar rule that the stockholder's interest in the property is subordinate to the rights

of creditors; first of secured and then of unsecured creditors. And any arrangement of the parties by which

the subordinate rights and interests of the stockholders are attempted to be secured at the expense of the

prior rights of either class of creditors comes within judicial denunciation.

In re Combustion Eng’g, Inc., 391 F. 3d 190, 239 (3d Cir 2004)

Similarly situated claims must receive the same treatment under a plan.

Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007)

Describing the broad authority § 105 grants to bankruptcy judges to take any action necessary to prevent an

abuse of process

Pre-petition bad faith. Established the 7 elements of fraudulent intent.

In re Thomas, 223 Fed. Appx. at 313

Bankruptcy Courts are courts of equity.

Nikoloutsos v. Nikoloutsos (In re Nikoloutsos), 199 F.3d 233, 236

A court of equity is enabled to frustrate fraud and work complete justice.

In re Trico Marine Services, Inc., 337 B.R. 811 (Bankr. S.D.N.Y. 2006)

Request for revocation was denied, but was given a stay to present claims of damages instead. Damages

were granted. There is precedent for requesting damages for fraud Post-Confirmation.

Walker v. Sheldon, 10 N.Y.2d 401 (N.Y. 1961)

Holding that only gross and wanton conduct against the public can support an award of punitive damages.

Stating that "those who deliberately and cooly engage in a far-flung scheme, systematically conducted for

profit, are very much more likely to pause and consider the consequences if they have to pay more than the

actual loss suffered by an individual plaintiff

Eastman Co. v. Southern Photo Co., 273 U.S. 359 (1927)

Explaining "a defendant whose wrongful conduct has rendered difficult the ascertainment of the precise

damages suffered by the plaintiff, is not entitled to complain that they cannot be measured with the same

exactness and precision as would otherwise be possible"


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Confidential

Salmon v. Brookshire, 301 S.W.2d 48 (Mo. Ct. App. 1957)

Where the recipient of fraud or deceit is left with no value whatsoever, the proper measure of damages is

"the amount ... paid with interest from the date of payment, plus incidental losses and expenses suffered as a

result of the seller's misrepresentations."

Cohen v. de la Cruz, 523 U.S. 213 (1998)

Holding that “§ 523 prevents the discharge of all liability arising from fraud,” stressing that this provision

applies to treble damages and to attorney fees and costs.

BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996)

Holding that a court must consider "the degree of reprehensibility of the defendant's conduct," the "ratio to

the actual harm," and the disparity between "the punitive damages award and the civil or criminal penalties

that could be imposed for comparable misconduct."

In re Rusty Jones, Inc., 134 B.R. 321 (Bankr. N.D. Ill. 1991)

It is well established that simultaneous representation of both a debtor and a debtor's shareholder may under

some circumstances create a conflict of interest under sections 327 and 328. Attorneys for a Chapter

11 corporate debtor owe a fiduciary duty to the corporation and not to the employees, officers, directors, or

dominant shareholders of the corporation or of a controlling parent company.

In re Tabor, 583 B.R. 155 (Bankr. N.D. Ill. 2018)

Holding that bankruptcy courts have authority to oversee and correct for attorney conduct under Chambers

v. NASCO, Inc., 501 U.S. 32; bankruptcy courts have, essentially, four types of authority that might be

invoked: " the power to regulate behavior before it inherent in all courts; the direct, specific authority of a

statute or rule; the ability to regulate the practice of the federal bar, as delegated to the court by the United

States District Court for this District; and the authority afforded specifically to the bankruptcy courts under

section 105 of the Bankruptcy Code."


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Confidential

Standards

BVS-III (II)(A) Asset-Based Approach to Business Valuation of the American Society of Appraisers.

The asset-based approach is a general way of determining a value indication of a business, business

ownership interest, security, or intangible asset using one or more methods based on the value of the assets

net of liabilities.


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Confidential

EXHIBITS

Exhibit A: Valaris 8-K SEC Filing, August 28th, 2020

Exhibit B: Illustrative presentation prepared by Tempest Capital

Exhibit C: Valaris Investor Presentation from February 2020

Exhibit D: Tempest Valaris Valuation Presentation


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ADVERSARY COMPLAINT FOR INJUNCTIVE RELIEF, CIVIL PENALTIES, RESTITUTION, AND OTHER EQUITABLE RELIEF

EXHIBIT A


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EXHIBIT B


706.

026.

MI.1

TE

MP

ES

T C

AP

ITA

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706.

026.

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Conf

iden

tial

DIS

CLA

IMER

Tem

pe

stC

ap

ita

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tion

(“Pr

esen

tatio

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has

been

prep

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ere

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ange

and

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noob

ligat

ion

toup

date

this

docu

men

tto

refle

ctan

ysu

chch

ange

s.No

thin

ghe

rein

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cons

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uced

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ther

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edto

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son

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nw

hole

orin

part

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any

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empe

st.


706.

026.

MI.1

Conf

iden

tial

I.In

trod

uctio

n

II.M

ater

ially

Inco

nsist

ent F

air M

arke

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ues

III.

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atio

n of

ASC

360

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IV.

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ives

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rofit

from

a B

ankr

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oces

s

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hapt

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erpr

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d M

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ipul

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ed a

nd C

onfli

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alua

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regu

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706.

026.

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Conf

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Jun-

19Au

g-19

Oct

-19

Dec-

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n-20

Aug-

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ct-2

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c-20

Feb-

21Ap

r-21

Valu

atio

ns o

f PP&

E(U

S$M

M)

SEC

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and

10-

k fil

ings

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agem

ent P

rese

ntat

ions

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rd B

K Va

luat

ion

9

Row

an –

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o M

erge

r af

ter f

arne

ss o

pini

ons

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3Q19

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9

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2Q20

3Q20

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202

0

Laza

rd D

S Va

luat

ion

@

con

firm

atio

n1Q21

Sour

ce: C

ompa

ny 1

0-Q

s, 10

-Ks a

nd D

isclo

sure

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tem

ent

MA

TER

IALL

Y I

NC

ON

SIST

ENT

FA

IR M

AR

KET

VA

LUES

OV

ER T

HE

SAM

E P

ERIO

D

M

isle

ad

ing

valu

ati

on

s o

f P

P&

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etw

ee

n S

EC

fil

ings

, Le

nd

er´

s T

hir

d-

Pa

rty

ap

pra

ise

rs a

nd

by

Laza

rd.

Gros

s Ass

et V

alue

MD&

A Fe

b-20

, acc

ordi

ng to

le

nder

´s in

depe

nden

t app

raise

rs

Gros

s Ass

et V

alue

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A Au

g-19

, acc

ordi

ng to

le

nder

´s in

depe

nden

t app

raise

rs

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rdLa

zard

Valu

atio

n pr

esen

ted

for

secu

ritie

s re

gist

ratio

n us

ing

fresh

star

t ac

coun

ting

at F

air

Mar

ket V

alue


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026.

MI.1

Conf

iden

tial

Sour

ce: C

orpo

rate

repo

rts,

2020

10-

K. K

PMG

Impa

irmen

t of n

on-fi

nanc

ial a

sset

s han

dboo

k

10

Gros

s Ass

et V

alue

Est

imat

es(In

US$

B fo

r Feb

-20)

Anal

yst 1

10.1

Anal

yst 2

9.7

Anal

yst 3

9.5

Anal

yst 4

9.1

Anal

yst 5

8.9

•Th

eav

erag

eGr

oss

PP&

Ees

timat

edby

five

inde

pend

enta

naly

stsi

sUS$

9.4B

with

are

plac

emen

tval

ueof

US$2

3.9B

,aso

fFeb

ruar

y20

20

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ird-P

arty

inde

pend

ent

appr

aise

rsse

lect

edby

Lend

er´s

gave

a~8

xhi

gher

valu

atio

nto

PP&

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anth

eon

epu

blish

edon

the

Disc

losu

rest

atem

ent

ofth

eBa

nkru

ptcy

plan

.

MA

TER

IALL

Y I

NC

ON

SIST

ENT

FA

IR M

AR

KET

VA

LUES

OV

ER T

HE

SAM

E P

ERIO

D

Le

nd

er´

s in

de

pe

nd

en

t a

pp

rais

ers

gav

e f

un

da

me

nta

lly

dif

fere

nt

valu

ati

on

fro

m t

he

on

e p

rese

nte

d b

y La

zard

25.5

23.9

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1.2

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Con

stuc

tion

Cost

Rep

lace

men

t Cos

t G

ross

Ass

et V

alue

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pend

ent A

naly

sts V

alua

tions

of P

P&E

pres

ente

d in

Feb

-20

MD&

A vs

Laza

rd V

alua

tion

(US$

B)

MD&

A (F

eb-2

0)La

zard

Net

PP&

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age

prov

ided

by

anal

ysts

of $

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Anal

yst G

ross

Ass

et V

alue

Est

imat

es in

clude

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B M

arke

ts, M

orga

n St

anle

y, S

cotia

bank

, Sp

areB

ank

and

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ls Fa

rgo


706.

026.

MI.1

III.

VIO

LATI

ON

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nfid

entia

l


706.

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iden

tial

0.8%

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an A

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sco

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ts

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irmen

t % o

f Val

aris

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TES

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OSS

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ASS

ETS

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fere

nt

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air

me

nt

test

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sed

in

th

e 1

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or

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lari

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igs

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atio

n of

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. GAA

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irmen

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ust

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rform

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agr

oup

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sets

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eas

setg

roup

isde

term

ined

by:

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pera

tiona

lfin

ancia

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orm

atio

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depe

nden

ceof

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cash

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ithre

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tto

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p

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irmen

t val

uatio

n te

st is

not

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ng a

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iform

ly to

subs

tant

ially

the

sam

e as

sets

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in d

irect

vio

latio

n of

U.S

. GAA

P AS

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ce: 1

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for t

he th

ird q

uart

er q

uart

er o

f 202

0 p.

25

and

KPM

G Im

pairm

ent o

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ncia

l ass

ets h

andb

ook

12

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oan

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wan

wer

em

erge

don

April

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019.

Both

entit

iesw

ere

subj

ectt

oVa

laris

impa

irmen

ttes

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ough

out2

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How

ever

,

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wan

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tsw

ere

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ectt

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impa

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,on

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sco

asse

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ectt

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,on

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wan

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eun

derl

egal

disp

ute,

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ting

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cent

ive

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erva

luat

ion


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026.

MI.1

Conf

iden

tial

Sour

ce: V

alar

is Sc

hedu

le o

f Ass

ets a

nd Li

abili

ties

durin

g th

e ba

nkru

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pro

cess

13

Vala

risst

ated

inth

eirS

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ing

that

itre

alize

da

quat

erly

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vera

bilit

yte

stof

itsen

tire

fleet

,im

pairi

ngth

ebo

okva

lue

ofPP

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fora

nych

ange

sin

mar

ketc

ondi

tions

.The

reco

vera

bilit

ytes

tund

erAS

C36

0-10

ism

eant

toas

sess

the

fair

mar

ketv

alue

ofas

sets

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How

ever

,Va

laris

isst

atin

gth

atth

ebo

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lue

ofPP

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pres

ente

din

the

10K

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mat

eria

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ffer(

itdi

ffers

by~1

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rom

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one

pres

ente

din

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losu

reSt

atem

ent.

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can

that

reas

onab

lyre

conc

ileto

mat

eria

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ilarF

airM

arke

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ues?

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risad

mits

inth

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hedu

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urta

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uire

din

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edur

e,th

atde

spite

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quar

terly

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asse

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heBo

okVa

lue

didn

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pres

ente

dth

eFa

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arke

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ue.

Scre

ensh

ot fr

om V

alar

is Sc

hedu

le A

/B: P

rope

rty

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vidu

al c

ourt

filli

ng:

Eith

erVa

laris

lied

to in

vest

ors o

n th

eir 1

0-Ks

& 1

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s com

mitt

ing a

ccou

ntin

g fra

ud, o

r Val

aris

lied

on it

s ban

krup

tcy f

illin

g an

d co

mm

itted

ban

krup

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fraud

.

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ala

ris

sta

ted

th

at

the

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ok

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lue

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pre

sen

ted

th

e

Fair

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rke

t V

alu

e d

esp

ite

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ply

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y re

cove

rab

ilit

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sts


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IV.

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ES T

O P

RO

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FR

OM

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AN

KR

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OC

ESS

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entia

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iden

tial

WIT

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REP

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EMEN

TV

ALU

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SSET

SO

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S$2

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EA

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CO

NFL

ICTS

OF

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TH

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AN

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OC

ESS

Acc

om

pa

nie

db

ya

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cen

tive

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ali

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ma

na

gem

en

tm

ayh

ave

alt

ere

din

de

pe

nd

en

tva

lua

tio

n

Sour

ce: C

orpo

rate

repo

rts,

2020

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K. D

isclo

sure

stat

emen

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r mor

e in

form

atio

n, s

ee a

ppen

dix

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ide

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%

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rupt

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wne

rshi

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ankr

uptc

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ners

hip

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agem

ent b

enef

icial

ow

ners

hip

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rms

ofre

plac

emen

tva

lue,

man

agem

ent

will

keep

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.3B,

whi

chis

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high

erth

anth

eva

luat

ion

base

don

man

agem

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uida

nce

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val

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n w

as m

ade

with

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agem

ent g

uida

nce,

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anag

emen

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f rea

sons

to ju

stify

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ltof

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an,

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emen

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cent

ive

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whi

chan

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esta

blish

edfo

rman

agem

ent.

15

244.

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tion

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agem

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OC

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volv

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dit

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rsw

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pri

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lari

se

qu

ity

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ce: C

orpo

rate

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rts,

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and

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brua

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pire

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itted

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ing

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uity

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ill re

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ir pr

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16


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Conf

iden

tial

Sour

ce: D

ebto

rs a

pplic

atio

n fo

r ent

ry (d

ocum

ent 2

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ing)

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(Pro

xy m

ater

ials)

201

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-04.

