Financial Performance - Operating revenues for the three months ended March 31, 2025, were $335 million, down 9% from $367 million in the same period of 2024 [91]. - The total operating profit for Q1 2025 was $18 million, a significant decrease of 78% compared to $80 million in Q1 2024 [91]. - Net loss for the three months ended March 31, 2025, was $14 million, compared to a net income of $60 million in the same period of 2024, marking a 123% decline [91]. - Total operating expenses for Q1 2025 were $317 million, an increase of 5% compared to $303 million in Q1 2024 [112]. - Other financial items increased by $8 million in Q1 2025, primarily due to a provision recognized related to assets sold in 2023 [127]. - The income tax expense increased by $5 million in Q1 2025, primarily due to the recognition of a deferred tax benefit in Q1 2024 [129]. Revenue Sources - The average contractual dayrate increased to $323 thousand in Q1 2025 from $300 thousand in Q1 2024, contributing an additional $26 million to contract revenues [99]. - Economic utilization for rigs on contract dropped to 84% in Q1 2025 from 97% in Q1 2024, resulting in a $22 million decrease in contract revenues [102]. - Management contract revenues increased by $3 million in Q1 2025, driven by higher management fees on three managed rigs [107]. - Leasing revenues decreased by $3 million in Q1 2025 due to the disposal of Gulfdrill rigs in June 2024, despite higher charter rates for the West Gemini [110]. Cash Flow and Liquidity - Net cash used in operating activities was $27 million in Q1 2025, a decrease of $56 million compared to net cash provided of $29 million in Q1 2024 [141]. - Available liquidity as of March 31, 2025, was $629 million, consisting of $404 million in unrestricted cash and $225 million in available borrowings [137]. - $49 million cash used in investing activities for Q1 2025 primarily for capital expenditures on West Neptune, West Elara, and West Auriga [142]. - $119 million cash used in financing activities for Q1 2024 related to share repurchases [143]. Debt and Financing - Total debt as of March 31, 2025, is $625 million, with a carrying value of $611 million [144]. - The company entered into a $225 million, 5-year Senior Secured Revolving Credit Agreement in July 2023 [145]. - $575 million notes issued in July 2023, maturing on August 1, 2030, secured by a second priority lien [146]. - The company has $208 million remaining under the $500 million share repurchase program as of March 31, 2025 [133]. Market Conditions - The average Brent oil price for the three months ended March 31, 2025, was $76 per barrel, down from $80 per barrel in 2024 [85]. - The company is exposed to market risks, including foreign exchange and interest rate risks, with no material changes reported as of March 31, 2025 [151]. Compliance and Accounting - As of March 31, 2025, the company was in compliance with financial covenants, including an Interest Coverage Ratio of at least 2.50 to 1.00 [148][152]. - The company made critical accounting estimates affecting reported amounts of assets, liabilities, revenues, and expenses [149]. - There have been no material changes to the judgments, assumptions, and estimates upon which critical accounting policies are based as of March 31, 2025 [150]. Contract Backlog and Rig Utilization - As of March 31, 2025, the total contract backlog was $2,914 million, a decrease from $3,180 million as of December 31, 2024, representing a decline of 8.3% [80]. - The average number of rigs on contract decreased from 10 in Q1 2024 to 9 in Q1 2025, leading to a $42 million decrease in contract revenues [96]. - Vessel and rig operating expenses remained consistent at $179 million in Q1 2025, with a decrease of $33 million attributed to lower managed service agreement fees [114]. - Depreciation and amortization increased by $17 million to $55 million in Q1 2025, primarily due to capital projects on the West Auriga and West Polaris [115]. - Interest income decreased by $3 million to $4 million in Q1 2025, primarily due to a decrease in cash and cash equivalents [125].

