Eldorado Drilling has graduated from a leveraged, speculative drillship investor to an integrated contract driller via the Vantage merger announced last week. Eldorado is also fresh off acquiring 7G Deep Value Driller for $300mm, although still needs to raise $230mm of debt to finance the deal. Eldorado’s fleet is now warm and it can manage its own rigs.

“Eldorado 1.0” was effectively a drillship warehousing vehicle — acquiring three cold-stacked 7G newbuilds (Dorado, Draco and Zonda) from shipyards at roughly $220mm each in 2023–2024 (first ordered by Seadrill and Pacific Drilling), with a thesis of buy distressed, wait for the market, and sell at a profit. “White space” of 2025 interrupted the thesis as projects they depended on for contracts slipped to 2H26–2027, leaving the rigs idle with the debt carry and stacking costs painful. Eldorado sold Dorado and Draco to Turkish Petroleum in 2025 — a net positive for the broader drillship market, as both rigs are now working for Turkey’s own energy security needs rather than competing for open tenders.

Following the Vantage merger, “Eldorado 2.0″ has a warm fleet of rigs, in-house operational capabilities acquired from Vantage and an improved balance sheet, although is still at least 3x net leverage. This is in contrast to Eldorado 1.0, which only had Zonda contracted with Dorado and Draco needing >$100mm activation costs and external management.

Eldorado is completing a capital raise in Norway, and will still require >$600mm of secured debt capital raises in 2026.

Secured Eldorado credit has good downside protection with Zonda and Platinum Explorer as collateral. Transocean Titan (8G) and Poseidon (7G+) secured credit always traded well, partly due to strong structural protections including required amortization which forthcoming Eldorado credit will also have. DVD is a standard 7G drillship but still marketable globally. Vantage is positive for Eldorado because Vantage is >$40mm net cash balance sheet with ~$280B EBITDA backlog from its 1.25 rigs

Deep Value Driller is the one uncontracted asset in the fleet, though an award looks likely. Saipem held a $300mm purchase option on the rig, positioning it for Eni’s Geng North in Indonesia, but countered at $275mm, giving Eldorado the opening to step in at the full price in 1Q26. DVD has contracting opportunities, including Total’s Venus in Namibia.

Earlier this week ONGC (India) reduced its open tender to “one or more drillships”, less than the the 5 previously communicated but that was never likely. It will not impact Vantage’s 6G Platinum Explorer contract with ONGC at $235k/dayrate through 2029. It’s low cost work at under $120k daily opex.

India is a growth market in deepwater. There’s multiple regions but it shares the Andaman Sea with Indonesia, and its a high potential greenfield region but still early.

Vantage only owns 25% of Tungsten Explorer after a 2024 sale of 75% to TotalEnergies. Vantage used cash proceeds to pay down debt, sold some more jackup rigs at good prices in 2024 and paid down its debt with cash left to spare which helped position Vantage for this merger as it’s balance sheet was key to improving Eldorado’s capitalization.