Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were $621 million, up from $584 million in the prior quarter, reflecting a strong operational performance [32] - Adjusted EBITDA increased to $181 million in Q1 2025 from $142 million in the previous quarter, primarily due to more operating days and higher average daily revenue for the floater fleet [32][33] - Adjusted free cash flow for the quarter was $74 million, with cash and cash equivalents at $454 million, providing total liquidity of approximately $830 million [34] Business Line Data and Key Metrics Changes - The company added over $1 billion in new contract backlog since the last conference call, including significant contracts for drillships offshore West Africa and shallow water markets [6][10] - The total backlog increased to more than $4.2 billion, a nearly 20% increase from the previous backlog of $3.6 billion [19] - Fleet-wide revenue efficiency was reported at 96% during Q1 2025, indicating strong operational performance [7] Market Data and Key Metrics Changes - The global jackup fleet utilization stood at 90% at the end of Q1 2025, down from 94% in early 2024, indicating some downward pressure on day rates in certain regions [26] - Offshore Africa remains the most active area for future floater opportunities, with approximately 10 long-term programs expected to start in 2026 or 2027 [22] - The company is tracking around 25 floater opportunities, primarily related to drillships, with expected start dates in 2026 and 2027 [21][51] Company Strategy and Development Direction - The company is focused on delivering outstanding operational performance, executing its commercial strategy, and prudently managing its fleet and costs [14][18] - There is an emphasis on securing long-term contracts for high specification assets, particularly seventh-generation drillships, which are expected to be favored by customers for complex drilling solutions [14][15] - The company plans to continue managing costs for rigs expected to experience idle time and is willing to retire rigs when their economic benefit no longer justifies their costs [16][17] Management's Comments on Operating Environment and Future Outlook - Management noted that while macroeconomic uncertainty has increased, offshore production is expected to remain a vital component of meeting global energy needs [12][18] - The company anticipates that most projects being evaluated by customers for near to medium-term commencement are expected to be economic well below current commodity prices [13] - Management remains optimistic about securing additional contracts due to the high quality of its fleet and operational performance [14][18] Other Important Information - The company received the 2024 Best Safety Performance Award for jackup rigs, highlighting its commitment to safe operations [7] - The company reported a net loss of $39 million in Q1 2025, adjusted for discrete expenses, net income was $128 million [34] Q&A Session Summary Question: Regarding the 25 floater opportunities tracked for 2026 and 2027, what percentage require seventh-generation drillships? - Management indicated that the overwhelming majority of the 25 opportunities are drillship-related, with customers likely preferring seventh-generation assets due to their efficiency and capabilities [51] Question: Are customers showing interest in performance bonus structures in contracts? - Management confirmed that performance incentives are part of current contracts and are generally targeted at drilling wells ahead of the customer's AFE or reducing the number of days [52] Question: Can you comment on the pricing levels for the five-year extensions on jackups in Saudi Arabia? - Management stated that while specific day rates cannot be disclosed, the rates for the extensions are above historic levels and are considered solid contracts [73] Question: Is there a Brent price level at which offshore FIDs could start to get pushed back? - Management noted that they have not seen any programs getting pushed back based on current Brent prices, as the economics for offshore projects remain compelling [78]

Company Overview - Vantage Drilling International Ltd. is an offshore drilling contractor based in Bermuda, primarily engaged in contracting drilling units, related equipment, and work crews on a dayrate basis for oil and natural gas wells globally [2] Recent Developments - Alisdair Semple has been appointed as Chief Commercial Officer, reporting directly to CEO Ihab Toma, and will continue to operate from the Dubai office [1]

