Seadrill Limited (SDRL) announced Monday that its 50:50 joint venture, Sonadrill, has secured a contract extension for the ultra-deepwater drillship Sonangol Quenguela. The exercise of a seven-well priced option extends the rig’s operations in Angola by approximately 480 days, ensuring its ...

Mar 16, 2026 5:30 PM Eastern Daylight Time Seadrill Announces Contract Extension in Angola Seadrill Announces Contract Extension in Angola Share HAMILTON, Bermuda--(BUSINESS WIRE)--Seadrill Limited ("Seadrill" or the "Company") (NYSE: SDRL) today announced Sonadrill Holding Ltd ("Sonadrill"), its 50:50 joint venture with an affiliate of Sonangol E.P. ("Sonangol"), has been awarded a contract extension. Kevin Smith Vice President – Corporate Finance and Investor Relations ir@seadrill.com Industry: A seven-we ...

Core Insights - Seadrill reported a strong operational performance in 2025, with full-year EBITDA of $353 million, exceeding guidance, and a backlog increase to approximately $2.5 billion, indicating robust demand in the offshore drilling sector [3][7][8] Financial Performance - For Q4 2025, Seadrill achieved EBITDA of $88 million, with total operating revenues of $362 million, slightly down from the previous quarter [10][11] - The company ended 2025 with $365 million in cash and total liquidity of $524 million, against gross debt of $625 million [6][12] - Seadrill's 2026 guidance includes total operating revenues of $1.4 to $1.45 billion and EBITDA of $350 to $400 million, with capital expenditures trimmed to $200 to $240 million [5][13][16] Operational Highlights - Seadrill's contracted backlog increased by roughly $500 million since the last update, with firm backlog covering about 90% of the midpoint of its 2026 revenue guidance [7][9] - The company emphasized operational execution and safety, achieving its best safety performance in history, with a total recordable incident rate 50% better than the industry benchmark [2] Market Outlook - The offshore deepwater market is showing renewed strength entering 2026, driven by tightening supply, rising utilization, and improving contract terms, which may support higher day rates into 2027 [4][17] - Day rates in the U.S. Gulf are stable in the low $400s, with expectations for increases as the market tightens [9][17] Contract Awards and Extensions - Recent contract awards include a $152 million contract for West Capella and extensions for various rigs, contributing to the backlog and enhancing earnings potential for 2026 and 2027 [13][14][19] - Seadrill continues to invest in workforce development and operational discipline, with initiatives at the Seadrill Academy and global workshops [7]

Revenue Contribution - Petrobras accounted for 36% of total operating revenues in 2025, up from 16% in 2023, indicating a significant increase in reliance on this customer [48]. - Sonadrill maintained a steady contribution of 22% to total revenues for both 2025 and 2024, reflecting stable business relations [48]. Safety and Workforce - The total recordable incident rate (TRIR) for the year ended December 31, 2025, was 0.17, significantly below the industry average of 0.34, showcasing the company's commitment to safety [59]. - As of December 31, 2025, the company employed approximately 3,000 staff globally, including contracted personnel, indicating a stable workforce size [53]. - The company has developed a comprehensive training program in collaboration with the International Well Control Forum, aiming to enhance the skills of its drillers [57]. - The Seadrill Development Academy features advanced drilling simulators to improve training and operational efficiency, supporting continuous improvement initiatives [58]. - The collective bargaining agreement in Brazil was successfully negotiated for the period from September 2025 to August 2026, ensuring stable labor relations [55]. Market Conditions - The offshore drilling market is highly competitive, influenced by oil and gas price volatility, which affects customer expenditures on drilling services [49]. Talent Management - The company is focused on attracting and retaining top talent through competitive reward policies and a supportive work environment [56]. Financial Exposure - The majority of the company's revenues and expenses are denominated in U.S. dollars, which is the functional currency of its subsidiaries [353]. - The company is exposed to foreign exchange risks due to a portion of revenues and expenses being denominated in other currencies [353]. - The company does not expect foreign exchange exposures to cause significant fluctuations in net income and does not currently hedge them [354]. - The majority of the company's debt portfolio is on a fixed interest rate [355].