Financial Data and Key Metrics Changes - Seadrill reported total operating revenues of $335 million for Q1 2025, an increase of $46 million from the prior quarter [24] - Adjusted EBITDA was $73 million, up from $28 million in the previous quarter [26] - Economic utilization for the quarter was 84%, impacted by downtime in three rigs in Brazil [7][8] Business Line Data and Key Metrics Changes - Contract drilling revenues increased by $44 million sequentially to $248 million due to additional operating days [24] - Total operating expenses decreased to $317 million from $323 million in the prior quarter [25] - Vessel and rig operating expenses rose by $15 million to $179 million due to additional operating days across the fleet [25] Market Data and Key Metrics Changes - Global macro uncertainty and OPEC's decision to increase supply are affecting commodity prices and client investment confidence [8][9] - The U.S. Gulf is expected to see increased competition with up to five rigs rolling off contract before year-end, exerting downward pressure on rates in 2025 [16] - Demand in Africa is projected to decline by two to four rigs in 2025 before rebounding in 2027 and beyond [18] Company Strategy and Development Direction - Seadrill focuses on high specification floaters and deepwater basins, believing that deepwater investments are compelling due to expansive reserves [11][29] - The company aims to prioritize margins and cash flow over utilization for long-term value creation [12][29] - Seadrill maintains a robust balance sheet with $430 million in cash and a backlog of $2.8 billion extending through 2028 and into 2029 [12][26] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future demand for deepwater drilling despite current market volatility [10][29] - Active dialogues with clients for opportunities in the second half of 2025 and 2026 are ongoing, with expectations for multiple contract awards [9][29] - The company is optimistic about the longevity of demand in Brazil, with Petrobras issuing a multiyear tender for rigs [19][20] Other Important Information - Seadrill is participating in voluntary mediation with Petrobras regarding delayed penalty notices [13] - The company has undertaken an initial review of the impact of tariffs, believing any impact is already reflected in current guidance [28] Q&A Session Summary Question: Shift in client interest towards performance-based contracts - Management noted that performance-based contracts are not new and they are open to larger performance-based contracts for the right clients [34][36] Question: Costs associated with stacking the Capella - Management indicated they are in a ramp-down mode and have not reached a long-term cold stacking rate yet [38] Question: Decision process for stacking versus keeping a rig warm - Management emphasized the importance of being decisive and disciplined about removing supply from the market when necessary [41] Question: Confidence in securing contracts for the second half of 2025 - Management expressed confidence in their contracting outlook, noting that they have not moved to cold stack certain rigs, indicating ongoing market opportunities [61] Question: Need to compete on price - Management stated that performance still matters significantly and they have historically been able to secure leading edge day rates [63][65]

Financial Data and Key Metrics Changes - Seadrill reported total operating revenues of $335 million for Q1 2025, an increase of $46 million from the prior quarter [25] - Adjusted EBITDA was $73 million, up from $28 million in the previous quarter [27] - Economic utilization for the quarter was 84%, impacted by downtime in three rigs in Brazil [7] Business Line Data and Key Metrics Changes - Contract drilling revenues increased by $44 million sequentially to $248 million due to additional operating days [25] - Vessel and rig operating expenses rose by $15 million to $179 million due to increased operating days across the fleet [26] - Management contract expenses decreased by $6 million to $45 million, largely due to timing of project spending [26] Market Data and Key Metrics Changes - Global macro uncertainty and OPEC's decision to increase supply have negatively impacted commodity prices and client investment confidence [8] - Offshore sanctioning activity is forecasted to double in 2026 and 2027 compared to 2025, with a significant portion of projects being economically viable above $50 per barrel [11] Company Strategy and Development Direction - The company aims to prioritize margins and cash flow over utilization to create long-term value for shareholders [12] - Seadrill is focused on high specification floaters and deepwater basins, maintaining a strong balance sheet and durable backlog [30] - The company is actively pursuing opportunities in the second half of 2025 and 2026, despite current market volatility [29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in future demand for deepwater drilling, citing the need for investment to offset depletion [9] - The company is encouraged by ongoing dialogues with clients for upcoming contract opportunities [8] - Management acknowledged the current market's volatility but remains optimistic about securing contracts for their rigs [61] Other Important Information - Seadrill closed Q1 2025 with cash of $430 million and a backlog of $2.8 billion extending through 2028 and into 2029 [12] - The company is engaged in voluntary mediation with Petrobras regarding delayed penalty notices [13] Q&A Session Summary Question: Shift in client interest towards performance-based contracts - Management noted that performance-based contracts are not new and they are open to such arrangements for the right clients and rigs [36] Question: Costs associated with stacking the Capella rig - Management indicated they are currently reducing costs while pursuing contracting opportunities and have not yet moved to cold stack the rig [38] Question: Decision process for stacking versus keeping a rig warm - Management emphasized the importance of being decisive and disciplined in removing supply from the market when necessary [41] Question: Confidence in securing contracts for the second half of 2025 - Management expressed confidence in their assets and the ongoing market dynamics, indicating they are actively pursuing opportunities [61] Question: Need to compete on price - Management stated that performance remains a key differentiator and they are not feeling pressured to lower prices significantly [63]

