Financial Data and Key Metrics Changes - Seadrill reported EBITDA of $133 million on total operating revenues of $375 million for Q2 2024, resulting in an EBITDA margin of 35.5% [6][23] - The company lowered its second half EBITDA expectations due to revised estimates for contract start dates and uncommitted near-term availability on other rigs [6][26] - Full year EBITDA guidance was adjusted to a range of $315 million to $365 million, reflecting risks and opportunities [26] Business Line Data and Key Metrics Changes - Contract drilling revenues for Q2 2024 were $267 million, down $8 million from Q1 2024, with no contributions from the Polaris and Auriga during the quarter [20] - Leasing revenues were $26 million, including two quarters of bareboat charter income [21] - Vessel and rig operating expenses decreased to $165 million from $180 million in the prior quarter, primarily due to the Polaris and Auriga undergoing contract preparation [22] Market Data and Key Metrics Changes - Brazil remains the most important deepwater market, with expectations of flat floating rig numbers around 30 [15] - The U.S. Gulf of Mexico is active with high specification thresholds driving day rate development, but contract awards vary significantly [16] - West Africa is expected to see incremental demand in 2026 and beyond, particularly in Namibia and Nigeria [17] Company Strategy and Development Direction - Seadrill aims to achieve through-cycle resiliency by focusing on scale, balance sheet strength, management discipline, and safe operations [8][12] - The company is transitioning to a domestic issuer and simplifying its business by ending its secondary listing on the Oslo Stock Exchange [19] - Seadrill continues to prioritize capital return programs, having completed a $500 million buyback facility and announced another $500 million program [24] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term position of the deepwater drilling industry despite short-term visibility challenges [10][12] - The company noted that demand delays, rather than destruction, are occurring due to E&P customers prioritizing capital returns over new contracts [11][12] - Management acknowledged the importance of maintaining a strong balance sheet and operational discipline to navigate market volatility [12][26] Other Important Information - The company achieved a $203 million gain on the sale of the Gulfdrill joint venture and Qatar jack-ups, contributing positively to its financials [22] - Seadrill's cash flow from operations was $79 million for the quarter, with free cash flow of $36 million [25] Q&A Session Summary Question: Thoughts on sixth gen rates and their impact - Management believes sixth gen rates can be maintained through strategic placement of rigs in favorable markets [30] Question: Competitive landscape changes due to consolidation - Management maintains that their posture remains unchanged despite recent competitor exits, focusing on growth opportunities while being a potential acquisition target [35] Question: Delays in Auriga and Polaris contracts - Delays are attributed to supply chain issues and uncertainties in the customer acceptance process [36][38] Question: Guidance implications for 2025 - Reduced guidance for 2024 primarily affects timing, with expectations that it will not impact 2025 significantly [40][41] Question: Reactivation costs and strategy for cold-stacked rigs - Management is focused on ensuring a material contribution to reactivation costs before proceeding with any cold-stacked units [47] Question: Impact of capital discipline on operator partnerships - Some clients are looking to farm down their exposure, which complicates securing contracts [61] Question: Factors influencing contracting activity - Management noted that project timing, equipment availability, and capital discipline are key factors affecting contracting [66][68]

Anastasia Yakovleva Investment Thesis We believe that dayrates will increase thanks to robust demand for offshore rigs and supply constraints. Consequently, we expect sequential increases in realized dayrates for Seadrill (NYSE:SDRL) starting in the 4Q24, as older contracts will have rolled off. We estimate SDRL's fair value at $79 per share (base case), assuming the stock will trade at 8x EV/EBITDA. Investment risks include lower oil demand due to decarbonization measures in the long run and out-of-ser ...

Seadrill Limited (SDRL) has signed an agreement to sell off three of its jack-up rigs, also known as Qatar jack-up fleet, along with its 50% equity interest in the joint venture that operates these rigs, to Gulf Drilling International (GDI). Seadrill’s joint venture partner GDI will be taking over the three rigs, West Castor, West Telesto and West Tucana, and the venture in exchange for cash proceeds worth $338 million.SDRL has stated that the divestiture aligns with its overall strategy to simplify its bus ...