Financial Data and Key Metrics Changes - For full year 2025, the company delivered EBITDA of $353 million, exceeding the midpoint of the original guidance range [5][25] - Total operating revenues for Q4 2025 were $362 million, slightly down from $363 million in the prior quarter [25] - Fourth quarter EBITDA was $88 million, contributing to a full year EBITDA of $353 million [26] Business Line Data and Key Metrics Changes - Contract drilling revenues for Q4 2025 were $373 million, a sequential decrease of $7 million due to fewer operating days for the West Vela [25] - Reimbursable revenues increased by $5 million during Q4 to $16 million, partially offsetting the decrease in contract drilling revenues [26] Market Data and Key Metrics Changes - The ultra deepwater market entered 2026 with renewed strength, with tightening supply and increasing visibility indicating a robust 2027 [11] - The International Energy Agency projects that oil and gas demand will grow through 2050, reversing prior expectations of a near-term peak [11][12] - The market will require approximately 25 million barrels per day of new production by 2035 to remain in balance [11] Company Strategy and Development Direction - The company is focused on maximizing utilization across its high-specification fleet, with a backlog profile providing strong revenue visibility into 2026 and beyond [10] - The strategic partnership with Trendsetter has resulted in a differentiated offering that will continue to deliver advantages for both companies [9] - The company aims to capitalize on the growing deepwater demand, particularly in regions like Africa and Southeast Asia [20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in deepwater demand for 2026 and beyond, with expectations of increasing day rates and utilization [19][20] - The company highlighted that the current macro environment is the most favorable in recent memory, with operators pivoting back towards deepwater [11] - Management noted that the longevity of reserves is becoming a focal point for oil majors, indicating a shift in industry dynamics [12] Other Important Information - The company ended 2025 with a total cash balance of $365 million, including $26 million in restricted cash [26] - Total liquidity at the end of Q4 was $524 million, with gross principal debt of $625 million maturing through 2030 [27] Q&A Session Summary Question: Expectations for day rates in 2027 - Management expects day rates to exceed current levels, potentially seeing increases in 2026 based on market data [33][35] Question: Petrobras negotiations - Management is having positive discussions with Petrobras but cannot predict the timing of contract conclusions [38][39] Question: Fleet positioning and rig movements - The company is open to moving rigs based on economic choices, prioritizing high cash flow opportunities [46][48] Question: ONGC tender and market activity - Management sees positive developments in the Indian market and intends to participate in upcoming tenders [64][66] Question: Pricing discussions with customers - Conversations with customers are evolving, with some willing to negotiate for better day rates in exchange for longer-term contracts [91][92]

Financial Data and Key Metrics Changes - For the full year 2025, the company delivered EBITDA of $353 million, exceeding the midpoint of the original guidance range [4] - Total operating revenues for Q4 2025 were $362 million, slightly down from $363 million in the prior quarter [24] - Contract drilling revenues decreased by $7 million to $373 million due to fewer operating days for the West Vela [24] - Total operating expenses for Q4 were $344 million, an increase of $7 million primarily due to higher depreciation and amortization costs [25] - The company ended 2025 with a total cash balance of $365 million, including $26 million in restricted cash [25] Business Line Data and Key Metrics Changes - The West Neptune achieved a record-breaking six-zone completion for LLOG in the U.S. Gulf, completing the program in 11 days, exceeding the prior benchmark by 60% [5] - The West Elara earned ConocoPhillips Supplier of the Year Award, reflecting performance metrics and reliability [6] - The Sevan Louisiana successfully executed two well interventions using Trendsetter's innovative Trident system, broadening its market potential [7] Market Data and Key Metrics Changes - The ultra-deepwater market entered 2026 with renewed strength, with tightening supply and increasing visibility indicating a robust 2027 [9] - The International Energy Agency projects that oil and gas demand will grow through 2050, reversing prior expectations of a near-term peak [9] - The market will require approximately 25 million barrels per day of new production by 2035 to remain in balance [9] Company Strategy and Development Direction - The company is focused on maximizing utilization across its high-specification fleet, with a backlog profile providing strong revenue visibility into 2026 and beyond [8] - The strategic partnership with Trendsetter is expected to deliver advantages for both companies well into the future [7] - The company aims to capitalize on the growing deepwater demand, particularly in regions like Africa and Southeast Asia [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in deepwater demand for 2026 and beyond, with expectations of increasing day rates and utilization [17] - The company highlighted that operators are beginning to prioritize long-term contracts as they anticipate supply constraints [70] - Management noted that the current macro environment is the most favorable in recent memory, with a broad-based increase in demand across various regions [9][78] Other Important Information - The company anticipates total operating revenues of $1.4 billion to $1.45 billion for full year 2026, excluding $50 million of reimbursable revenues [26] - Full year EBITDA guidance for 2026 is set at $350 million to $400 million, including a non-cash expense of $26 million [27] - The company expects a significant step down in capital expenditures for 2026, ranging from $200 million to $240 million [27] Q&A Session Summary Question: Expectations for day rates in 2027 - Management expects day rates to exceed current levels based on market data and increasing demand [34][36] Question: Update on Petrobras negotiations - Management is having positive discussions with Petrobras but cannot predict the timing of contract conclusions [38] Question: Strategic positioning of the fleet - The company is open to moving rigs to maximize cash flow, depending on market opportunities [46][47] Question: Thoughts on recent ONGC tenders - Management views the recent ONGC tenders as a positive sign of increasing demand in the Indian market [63] Question: Conversations with customers about pricing - Management noted that discussions vary by client, with some willing to negotiate for better day rates [88]

Investor Presentation February 2026 Disclaimer FORWARD-LOOKING STATEMENTS: This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this presentation, including, without limitation, those regarding Seadrill Limited's (the "Company") outlook and guidance, plans, strategies, business prospects, financi ...