Laza

rd d

ecla

red

itsel

f ind

epen

dent

and

free

of c

onfli

cts,

havi

ng p

revi

ously

pro

vide

d se

rvice

s to

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ris, k

now

ing

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Com

pany

´s fi

nanc

ial i

nfor

mat

ion

and

bein

g aw

are

of p

revi

ous v

alua

tions

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g20

19,L

azar

dpr

ovid

edfin

ancia

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serv

ices

toVa

laris

tora

iseeq

uity

orde

btw

ithou

tsu

cces

s.In

addi

tion,

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asad

viso

rw

hen

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ffere

da

disp

ute

with

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inus

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agem

ent

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one

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em

ost

impo

rtan

tsh

areh

olde

rsof

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ris.I

nAu

gust

2020

,Laz

ard

stop

ped

repr

esen

ting

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riseq

uity

,and

star

ted

repr

esen

ting

the

debt

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they

are

noti

ndep

ende

ntpa

rtie

s.

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rd´s

com

pens

atio

ndu

ring

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risba

nkru

ptcy

will

beap

prox

imat

ely

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,co

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erab

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ore

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com

pens

atio

nre

ceiv

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sing

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hich

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sispo

ints

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in

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nden

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ctur

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tter

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ter,

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laris

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have

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age

and

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for

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rese

nt

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len

de

rsju

sta

fte

rre

pre

sen

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CH

AP

TER

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Conf

iden

tial

Sour

ce: C

ompa

ny 8

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om A

ugus

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, 202

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eth

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pted

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ess

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er(L

umin

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git

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ness

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vote

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dire

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here

quity

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tyis

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gth

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om A

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, 202

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ound

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e re

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Conf

iden

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Sour

ce: C

ompa

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om A

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om19

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ym

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atz

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wed

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Chap

ter 1

1.

27


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iden

tial

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repo

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filed

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ound

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706.

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tial

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ce: M

anag

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te p

rese

ntat

ions

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bene

fitin

gth

em

arke

tco

nditi

ons

and

indi

catin

gan

econ

omic

reac

tivat

ion.

Note

: The

oil

dem

and

was

take

n fro

m th

e In

tern

atio

nal E

nerg

y Age

ncy


706.

026.

MI.1

IX.

OT

HER

IR

REG

ULA

RIT

IES

39Co

nfid

entia

l


706.

026.

MI.1

Conf

iden

tial

OTH

ERIR

REG

ULA

RIT

IES

Ma

na

gem

en

tco

mp

en

sati

on

incr

ea

sed

de

spit

eco

vid

-19

Sour

ce:.

Vala

ris 2

020

10-K

.

5.8

3.4

3.2

11.5

7.6

4.2

3.8

5.0

T.P.

Bur

keJ.

Baks

htM

. McG

uint

yC.

G. T

row

ell

Exec

utiv

e to

tal c

ompe

nsat

ion

2019

-202

0 (U

S$ M

M)

2019

2020

Nam

e an

d Pr

incip

al P

ositi

onSa

lary

Bonu

sSh

are

Awar

dsNo

n-Eq

uity

Inc.

pla

nO

ther

com

pens

atio

nTh

omas

P. B

urke

(CEO

)85

5,00

0 1,

282,

500

1,42

3,44

7 3,

397,

129

609,

014

Jona

than

Bak

sht(

CFO

)55

0,00

0 1,

375,

000

582,

699

1,62

8,02

2 83

,847

M

ichae

l McG

uint

y (G

ener

al c

ouns

el)

510,

000

1,27

5,00

0 44

9,51

2 1,

235,

704

299,

844

Carl

G. T

row

ell(

Exec

utiv

e Ch

airm

an)

189,

150

--

-4,

838,

803

Durin

g20

20,d

espi

teCO

VID

19:

•Bu

rke´

sco

mpe

nsat

ion

incr

ease

d30

.7%

from

the

prio

rye

ar.

•Ba

ksht

´sco

mpe

nsat

ion

incr

ease

d25

.7%

from

the

prio

rye

ar.

•M

cGui

nty´

scom

pens

atio

nin

crea

sed

19.2

%co

mpa

red

topr

iory

ear.

•Tr

owel

lste

pped

dow

nas

exec

utiv

ech

airm

anon

April

30,2

020.

Exec

utiv

e co

mpe

nsat

ion

incr

ease

d de

spite

bad

man

agem

ent.

Also

, let

´s n

ot fo

rget

the

10%

ES

OP

rese

rved

for

them

in th

e re

orga

niza

tion

plan

40


706.

026.

MI.1

Conf

iden

tial

0102030405060708090

0510152025303540 May

-18

Aug-

18No

v-18

Feb-

19M

ay-1

9Au

g-19

Nov-

19Fe

b-20

May

-20

Aug-

20No

v-20

Feb-

21M

ay-2

1

Oil Price $US

Valaris US$

Vala

risBr

ent O

il Pr

ice

41

OTH

ERIR

REG

ULA

RIT

IES

Co

nst

an

tm

isle

ad

ing

sta

tem

en

tsb

ym

an

age

me

nt

Vala

ris a

dds A

dam

Wei

tzm

an a

s Bo

ard

Mem

ber

Covi

d-19

Ensc

o en

tere

d in

to a

mer

ger

agre

emen

t with

Row

an

Ensc

o an

d Ro

wan

mer

ge to

fo

rm V

alar

is

Oil p

rices

reco

vere

d

Vala

ris g

ets l

isted

aga

in ju

st o

ne

mon

th a

fter c

ourt

app

rove

d an

d co

nfirm

ed r

estr

uctu

ring

plan

Vala

ris a

nnou

nced

pos

sible

re

stru

ctur

ing

Vala

ris fi

led

for C

hapt

er 1

1 Vala

ris re

ceiv

ed

cour

t app

rova

l of

chap

ter 1

1 pl

an

¨We

are

seei

ng h

ighe

r le

vels

of cu

stom

er

dem

and¨

-3Q

18 E

C

¨We

have

bor

row

ing c

apac

ity o

f $2

bill

ion

thro

ugh

Sept

embe

r 20

19, $

1.3

billi

on fr

om O

ctob

er

2019

to S

epte

mbe

r 202

0, an

d $1

.2

billi

on fr

om O

ctob

er 2

020

thro

ugh

Sept

embe

r 202

2¨-4

Q18

EC

¨Ava

ilabl

e liq

uidi

ty w

as $

1.6

billi

on, o

f whi

ch $

130

mill

ion

was

ca

sh a

nd $

1.5

billi

on w

as u

ndra

wn

capa

city

on th

eir r

evol

ving

cred

it fa

cility

¨-3Q

19 E

C

¨I'm

ple

ased

to re

port

that

as o

f ye

ar-e

nd, w

e ha

d no

am

ount

dr

awn

on o

ur re

volv

ing c

redi

t fa

cility

¨-4Q

19 E

C

¨Hig

h-Q

ualit

y Fl

eet P

rovi

des

Sign

ifica

nt A

sset

Cov

erag

e to

Ra

ise C

apita

l to

Cove

r Int

erim

Fu

ndin

g Gap

s¨-F

eb-2

0 M

D&A

Sour

ce: C

ompa

ny S

EC fi

lings

, M

D&As

and

Ear

ning

s Ca

lls


706.

026.

MI.1

Conf

iden

tial

42

OTH

ERIR

REG

ULA

RIT

IES

Hig

hly

un

usu

al

de

pa

rtu

reo

fC

hie

fLe

gal

Off

ice

r

How

ever

, let

's no

t for

get t

hat:

•As

are

sult

ofth

ere

orga

niza

tion

plan

,am

anag

emen

tin

cent

ive

plan

was

mad

e,in

whi

chan

ESO

Pof

10%

was

esta

blish

edfo

rman

agem

ent

•Va

laris

man

agem

ent

ince

ntiv

epl

anw

illve

stno

earli

erth

an1

year

onw

hich

the

awar

dis

gran

ted,

subj

ect

toco

ntin

ued

serv

icean

dth

eac

hiev

emen

tofp

erfo

rman

cem

etric

s

Why

wou

ld th

e CL

O le

ave

havi

ng ju

st b

een

awar

ded

an e

quity

ESO

P pa

ckag

e po

tent

ially

wor

th h

undr

eds o

f mill

ions

of d

olla

rs?

Sour

ce:.

Vala

ris 8

-K fr

om M

ay 5

th, 2

021

Mic

hael

T. M

cGui

nty

On

May

5th,

2021

,Va

laris

was

notif

ied

that

,ef

fect

ive

asM

ay31

st,

2021

,M

ichae

l,th

eCo

mpa

ny’s

Seni

orVi

cePr

esid

ent,

Gene

ral

Coun

sel

and

Secr

etar

y,w

illre

sign

from

the

Com

pany

.


706.

026.

MI.1

Conf

iden

tial

OTH

ERIR

REG

ULA

RIT

IES

Laza

rda

nd

oth

er

con

flic

tso

fin

tere

st

Sour

ce: Y

ahoo

Fin

ance

. Disc

losu

re st

atem

ent.

Sam

Whi

ttak

er re

join

ed

Laza

rd F

inan

cial A

dviso

ry a

s M

anag

ing

Dire

ctor

Laza

rdLt

dan

noun

ced

that

Sam

Whi

ttake

rwill

re-jo

inLa

zard

Fina

ncia

lAdv

isory

asa

Man

agin

gDi

rect

or,

effe

ctiv

eim

med

iate

ly.S

amjo

insf

rom

PJT

Part

ners

whe

rehe

wor

ked

fort

hela

stfiv

eye

ars,

mos

trec

ently

asa

Man

agin

gDi

rect

orin

itsEM

EARe

stru

ctur

ing

grou

p.Bo

thLa

zard

and

JTP

part

ners

had

prov

ided

finan

ciala

dviso

ryse

rvice

sto

Vala

risto

raise

equi

ty,h

owev

er,i

twas

unsu

cces

sful

.Its

houl

dbe

note

dth

atfe

esre

ceiv

edin

rest

ruct

urin

gm

aybe

mat

eria

llyhi

gher

than

thos

ere

ceiv

edfo

rrai

sing

equi

tyor

debt

.

Laza

rd p

rofe

ssio

nal C

ompe

nsat

ion

•A

mon

thly

fee

of$2

50,0

00

•A

rest

ruct

urin

gfe

eof

17,0

00,0

00.

•En

hanc

edRe

stru

ctur

ing

Fee

of$5

,000

,000

.

•Ex

chan

geFe

eof

$17,

000,

000.

Oth

er in

cons

isten

cies i

n va

luat

ion

Laza

rddi

dno

test

imat

eth

eva

lue

ofan

yta

xas

sets

,nor

did

ites

timat

eth

eim

pact

ofan

yca

ncel

latio

nof

inde

bted

ness

inco

me

onth

eRe

orga

nize

dVa

laris

’Pro

ject

ions

.The

fore

goin

gis

rele

vant

beca

use

they

coul

dha

vea

signi

fican

tim

pact

onva

luat

ion.

Likew

ise,n

ova

lue

was

assig

ned

toAR

O.

43


706.

026.

MI.1

Conf

iden

tial

OTH

ERIR

REG

ULA

RIT

IES

RC

Fle

nd

ers

alo

ng

wit

hm

an

age

me

nt

may

hav

ep

lott

ed

for

Va

lari

sto

gob

an

kru

pt

Sour

ce: D

isclo

sure

stat

emen

t. Va

laris

201

9-20

10-

K.

Vala

ris Li

quid

ity re

port

ed b

y m

anag

emen

t In

the

2019

10-K

,file

don

Febr

uary

21,2

020,

Man

agem

entr

epor

ted

that

they

had

US$9

7.2

MM

inca

shan

dUS

$1.6

Bun

draw

nca

pacit

yun

dert

heir

cred

itfa

cility

,whi

chex

pire

din

Sept

embe

r202

2.

The

impa

ct o

f CO

VID-

19 in

Va

laris

Liqu

idity

Inth

e20

1910

-K,f

iled

onFe

brua

ry21

,202

0,M

anag

emen

trep

orte

dth

atth

eyha

dUS

$97.

2M

Min

cash

and

US$1

.6B

undr

awn

capa

city

unde

rthe

ircr

edit

facil

ity,w

hich

expi

red

inSe

ptem

ber2

022.

Anin

ciden

ton

one

ofth

eVa

laris

plat

form

s(w

hich

was

fully

insu

red)

caus

eda

maj

orco

ntra

ctto

beca

ncel

edan

da

back

log

ofap

prox

imat

ely

150

mill

ion

lost

.Com

bine

dw

ithCO

VID-

19,t

heRC

Fle

nder

sde

clare

da

mat

eria

ladv

erse

effe

ct,w

hich

was

notc

onte

sted

bym

anag

emen

t.Th

isha

da

signi

fican

tne

gativ

eef

fect

,whi

chw

asa

maj

orfa

ctor

inth

eba

nkru

ptcy

.

RCF

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t´s V

alua

tion

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ute

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iteha

ving

acce

pted

prev

ious

valu

atio

ns,t

heRC

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nder

shad

adi

sput

ew

hen

seek

ing

that

,with

aneq

uity

ofUS

$1.

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apa

rtici

patio

nof

54.7

%w

asre

serv

edfo

rthe

m,w

hich

impl

ied

a1.

7xla

rger

owne

rshi

pco

mpa

red

to32

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ofLa

zard

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luat

ion,

whi

chgi

vest

hem

a10

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incip

alre

cove

ry.

32.5

%

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%

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alua

tion

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uted

by

RCF

lend

ers

RCF

equi

ty o

wne

rshi

p

44


706.