Shares of Seadrill (SDRL) have gained 7.3% over the past four weeks to close the last trading session at $52.51, but there could still be a solid upside left in the stock if short-term price targets of Wall Street analysts are any indication. Going by the price targets, the mean estimate of $68.25 indicates a potential upside of 30%.The average comprises four short-term price targets ranging from a low of $60 to a high of $80, with a standard deviation of $9.95. While the lowest estimate indicates an increa ...

Financial Data and Key Metrics Changes - Seadrill reported $367 million in revenue for Q1 2024, with an EBITDA of $124 million, resulting in an EBITDA margin of 33.8% [7][20] - Contract drilling revenues were $275 million, a decrease of $40 million from the previous quarter due to fewer operating days, despite improved economic utilization [20] - The EBITDA margin, net of reimbursable revenue and expenses, was 35.7% [21] Business Line Data and Key Metrics Changes - The company reintegrated the West Polaris and West Auriga into its fleet, preparing them for upcoming contracts in Brazil [8][21] - The Sevan Louisiana completed its work in the U.S. Gulf of Mexico and is now undergoing maintenance [21] - Economic utilization reached 97% during the quarter, contributing to the increase in EBITDA [21] Market Data and Key Metrics Changes - The offshore rig market remains strong, with marketed utilization for deepwater floaters exceeding 90% [11] - The current market dynamics indicate a supply-driven recovery, with limited new rigs entering the market since 2015 [12][13] - Demand for deepwater production is expected to grow, supported by favorable economics and low lifting costs [50] Company Strategy and Development Direction - Seadrill aims to focus on its core market segment of floating rigs while divesting from non-core assets, such as the Qatar jack-up rigs [9] - The company is committed to maintaining a competitive rig fleet and maximizing shareholder returns through share repurchase programs [10] - Continuous investment in fleet upgrades is planned to enhance operational efficiency and service delivery [17][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the offshore market's fundamentals, despite potential volatility in rig utilization [14][19] - The company is aware of the challenges in securing long-term contracts due to E&P preferences for shorter terms [14] - Management remains optimistic about the long-term demand for deepwater production and the company's positioning within the market [50] Other Important Information - Seadrill has repurchased $442 million of its shares since initiating a $500 million buyback program [10][23] - The company maintains a strong balance sheet with total gross debt of $625 million and a cash position of $612 million [24] Q&A Session Summary Question: Opportunities for the West Capella in South Korea - Management indicated potential for the West Capella to remain in Southeast Asia or return to core markets depending on future opportunities [31][32] Question: Contracting for the West Phoenix - Management is evaluating the investment required for the West Phoenix and may choose to stack the rig if a suitable contract is not secured [34][35] Question: Market Dynamics and Customer Awareness - Management noted that customers are becoming more aware of the costs and time associated with reactivating idle rigs, but some still perceive available capacity in the market [46][49] Question: Guidance and One-Time Items - The $16 million benefit from the recovery of import duties is included in the adjusted EBITDA expectations, but its impact on guidance remains uncertain [62][64] Question: Future of the Louisiana Rig - Management confirmed that the Louisiana is being marketed globally, with potential opportunities in both the Gulf of Mexico and Angola [66][68]

Seadrill (SDRL) came out with quarterly earnings of $0.81 per share, beating the Zacks Consensus Estimate of $0.68 per share. This compares to earnings of $0.83 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 19.12%. A quarter ago, it was expected that this offshore drilling services provider would post earnings of $0.65 per share when it actually produced earnings of $0.95, delivering a surprise of 46.15%.Over the last four q ...