Financial Data and Key Metrics Changes - Transocean reported an adjusted EBITDA of $244 million on contract drilling revenues of $906 million, resulting in an adjusted EBITDA margin of approximately 27% [9][23] - The company experienced a net loss attributable to controlling interest of $79 million, equating to a net loss of $0.11 per diluted share [23] - Cash flow from operating activities was $26 million, while free cash flow was negative $34 million due to $60 million in capital expenditures [23][24] - Total liquidity at the end of the first quarter was approximately $1.3 billion, including $263 million in unrestricted cash [25] Business Line Data and Key Metrics Changes - Contract drilling revenues exceeded guidance primarily due to higher utilization on the Transocean Spitzbergen and Transocean Endurance [23] - Average daily revenue was approximately $444,000, with operating and maintenance expenses at $618 million, which was within guidance [23][24] Market Data and Key Metrics Changes - The U.S. Gulf is expected to see up to six programs commence in the second and third quarters of 2026, with three expected to come from public tenders [15] - In Brazil, Petrobras is increasing its rig count and has released tenders for upcoming projects, indicating a strong market outlook [16] - The company anticipates growth in West Africa, with multi-year opportunities expected to arise in 2026 [60] Company Strategy and Development Direction - Transocean is focused on converting its $7.9 billion backlog into revenue and cash to create sustainable value for shareholders [22] - The company is committed to delivering safe, reliable, and efficient operations while optimizing performance and maximizing shareholder returns [6][22] - Management emphasized the importance of deepwater drilling and the strategic shift among European majors towards oil and gas investments [11][14] Management Comments on Operating Environment and Future Outlook - Management noted that market volatility has not materially impacted business operations, with no planned programs delayed or canceled [13] - The outlook for deepwater drilling remains positive, with projections indicating a 40% increase in deepwater investment by 2029 [14][86] - Management expressed confidence in the future of offshore drilling, citing strong fundamentals and increasing offshore drilling activity [21][88] Other Important Information - The company has identified approximately $100 million in cash cost savings for 2025, with a similar amount expected for 2026 [34][70] - There are no significant costs associated with achieving these savings, which primarily come from renegotiating contracts and utilizing local crews [72] Q&A Session Summary Question: Timing of contract announcements - Management expects several contract announcements throughout the year, particularly in the second half, with a focus on long-term awards [44] Question: Day rates for upcoming contracts - There may be near-term pressure on day rates for short-term work, but long-term contracts are expected to remain stable [46][47] Question: Implications of Shell awards from Noble - Management believes there are still opportunities with Shell, as they anticipate additional demand in the Gulf of Mexico [54] Question: Activity assumptions for West Africa - Management sees potential growth in West Africa, with expectations for multi-year opportunities starting in 2026 [60] Question: Cost savings details - Management confirmed $100 million in identified savings for 2025, with a similar expectation for 2026, primarily from operational efficiencies [70] Question: Status of idle and cold stacked vessels - The company is actively looking for opportunities for its idle vessels and continues to assess its cold stacked fleet [76][78]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of $244 million on $906 million of contract drilling revenues, resulting in an adjusted EBITDA margin of approximately 27% [10] - The net loss attributable to controlling interest was $79 million, or a net loss of $0.11 per diluted share [25] - Cash flow from operating activities was $26 million, with free cash flow of negative $34 million reflecting $60 million of capital expenditures [26] Business Line Data and Key Metrics Changes - Contract drilling revenues exceeded guidance due to higher than anticipated utilization on specific rigs, with average daily revenue approximately $444,000 [26] - Operating and maintenance expenses were $618 million, within guidance range, but included a $34 million non-cash charge related to a customer dispute [27] Market Data and Key Metrics Changes - The company expects up to six programs to commence in the U.S. Gulf in the second and third quarters of 2026, with three expected to come from public tenders [16] - In Brazil, Petrobras is expected to increase its rig count to over 30 active rigs by the end of the year, with ongoing tenders for new programs [17] Company Strategy and Development Direction - The company is focused on converting its $7.9 billion backlog to revenue and cash to create sustainable value for shareholders [24] - Management emphasized the importance of deepwater drilling, with projections indicating a 40% increase in deepwater investment by 2029 [15] Management Comments on Operating Environment and Future Outlook - Management noted that market and commodity volatility has not materially impacted the business, and no planned programs have been delayed or canceled [14] - The outlook for deepwater drilling remains positive, supported by third-party projections and a strategic shift among major operators towards oil and gas investments [12][15] Other Important Information - The company has identified approximately $100 million in cash cost savings expected to be realized in 2025, with a similar amount anticipated for 2026 [34] - The projected liquidity at year-end 2025 is forecasted to be between $1.45 billion and $1.55 billion [30] Q&A Session Summary Question: Timing of contract announcements - Management expects several contract announcements over the summer and into the end of the year, with the second half of the year potentially being prolific for long-term awards [45] Question: Expected day rates for upcoming contracts - There may be near-term pressure on day rates for short-term work, but long-term contracts are expected to remain stable [48][49] Question: Implications of Shell awards from Noble - Management believes there are still opportunities with Shell, and they are taking a long-term view on rates and contracts [56][59] Question: Activity assumptions for West Africa - Management sees potential growth in West Africa, with expectations for multi-year opportunities and increased rig demand in the region [61] Question: Cost savings details - The company anticipates $100 million in cost savings for 2025 and a similar amount for 2026, primarily through renegotiation of contracts and operational efficiencies [68] Question: Status of idle and cold stacked vessels - The company is actively looking for opportunities for its idle vessels and continues to assess its cold stacked fleet on a quarterly basis [74][76]