Financial Performance - Total operating revenues for Q1 2025 increased by $46 million to $335 million compared to $289 million in Q4 2024[3] - Contract revenues rose by $44 million to $248 million in Q1 2025, driven by increased operating days from West Auriga and West Polaris[3] - Net loss for Q1 2025 was $14 million, with an adjusted EBITDA of $73 million, up from $28 million in the previous quarter[5] - The adjusted EBITDA margin improved to 21.8% in Q1 2025 from 9.7% in Q4 2024[2] - Net loss for the three months ended March 31, 2025, was $14 million, compared to a net income of $60 million in the same period of 2024[21] - Adjusted EBITDA for the same period was $73 million, with an Adjusted EBITDA margin of 21.8%, up from 9.7% in the previous quarter[26] - Total operating revenues increased to $335 million in Q1 2025, compared to $289 million in Q4 2024[26] Cash Flow and Expenses - Free cash flow for Q1 2025 was negative $72 million, impacted by contract preparation and mobilization costs[6] - Total operating expenses decreased by $6 million to $317 million in Q1 2025, reflecting lower merger and integration costs[4] - Cash and cash equivalents at the end of Q1 2025 were $404 million, down from $478 million at the end of Q4 2024[18] - Net cash used in operating activities was $(27) million for Q1 2025, compared to $29 million provided in Q1 2024[21] - Free Cash Flow for Q1 2025 was $(72) million, a decline from $(31) million in Q4 2024[29] - Additions to drilling units and equipment amounted to $(45) million in Q1 2025, compared to $(23) million in Q4 2024[21] - Cash and cash equivalents at the end of the period were $430 million, down from $612 million at the end of Q1 2024[21] Debt and Backlog - Gross principal debt stood at $625 million as of March 31, 2025[6] - As of May 12, 2025, Seadrill's order backlog was approximately $2.8 billion[7] Operational Metrics - The average number of rigs on contract rose to 9 in Q1 2025, with average contractual dayrates increasing to $323, up from $289 in Q4 2024[27] - Economic utilization decreased to 83.9% in Q1 2025, down from 93.0% in Q4 2024[27] - The company reported a significant increase in depreciation and amortization expenses, rising to $55 million in Q1 2025 from $38 million in Q1 2024[21] Guidance - For the full year 2025, Seadrill maintains guidance for total operating revenues in the range of $1,300 million to $1,360 million[7]

Group 1 - Seadrill Limited (NYSE: SDRL) added $1 billion in backlogs during 2024, indicating strong demand for its services [1] - The company repurchased $100 million worth of shares, reducing the total share count by 3 million [1] - Seadrill's backlog extends well into the end of the decade, providing a secure revenue stream for the company [1]

Group 1 - The Daily Drilling Report is an investment group focused on providing analysis for the oil and gas industry, featuring a model portfolio that encompasses all segments of upstream oilfield activity with weekly updates [1] - The group offers investment ideas for both U.S. and international energy companies, covering a range from shale to deepwater drillers [1] - Technical analysis is utilized to identify catalysts within the oil and gas sector [1] Group 2 - Fluidsdoc is an experienced professional in the oil industry with 40 years of experience across six continents and over twenty countries, specializing in the upstream oilpatch [2]