Fleet and Operations - As of March 31, 2024, Seadrill owned a total of 19 drilling rigs, with 13 currently operating, including three leased to Gulfdrill LLC and one to Sonadrill[12]. - As of March 31, 2024, two rigs were undergoing contract preparations for upcoming contracts expected to commence at the end of 2024[12]. - Average number of rigs on contract increased to 10 in Q1 2024 from 9 in Q1 2023, driven by the Aquadrill acquisition[28]. - The company is focused on optimizing rig-based spending and improving revenue efficiency amid fluctuating market conditions[5]. Financial Performance - Operating revenues for Q1 2024 were $367 million, a 38% increase from $266 million in Q1 2023[24]. - Contract revenues rose to $275 million in Q1 2024, up 48% from $186 million in Q1 2023[26]. - Net income for Q1 2024 was $60 million, compared to $43 million in Q1 2023, marking a 40% increase[24]. - Operating profit rose to $80 million in Q1 2024, a 57% increase from $51 million in Q1 2023[76]. - Basic EPS for the three months ended March 31, 2024, was $0.83, slightly down from $0.86 in the prior year[76]. Contract Backlog and Projections - The total contract backlog as of March 31, 2024, was $2.822 billion, down from $3.020 billion as of December 31, 2023, representing a decrease of approximately 6.5%[17]. - The drilling contracts backlog was $2.481 billion as of March 31, 2024, compared to $2.612 billion at the end of 2023, indicating a decline of about 5%[17]. - The projected realization of the contract backlog includes $741 million in 2024, $895 million in 2025, and $494 million in 2026[18]. Shareholder Returns and Capital Allocation - Seadrill's capital allocation framework aims to return at least 50% of free cash flow to shareholders through dividends and share repurchases[5]. - The company authorized a share repurchase program of up to $500 million, with $192 million of common shares repurchased as of May 10, 2024[53]. - For the period from January 1, 2024, to May 10, 2024, Seadrill repurchased approximately 3.8 million shares at a weighted average price of $46.95[13]. Liquidity and Debt - As of March 31, 2024, Seadrill had available liquidity of $809 million, consisting of $612 million in cash and cash equivalents and $225 million in undrawn revolving credit[54]. - Total debt as of March 31, 2024, was $625 million, including a $575 million secured bond and a $50 million senior convertible bond[61]. - Seadrill's net leverage target is less than 1.0x under current market conditions, with a maximum through-cycle target of less than 2.0x[52]. Market Conditions and Utilization - The average oil price for the three months ended March 31, 2024, is a key factor influencing the offshore drilling market conditions[18]. - Economic utilization for rigs on contract improved to 97% in Q1 2024 compared to 95% in Q1 2023[30]. - Marketed utilization for harsh environment floaters was 91% in Q1 2024, down from 93% in Q1 2023, indicating slight market challenges[21]. Legal and Tax Matters - The company is involved in ongoing legal proceedings, including a claim from SFL Hercules Ltd. for approximately $51 million related to the rig West Hercules[143]. - Seadrill is facing a tax audit in Brazil with an assessed amount of approximately $66 million plus $10 million in interest, stemming from years 2009 and 2010[146]. Acquisitions and Mergers - The company completed the acquisition of Aquadrill LLC on April 3, 2023, adding four drillships and one semi-submersible to its fleet[89]. - Seadrill completed the acquisition of Aquadrill, exchanging 29.9 million common shares, $30 million in tax withholding, and $1 million in cash[157]. - The total assets acquired in the merger amounted to $1,436 million, while total liabilities assumed were $162 million, resulting in net assets acquired of $1,274 million[159]. Other Financial Metrics - Total operating expenses increased to $303 million in Q1 2024 from $219 million in Q1 2023, primarily due to higher vessel and rig operating expenses[34]. - Cash flows provided by operating activities increased to $29 million for the three months ended March 31, 2024, compared to $15 million in the same period of 2023[56]. - Total current liabilities decreased to $355 million as of March 31, 2024, from $389 million at December 31, 2023[79].

