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 Data and Key Metrics Changes - The company generated quarterly revenues of just over $1 billion, with total direct operating costs at $702 million and general and administrative expenses approximately $81 million for the quarter [16][17]. - Gross capital expenditures for the second quarter were $159 million, aligning with expectations, while cash flow from operations was $56 million, negatively impacted by nonrecurring transaction-related costs and working capital challenges [18][27]. - The company maintains cash and short-term investments of $196 million, with an undrawn credit facility of $950 million, ensuring adequate liquidity for operations and debt repayment [27]. Business Line Data and Key Metrics Changes - In the North America Solutions segment, the average contracted rig count was 149, with revenues of $600 million, unchanged from the first quarter, and a direct margin of approximately $266 million, slightly stronger than the previous quarter [19][20]. - The International Solutions segment ended the quarter with 76 rigs working and a contracted drilling backlog of approximately $4 billion, generating a direct margin of $27 million, significantly impacted by rig suspensions in Saudi Arabia [20][22]. - The Offshore Solutions segment generated $26 million in direct margins, with a current backlog of $2.5 billion, benefiting from the KCAD acquisition [12][20]. Market Data and Key Metrics Changes - The company expects softer oil prices to lower the industry rig count as market volatility overrides potential incremental demand, with over 50% of customers preferring performance-based contracts [8][19]. - The average rig count in the North American Solutions segment is projected to range between 143 and 149 for the third quarter, with a revenue backlog of approximately $700 million [21][22]. Company Strategy and Development Direction - The company aims to execute its international growth strategy following the KCAD acquisition, which has positioned it as a global leader with the largest active rig count in the industry [5][6]. - The focus is on enhancing value and performance for customers and shareholders by prioritizing safety, drilling efficiency, and reliability [13][14]. - The company plans to realign cost structures, secure value-added synergies, and reduce debt on its balance sheet while remaining optimistic about scaling in prolific oil and gas regions [14][27]. Management's Comments on Operating Environment and Future Outlook - Management acknowledges headwinds from OPEC production increases and US tariff initiatives, but remains bullish about the long-term outlook for oil and gas markets, expecting demand to continue increasing [7][8]. - The company is focused on integrating operations and minimizing costs while addressing challenges in Saudi operations, with expectations for improvement in results as integration progresses [11][20]. - Management emphasizes the importance of performance-based contracts and technology solutions in driving efficiency and reliability for customers [9][22]. Other Important Information - The company is capturing synergies post-acquisition and has identified additional cost savings exceeding the original $25 million target by 2026 [26]. - The projected depreciation expense for the full year is around $595 million, with general and administrative expenses expected to be approximately $280 million [25][26]. Q&A Session Summary Question: What is the current state of the Saudi market regarding rig suspensions? - Management indicated uncertainty about the completion of the suspension cycle but noted that historically, rigs have returned to work after suspensions [30][32]. Question: How will the dynamics of rig suspensions and legacy HP rigs affect fiscal Q4? - Management expects a positive inflection in margins for Q4 as legacy HP rigs come online, offsetting the impact of suspensions [34][36]. Question: What is the expected contribution from the eight rigs in Saudi Arabia? - The anticipated contribution is around $25 million annually, with potential for this number to increase due to operational synergies [42][44]. Question: Will there be pressure on day rates in the domestic market due to rig count declines? - Management acknowledged the potential for pricing concessions but emphasized the importance of maintaining margins through performance-based contracts [52][102]. Question: Are there plans to relocate land rigs from Saudi Arabia to other markets? - Management confirmed that relocating rigs to neighboring countries is a possibility if they do not return to work [87][88]. Question: Is there potential for an increase in performance-based contracts? - While the current adoption rate is stable, management is actively pushing for more performance-based contracts as a means to provide value to customers [89][92].

Patterson-UTI Energy (PTEN) Q1 2025 Earnings Call April 24, 2025 09:26 PM ET Company Participants Michael Sabella - VP - Investor RelationsWilliam A. (Andy) Hendricks - President & CEOAndrew Smith - EVP & CFOArun Jayaram - Vice PresidentScott Gruber - Director - Oilfield Services & Equipment ResearchAtidrip Modak - Vice President - Energy Services & E&PsEddie Kim - Vice President - Equity ResearchKeith Mackey - Director - Global Equity Research, Oil & Gas ServicesStephen Gengaro - Managing DirectorConnor Je ...