026.

MI.1

Conf

iden

tial

OTH

ERIR

REG

ULA

RIT

IES

Ma

na

gem

en

ta

lon

gw

ith

len

de

rsso

ug

ht

tod

ete

rre

do

the

rp

art

ies

fro

mta

kin

go

ver

an

dim

ple

me

nti

ng

an

alt

ern

ati

vep

lan

Sour

ce: V

alar

is w

eb p

age

new

s. VA

L –

NOL

(Equ

ity tr

adin

g) In

terim

Ord

er R

evise

d

Vala

rispl

can

noun

ced

that

onAu

gust

19,

2020

itw

asno

tifie

dby

the

New

York

Stoc

kEx

chan

geof

itsde

term

inat

ion

toin

defin

itely

susp

end

trad

ing

ofth

eCo

mpa

ny’s

com

mon

stoc

kan

dto

com

men

cepr

ocee

ding

sto

delis

tthe

Com

pany

’sco

mm

onst

ock

from

the

NYSE

,in

acco

rdan

cew

ithSe

ctio

n80

2.01

Dof

the

NYS

ELis

ted

Com

pany

Man

ual

due

toth

eCo

mpa

ny’s

volu

ntar

yfil

ing

for

reor

gani

zatio

nun

der

Chap

ter

11of

the

Bank

rupt

cyCo

deon

Augu

st19

,202

0.

Trad

ing

susp

ensio

n an

d de

listin

g of

Val

aris

com

mon

stoc

k

Proc

edur

es th

at a

pply

to tr

ansf

ers

of C

omm

on S

tock

Asa

resu

ltof

the

susp

ensio

nan

dde

listin

gof

the

Vala

risco

mm

onst

ock,

ifth

ere

are

tran

sact

ions

ofa

cons

ider

able

volu

me

ofat

leas

t8,9

74,3

59sh

ares

,the

part

iest

osu

chtr

ansa

ctio

nm

ustf

ilew

ithth

eCo

urt,

and

serv

eup

onth

eNo

tice

Part

ies,

anad

vanc

ew

ritte

nde

clara

tion

ofth

ein

tend

edtr

ansf

erof

Com

mon

Stoc

k.

Man

agem

ent i

nten

t to

prot

ect t

ax

attr

ibut

es

One

ofth

ein

tent

ions

ofsu

spen

ding

tran

sact

ions

with

Vala

risst

ock

isth

atM

anag

emen

twan

tsto

prot

ectt

heta

xat

trib

utes

,whi

char

est

illat

risk.

The

Tax

Attr

ibut

esar

epo

tent

ially

ofsig

nific

antv

alue

toVa

laris

and

thei

res

tate

sbe

caus

eth

eCo

mpa

nyca

nca

rry

forw

ard

cert

ain

Tax

Attr

ibut

esto

offs

etfu

ture

taxa

ble

inco

me

infu

ture

year

s.

Vala

ris m

anag

emen

t sou

ght t

o pr

even

t a th

ird p

arty

from

taki

ng o

ver t

he co

mpa

ny a

nd im

plem

entin

g

an

alte

rnat

e pl

an b

y p

reve

ntin

g pu

rcha

ses o

f sha

res

45


706.

026.

MI.1

AP

PEN

DIX

A:

U.S

. G

AA

P I

MPA

IRM

ENT

PO

LIC

Y

Conf

iden

tial

46


706.

026.

MI.1

Conf

iden

tial

Sour

ce: K

PMG

Impa

irmen

t of n

on-fi

nanc

ial a

sset

s han

dboo

k

AP

PE

ND

IXA

:U

.S.

GA

AP

IMPA

IRM

EN

TP

OLI

CY

U.S

.G

AA

PA

SC3

60

-10

Issu

e1:

Vala

risdi

dno

tim

paire

deq

ually

the

asse

tgr

oup.

Onl

yEn

sco

asse

tw

ere

subs

tant

ially

impa

ired;

whi

leRo

wan

’sre

mai

nvi

rtua

lthe

sam

e.

Issu

e2:

Carr

ying

outt

hree

cons

ecut

ive

(Mar

ch,J

une,

and

Oct

ober

2020

)im

pairm

ents

ina

year

leng

thvi

olat

esth

em

anda

teof

refle

ctin

gth

em

arke

tva

lue

ofth

egr

oup

asse

t.

Wha

tisa

nIm

pairm

ent?

Anim

pairm

ents

isa

redu

ctio

nin

the

carr

ying

valu

eof

anas

set

grou

p.An

impa

irmen

tsoc

curs

whe

na

long

-live

dgr

oup

asse

tw

hen

the

com

pany

conc

lude

stha

tthe

dras

ticre

duct

ion

inth

eva

lue

ofth

elo

ng-li

ved

asse

tisn

otlo

nger

reco

vera

ble.

Impa

irmen

tmea

sure

men

tfor

long

-live

das

sets

Step

1

Step

2

Undi

scou

nted

Cash

Flow

-Est

imat

edfu

ture

cash

flow

sus

edto

test

the

reco

vera

bilit

yof

alo

ng-li

ved

asse

tsh

allo

nly

inclu

deth

efu

ture

cash

inflo

ws

less

dire

ctly

asso

ciate

dca

shou

tflow

sw

ithan

dth

atar

eex

pect

edto

arise

asa

dire

ctre

sult

ofth

eus

ean

dev

entu

aldi

spos

ition

ofth

eas

setg

roup

.Tho

sees

timat

essh

alle

xclu

dein

tere

stch

arge

stha

twill

bere

cogn

ized

asan

expe

nse

whe

nin

curr

ed.

Fair

valu

e-F

air

valu

eis

the

price

that

wou

ldbe

rece

ived

tose

llan

asse

tor

paid

totr

ansf

era

liabi

lity

inan

orde

rlytr

ansa

ctio

nbe

twee

nm

arke

tpar

ticip

ants

atth

em

easu

rem

ent

date

.Fai

rval

ueis

anex

itpr

ice.

47


706.

026.

MI.1

AP

PEN

DIX

B:

VA

LAR

IS V

ALU

ATI

ON

S A

ND

MA

RK

ET

CO

ND

ITIO

NS

Conf

iden

tial

48


706.

026.

MI.1

Conf

iden

tial

AP

PE

ND

IXB

:V

ALA

RIS

VA

LUA

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er

20

19

Sour

ce: M

anag

emen

tcor

pora

te p

rese

ntat

ion,

Sep

tem

ber 2

019,

pag

e 27

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The

aver

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s PP&

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timat

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e in

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Feb

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51


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Feb

ruar

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age

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87

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91

2013

2014

2015

2016

2017

2018

2019

Num

ber o

f new

Maj

or O

ffsho

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ppro

vals

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AN

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rent

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l pric

es (B

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take

n fro

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Oil

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Pre-

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Vala

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Bank

rupt

cy

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19 c

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and

the

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man

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ent a

rgue

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at th

e in

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ry w

as g

oing

to ta

ke so

me

time

to

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ver,

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ever

, at t

he e

nd o

f 202

0, o

il pr

ices b

egan

to ri

se, c

urre

ntly

exc

eedi

ng th

e pr

ices t

hat t

hey

wer

e be

fore

the

pand

emic.

53


706.

026.

MI.1

Conf

iden

tial

AP

PE

ND

IXB

:V

ALA

RIS

VA

LUA

TIO

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AN

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an

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om

ba

nkr

up

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un

til

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rch

20

21

Sour

ce: B

rent

crud

e oi

l pric

es (B

Z=F)

and

VAL

PQ st

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price

wer

e ta

ken

from

yah

oo fi

nanc

e.

Cont

rary

to m

anag

emen

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umen

ts, t

he p

rice

of o

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s bee

n on

the

rise

since

Val

aris

anno

unce

d its

ban

krup

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in

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ch h

as b

een

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cted

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e st

ock

price

.

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Oil

price

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laris

stoc

k

Vala

ris B

ankr

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tion

54


706.

026.

MI.1

Conf

iden

tial

AP

PE

ND

IXB

:V

ALA

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VA

LUA

TIO

NS

AN

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AR

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ION

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do

ild

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an

dfo

rn

ext

five

yea

rs

Sour

ce: I

EA a

naly

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nd fo

reca

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ttps

://w

ww

.iea.

org/

repo

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mai

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Oil D

eman

d (m

b/d)

2019

2020

2021

2022

2023

2024

2025

2026

Tota

l OEC

D

47.7

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2019

2020

2021

2022

2023

2024

2025

2026

Estim

ated

oil

dem

and

for t

he n

ext f

ive

year

s(m

b/d)

Afte

r the

dro

p in

oil

dem

and

in 2

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it w

ill g

row

app

roxi

mat

ely

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ann

ually

unt

il 20

26

By20

21,d

eman

dw

illha

veal

mos

trec

over

ed,a

ndby

2023

,pr

e-pa

ndem

icde

man

dw

illbe

surp

asse

d.

55


706.

026.

MI.1

Conf

iden

tial

AP

PE

ND

IXB

:V

ALA

RIS

VA

LUA

TIO

NS

AN

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AR

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TC

ON

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ION

SW

orl

do

ilsu

pp

ly

Sour

ce: I

EA a

naly

sis a

nd fo

reca

st: h

ttps:

//w

ww

.iea.

org/

repo

rts/

oil-

2021

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rce=

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Supp

ly (

mb/

d)20

1920

2020

2120

2220

2320

2420

2520

26

Tota

l OEC

D 28

.5

27.9

28

.2

29.0

29

.6

29.9

29

.9

29.7

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l non

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D 32

.0

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31.5

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4 2.

4 2.

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5 2.

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al b

iofu

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2.8

2.6

2.8

3.0

3.1

3.2

3.3

3.3

Tota

l non

-OPE

C 65

.7

63.1

63

.8

65.9

67

.1

67.5

67

.8

67.6

OPE

C

Crud

e 29

.5

25.7

-

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--

-

OPE

C NG

Ls

5.4

5.2

5.3

5.5

5.5

5.6

5.6

5.7

Tota

l OPE

C 34

.9

30.9

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--

--

-

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l Sup

ply

100.

6 94

.0

--

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--

65.7

63.1

63.8

65.9

67.1

67.5

67.8

67.6

2019

2020

2021

2022

2023

2024

2025

2026

Tota

l non

-OPE

C su

pply

(mb/

d)

Alth

ough

the

tota

les

timat

edgl

obal

supp

lyis

not

yet

avai

labl

e,th

esu

pply

from

non-

OPE

Cco

untr

ies

will

exce

edpr

e-pa

ndem

icle

vels

in20

22.

Note

1:Pr

oces

sing

gain

sar

ene

tvo

lum

etric

gain

san

dlo

sses

inth

ere

finin

gpr

oces

sand

mar

ine

tran

spor

tatio

nslo

sses

.

56


706.

026.

MI.1

Conf

iden

tial

AP

PE

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IXB

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NS

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rig

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nh

ea

de

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ma

rkin

ne

xt3

yea

rs

Sour

ce: E

sgia

n, B

asso

eco

mm

enta

ry. M

anag

emen

t Cor

pora

te P

rese

ntat

ion,

Aug

ust 2

020,

pag

e 26

.

Bass

oe R

igs A

naly

tics

expe

ctat

ion

Bass

oeex

pect

sglo

balc

ompe

titiv

eut

iliza

tion

toris

efro

m62

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cord

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nnin

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this

year

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the

end

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yJu

ly20

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ompe

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iliza

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ese

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tsfro

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ary

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,whi

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ary

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and

tobe

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byla

te20

25.

Vala

ris m

anag

emen

t ex

pect

ed u

tiliza

tion

By20

21,

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tha

des

timat

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chw

ould

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22an

d20

23,

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2024

and

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25.

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67%

70%

80%

2021

2025

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ris u

tiliza

tion

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igs

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obal

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expe

cted

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021

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ter t

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repo

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58


706.

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PE

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ions

, Feb

ruar

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ition

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59


706.

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MI.1

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iden

tial

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PE

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706.

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MI.1

AP

PEN

DIX

D:

PR

OB

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Conf

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61


706.

026.

MI.1

Conf

iden

tial

AP

PE

ND

IXD

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IMIN

AL

EN

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ER

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ked

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r

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ensh

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Res

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om IC

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706.

026.

MI.1

AP

PEN

DIX

E:

OTH

ER R

ELEV

AN

T IN

FOR

MA

TIO

N

Conf

iden

tial

63


706.

026.

MI.1

Conf

iden

tial

Vala

risLT

D(th

e“C

ompa

ny”)

isa

lead

ing

prov

ider

ofof

fsho

reco

ntra

ctdr

illin

gse

rvic

esto

the

inte

rnat

iona

loil

and

gasi

ndus

try.

The

com

pany

was

foun

ded

inAp

ril20

19af

ter

the

mer

ger

ofEn

sco

and

Row

an,t

wo

ofth

em

ain

offs

hore

drill

ing

com

pani

esw

orld

wid

e.Cu

rren

tly,V

alar

isco

unts

with

adi

vers

erig

fleet

cons

istin

gof

ultr

a-de

epw

ater

drill

ship

s,ve

rsat

ilese

misu

bmer

sible

san

dm

oder

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allo

w-

wat

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scap

able

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eetin

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wid

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ectr

umof

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omer

s’w

ellp

rogr

amre

quire

men

ts.T

heco

mpa

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nto

tal,

mak

ing

itth

ew

orld

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etam

ongs

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ive

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ips

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sible

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ups

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l PP&

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orth

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AP

PEN

DIX

E:O

THER

REL

EVA

NT

INFO

RM

AT

ION

Co

mp

an

yO

verv

iew

(1)

Valu

e at

Rep

lace

men

t Cos

t acc

ordi

ng to

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agem

ent G

uida

nce

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ater

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th 1

2,00

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. Dril

ling

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avg.