Revenue Contributions - Total revenues from Sonadrill accounted for 22% of consolidated operating revenues for the year ended December 31, 2024[51]. - Petrobras contributed 18% to total revenues for the year ended December 31, 2024[51]. - The company’s revenues from customers with over 10% contribution included Var Energi at 7% and Equinor at 7% for the year ended December 31, 2024[51]. Employee and Training Initiatives - As of December 31, 2024, the company employed approximately 3,300 employees worldwide[56]. - The company is committed to enhancing employee training through the Seadrill Development Academy, which includes advanced technical and behavioral simulations[60]. Safety and Environmental Compliance - The total recordable incident rate (TRIR) for the year ended December 31, 2024, was 0.36, below the industry average of 0.44[62]. - The company’s operations are subject to numerous environmental laws and regulations that can significantly affect operational capabilities and financial condition[67]. Financial Management and Risk Exposure - The company has a majority of its revenues and expenses denominated in U.S. dollars, with some exposure to foreign currencies, but does not expect significant fluctuations in net income from foreign exchange risks[359]. - The majority of the company's debt portfolio is on a fixed interest rate, minimizing interest rate risk exposure[361]. - The company intends to reduce market risks, including foreign exchange and interest rate risks, through appropriate management policies[358]. - The company has a history of utilizing derivative instruments to manage market risks when deemed appropriate[358]. - The company does not currently hedge its foreign exchange exposures, which primarily relate to cash and working capital balances[360]. Leadership and Governance - The executive team includes Simon Johnson as President and CEO, Grant Creed as CFO, and Samir Ali as Chief Commercial Officer, among others, with extensive experience in the offshore drilling industry[72][73][74][75][76][77]. - The executive team has a combined experience of over 100 years in the offshore drilling and oilfield services sectors, enhancing the company's operational capabilities[72][73][74][75][76][77]. - The company has been focusing on strategy development, investor outreach, and relationship management under the leadership of its executive team[72]. - The company has a diverse board of directors with significant experience in the energy sector, enhancing governance and strategic oversight[78]. Operational Overview - The company operates in a single, global offshore drilling market, with operations geographically dispersed in oil and gas exploration areas worldwide[49]. - The backlog information is detailed in Part II, Item 7 of the financial report[48]. - The collective bargaining agreement in Brazil was successfully negotiated for the period from September 2024 to August 2025[58]. - The company has made its financial information available through SEC filings and its website, ensuring transparency for investors[79][80].

Financial Data and Key Metrics Changes - For the full year 2024, the company delivered $378 million of adjusted EBITDA on $1.4 billion of revenue, with capital expenditures of $118 million [38][39] - The fourth-quarter total operating revenues were $289 million, primarily impacted by fewer operating days due to planned out-of-service time and cold stacking of rigs [40] - The company maintained a strong balance sheet with gross principal debt of $625 million and cash of $505 million, resulting in a net debt position of $120 million [42] Business Line Data and Key Metrics Changes - The company returned over $500 million in capital to shareholders and had a contracted backlog of $1.3 billion, with $400 million from divesting non-core assets [8][9] - The share repurchase program returned a total of $792 million to shareholders, reducing the issued share count by 22% since September 2023 [9][44] - The company secured approximately 65% of the global backlog awarded to the four largest publicly traded offshore drillers, despite representing only 18% of the drillship fleet [27] Market Data and Key Metrics Changes - The drillship marketed utilization is now in the mid-eighties, down from the high nineties in 2023, indicating a softening market [32] - The company expects future demand to increase, but visibility remains unclear, with a strong balance sheet and 75% of the marketed fleet contracted for 2025 [12][32] - The company reported $3 billion in durable contract cover extending through 2028 and into 2029 [13] Company Strategy and Development Direction - The company aims to be a pure-play floater company, having executed a strategy to rationalize its fleet and divest non-core assets [49][50] - The focus remains on delivering safe and efficient operations while optimizing the cost base to navigate market volatility [25][138] - The company is committed to improving safety performance and maintaining a low-cost operating model [137][140] Management's Comments on Operating Environment and Future Outlook - Management noted that the immediate outlook for 2025 is uncertain, but they expect a rapid improvement in 2026 as deferred demand intersects with major projects [66] - The company is optimistic about the exploration activities, with around 30% of rigs currently drilling exploration wells, indicating a shift in market dynamics [65][131] - Management is actively engaged in discussions with clients to navigate new regulatory expectations and minimize potential non-revenue days [55][90] Other Important Information - The company is facing legal challenges from Petrobras, with claims amounting to approximately $213 million related to delayed penalties from contracts dating back to 2012 [22][21] - The company intends to vigorously defend its position and is evaluating all options, including potential counterclaims against Petrobras [23][24] Q&A Session Summary Question: Downtime for the Telus rig - Management confirmed 50 days of downtime due to a protracted regulatory clearance process, not due to changes in rules [54][55] Question: Petrobras litigation context - Management acknowledged the surprise regarding the $213 million claim and noted that penalties are capped at 10% of contract value [57][58] Question: Client conversations and project economics - Management indicated a mix of client responses, with some being cautious while others are ready to return to the market as day rates improve [62][68] Question: Operating expenses and guidance - Management provided insights on expected operating expenses, estimating $150k per day across the drillship fleet, excluding SG&A [75][76] Question: Share buyback program amid uncertainty - Management emphasized the importance of cash conservation while recognizing the attractiveness of current share prices for buybacks [110][111] Question: Exploration activities and client strategies - Management noted an increase in exploration activities and a growing demand for drilling in 2026 and beyond [126][131]

