Financial Reporting and Accounting - The company adopted fresh start accounting upon emergence from bankruptcy on April 23, 2021, resulting in a new entity for financial reporting purposes with no beginning retained earnings or deficit [13]. - The fair values of the Successor's assets and liabilities differ materially from their recorded values prior to the bankruptcy, affecting comparability of financial statements [14]. Revenue Sources and Contracts - For the year ended December 31, 2022, BP accounted for 33.1% of total revenues, while Woodside represented 29.7% [31]. - The company earned $58.0 million in revenues from the management and marketing services agreement with Aquadrill during 2022 [31]. - The company’s drilling contracts typically provide for a basic dayrate, with potential reductions during rig movement or operational interruptions [23]. - The duration of dayrate drilling contracts is generally tied to the time required to drill a well or a fixed period, with options for customers to extend contracts [26]. - As of January 1, 2023, the company's contract backlog was $1.8 billion, an increase of 50% from $1.2 billion on January 1, 2022 [32]. - 81% of the contracted backlog ($1.4 billion) is attributable to future operations with three customers, including contracts for five and three rigs respectively [32]. Fleet and Operations - The company managed two drillships, West Auriga and West Vela, both contracted as of December 31, 2022, under a management and marketing services agreement with Aquadrill LLC [28]. - The company operates a fleet of 12 rigs, including 4 drillships and 8 semisubmersibles, with various attributes such as dynamic positioning and managed pressure drilling capabilities [20]. - The principal markets for the company's offshore contract drilling services include the Gulf of Mexico, Canada, Brazil, Australia, Europe, Africa, and the Mediterranean [22]. Market Conditions - The company operates in a highly competitive offshore drilling market with approximately 685 mobile drilling rigs in service worldwide [33]. - The offshore drilling industry is characterized by intense price competition and an oversupply of drilling rigs, impacting market dynamics [35]. Workforce and Training - As of December 31, 2022, the company managed a global workforce of approximately 2,100 employees, with over 57% having been employed for five years or more [37]. - The company utilizes a comprehensive training program to ensure employees receive position-specific training for career development [41]. Financial Risks - The company has exposure to interest rate risk on its debt instruments, with $177.5 million in variable interest rate debt as of December 31, 2022 [271]. - A 100-basis point increase in market interest rates would result in an estimated $3.0 million increase in annual interest expense based on current variable-rate debt levels [271]. Health, Safety, and Environment (HSE) - The company emphasizes a commitment to Health, Safety, and the Environment (HSE) as part of its core values and operational strategy [38]. Regulatory Environment - The company is subject to extensive domestic and international regulations that could significantly impact its business activities and revenues [36].
Diamond Offshore Drilling(DO) - 2022 Q4 - Annual Report