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 ...

Seadrill Limited (NYSE:SDRL) Q4 2023 Results Conference Call February 29, 2024 10:00 AM ET Company Participants Lydia Mabry - Director of Investor Relations Simon Johnson - President and Chief Executive Officer Grant Creed - Executive Vice President and Chief Financial Officer Samir Ali - Executive Vice President and Chief Commercial Officer Marcel Wieggers - Senior Vice President of Operations Conference Call Participants Frank Galanti - Stifel Greg Lewis - BTIG Fredrik Stene - Clarkson Securities Hamed Kh ...

Core Insights - Seadrill Limited reported a full-year operating profit of $329 million and Adjusted EBITDA of $495 million for 2023, aligning with guidance [2][7] - The company secured significant contracts in Brazil and the U.S. Gulf of Mexico, achieving some of the highest dayrates in the current market cycle [2][10] - Seadrill completed $342 million in share repurchases, representing 11% of its share capital, as part of its ongoing buyback program [2][8] Quarterly Highlights - For Q4 2023, Seadrill reported total operating revenues of $408 million, with contract revenues of $315 million, a slight decrease from the previous quarter [3][5] - Adjusted EBITDA for Q4 2023 was $100 million, down from $151 million in Q3 2023, reflecting a decrease in operating profit to $52 million from $117 million [3][5][29] - The company operated an average of 12 rigs with an economic utilization rate of 92.4% [5][33] Financial Performance - Full-year total operating revenues reached approximately $1.5 billion, a 48% increase from $1.0 billion in the previous year [6][7] - Operating expenses increased to $356 million in Q4 2023, primarily due to provisions, repair and maintenance projects, and personnel costs [5] - Net cash provided by operating activities for Q4 was $140 million, marking a 25% improvement from Q3 [6] Share Repurchase Program - Seadrill initiated a $250 million buyback program in September 2023, which was expanded by an additional $250 million in December 2023 [8] - As of February 27, 2024, the company had repurchased a total of eight million shares at an average price of $43.36 per share [8] Balance Sheet Overview - As of December 31, 2023, Seadrill had gross principal debt of $625 million and cash and cash equivalents of $728 million [9][21] - The company maintains an additional $225 million in available borrowings under its undrawn senior secured revolving credit facility [9] Operational and Commercial Activity - Seadrill's order backlog stood at approximately $2.9 billion as of February 28, 2024, including $1.1 billion in contract additions since November 2023 [10] - Notable contracts secured include $1.1 billion in Brazil and a $74 million contract in the U.S. Gulf of Mexico [11][12]

Group 1 - Seadrill Limited will report its fourth quarter and full year 2023 results on February 28, 2024, after the NYSE closes for trading [1] - A conference call to discuss the results is scheduled for February 29, 2024, at 09:00 CST / 16:00 CET, with participants required to join at least 15 minutes prior [1] - The conference call will be accessible via a live webcast on Seadrill's website, with a replay available afterwards [1] Group 2 - Seadrill is a leading offshore drilling contractor that employs advanced technology to access oil and gas resources in various environments globally [2] - The company operates a high-quality, technologically-advanced fleet that covers all asset classes, enabling operations from shallow to ultra-deepwater locations [2] - Seadrill's experienced crews are capable of conducting operations across diverse geographies [2]