Core Insights - Seadrill Limited has announced new contract awards for its drillships, West Capella and West Neptune, indicating a positive outlook for the company's operations in the offshore drilling sector [1][2]. Contract Awards - The West Capella drillship has secured a one-well contract in South Korea, valued at approximately $32 million, with an estimated duration of 40 days starting in December 2024 [1]. - The West Neptune drillship has received a contract extension in the U.S. Gulf of Mexico, valued at approximately $86 million, extending its operations by six months starting in the September quarter of 2025 [2]. Technical Specifications - West Capella is a sixth-generation ultra-deepwater drillship with a maximum drilling depth of 37,500 feet and operational capabilities in water depths of 10,000 feet. It can accommodate 180 personnel [2][3]. - West Neptune is a seventh-generation ultra-deepwater drillship with similar maximum drilling depth capabilities and can operate in water depths of 12,000 feet [3]. Upgrades and Innovations - Seadrill plans to enhance the West Neptune drillship with managed pressure drilling (MPD) capabilities during scheduled out-of-service periods, making it the tenth rig in the fleet with such technology [3]. Industry Context - The energy sector shows promising opportunities with companies like SM Energy and Hess Corp. demonstrating strong production outlooks and significant resource discoveries, respectively [4]. - Eni, a global integrated energy company, is focusing on liquefied natural gas, which is expected to play a crucial role in the energy transition due to its lower carbon footprint [5].

Debt Issuance and Refinancing - Seadrill issued $500 million in 8.375% Senior Secured Second Lien Notes due 2030 on July 27, 2023, followed by an additional $75 million issuance on August 8, 2023, to refinance existing secured debt[1]. - The company incurred approximately $26 million in issuance costs related to the refinancing of its debt[1]. - The new Senior Secured Revolving Credit Facility allows for borrowings of up to $225 million, with an accordion feature to increase this limit by an additional $100 million[1]. Financial Projections and Performance - The total operating revenues for the pro forma combined statement for the year ended December 31, 2023, are projected to be $1,580 million, up from $1,502 million for Seadrill's historical results[5]. - Operating profit for the pro forma combined entity is estimated at $323 million, compared to $329 million for Seadrill's historical results[5]. - The interest expense for the pro forma combined entity is projected to be $58 million, down from $59 million in Seadrill's historical results[5]. - The basic earnings per share (EPS) for continuing operations is projected to be $3.71 for the pro forma combined entity, compared to $3.82 for Seadrill's historical results[5]. Merger and Acquisition Details - The merger with Aquadrill on April 3, 2023, resulted in Seadrill acquiring 29.9 million common shares and $1 million in cash, with a total consideration of $30 million settled by tax withholding[1]. - The pro forma financial information assumes that the completed transactions occurred on January 1, 2023, reflecting their impacts in the historical consolidated balance sheet as of December 31, 2023[2]. - Seadrill issued 8 million shares to Aquadrill shareholders, impacting the weighted average shares outstanding[13]. - Seadrill recognized the effects of the merger in its historical financial statements, including adjustments to shares outstanding since January 1, 2023[12]. Adjustments and Depreciation - The pro forma adjustments include a depreciation and amortization increase of $11 million due to the merger, reflecting preliminary asset values[5][11]. - The total adjustment to depreciation and amortization is $(11) million, reflecting various adjustments including a $70 million depreciation expense for fair value of drilling units[12]. - The estimated remaining useful lives for the acquired drilling units range from 15 to 21 years, affecting depreciation calculations[12]. - The amortization expense for unfavorable contract liabilities is $42 million, contributing to the overall financial adjustments[12]. Interest Expense Adjustments - The removal of historical Initial Term Loan and Initial Second Lien interest expenses resulted in a total adjustment to interest expense of $1 million[15]. - Interest expense adjustments include a $12 million removal of Initial Term Loan interest expense and a $16 million removal of Initial Second Lien interest expense[15]. - The total adjustment to interest expense includes a $28 million expense related to Second Lien Notes[15]. - The dilutive impact of Seadrill's pre-transaction convertible bond is approximately 3% of the fully diluted pro forma common shares outstanding[13].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 20-F ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 OR ☐ SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of ...