Financial Performance - Fourth quarter 2025 total operating revenues were $362 million, a slight decrease from $363 million in the prior quarter[4] - Contract revenues for the fourth quarter were $273 million, compared to $280 million in the previous quarter[4] - Full year 2025 net loss was $77 million, with an Adjusted EBITDA of $353 million[6] - Seadrill's total operating expenses for the fourth quarter increased to $344 million, up from $337 million in the prior quarter[4] - Full year 2026 guidance includes total operating revenues of $1.40 billion to $1.45 billion and Adjusted EBITDA of $350 million to $400 million[6] - The company reported an Adjusted EBITDA margin of 25.4% for the fourth quarter, up from 24.4% in the previous quarter[3] - Net loss for 2025 was $77 million, a significant decrease compared to a net income of $446 million in 2024[22] - Adjusted EBITDA for 2025 was $353 million, with an Adjusted EBITDA margin of 24.6%[27] Contract and Backlog - The company secured contract awards across seven rigs, adding $0.5 billion to the Contract Backlog[6] - As of February 25, 2026, Seadrill's Contract Backlog was approximately $2.5 billion[8] - West Capella received a contract award with PTTEP in Malaysia, adding over 14 months in firm term, enhancing earnings potential for 2026 and 2027[6] Debt and Cash Position - Seadrill had a net debt position of $260 million at quarter-end, with gross principal debt of $625 million and cash and cash equivalents of $365 million[5] - Cash and cash equivalents, including restricted cash, decreased from $505 million at the beginning of 2025 to $365 million at the end, representing a decrease of 28.0%[22] - Total current liabilities decreased from $501 million in 2024 to $374 million in 2025, a reduction of approximately 25.4%[20] - Long-term debt remained relatively stable, increasing slightly from $610 million in 2024 to $613 million in 2025[20] Asset and Equity Changes - Total assets decreased from $4,156 million in 2024 to $3,947 million in 2025, a decline of approximately 5.0%[20] - Shareholders' equity decreased from $2,918 million in 2024 to $2,858 million in 2025, a decline of about 2.1%[20] Operational Metrics - Average contractual dayrates for rigs decreased from $330,000 in Q3 2025 to $319,000 in Q4 2025[28] - Economic utilization remained stable at 91.0% in Q4 2025, slightly down from 91.1% in Q3 2025[28] - The company reported a net cash used in operating activities of $28 million in 2025, compared to a net cash provided of $88 million in 2024[22]

Core Viewpoint - Seadrill Limited has secured a one-year extension for the ultra-deepwater drillship West Saturn, adding $114 million to its contract backlog and extending the contract through October 2027 [1]. Group 1: Contract Details - Equinor Brasil Energia Ltda has exercised a priced option for the West Saturn drillship, which originally commenced in 2022 [1]. - The contract extension marks the continuation of the agreement into a sixth consecutive year [1]. Group 2: Financial Impact - The exercised option contributes an additional $114 million to Seadrill's contract backlog [1].

Core Viewpoint - Seadrill's share price experienced a significant increase of 8.9% to close at $38.16, driven by strong trading volume and the announcement of new offshore drilling contracts totaling approximately $235 million, enhancing revenue visibility into 2026-2027 [1][2]. Group 1: Company Performance - Seadrill's recent contracts include a $157 million ultra-deepwater drillship contract for the West Capella in Malaysia, starting in Q2 2026 for 440 days, and a $78 million accommodation contract for the West Elara with Equinor in Norway from Q3 2026 through Q4 2027 [2]. - The company is expected to report quarterly earnings of $0.07 per share, reflecting a year-over-year decline of 93.5%, while revenues are projected to be $332 million, representing a 14.9% increase from the previous year [3]. Group 2: Market Sentiment and Trends - The consensus EPS estimate for Seadrill has remained unchanged over the last 30 days, indicating that stock price movements may not sustain without trends in earnings estimate revisions [4]. - Seadrill currently holds a Zacks Rank of 3 (Hold), while another company in the same industry, Helmerich & Payne, has a Zacks Rank of 4 (Sell) and reported a 3.2% increase in its stock price [4][5].