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ax. W

ater

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th ~

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. Dril

ling

Dept

h ~3

7,50

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t 9 y

ears

old

on

avg.

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ax. W

ater

Dep

th ~

400´

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ax. D

rillin

g De

pth

~35,

000´

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eet 1

2 ye

ars o

ld o

n av

g.

Cons

truc

tion

cost

per

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ckup

rang

es fr

om

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to $

530

mill

ion

Cons

truc

tion

cost

per

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misu

bmer

sible

rang

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om

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770

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ion

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truc

tion

cost

per

Dr

illsh

ip ra

nges

from

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50 m

illio

n to

$1.

2 bi

llion


706.

026.

MI.1

Conf

iden

tial

65

Sour

ce: V

alar

is 10

k –

2020

p. 7

4

Vala

rispr

ovid

esdr

illin

gse

rvic

eson

ada

yra

teco

ntra

ctba

sis.

Unde

rda

yra

teco

ntra

cts,

Vala

rispr

ovid

esan

inte

grat

edse

rvice

that

inclu

des

the

prov

ision

ofa

drill

ing

rigan

drig

crew

sfo

rw

hich

the

Com

pany

rece

ives

ada

ilyra

te.I

nad

ditio

n,Va

laris

rece

ives

alu

mp-

sum

infe

esor

simila

rcom

pens

atio

nfo

rthe

mob

iliza

tion,

dem

obili

zatio

nan

dca

pita

lupg

rade

soft

heir

rigs.

The

cust

omer

sbea

rsub

stan

tially

allt

heCA

PEX,

asw

ella

sthe

econ

omic

risk

rela

tive

toth

esu

cces

soft

hew

ell.

Vala

riscu

stom

ersi

nclu

dem

any

ofth

ele

adin

gna

tiona

land

inte

rnat

iona

loil

com

pani

es,i

nad

ditio

nto

man

yin

depe

nden

tope

rato

rs.

Vala

ris20

2020

1920

18Ri

g Ut

iliza

tion

Floa

ters

29%

47%

46%

Jack

ups

54%

66%

63%

Oth

er

98%

100%

100%

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l Val

aris

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63%

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age

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even

ue

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2m

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ess

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ers

ofVa

laris

are

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zatio

n(#

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age

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ontr

act

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ing

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nues

perR

ig/#

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ysin

perio

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AP

PEN

DIX

E:O

THER

REL

EVA

NT

INFO

RM

AT

ION

Bu

sin

ess

Mo

de

l


706.

026.

MI.1

Conf

iden

tial

Feb-

19Ap

r-19

Jun-

19Au

g-19

Oct

-19

Dec-

19Ja

n-20

Mar

-20

May

-20

66

July

2019

Ensc

o-Ro

wan

PLC

chan

ged

itsna

me

toVa

laris

PLC.

Oct

ober

2019

Anno

unce

d7

new

cont

ract

awar

dsw

ithas

socia

ted

reve

nue

back

log

ofap

prox

.$24

5m

illio

n.

Nov

embe

r201

9An

noun

ced

10ne

wco

ntra

ctaw

ards

with

asso

ciate

dre

venu

eba

cklo

gof

appr

ox.$

285

mill

ion.

Nov

embe

r201

9An

noun

ced

the

appo

intm

ent

ofFr

eder

ickAr

nold

sto

the

Boar

dof

Dire

ctor

sto

serv

ein

the

Fina

nce

Com

mitt

eeas

anin

depe

nden

tbo

ard

mem

ber.

Augu

st20

19Lu

min

usas

larg

est

equi

tyho

lder

(19%

)as

ked

Vala

risto

inclu

dere

pres

enta

tives

from

itssh

areh

olde

rsw

ithth

egr

eate

stec

onom

icex

posu

re.

The

reas

onbe

ing

that

Lum

inus

belie

ved

self-

infli

cted

wou

nds

and

miss

edop

port

uniti

esw

ere

resp

onsib

lefo

rpas

tmat

eria

llos

ses.

(2)

Janu

ary

2020

Appo

ints

Adam

Wei

tzm

anto

itsbo

ard

ofdi

rect

ors

aspa

rtof

the

com

preh

ensiv

ere

fresh

men

tpr

ogra

mpr

opos

edby

Lum

inus

.

Mar

ch20

20Th

elo

ckdo

wns

rega

rdin

gth

eCo

vid-

19pa

ndem

icst

arte

din

the

wes

tdi

srup

ting

the

O&G

indu

stry

.

April

2019

Ensc

obu

ysRo

wan

for

$2.4

Ban

dm

erge

tofo

rmEn

sco-

Row

anPL

C(la

terV

alar

is).

AP

PEN

DIX

E:O

THER

REL

EVA

NT

INFO

RM

AT

ION

Re

leva

nt

Eve

nts

Pt.

1

Sour

ce: S

EC fi

lings

, MD&

As, 1

0-Ks

and

qua

rter

ly re

port

s

Inte

rest

ingl

y,Lu

min

ushe

ldsh

ortp

ositi

ons

inDi

amon

dsO

ffsho

reDr

illin

gIn

c,No

ble

Corp

.and

oil,

whi

lebe

ing

supp

osed

lylo

ngin

Vala

ris.


706.

026.

MI.1

Conf

iden

tial

Mar

-20

May

-20

Jul-2

0Se

p-20

Nov-

20Ja

n-21

Mar

-21

May

-21

67

June

2020

Ente

red

aw

aive

rin

orde

rto

use

a30

-day

grac

epe

riod

inor

der

toav

oid

som

ein

tere

stra

tepa

ymen

ts. Au

gust

2020

Offi

cially

files

for

Bank

rupt

cyan

dth

eNY

SEpr

epar

edto

delis

tthe

com

pany

.

April

2020

Mak

espu

blic

itsin

tent

ion

tore

stru

ctur

eis

debt

.Sto

ckta

nks.

Sept

embe

r202

0Ge

tsap

prov

alfo

ra

Supe

rSe

cure

dDI

Pof

$500

mill

ion

byth

eBa

nkru

ptcy

Cour

t.

April

2020

Vala

risw

asno

tifie

dby

the

NYSE

that

the

stoc

ktr

aded

belo

wth

em

inim

umth

resh

old

of$1

and

that

itne

eded

tocu

reth

ede

ficie

ncy

ifth

eco

mpa

nyw

ante

dto

rem

ain

liste

d.

Augu

st20

20Ad

amW

eitz

man

leav

esth

eBo

ard.

Also

,Va

laris

amen

ded

the

RSA

toal

low

Lum

inou

sto

buy

upto

10%

ofth

eCo

mpa

ny´s

outs

tand

ing

inde

bted

ness

.

May

2020

Desp

iteth

eco

mpa

nygo

ing

thro

ugh

finan

cialt

roub

le,m

anag

emen

tdec

ided

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crea

seits

pay

argu

ing

they

need

edto

bem

ore

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ivat

ed¨.

Sept

embe

r202

0An

noun

ced

that

over

70%

ofits

note

hold

ersh

adac

cept

edth

eRS

Aan

dBC

A.

Mar

ch20

20Re

ceiv

esco

urt

appr

oval

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apte

r11

plan

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orga

niza

tion

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2020

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plet

esre

stru

ctur

ing

and

islis

ted

agai

nin

the

NYSE

asVa

laris

LTD.

AP

PEN

DIX

E:O

THER

REL

EVA

NT

INFO

RM

AT

ION

Re

leva

nt

Eve

nts

Pt.

2

Sour

ce: S

EC fi

lings

, MD&

As, 1

0-Ks

and

qua

rter

ly re

port

s


706.

026.

MI.1

Conf

iden

tial

Sour

ce: V

ALPQ

and

RIG

pric

es w

ere

take

n fro

m y

ahoo

fina

nce.

AP

PEN

DIX

E:O

THER

REL

EVA

NT

INFO

RM

AT

ION

Va

lari

sco

mp

ari

son

wit

hTr

an

soce

an

-

5.0

10.

0

15.

0

20.

0

25.

0 Jan-

19Ju

n-19

Nov-

19Ap

r-20

Sep-

20Fe

b-21

RIG

vs V

ALPQ

stoc

k pr

ice co

mpa

rison

(US$

)

VALP

QRI

G

Som

e im

port

ant c

ompa

rison

s bet

wee

n Va

laris

and

Tr

anso

cean

are

:•

Vala

ris st

ock

price

has

falle

n m

ore

than

90%

sinc

e 20

19,

whi

le re

cent

ly, T

rans

ocea

n st

ock

has b

een

reco

verin

g.

•In

202

0, T

rans

ocea

n m

anag

ed to

rest

ruct

ure

US$

1.5B

of

debt

, avo

idin

g ba

nkru

ptcy

, w

hile

Val

aris

faile

d to

do

so in

20

19.

Loss

on

impa

irmen

t 20

1920

20Va

laris

10

4.0

3,64

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Tran

soce

an

609.

0 58

7.0

With

the

sam

e m

arke

t con

ditio

ns, a

nd si

mila

r fix

ed a

sset

s, Va

laris

reco

gnize

d im

pairm

ent

loss

es 6

.2x

grea

ter t

han

thos

e of

Tra

nsoc

ean

Unlik

e Tr

anso

cean

, Val

aris

man

agem

ent h

as co

nsist

ently

des

troy

ed sh

areh

olde

r val

ue.

68


706.

026.

MI.1

Conf

iden

tial

69

AP

PEN

DIX

E:O

THER

REL

EVA

NT

INFO

RM

AT

ION

Ma

inP

laye

rs

Sour

ce: C

ompa

ny S

EC fi

lings

Adde

dBo

ard

Mem

bers


706.

026.

MI.1

Vehi

cles u

sed

for V

alar

is tr

ansa

ctio

n:

•Lu

min

us M

anag

emen

t, LL

C (D

elaw

are)

•Lu

min

us E

nerg

y Pa

rtne

rs M

aste

r Fun

d, Lt

d (H

amilt

on, B

erm

uda)

Othe

r Rel

ated

Veh

icles

:

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inus

Ene

rgy

Part

ners

Ltd

(Ham

ilton

, Ber

mud

a)

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inus

Ass

et P

artn

ers L

p(D

elaw

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inus

Cap

ital P

artn

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ffsho

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td.(C

aym

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land

s)

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inus

Cap

ital P

artn

ers O

nsho

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P (D

elaw

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Lum

inus

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dit I

, LLC

(Del

awer

e)

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inus

Cre

dit O

ppor

tuni

ties I

Lp

(Del

awer

e)

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inus

Cre

dit O

ppor

tuni

ties I

iLp

(Del

awer

e)

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inus

Cre

dit O

ppor

tuni

ties P

ie I

Lp(D

elaw

ere)

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inus

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dit O

ppor

tuni

ties P

ie Ii

Lp(D

elaw

ere)

Lum

inus

Ene

rgy

Part

ners

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LP (D

elaw

ere)

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inus

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cial O

ppor

tuni

ties I

Mas

ter F

und,

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man

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nds)

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inus

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ppor

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PIE

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. (Ca

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inus

Rel

ated

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inus

Rel

ated

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c(D

elaw

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70

AP

PEN

DIX

E:O

THER

REL

EVA

NT

INFO

RM

AT

ION

Ve

hic

les

use

db

yLu

min

us


706.

026.

MI.1

AP

PEN

DIX

F:

SOU

RC

ES

Conf

iden

tial

71


706.

026.

MI.1

Conf

iden

tial

Corp

orat

e re

port

s:•

Vala

ris 1

0-K

2020

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Vala

ris 1

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Vala

ris 1

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. •

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10-Q

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laris

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8, 2

020

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anag

emen

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pora

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rese

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from

Sep

tem

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019,

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Feb

ruar

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20 a

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ugus

t 202

0

Bank

rupt

cy d

ocum

ents

:•

Disc

losu

re S

tate

men

t Rel

atin

g to

the

Debt

ors'

Third

Am

ende

d Jo

int C

hapt

er 1

1 Pl

an o

f Reo

rgan

izatio

n; F

iled

by V

alar

is pl

c.

http

s://c

ases

.stre

tto.

com

/pub

lic/X

088/

1039

6/PL

EADI

NGS/

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6123

0208

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Debt

ors´

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orde

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o (I)

reta

in a

nd e

mpl

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zard

Frè

res &

Co.

LLC

as in

vest

men

t ban

ker

effe

ctiv

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etiti

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ate,

(II)

mod

ify ce

rtai

n tim

e-ke

epin

g re

quire

men

ts, a

nd (I

II) g

rant

ing

rela

ted

relie

f. ht

tps:/

/cas

es.st

rett

o.co

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ublic

/X08

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DING

S/10

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AMO

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FFSH

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DRI

LLIN

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ing

cert

ain

time-

keep

ing

requ

irem

ents

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( C)

Gra

ntin

g re

late

d re

lief.

http

s://c

ases

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ecle

rk.c

om/d

iam

ond/

Hom

e-Do

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oadP

DF?i

d1=M

TQw

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0•

Supp

lem

ent c

ertif

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of s

ervi

ce: h

ttps

://ca

ses.s

tret

to.c

om/p

ublic

/X08

8/10

396/

PLEA

DING

S/10

3960

1302

1800

0000

0012

.pdf

Oth

er d

ocum

ents

:•

Vala

ris a

nd Lu

min

us M

anag

emen

t Coo

pera

tion

and

Supp

ort A

gree

men

t. •

Vala

ris S

C 13

G (B

enef

icial

ow

ners

hip

repo

t) 20

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EXHIBIT D


Valaris Valuation Model Assumptions

August 2021


2

Legal Disclaimer

This document has been prepared by Tempest Capital SC for litigation purposes only. This document is an indicative summary of the assumptions made by Tempest to perform a scenario analysis on Valaris´ valuation model. This document contains the assignment-specific elements of information required to be included by the Uniform Standards of Professional Practice (USPAP) as promulgated by The Appraisal Foundation of Washington, DC. The data utilized to compute Valaris´ valuation model was based on public information available during the creation of the model. Tempest is not an independent party on this litigation process. Tempest does not guarantee the accuracy or completeness of information which is contained in this document and which is stated to have been obtained from or is based upon trade and statistical services or other third-party sources. Any data on past performance, modeling or backtesting contained herein is no indication as to future performance. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modeling or back-testing or any other information contained herein. All options and estimates are given as of the date hereof and are subject to change, and Tempest assumes no obligation to update this document to reflect any such changes. The value of any investment may fluctuate as a result of market changes. The information herein is not intended to predict actual results, and no assurances are given concerning it.