Financial Data and Key Metrics Changes - For the full year 2024, the company delivered $378 million of adjusted EBITDA on $1.4 billion of revenue, with capital expenditures of $118 million [38][39] - The fourth-quarter total operating revenues were $289 million, primarily impacted by fewer operating days due to planned out-of-service time and cold stacking of rigs [40] - The company maintained a strong balance sheet with gross principal debt of $625 million and cash holdings of $505 million, resulting in a net debt position of $120 million [42] Business Line Data and Key Metrics Changes - The company returned over $500 million in capital to shareholders and had a contracted backlog of $1.3 billion, with $400 million from divesting non-core assets [8][9] - The share repurchase program returned a total of $792 million to shareholders, reducing the issued share count by 22% since September 2023 [9][44] - The West Vela secured additional work, adding $20 million to backlog, while the West Jupiter and West Telus were awarded three-year contracts with Petrobras, commencing in 2026, providing $1 billion in incremental backlog [28][30] Market Data and Key Metrics Changes - The drillship marketed utilization is currently in the mid-eighties, down from the high nineties in 2023, indicating a softening market [32] - The company has approximately 75% of available rig days contracted across its marketed fleet in 2025, insulating it from market volatility [32] - The market outlook indicates a slow pace of contracting in 2025 due to capital discipline and supply chain constraints, with around 30 floaters available globally without firm contracts [31] Company Strategy and Development Direction - The company aims to be a pure-play floater company, having executed a strategy to rationalize its fleet and divest non-core assets [49][50] - The focus remains on delivering safe and efficient operations while optimizing the cost base to navigate market volatility [25][140] - The company is positioned to capitalize on future demand increases, particularly in deepwater projects, which are expected to be more profitable with lower carbon emissions intensity [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand, although visibility remains unclear due to current market conditions [12] - The company is prepared to navigate regulatory challenges in Brazil and is actively engaging with clients and regulatory bodies to address new expectations [55][90] - The management highlighted the importance of maintaining a low-cost operating structure to remain competitive in the industry [140] Other Important Information - The company reported legal matters involving Petrobras, with claims amounting to approximately $213 million related to delayed penalties from contracts dating back to 2012 [22][21] - The company intends to vigorously defend its position regarding these claims and is evaluating all options, including potential counterclaims [23][58] Q&A Session Summary Question: Can you provide details on the 50 days of downtime for the Telus? - Management confirmed the downtime was due to a protracted regulatory clearance process, not a change in rules [54][55] Question: Is the claim from Petrobras related to the Sete rigs a new claim? - Management indicated surprise at the claim and noted that penalties are capped at 10% of the contract value [57][58] Question: What is the tone of conversations with clients regarding project economics? - Management noted an increase in exploration activity and optimism for future demand, particularly for projects starting in 2026 and 2027 [66][68] Question: How will operating expenses be managed for rigs without clear work? - Management stated that they will be disciplined and may stack rigs if there is no clear line of sight for work [83] Question: What is the company's stance on share buybacks given the current uncertainty? - Management acknowledged the attractive share price but emphasized the need for cash conservation and board consultation before further buybacks [111][112] Question: How does the new leadership at ANP affect regulatory scrutiny? - Management noted that the regulatory focus can shift and emphasized the importance of adapting to new expectations [90][102]

Core Viewpoint - Seadrill reported quarterly earnings of $1.07 per share, significantly exceeding the Zacks Consensus Estimate of a loss of $0.34 per share, marking an earnings surprise of 414.71% [1] - The company posted revenues of $289 million for the quarter ended December 2024, which fell short of the Zacks Consensus Estimate by 3.51% and decreased from $408 million year-over-year [2] Financial Performance - Seadrill has surpassed consensus EPS estimates in all four of the last quarters [2] - The company has also topped consensus revenue estimates three times over the last four quarters [2] - The current consensus EPS estimate for the upcoming quarter is $1.06 on revenues of $376.5 million, while for the current fiscal year, it is $3.72 on revenues of $1.46 billion [7] Market Position and Outlook - Seadrill shares have underperformed the market, losing approximately 27.7% since the beginning of the year, compared to a 1.3% gain in the S&P 500 [3] - The Zacks Rank for Seadrill is currently 5 (Strong Sell), indicating expectations of underperformance in the near future [6] - The Oil and Gas - Drilling industry is currently ranked in the bottom 14% of over 250 Zacks industries, suggesting a challenging environment for the sector [8]