The Future of Long-Idle Drillships: Cold-Stacked or Dead-Stacked?

Noble Corporation’s recent decision to sell the Pacific Meltem and Pacific Scirocco for non-drilling purposes highlights a key issue in the drillship market: What happens to cold-stacked rigs that are unlikely to return to work? With the floater market showing signs of weakness and contract opportunities becoming scarcer, reactivating these units is proving even more challenging.

Esgian Rig Values has adjusted its valuations since early 2025 to reflect these conditions, reducing 6th generation drillship values by approximately 12%, 7th generation values by approximately 6.5%, and cold-stacked rig values by a further 10% in February leading to a 24% reduction year to date for the latter. While some of these could technically be reactivated, the high costs and uncertain contract prospects make recycling or conversion a more viable option for older, long-idle rigs.

Transocean, which holds the largest pool of cold-stacked drillships, may eventually have to make tough decisions on rigs such as Discoverer Clear Leader and Discoverer Americas, which have been stacked for over seven years. Valaris DS-11, stacked since 2022, is another possible /conversion candidate. Meanwhile, the demand outlook over the next 24 months remains challenging, with contracted competitive utilization projected to decline from 90% to 73% by December 2025.

With no confirmed contracts for several rigs rolling off contract, owners have little incentive to reactivate cold-stacked assets, especially as doing so would only introduce more competition and pressure on already softening dayrates. Selling these rigs for drilling purposes would only introduce further competition, potentially bidding against their own fleet in an already oversupplied market. However, some alternatives to scrapping are emerging.

Market rumours suggest that Turkish Petroleum (TP) is looking to acquire up to four drillships. While specific units have not been confirmed, this strategy could provide an attractive solution for owners seeking to sell stacked rigs at substantially higher prices than scrapping, without creating additional competition. Since 2018, 25 drillships have exited the market, with 21 scrapped and 4 sold for conversion.
The most recent drillship taken out of the drilling fleet was Transocean’s 6 th generation Ocean Rig Olympia, which is to be converted for deep-sea mining. Meanwhile, Noble recycled the 6 th generation Pacific Mistral and Pacific Bora in 2021 for $10 million and $14.5 million, respectively. That year saw the highest number of drillship retirements, with 9 units recycled amid the market turbulence caused by the COVID-19 pandemic.

Presently, 13% of the total drillship fleet is cold-stacked. This accounts for 14 rigs, all of which are young and modern, with delivery years ranging between 2009 and 2023, including designs such as 7th generation Samsung 12000 and DSME 12000. Three rigs have also never worked, the 7th generation 12,000-ft Pacific Meltem, Valaris DS-13, and Valaris DS-14, being stacked shortly after delivery. The pool of cold-stacked drillships is controlled by three companies – Noble, Transocean and Valaris.

List of Cold-Stacked Drillships

With Noble’s divestment, the landscape of cold-stacked drillship ownership is shifting. While Noble will soon exit this space, Transocean and Valaris still hold a considerable number of long-idle rigs, each facing different strategic and financial challenges. For Noble, this move aligns with its aggressive strategy to cut costs and focus on a more competitive, high-spec fleet, a direction further reinforced by its merger with Diamond Offshore in September 2024.

Transocean currently holds 9 cold-stacked drillships. Aside from Discoverer Inspiration (stacked for 294 days and currently held for sale) and Discoverer India (stacked for 4.5 years), the other rigs have been idle for over 7 years. Reactivation costs pose a significant challenge; however, scrapping these rigs would have a major financial impact, with their Book Value significantly higher than their Market Value.

Esgian values the Transocean Enhanced Enterprise Class rigs, Discoverer Clear Leader, Discoverer Americas, Discoverer Inspiration between $64 and $75 million. ustoMSC P10000 Deepwater Champion is valued between $144 and $159 million, and Samsung 12000 Ocean Rig Mylos, Ocean Rig Athena and Ocean

Rig Apollo are valued between $165 and $185 million.
With recycling most likely not a viable option, Transocean is left with the expensive option of reactivation, which could cost as much as $100 to $150 million per rig, or simply leave them stacked with minimal upkeep or what could best be described as ‘dead-stacked’.

Transocean’s Cold-Stacked Drillships’ Valuation

Valaris faces a different challenge with its 3 cold-stacked drillships. Two of them, newbuilds Valaris DS-13 and Valaris DS-14, were acquired for an aggregate price of $337 million and stacked shortly after. Despite being cold-stacked for nearly a year and a half, Valaris has actively marketed these rigs, indicating that they have been maintained in good condition.

As a result, Esgian estimates that reactivation would cost approximately $40 to $50 million, and would take about 6 months to complete. Valaris DS-11, on the other hand, was delivered in 2013 and has been stacked for a little over two years.
It could be a potential candidate for recycling or conversion and is currently valued between $171 and $189 million. This valuation considers the rigs’ cold-stacked status, meaning that selling them for non-drilling purposes, such as conversion or recycling, would result in materially lower sales prices.

Valaris’ Cold-Stacked drillships’ Valuation

With demand softening and utilization expected to decline, what does this mean for the viability of long-term cold-stacked rigs? The current competitive drillship fleet totals 80 rigs. Competitive contracted utilization* is 89%, projected to average around 86% by the end of the second quarter of this year, and to drop to 71% by December, with 14 drillships rolling off contract by year-end and no confirmed future contracts so far.

*Competitive contracted utilization is the number of rigs contracted (current and future) divided by the competitive fleet.

With demand now being pushed into late 2026 and beyond in key deepwater regions such as the US GOM, South America, West Africa, and Southeast Asia, the existing fleet is already facing increasing competition for contracts. This tightening market dynamic suggests that bringing additional capacity online through the reactivation of cold-stacked rigs is not a viable solution in the short term.