3

Contents Valuation Scenarios....................................................................................................................................... 4

Upside Case ............................................................................................................................................... 5

Tempest Case ............................................................................................................................................ 6

Management Case .................................................................................................................................... 7

Damages ........................................................................................................................................................ 8


4

VValuation Scenarios

Valaris Enterprise Value (“EV”) ranges in three different valuation scenarios. Each scenarios contains a series of assumptions and drivers based on industry research paramount to obtain a possible valuation range.

To compute the theoretical value of Valaris´s Enterprise Value Plaintiff used a Discounted Cash Flow (“DCF”) analysis, based on the Company's Free Cash Flow (FCFF). Weighted Average Cost of Capital (“WACC”) is assumed at 8.1%, for which the cost of capital is estimated (“Kc”) at 8.3%, a cost of debt of 8.25%, and a 10.7% Debt-to-Equity (“D/E”) ratio. To estimate the KC, a Capital Asset Pricing Model (“CAPM”) was used. CAPM considered a 1.58% risk-free rate, a 1.1 beta, and a 6.0% market risk premium.

Aside from the discount rate, the valuation was based upon 3 main drivers. Those drivers being 1) Fleet utilization of active rigs, 2) Number of active rigs, and 3) Average daily rate charged per rig. Using them as a based to compute sales and potential free cash flows.

Regarding the long-term growth rate used for the DCF, the estimate is in line with the expected growth in GDP of the regions served by Valaris.

7,432

17,253

26,043

14,268

33,310

50,088

Replacement Valueof PP&E $23,900

Management Case

Tempest Case

Upside Case

Valaris Enterprise Value(US$ MM)

Net PP&E 1Q21 $10,083


5

UUpside Case In this scenario, the model estimates the oil and gas industry quickly recovers to pre-pandemic levels, increasing the demand for specialized rigs and driving utilization back to levels seen in 2014.

Active fleet

It is assumed that Valaris will have to lightly increase its fleet due to a fast post-pandemic recovery and increased demand for fossil fuels from emerging markets in Africa and Asia; a progressive reactivation plan will take place in most of Valaris´ fleet to take advantage of such market conditions and improve the Company´s overall margins.

99.7

91.0

96.499.5 101.2 102.3 103.2 104.1

2019 2020 2021 2022 2023 2024 2025 2026

Estimated oil demand for the next five years(Millions of Barrels per Day)

Source: International Energy Agency (2021)


6

It is projected the oil demand will surpass the existing demand before the pandemic, as important parts of the economy have been reactivating, such as tourism. Benefiting overall market conditions.

Terminal value (US$ Million)

Long term growth rate 3.0%

2025 FCF x (1+g) 2,194

Terminal value in 2025 43,014

Present value of terminal value 29,139

Present value of stage 1 cash flows 6,436

Total Enterprise Value (TEV) 35,576

Valaris Upside Scenario gives an average Enterprise Value of $35.9 billion, ranging between a minimum value of $26.0 billion and a maximum value of $50.0 billion.

TTempest Case In this scenario, it is estimated the oil and gas industry recovers to pre-pandemic levels with progressive demand for specialized rigs. It is expected a considerable part of the global population will resume the utilization of transportation vehicles powered by fossil fuels, as well as key industries having to purchase such commodities, for their manufactured goods.

It is assumed a +86% utilization rate for Valaris´s overall fleet. An implied mean reversion to Company´s historical utilization average. Despite ups and downs caused by the volatility in oil and gas prices, Valaris has maintained a utilization rate ranging from 75% to 90% for the last three decades. Driving the average day rate to historic price levels.

Enterprise Value

Long term growth rate (g):35,576 1.0% 2.0% 3.0% 3.5% 5.0%

10.1% 20,679 22,645 25,165 26,712 33,171

9.1% 23,429 26,043 29,514 31,715 41,536

8.1% 26,961 30,562 35,576 38,900 55,306

7.1% 31,659 36,862 44,604 50,088 82,206

6.1% 38,210 46,247 59,470 69,896 158,043

WAC

C

$US millions


7

Assumptions of a moderate post-pandemic growth are conservative and believable based on Valaris’s two latest fleet reports, where the Company announced it was awarded and extended 44 contracts in the last 3 months. Demonstrating Valaris’ recovering capacity.

Terminal value (US$ Million)

Long term growth rate 3.0% 2025 FCF x (1+g) 1,465 Terminal value in 2025 28,727 Present value of terminal value 19,461 Present value of stage 1 cash flows 4,158

Total enterprise value (TEV) 23,619

Valaris Tempest case scenario gives an average Enterprise Value of $23.8 billion, ranging between a minimum value of $17.2 billion and a maximum value of $33.3 billion.

Management Case In this scenario, the model estimates the oil and gas industry will not recover to pre-pandemic levels, making the demand for specialized rigs to remain at the same level and with the total number of rigs active remaining at the same level having no further reactivation of rigs.

It is assumed an over 86% utilization rate for Valaris´ overall fleet since this have been the company´s average margins throughout its history. Despite having ups and downs due to volatility in oil and gas prices, Valaris has maintained a utilization rate ranging from 75 to 90% in the last three decades.

Enterprise Value


10.1% 13,671 14,984 16,667 17,700 22,014

9.1% 15,507 17,253 19,571 21,041 27,600

8.1% 17,866 20,271 23,619 25,839 36,796

7.1% 21,003 24,478 29,648 33,310 54,760

6.1% 25,377 30,745 39,576 46,539 105,407

WAC

C

$US millions


8

Moreover, the model assumes Valaris will not have to increase its current fleet since demand for oil and rigs will remain stagnant.

Valaris Management case scenario gives an average Enterprise Value of $10.2 billion, ranging between a minimum value of $7.4 billion and a maximum value of $14.2 billion.

Terminal value (US$ Million) Long term growth rate 3.0% 2025 FCF x (1+g) 623 Terminal value in 2025 12,223 Present value of terminal value 8,280 Present value of stage 1 cash flows 1,862 Total enterprise value (TEV) 10,143

DDamages Based on Valaris’s 2019 10-K as of December 31st 2019, the implied share price based on Book Value of equity and the Replacement Value of its Assets, would have given the Plaintiff the following amounts for his investment:

Investment value based on Book Value Investment value based on Assets Replacement Value

Book value of equity $9,310.9 million

Replacement value of assets $23,900 million

Shares outstanding 197.3 million Shares outstanding 197.3 million

Implied price per share $47.2

Implied price per share $121.14 Plaintiff´s # of shares 152,900 Plaintiff´s # of shares 152,900 Total amount $7,216,295.2 Total amount $18,523,392.5

Considering the Plaintiff´s loss of his initial investment, lost profit, and economic damages, his 152,900 shares would have been worth at least $7,216,295.2, based on Valaris’s financial statements and disclosures. Equitable relief of treble damages would bring the total amount of damages to $$21,648,885.6.

Initial investment Lost Profit Investment amount based onBV of equity

Equitable Relief

$960,612

$6,255,683.2 $7,216,295.2

$21,648,885.6

3x equity BV of invested amount

(Treble damages)

Enterprise Value


10.1% 5,906 6,465 7,181 7,620 9,456

9.1% 6,689 7,432 8,418 9,044 11,834

8.1% 7,695 8,718 10,143 11,087 15,749

7.1% 9,031 10,510 12,710 14,268 23,395

6.1% 10,895 13,179 16,936 19,899 44,946

WAC

C

$US millions


February 2020

Investor Presentation

Case 20-34114 Document 1367-1 Filed in TXSB on 08/30/21 Page 1 of 42

Statements contained in this investor presentation that are not historical facts are forward-looking statements within the meaning ofSection 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statementsinclude words or phrases such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “plan,” “project,” “could,” “may,” “might,”“should,” “will” and similar words and specifically include statements involving expected financial performance, effective tax rate,expected expense savings, day rates and backlog, estimated rig availability; rig commitments and contracts; contract duration,status, terms and other contract commitments; estimated capital expenditures; letters of intent or letters of award; scheduled deliverydates for rigs; the timing of delivery, mobilization, contract commencement, relocation or other movement of rigs; our intent to sell orscrap rigs; and general market, business and industry conditions, trends and outlook. In addition, statements included in this investorpresentation regarding the anticipated benefits, opportunities, synergies and effects of the merger between Ensco and Rowan areforward-looking statements. Such statements are subject to numerous risks, uncertainties and assumptions that may cause actualresults to vary materially from those indicated, including actions by rating agencies or other third parties; actions by our securityholders; costs and difficulties related to the integration of Ensco and Rowan and the related impact on our financial results andperformance; our ability to repay debt and the timing thereof; availability and terms of any financing; commodity price fluctuations,customer demand, new rig supply, downtime and other risks associated with offshore rig operations, relocations, severe weather orhurricanes; changes in worldwide rig supply and demand, competition and technology; future levels of offshore drilling activity;governmental action, civil unrest and political and economic uncertainties; terrorism, piracy and military action; risks inherent toshipyard rig construction, repair, maintenance or enhancement; possible cancellation, suspension or termination of drilling contractsas a result of mechanical difficulties, performance, customer finances, the decline or the perceived risk of a further decline in oiland/or natural gas prices, or other reasons, including terminations for convenience (without cause); the cancellation of letters ofintent or letters of award or any failure to execute definitive contracts following announcements of letters of intent, letters of award orother expected work commitments; the outcome of litigation, legal proceedings, investigations or other claims or contract disputes;governmental regulatory, legislative and permitting requirements affecting drilling operations; our ability to attract and retain skilledpersonnel on commercially reasonable terms; environmental or other liabilities, risks or losses; debt restrictions that may limit ourliquidity and flexibility; tax matters including our effective tax rate; and cybersecurity risks and threats. In addition to the numerousfactors described above, you should also carefully read and consider “Item 1A. Risk Factors” in Part I and “Item 7. Management’sDiscussion and Analysis of Financial Condition and Results of Operations” in Part II of our most recent annual report on Form 10-K,as updated in our subsequent quarterly reports on Form 10-Q, which are available on the SEC’s website at www.sec.gov or on theInvestors section of our website at www.valaris.com. Each forward-looking statement speaks only as of the date of the particularstatement, and we undertake no obligation to publicly update or revise any forward-looking statements, except as required by law.

2

Forward-Looking Statements


1. Company Highlights2. Market Dynamics3. Valaris Fleet4. ARO Drilling5. Financial Management6. Operational Highlights, Integration & Synergies

Outline

3


4

Valaris Overview (NYSE: VAL)

Fleet• Largest and amongst the

highest-quality offshore drilling fleets in the world

16 drillships

11 semisubmersibles1

52 jackups1

• ~$9 billion of gross asset value from rig fleet according to third party estimates

• ARO Drilling 50/50 joint venture with Saudi Aramco, the largest jackup customer worldwide

1Excludes one semisubmersible and one jackup that are held for sale; 2As of September 30, 2019; 3Borrowing capacity under revolving credit facility is approximately $1.6B through September 2022. As of September 30, 2019, the Company had drawn $141M on its revolver ; 4As of most recent 10-Q filing

Operational

• Presence in nearly all major offshore markets and on six continents

• Large & diverse customer base including major, national and independent E&P companies

• Strong track record of safety, innovation and operational excellence

Financial

• $1.6 billion of liquidity‒ $0.1 billion of cash and short-

term investments2

‒ $1.5 billion available under unsecured revolving credit facility3

• $2.3 billion of contracted revenue backlog4

• $1.0 billion of debt maturities prior to 20242

– Ability to add guaranteed and/or secured debt to capital structure

$


5

Valaris is Focused on Four Key Priorities in 2019

Fleet Strategy & Contracting Assets

Driving Value at ARO Drilling

Delivering on Integration & Synergy Capture and Operational Excellence

Proactive Financial Management


6

Market Dynamics


7

Offshore Project Approvals Expected to Lead to Higher Levels of Capital Expenditures

87

5442

32

5872

91

2013 2014 2015 2016 2017 2018 2019

Number of New Major Offshore Project Approvals • With lower project costs relative to prior years and increasing cash flows from higher commodity prices, the number of final investment decision approvals for large offshore projects has increased recently‒ Drilling rigs required between

approval and first production, which averages ~4 years for deepwater projects and ~1.5 years for shallow-water projects, and for periodic maintenance over the life of an offshore well

• As a result, capital expenditures are expected to increase at a gradual rate over the next several years, with the majority of this growth coming from projects in deepwaterSource: Rystad Energy ServiceDemandCube as of January 2020, major projects

defined as projects with >$250 million of associated capital expenditures

326

156200

2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E 2024E

E&P Offshore Capital Expenditures

Shallow Water Deepwater

5% CAGR


8

The Global Floater Market is Recovering

40%

50%

60%

70%

80%

90%

Total Utilization1

5

10

15

20

0

50

100

150

2013 2014 2015 2016 2017 2018 2019

New Contracts2

Rig Years (L Axis) Average Contract Duration (R Axis, Months)

• Utilization for the global floater fleet has gradually increased since early 2017 due to a higher number of rig years awarded for new contracts, leading to an improvement in average spot day rates

• Rig years awarded increased by ~17% in 2019 and we have recently seen an increase in the rate of tendering activity, particularly for work beginning mid-2020 and beyond

Source: IHS Markit RigPoint as of January 20201Total utilization reflects rigs currently under contract and contracted for future work as a percentage of the global floater fleet; includes benign & harsh-environment rigs; 2Fixtures data includes new mutual contracts only

2013 2014 2015 2016 2017 2018 2019


9

The Global Jackup Market is Recovering

40%

50%

60%

70%

80%

90%

Total Utilization1

10

12

14

16

18

20

0

80

160

240

320

400

2013 2014 2015 2016 2017 2018 2019

New Contracts2

Rig Years (L Axis) Average Contract Duration (R Axis, Months)

• Utilization for the global jackup fleet has also moved higher since early 2017, as a steady increase in rig years awarded for new contracts has led to a more significant improvement in average spot day rates as compared to floaters

• In addition, average contract durations for jackups have increased meaningfully in 2019, contributing to the increase in aggregate rig years awarded for new contracts

Source: IHS Markit RigPoint as of January 20201Total utilization reflects rigs currently under contract and contracted for future work as a percentage of the global jackup fleet; includes benign & harsh-environment rigs; 2Fixtures data includes new mutual contracts only

2013 2014 2015 2016 2017 2018 2019


10

Valaris Fleet


11

Fleet Overview

Diverse Fleet Capable of Meeting a Broad Spectrum of Customers’ Well Program Requirements

Drillships Semisubmersibles Jackups

16 Total 11 Total 52 Total– Average age of 6 years– 11 assets equipped with dual 2.5

million lbs. hookload derricks and two blowout preventers

– 9 modern assets with sixth generation drilling equipment– 3 rigs capable of working in both

moored and dynamically-positioned mode

– 7 heavy duty ultra-harsh & 7 heavy duty harsh environment rigs

– 14 heavy duty & 11 standard duty modern benign environment rigs

– 13 standard duty legacy rigs


12

Highest-Specification Drillships1

40%

60%

80%

100%

Total Utilization

Highest-Spec Drillships Other Drillships

Illustrative Rig-Level EBITDA Scenarios3 ($M)

Day Rate

$200K $300K $500K

Util

izat

ion 70% (40) 241 803

85% 80 422 1,104

95% 161 542 1,305

Source: IHS Markit RigPoint as of January 2020; Wells Fargo Securities as of December 20191Drillships delivered in 2013 or later, equipped with dual BOP and 2.5mm lbs. hookload derricks. Includes 8 rigs that are under construction; 2Based on Wells Fargo Securities estimates; 3Assumes average operating expense of $150K/day, unadjusted for changes in utilization

47of 123

drillshipsworldwide

11Valaris

10Transocean

4 Diamond

4Noble

4Seadrill

14All Other

L M H

L

H

M

2013 2014 2015 2016 2017 2018 2019

60%

70%

80%

90%

100%

$100 $200 $300 $400 $500 $600 $700

Day Rates for New Contracts(2013 – Current)

Day Rates – $K/day

Tota

l Util

izat

ion

L

M

H

Utilization for highest-specification drillships at time of contract signing

$2.8

$5.3

Gross AssetValue

ReplacementValue

Valaris Asset Value2 ($B)


13

Contract Status & Priorities For Marketed Floaters1

VALARIS 6002

VALARIS 5004

VALARIS MS-1

VALARIS 8504

VALARIS 8503

VALARIS 8505

VALARIS DPS-1

VALARIS DS-6

VALARIS DS-11

VALARIS DS-17

VALARIS DS-7

VALARIS DS-4

VALARIS DS-9

VALARIS DS-16

VALARIS DS-18

VALARIS DS-15

VALARIS DS-12

VALARIS DS-8

VALARIS DS-10

Contracted Options

2020 2021

1 Excludes 2 drillships that are under construction as well as 2 drillships and 4 semisubmersibles that are preservation stacked

Dril

lshi

psSe

mis

ubm

ersi

bles

Priorities

• Increase contracted backlog on active rigs with near-term availability; warm stack and reduce costs to <$40K/day if uncontracted

• Increase contracted backlog on active rigs with near-term availability; warm stack and reduce costs to <$40K/day if uncontracted

• Divest unless new contract covers capital investment required to keep rigs active and provides adequate return of capital


14

Heavy Duty Ultra-Harsh & Harsh Environment Jackups1

50%

60%

70%

80%

90%

100%

Total Utilization

HD UH & HE Jackups Other Jackups

13Valaris

11Maersk10

Noble

5Borr

3SDRL

10All Other

49of 576

jackupsworldwide


Day Rate

$100K $150K $200K

Util

izat

ion 70% - 166 332

85% 71 273 475

95% 119 344 569

Source: IHS Markit RigPoint as of January 2020; Wells Fargo Securities as of December 20191Includes jackups with the following rig designs: GustoMSC CJ70, Le Tourneau Super Gorilla Class and KFELS N Class, and other jackupdesigns classified as harsh environment and North Sea capable delivered in 2000 or later; 2Includes 5 rigs that are under construction; 3Based on Wells Fargo Securities estimates; 4Assumes average operating expense of $70K/day, unadjusted for changes in utilization

2

L M H

L

H

M

2013 2014 2015 2016 2017 2018 2019

60%

70%

80%

90%

100%

$50 $150 $250 $350 $450



Tota

l Util

izat

ion

Utilization for heavy duty ultra-harsh & harsh environment jackups at time of contract signing

L

M

H

2012

$1.6

$4.0

Gross AssetValue

ReplacementValue



15

Contract Status & Priorities ForHeavy Duty Ultra-Harsh & Harsh Environment Jackups

VALARIS JU-121

VALARIS JU-102

VALARIS JU-101

VALARIS JU-100

VALARIS JU-122

VALARIS JU-123

VALARIS JU-120

VALARIS JU-291

VALARIS JU-247

VALARIS JU-249

VALARIS JU-290

VALARIS JU-292

VALARIS JU-250

VALARIS JU-248

Contracted Options

2020 2021

1 VALARIS JU-100 excluded from slide 14 as the rig was delivered before 2000

Hea

vy D

uty

Ultr

a-H

arsh

Hea

vy D

uty

Har

sh

Priorities

• Increase contracted backlog on active rigs with near-term availability

Leased to ARO Drilling

1


40%

60%

80%

100%

Total Utilization

Modern HD & SD Jackups Legacy SD Jackups

16


Modern Heavy Duty & Standard Duty Jackups1

193of 576

jackupsworldwide

25Valaris

13Seadrill

22Borr

109All Other

16COSL

8Shelf

Day Rate

$75K $100K $150K

Util

izat

ion 70% (23) 137 456

85% 80 274 662

95% 148 365 798

Source: IHS Markit RigPoint as of January 2020; Wells Fargo Securities as of December 20191Benign environment jackups delivered in 1999 or later with 1.5 million lbs. hookload derrick capacity, a minimum of three mud pumps and capable of operating in a minimum water depth of 340 ft. Includes 19 rigs that are under construction; 2Based on Wells Fargo Securities estimates; 3Assumes average operating expense of $55K/day, unadjusted for changes in utilization

L M H

L

H

M

2013 2014 2015 2016 2017 2018 2019

60%

70%

80%

90%

100%

$0 $100 $200 $300


Utilization for modern heavy duty & standard duty jackups

at time of contract signing


Tota

l Util

izat

ion

L

M

H

2012

$2.3

$4.8

Gross AssetValue

ReplacementValue



17

Contract Status & Priorities ForMarketed Modern Heavy Duty & Standard Duty Jackups1

VALARIS JU-145

VALARIS JU-75

VALARIS JU-140

VALARIS JU-141

VALARIS JU-146

VALARIS JU-143

VALARIS JU-144

VALARIS JU-147

VALARIS JU-148

VALARIS JU-76

VALARIS JU-118

VALARIS JU-104

VALARIS JU-117

VALARIS JU-115

VALARIS JU-107

VALARIS JU-110

VALARIS JU-109

VALARIS JU-108

VALARIS JU-116

VALARIS JU-106

Contracted Options

2020 2021

Hea

vy D

uty

Mod

ern

Stan

dard

Dut

y M

oder

n

Priorities

Leased to ARO Drilling

1 Excludes 5 jackups that are preservation stacked or cold stacked

• Increase contracted backlog on active rigs with near-term availability

• Warm stack and reduce costs to <$30K/day if uncontracted

• Reactivate preservation stacked capacity if initial contract covers reactivation cost and provides adequate return on capital


18

Valaris Value PropositionContext for Illustrative EBITDA Scenarios

• Average day rates for modern floaters and jackupsbottomed during 2018 after reaching recent highs between 2012 and 2014

• Based on historical build costs, we expect that day rates would need to be higher than the average used in Scenario H to incentivize new rig orders

– Since 2000, the average build costs for floaters was ~$665 million, while jackups averaged ~$200 million; an average day rate of ~$490K for floaters and ~$160K for jackups would be needed to meet a 15% unlevered internal rate of return1

50%

60%

70%

80%

90%

100%

$100 $200 $300 $400 $500 $600

Floater Average Utilization and Day Rates By Year(2008 – Current)

$K/day

50%

60%

70%

80%

90%

100%

$60 $80 $100 $120 $140 $160 $180

Jackup Average Utilization and Day Rates By Year(2008 – Current)

$K/daySource: IHS Markit RigPoint; Valaris analysis for comparable operating geographies1Discounted cash-flow analysis assumes 35-year useful life, average opex of $150K/day, $5 million of annual maintenance costs, $10 million of survey costs every five years for floaters; and 30-year useful life, average opex of $50K/day, $2.5 million of annual maintenance costs, $7 million of survey costs every five years for jackups; and 90% operational utilization. Analysis excludes debt service costs, shore-based support costs, taxes, and assumes no residual value at the end of the asset life.

2015

20192017

20092011

2013

2019

2017

201320092011

2015

M

H

Includes new contracts for all benign environment floaters delivered from 2000 onwards

Includes new contracts for all jackupsdelivered from 2000 onwards

M

H


19

Valaris Value Proposition

$ MillionIllustrative Rig-Level

Annual EBITDAScenarios1

Asset Values2

Fleet M H Gross Replace-ment

Highest Specification Drillships3 (11) $422 $1,305 $2,804 $5,304

Heavy Duty Ultra-Harsh & HE Jackups3 (13) 273 569 1,632 4,002

Modern Heavy & Standard Duty Jackups3 (25) 274 798 2,286 4,835

ARO Drilling Jackups4 (7) 51 94 373 575

Other Drillships5 (5) 153 376 1,032 2,570

Semisubmersibles6 (11) 241 512 705 4,550

Other Jackups7 (14) 139 256 266 2,020

Total $1,553 $3,910 $9,098 $23,856

Source: Wells Fargo Securities as of December 2019; Valaris analysis1Utilization assumptions: M: 85%, H: 95%; 2Based on Wells Fargo Securities estimates as of December 2019; 3Illustrative annual EBITDA based on assumptions from M and H scenarios in slides 12-14; 4Represents 50% ownership interest from ARO Drilling’s 7 owned rigs; Assumes day rates of M: $100K/day, H: $125K/day and average operating expense of $45K/day, unadjusted for changes in utilization; 5Assumes day rates of M: $275K/day, H: $375K/day and average operating expense of $150K/day, unadjusted for changes in utilization; 6Assumes day rates of M: $200K/day, H: $250K/day and average operating expense of $110K/day, unadjusted for changes in utilization; 7Assumes day rates of M: $85K/day, H: $100K/day and average operating expense of $45K/day, unadjusted for changes in utilization

M H


20

ARO Drilling


21

ARO Drilling Overview

50% Ownership

50% Ownership

~$450M Shareholder

Notes Receivable

~$450M Shareholder

Notes Receivable

Leased Rigs (9)

• Three-year contracts; day rates set by an agreed pricing mechanism

• Valaris receives bareboat charter fee based on % of rig-level EBITDA

• ~$190M of bareboat charter revenue backlog to Valaris as of September 30, 2019 (no associated operating expense to Valaris)

Owned Rigs (7)

• Rigs contracted for three-year terms

• Renewed and re-priced every three years for at least an aggregate of 15 years

Newbuild Rigs (20)

• Initial 8-year contracts; day rate set by an EBITDA payback mechanism1

• Further 8-year contracts; day rate set by a market pricing mechanism and re-priced every three years

• Preference given for future contracts thereafter

• Rigs contribute to ARO Drilling results, of which Valaris recognizes 50% of net income

• Expected to generate ~$170M EBITDA in 2019• 50% attributable to Valaris (not reflected in Valaris

financials)1 Down payment on each newbuild rig is no more than 25% before delivery. Illustrative in-service newbuild rig capital cost of $175 million would provide an average day rate of ~$150K/day for the initial eight-year contract, based on cash operating costs of $45K/day +shorebase overhead allocation of $7.5 million per year

Valaris operates seven jackups offshore Saudi Arabia outside of ARO

Drilling joint venture


22

ARO Drilling Financial Considerations

50% Ownership

50% Ownership

~$450M Shareholder

Notes Receivable

~$450M Shareholder

Notes Receivable

Shareholder Notes

• ~$900M with 10-year maturities

• Issued as consideration for cash and rigs contributed by joint venture partners in 2017 and 2018

• Interest rate is LIBOR +2%; interest can be either paid in cash or PIK’d on an annual basis at discretion of ARO Drilling Board

• No third-party debt

Cash & Distributions

• ARO Drilling had more than $200M of cash as of March 31, 20191

• In total, ARO Drilling is expected to generate ~$170M EBITDA during 2019

• Excess cash can be distributed to joint venture partners at the discretion of ARO Drilling Board

Future Growth

• 20-rig newbuild program over ten years, with delivery of rigs 1 and 2 expected in 2022

• Opportunities for external financing given long-term nature of contracts backed by strong counterparty

• Expected to be financed by ARO cash flows or external financing

1 From Valaris 1Q19 results conference call


2323

Financial Management


24

Senior Notes

2020 2021 2022 2023 2024 2025 2026 2027

$141

$621

2040

Limited Debt Maturities to 2024

2042 2044

$ millions

$123

$762

$1,764

$850

$914

$695

$1,000

$112

$300$400

$1,401

Convertible Senior Notes

Note: All amounts as of September 30, 2019. Represents principal debt balances outstanding. Borrowing capacity under revolving credit facility is approximately $1.6B through September 2022. As of September 30, 2019 the drawn balance on the revolving credit facility was $141M

$850

$114

Revolving Credit Facility


25

• Cost management is a priority, with shore-based support costs and capex lower in 2020 than illustrative graph below

‒ ~$160M for Maintenance Capex

‒ ~$100M for G&A Expense

‒ ~$90M for Ops Support Exp.

Category 1

While Cash Flow Does Not Cover Costs at This Stage of the Cycle ...

~$400 million

~$120 million

~$180 million

$139 $139 $256 $241

$512 $153

$376

$64

$51

$94

$274

$274

$798

$273

$273

$569

$251

$422

LTM Cash BreakevenScenario

Scenario M Scenario H

Other Jackups Semis Other Drillships ARO Modern Jackups HE Jackups HS Drillships

Illustrative Rig-Level Annual EBITDA Scenarios3

~$950 million

$1,553 million

$3,910 million

1Includes taxes and other items2Annualized cash interest3Illustrative annual EBITDA based on M and H scenarios on slide 194LTM rig-level EBITDA excludes operations support costs included in contract drilling expense and G&A expense; excludes ARO Drilling

Ops Support Exp.

Other1

$1,305

~$950 million

Cash Breakeven Scenario Utilization Day RateHS Drillships 85% $250,000HE Jackups 85% $150,000Modern HD & SD Jackups 85% $100,000ARO Drilling 95% $100,000Other Drillships 70% $175,000Semisubmersibles 70% $150,000Other Jackups 85% $85,000

Interest on Senior Notes2

Maintenance Capex

~$150 millionG&A Expense

~$100 million

Illustrative AnnualCash Uses

$459 million

4 M H

Other non-recurring cash uses:• Newbuild capex ~$300M• Debt maturities


$2.0$1.7 $1.9

$3.0$3.5 $3.7 $3.9

$2.9

$1.3

$0.4

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

26

EBITDA is Cyclical and Currently in Process of Troughing

50%

60%

70%

80%

90%

100%

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

+103 rigs17 months

+53 rigs17 months

+70 rigs34 months

+118 rigs22 months

+82 rigs28 months

+195 rigs40 months

Global Fleet Utilization Valaris Pro Forma EBITDA1 ($B)

Source: IHS Markit RigPoint as of January 2020; Annual and Quarterly Filings1 EBITDA reflects net income, adjusted for interest, taxes, depreciation and impairment charges from Ensco plc, Rowan Companies plc and Atwood Oceanics, Inc. annual filings; Atwood Oceanics, Inc. 2017 results reflect the 9 months ended June 30, 2017 from their quarterly filing

+96 rigs37 months


27

$6.6 $7.4$5.3

$2.8

$3.7$4.0

$1.6

$5.3$4.8

$2.3

$0.3$0.6

$0.4

$8.9$9.1

$2.0$6.6

$25.5$23.9

$9.1

Net Debt Construction Cost Replacement Cost Gross Asset Value

Highest-Specification Drillships Heavy Duty Ultra-Harsh & Harsh Environment Jackups

Modern Heavy Duty & Standard Duty Jackups ARO Drilling - 50% of ARO Owned Assets

Other

High-Quality Fleet Provides Significant Asset Coverage to Raise Capital to Cover Interim Funding Gaps

$ billions

1 2 3 3

Source: IHS Markit RigPoint, Wells Fargo Securities, Valaris analysis1 Net debt represents total debt of $6.7B inclusive of principal balance of senior notes and amount outstanding on revolving credit facility less $0.1B of cash as of September 30, 2019 2 Construction cost per IHS Markit RigPoint3 Replacement cost and gross asset value per Wells Fargo Securities quarterly report dated December 10, 20194 Analyst Gross Asset Value Estimates include DNB Markets, Morgan Stanley, Scotiabank, SpareBank and Wells Fargo

• Largest fleet in the offshore drilling sector; majority of rigs are modern, high-specification assets

• Rig fleet provides meaningful asset coverage versus total debt even at currently depressed levels

Gross Asset Value Estimates4

Analyst 1 $10.1

Analyst 2 $9.7

Analyst 3 $9.5

Analyst 4 $9.1

Analyst 5 $8.9


Financial Levers• Liquidity

– Cash & short-term investments– Revolving credit facility1

• Issuance of securities– Valaris is one of two public offshore

drillers that has a largely unsecured capital structure

• Monetization of assets

• ~$450 million ARO shareholder notes

28

Unsecured Capital Structure Provides Flexibility to Raise Capital

1 Borrowing capacity under revolving credit facility is approximately $1.6B through September 20222 Based on most recent public filings, pro forma for recent transactions. Valaris as of September 30, 2019

Total Debt ($ billion)

% of Unsecured

Non-Guaranteed

% of Unsecured Guaranteed

% ofSecured

Transocean $9.8 40% 24% 36%

Seadrill $6.8 - - 100%

Valaris $6.7 98% 2% -

Noble $3.9 68% 29% 3%

Diamond $2.0 100% - -

Maersk $1.5 - - 100%

Borr $1.4 25% - 75%

Pacific $1.0 - - 100%

Comparison to Peers2


29

Operational Highlights, Integration & Synergies


30

Consistent Operational Results

• Achieved nearly 100% operational effectiveness for the past three years

• Focus on optimizing customers’ well delivery through well planning, drilling performance and performance contracts

Operational Excellence

Industry-Leading Customer Satisfaction

• Won 10 of 17 categories in latest survey2

1 Average of legacy Ensco “Operational Utilization” and legacy Rowan “Billed Uptime” for 2016, 2017 and 20182 2018 Oilfield Products & Services Customer Satisfaction Survey conducted by EnergyPoint Research

99% 99% 98%99% 99% 98%

2016 2017 2018

Fleet-Wide Operational Effectiveness1

Ensco Rowan

‒ Total Satisfaction

‒ Health, Safety & Environment

‒ Performance & Reliability

‒ Middle East

‒ North Sea

‒ Job Quality

‒ HPHT Wells

‒ Ultra-Deepwater Wells

‒ Deepwater Wells

‒ Shelf Wells


31

Innovation and Technology

Drilling Process Efficiency• Continuous Tripping Technology™ is a patented

system that fully automates the pipe tripping process without stopping to make or break connections, enabling 3x faster tripping speeds and delivering expected cost savings along with safer, more reliable operations

• Prototype installed on VALARIS JU-123, and technology is actively being marketed to customers

• Focused efforts on technology, systems and processes to differentiate our assets from the competition through better performance and reliability; key areas include:

‒ Improvements to the drilling process

‒ Equipment reliability

‒ Better productivity from our operations

• Our scale provides us with the ability to economically develop and deploy new technologies across a wide asset base and geographic footprint

Strategy

Equipment Maintenance

Placing Jackups on Location• Proprietary technologies create significant cost

savings for customers by optimizing jackup moves and reducing downtime spent waiting on weather

• Technology available on several jackups currently operating

• Management systems increase operational uptime and decrease lifecycle costs by optimizing asset usage and maintenance activities

• Currently deploying systems across the fleet that leverage best practices from legacy companies


32

Global Reach and Geographic Diversity

DrillshipsSemisubmersibles

Heavy Duty Ultra-Harsh Environment JackupsHeavy Duty Harsh Environment JackupsHeavy Duty Modern Jackups

Standard Duty Modern JackupsStandard Duty Legacy Jackups

• Presence in virtually all major offshore regions

• Critical mass of highest-specification drillships well positioned to serve major deepwater basins of West Africa, South America and Gulf of Mexico

• Versatile semisubmersible fleet capable of meeting a wide range of customer requirements including strong presence offshore Australia

• Leading provider of shallow-water jackup services in the Middle East and North Sea


33

Large and Diversified Customer Base

$2.3 Billion Contracted Revenue Backlog1

46%

24%

30%Major

Independent

National OilCompany

27%

25%19%

12%

7%6%

Europe

Middle East

Africa

U.S. Gulf & Mexico

Asia Pacific

Central & SouthAmerica

Note: Includes certain customers that may not currently have backlog1Contracted revenue backlog as of September 30, 2019


34

Significant Efficiencies From Merger and Cost Reduction Initiatives

Progress to DateSynergies & Cost Savings• More than 80% of integration-related

activities completed– Staffing reductions

– Houston and Aberdeen regional office and warehouse consolidation

– Major ERP conversion

• $135 million of annual run rate synergies expected to be achieved by the end of 2019

• $265 million of annual runrate synergies and cost savings as compared to pre-merger levels– G&A and other support costs

– Regional office consolidation

– Procurement and supply chain improvements

– Compensation standardization

– Other organizational optimization

• Expect to achieve $235 million by the end of 2020, and more than $265 million by the end of second quarter 2021


35

Appendix


36

Global Rig Fleet

Source: IHS Markit RigPoint as of January 20201Includes rigs >30 years of age that are idle without follow-on work or have contracts expiring before year-end 2020 without follow-on work and rigs 15 to 30 years of age that have been idle for more than two years and without follow-on work

• ~30 floaters1 could be candidates for retirement based on age and contract expirations

• ~150 jackups1 could be retired as expiring contracts and survey costs lead to the removal of older rigs from drilling supply

• Uncontracted newbuilds expected to be delayed further

Floaters JackupsDelivered RigsUnder Contract 124 349Future Contract 28 39Idle / Stacked 43 67

Marketed Fleet 195 455Non-Marketed 40 70

Total Fleet 235 525

Marketed Utilization 78% 85%Total Utilization 65% 74%

Newbuild RigsContracted 1 4Uncontracted 25 47

Total Newbuilds 26 51


37

CurrentTotal

Supply

IllustrativeTotal

Supply

IllustrativeMarketedSupply

Retirements Expected to Lead to Future Supply Contraction

CurrentTotal

Supply

IllustrativeTotal

Supply

IllustrativeMarketedSupply

Illustrative Jackup Supply

Illustrative Floater Supply

4235

22 -17-13

-3 228 26

202Build in Brazil

Newbuilds

Other Newbuilds

>30yrs idle w/o future contract

>30yrs rolling off

contract by YE2020

15-30yrs idle for

over 2yrs Non-marketed

36525

15 -87

-62

-6 421 14 407

Chinese Newbuilds

OtherNewbuilds

>30yrs idle w/o future contract >30yrs

rolling off contract by

YE2020

15-30yrs idle for

over 2yrs

Non-marketed

135 floaters retired since 3Q14

100 jackups retired since 3Q14

• Further floater retirements expected to offset newbuilddeliveries– Excluding another 26 floaters that

are not currently marketed, illustrative marketed supply of 202 compares to contracted floater count of 152

• When adjusting for likely retirements and newbuilds, the jackup count could decline by ~100 rigs or nearly 20%– Excluding another 14 jackups that

are not currently marketed, illustrative marketed supply of 407 compares to contracted jackupcount of 388

Source: IHS Markit RigPoint as of January 2020


Rowan Companies Inc.

Summary Corporate Structure

38

Valaris plc1

Ensco Jersey Finance Ltd.

Ensco International

Inc.

Pride International

LLC

1 Guarantor of debt issued by Ensco Jersey Finance Ltd., Ensco International Inc. and Pride International LLC; 2 Guarantor of debt issued by Rowan Companies Inc.

I

I

I

IG

I

G Guarantor

Issuer

Indirect Ownership

Before Internal Reorganization After Internal Reorganization

Rowan Companies

Ltd.2

G

IRowan

Companies LLC

Valaris plc1,2

Ensco Jersey Finance Ltd.1

Ensco International

Inc.1

Pride International

LLC1

I

I

I

IG

I

G Guarantor

Issuer

Indirect Ownership

Rowan Companies Ltd.

1 Guarantor of debt issued by Ensco Jersey Finance Ltd., Ensco International Inc. and Pride International LLC; 2 Debt previously issued by Rowan Companies Inc. assumed by Valaris plc


39

EBITDA Reconciliations

Source: Annual and Quarterly FilingsNote: Ensco/Valaris reflects Ensco plc for the six months ended March 31, 2019, plus Valaris plc for the six months ended September 30, 2019; Rowan reflects Rowan Companies plc for the six months ended March 31, 2019

$ MillionsEnsco/ Valaris Rowan

Pro Forma Valaris

Net income (loss) (163)$ (144)$ (307)$ Add (subtract):Income tax expense 102 (49) 52 Interest expense 363 57 421 Other (income) expense (888) (4) (892)

Operating loss (586) (140) (726) Add (subtract):Depreciation expense 568 187 756 Loss on impairment 131 - 131 Equity in earnings of ARO 3 (14) (11) (Gain) loss on asset disposals 5 (58) (54) Transaction costs 82 11 93 Recovery of certain legal costs (3) - (3) General & adminstrative expense 109 41 150 Operations support costs 76 46 122

Rig-level EBITDA 386$ 73$ 459$

Twelve Months Ended September 30, 2019


40


Source: Annual and Quarterly FilingsNote: EBITDA reflects net income, adjusted for interest, taxes, depreciation and impairment charges from Ensco plc, Rowan Companies plc and Atwood Oceanics, Inc. annual filings; Atwood Oceanics, Inc. 2017 results reflect the 9 months ended June 30, 2017 from their quarterly filing

$ Millions Atwood Ensco RowanPro Forma

ValarisNet income (loss) 251$ 785$ 368$ 1,403$ Less: (Income) loss from discontinued operations, net - (36) (39) (75)

Income (loss) from continuing operations 251 749 328 1,328 Add (subtract):Income tax expense 46 179 119 344 Other (income) expense 2 (9) 7 -

Operating income (loss) 298 919 454 1,671 Add (subtract):Depreciation 35 183 124 342 Loss on impairment - - - -

EBITDA 334$ 1,102$ 578$ 2,013$

Financial Year 2009


ValarisNet income (loss) 257$ 586$ 280$ 1,123$ Less: (Income) loss from discontinued operations, net - (29) (12) (41)

Income (loss) from continuing operations 257 557 268 1,082 Add (subtract):Income tax expense 63 97 92 252 Other (income) expense 2 (18) 19 3


EBITDA 359$ 846$ 517$ 1,722$

Financial Year 2010


ValarisNet income (loss) 272$ 606$ 737$ 1,614$ Less: (Income) loss from discontinued operations, net - 2 (601) (599)

Income (loss) from continuing operations 272 608 136 1,015 Add (subtract):Income tax expense 53 115 (6) 163 Other (income) expense 4 58 20 81


EBITDA 372$ 1,190$ 333$ 1,896$

Financial Year 2011


ValarisNet income (loss) 272$ 1,177$ 181$ 1,629$ Less: (Income) loss from discontinued operations, net - 46 23 68

Income (loss) from continuing operations 272 1,222 203 1,698 Add (subtract):Income tax expense 41 244 (20) 266 Other (income) expense 6 99 72 176

Operating income (loss) 319 1,565 255 2,140 Add (subtract):Depreciation 71 559 248 877 Loss on impairment - - 8 8

EBITDA 390$ 2,124$ 511$ 3,025$

Financial Year 2012


ValarisNet income (loss) 350$ 1,428$ 253$ 2,031$ Less: (Income) loss from discontinued operations, net - 5 - 5

Income (loss) from continuing operations 350 1,433 253 2,036 Add (subtract):Income tax expense 55 226 9 289 Other (income) expense 25 100 70 195

Operating income (loss) 430 1,759 332 2,520 Add (subtract):Depreciation 118 612 271 1,000 Loss on impairment - - 5 5

EBITDA 547$ 2,371$ 607$ 3,525$

Financial Year 2013


ValarisNet income (loss) 341$ (3,889)$ (115)$ (3,663)$ Less: (Income) loss from discontinued operations, net - 1,199 (4) 1,195

Income (loss) from continuing operations 341 (2,689) (119) (2,467) Add (subtract):Income tax expense 57 141 (151) 46 Other (income) expense 42 148 103 292

Operating income (loss) 439 (2,401) (167) (2,129) Add (subtract):Depreciation 147 538 323 1,008 Loss on impairment - 4,219 574 4,793

EBITDA 586$ 2,356$ 730$ 3,672$

Financial Year 2014


41


Source: Annual and Quarterly FilingsNote: EBITDA reflects net income, adjusted for interest, taxes, depreciation and impairment charges from Ensco plc, Rowan Companies plc and Atwood Oceanics, Inc. annual filings; Atwood Oceanics, Inc. 2017 results reflect the 9 months ended June 30, 2017 from their quarterly filing


ValarisNet income (loss) 433$ (1,586)$ 93$ (1,060)$ Less: (Income) loss from discontinued operations, net - 129 - 129

Income (loss) from continuing operations 433 (1,457) 93 (931) Add (subtract):Income tax expense 46 (14) 64 97 Other (income) expense 53 228 149 430

Operating income (loss) 531 (1,244) 307 (405) Add (subtract):Depreciation 172 573 391 1,136 Loss on impairment 61 2,746 330 3,137

EBITDA 764$ 2,075$ 1,028$ 3,868$

Financial Year 2015


ValarisNet income (loss) 265$ 897$ 321$ 1,483$ Less: (Income) loss from discontinued operations, net - (8) - (8)

Income (loss) from continuing operations 265 889 321 1,475 Add (subtract):Income tax expense 48 109 5 161 Other (income) expense (19) (68) 191 105

Operating income (loss) 294 929 517 1,740 Add (subtract):Depreciation 166 445 403 1,014 Loss on impairment 104 - 34 138

EBITDA 564$ 1,375$ 954$ 2,892$

Financial Year 2016


ValarisNet income (loss) (24)$ (304)$ 73$ (255)$ Less: (Income) loss from discontinued operations, net - (1) - (1)

Income (loss) from continuing operations (24) (305) 73 (256) Add (subtract):Income tax expense 7 109 27 142 Other (income) expense 43 64 139 246

Operating income (loss) 26 (132) 238 132 Add (subtract):Depreciation 122 445 404 970 Loss on impairment 59 183 - 242

EBITDA 207$ 496$ 642$ 1,344$

Financial Year 2017


ValarisNet income (loss) -$ (637)$ (347)$ (984)$ Less: (Income) loss from discontinued operations, net - 8 - 8

Income (loss) from continuing operations - (629) (347) (976) Add (subtract):Income tax expense - 90 (52) 38 Other (income) expense - 303 111 414

Operating income (loss) - (236) (288) (523) Add (subtract):Depreciation - 479 389 868 Loss on impairment - 40 - 40

EBITDA -$ 284$ 101$ 385$

Financial Year 2018


Boldly First


1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28


EXHIBIT C


Certificate Of CompletionEnvelope Id: 962649675E474490A0F14CD9C2B4EDA7 Status: CompletedSubject: Please DocuSign: Miralles vs Valaris - Pro Se Adversary Proceeding.pdfSource Envelope: Document Pages: 133 Signatures: 1 Envelope Originator: Certificate Pages: 1 Initials: 0 Sebastian MirallesAutoNav: EnabledEnvelopeId Stamping: EnabledTime Zone: (UTC-06:00) Guadalajara, Mexico City, Monterrey

Sudermann 139 apt 5Col. PolancoCiudad de Mexico, Ciudad de México [email protected] Address: 187.191.37.217

Record TrackingStatus: Original August 29, 2021 | 23:49

Holder: Sebastian Miralles [email protected]

Location: DocuSign

Signer Events Signature TimestampSebastian [email protected] PartnerTempest CapitalSecurity Level: Email, Account Authentication (None)

Signature Adoption: Pre-selected StyleUsing IP Address: 187.191.37.217

Sent: August 29, 2021 | 23:49Viewed: August 29, 2021 | 23:49 Signed: August 29, 2021 | 23:50Freeform Signing

Electronic Record and Signature Disclosure: Not Offered via DocuSign

In Person Signer Events Signature Timestamp

Editor Delivery Events Status Timestamp

Agent Delivery Events Status Timestamp

Intermediary Delivery Events Status Timestamp

Certified Delivery Events Status Timestamp

Carbon Copy Events Status Timestamp

Witness Events Signature Timestamp

Notary Events Signature Timestamp

Envelope Summary Events Status TimestampsEnvelope Sent Hashed/Encrypted August 29, 2021 | 23:49Certified Delivered Security Checked August 29, 2021 | 23:49Signing Complete Security Checked August 29, 2021 | 23:50Completed Security Checked August 29, 2021 | 23:50

Payment Events Status Timestamps


B1040 (FORM 1040) (12/15)

ADVERSARY PROCEEDING COVER SHEET(Instructions on Reverse)

ADVERSARY PROCEEDING NUMBER(Court Use Only)

PLAINTIFFS DEFENDANTS

ATTORNEYS (Firm Name, Address, and Telephone No.) ATTORNEYS (If Known)

PARTY (Check One Box Only)Trustee/Bankruptcy Admin

x

PARTY (Check One Box Only)x Debtor U.S. Trustee/Bankruptcy AdminCreditor Otherx Trustee

CAUSE OF ACTION (WRITEABRIEFSTATEMENTOFCAUSEOFACTION, INCLUDINGALLU.S. STATUTES INVOLVED)

NATURE OF SUIT(Number up to five (5) boxes starting with lead cause of action as 1, first alternative cause as 2, second alternative cause as 3, etc.)

FRBP 7001(1) – Recovery of Money/Property11-Recovery of money/property - §542 turnover of property12-Recovery of money/property - §547 preference13-Recovery of money/property - §548 fraudulent transfer14-Recovery of money/property - other

FRBP 7001(2) – Validity, Priority or Extent of Lien21-Validity, priority or extent of lien or other interest in property

FRBP 7001(3) – Approval of Sale of Property31-Approval of sale of property of estate and of a co-owner - §363(h)

FRBP 7001(4) – Objection/Revocation of Discharge41-Objection / revocation of discharge - §727(c),(d),(e)

FRBP 7001(5) – Revocation of Confirmation51-Revocation of confirmation

FRBP 7001(6) – Dischargeability66-Dischargeability - §523(a)(1),(14),(14A) priority tax claims62-Dischargeability - §523(a)(2), false pretenses, false representation,

actual fraud67-Dischargeability - §523(a)(4), fraud as fiduciary, embezzlement, larceny

(continued next column)

FRBP 7001(6) – Dischargeability (continued)61-Dischargeability - §523(a)(5), domestic support68-Dischargeability - §523(a)(6), willful and malicious injury63-Dischargeability - §523(a)(8), student loan64-Dischargeability - §523(a)(15), divorce or separation obligation(other than domestic support)

65-Dischargeability - other

FRBP 7001(7) – Injunctive Relief71-Injunctive relief – imposition of stay72-Injunctive relief – other

FRBP 7001(8) Subordination of Claim or Interest81-Subordination of claim or interest

FRBP 7001(9) Declaratory Judgment91-Declaratory judgment

FRBP 7001(10) Determination of Removed Action01-Determination of removed claim or cause

OtherSS-SIPA Case – 15 U.S.C. §§78aaa et.seq.02-Other (e.g. other actions that would have been brought in state court

if unrelated to bankruptcy case)

Check if this case involves a substantive issue of state law Check if this is asserted to be a class action under FRCP 23trial is demanded in complaint Demand $

Other Relief Sought

20-34114

SEBASTIAN MIRALLES

PRO SE KIRKLAND & ELLIS

VALARIS, PLC et AL

- Motion for Plan Revocation under 11 USC 1144 for Fraud Upon the Court- Equitable relief, compensatory damages, and exemplary damages

- Sua Ponte action as the Court sees Fit

11 U.S. Code § 102(1)(B)(i)(ii), 11 U.S. Code § 105(a), 11 U.S.C. § 1123(a)(4),18 U.S.C. § 152(1), 18 U.S.C. § 152(2), 18 U.S.C. § 152(3), 18 U.S.C. § 152(6),18 U.S.C. § 152 (7), 18 U.S.C. § 152(9), 11 U.S.C. § 1123(a)(4), 11 U.S. Code §1142 (b), 11 U.S.C § 1144, 11 U.S.C. § 1126(b)(1), 11 U.S.C. § 1126(b)(2), 11U.S.C. 1129(b)(2)(B)(ii), 17 C.F.R. § 240.10(b), 18 U.S. Code § 157, 17 C.F.R.§ 240.10(c)

x

x

x

21,648,885.60


B1040 (FORM 1040) (12/15)

BANKRUPTCY CASE IN WHICH THIS ADVERSARY PROCEEDING ARISESNAME OF DEBTOR BANKRUPTCY CASE NO.

DISTRICT IN WHICH CASE IS PENDING DIVISION OFFICE NAME OF JUDGE

RELATED ADVERSARY PROCEEDING (IF ANY)PLAINTIFF DEFENDANT ADVERSARY

PROCEEDING NO.

DISTRICT IN WHICH ADVERSARY IS PENDING DIVISION OFFICE NAME OF JUDGE

SIGNATURE OF ATTORNEY (OR PLAINTIFF)

DATE PRINT NAME OF ATTORNEY (OR PLAINTIFF)

INSTRUCTIONS

The filing of a bankruptcy case creates an “estate” under the jurisdiction of the bankruptcy court which consists ofall of the property of the debtor, wherever that property is located. Because the bankruptcy estate is so extensive and thejurisdiction of the court so broad, there may be lawsuits over the property or property rights of the estate. There also may belawsuits concerning the debtor’s discharge. If such a lawsuit is filed in a bankruptcy court, it is called an adversaryproceeding.

A party filing an adversary proceeding must also must complete and file Form 1040, the Adversary ProceedingCover Sheet, unless the party files the adversary proceeding electronically through the court’s Case Management/ElectronicCase Filing system (CM/ECF). (CM/ECF captures the information on Form 1040 as part of the filing process.) Whencompleted, the cover sheet summarizes basic information on the adversary proceeding. The clerk of court needs theinformation to process the adversary proceeding and prepare required statistical reports on court activity.

The cover sheet and the information contained on it do not replace or supplement the filing and service of pleadingsor other papers as required by law, the Bankruptcy Rules, or the local rules of court. The cover sheet, which is largely self-explanatory, must be completed by the plaintiff’s attorney (or by the plaintiff if the plaintiff is not represented by anattorney). A separate cover sheet must be submitted to the clerk for each complaint filed.

Plaintiffs and Defendants. Give the names of the plaintiffs and defendants exactly as they appear on the complaint.

Attorneys. Give the names and addresses of the attorneys, if known.

Party. Check the most appropriate box in the first column for the plaintiffs and the second column for the defendants.

Demand. Enter the dollar amount being demanded in the complaint.

Signature. This cover sheet must be signed by the attorney of record in the box on the second page of the form. If theplaintiff is represented by a law firm, a member of the firm must sign. If the plaintiff is pro se, that is, not represented by anattorney, the plaintiff must sign.

VALARIS, PLC 20-34114

SOUTHERN DISTRICT TEXAS HOUSTON Marvin Isgur

August 29, 2021 PRO SE


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