Core Viewpoint - Transocean Ltd. reported a net loss of $79 million for Q1 2025, reflecting challenges in contract drilling revenues and increased operating expenses, while maintaining a backlog of $7.9 billion [2][3][8]. Financial Performance - Contract drilling revenues for Q1 2025 were $906 million, a decrease of $46 million from the previous quarter and an increase of $143 million year-over-year [3][21]. - Revenue efficiency improved to 95.5% in Q1 2025 from 93.5% in Q4 2024, indicating better revenue generation relative to maximum potential [3][28]. - Operating and maintenance expenses rose to $618 million in Q1 2025, up from $579 million in Q4 2024, primarily due to legal costs and increased shipyard expenses [4][21]. - Adjusted EBITDA for Q1 2025 was $244 million, with an adjusted EBITDA margin of 26.9%, down from 33.9% in the previous quarter [8][37]. Earnings and Losses - The net income attributable to controlling interest was a loss of $79 million, translating to a diluted loss per share of $0.11 [2][21]. - Adjusted net loss for Q1 2025 was $65 million, or a loss of $0.10 per diluted share, after accounting for unfavorable discrete tax items [2][33]. Cash Flow and Capital Expenditures - Cash provided by operating activities was $26 million, a decrease of $180 million compared to the prior quarter, largely due to reduced customer collections [7][43]. - Capital expenditures increased to $60 million in Q1 2025 from $29 million in Q4 2024, focusing on upgrades for certain rigs [8][43]. Balance Sheet and Debt Management - The company repaid $210 million in outstanding debt during the quarter, improving its balance sheet despite ongoing market volatility [8][43]. - Total assets as of March 31, 2025, were $19.019 billion, down from $19.371 billion at the end of 2024 [24][25]. Fleet and Operational Statistics - Transocean operates a fleet of 34 mobile offshore drilling units, with a focus on ultra-deepwater and harsh environment drilling [11][12]. - The average daily revenue for ultra-deepwater floaters was $443,600 in Q1 2025, while for harsh environment floaters it was $443,600, reflecting a slight decrease from the previous quarter [28][29].

Core Insights - Petrobras has extended its partnership with Noble Corporation, reaffirming its commitment to offshore drilling operations in Colombia [1][2] - The extension involves the Noble Discoverer rig, which will now operate until August 14, 2026, following a successful performance in deepwater drilling [2] - An unpriced option for further extension could keep the Noble Discoverer operational through the third quarter of 2027, indicating a long-term investment in offshore drilling technology [5] Company and Industry Overview - The Noble Discoverer, built in 2009, is designed for extreme deepwater conditions, with a maximum drilling depth of 40,000 feet (12,192 meters) and operational efficiency in water depths of up to 10,000 feet (3,048 meters) [3][4] - The partnership between Petrobras and Noble Corporation is crucial for meeting the rising energy demands and driving innovation in offshore drilling technology [7][8] - This collaboration exemplifies the importance of long-term partnerships in the oil and gas sector, ensuring smooth and efficient offshore projects [10][12] Strategic Implications - The renewed contract strengthens Petrobras' position as a leader in offshore energy exploration, particularly in Latin America [11] - The partnership is essential for maintaining efficiency, reliability, and technological advancement in offshore drilling operations [12] - Petrobras' ongoing investment in offshore energy development highlights the need for reliable drilling equipment to meet modern exploration challenges [6]

Core Viewpoint - J.P. Morgan analyst Arun Jayaram has reiterated an Underweight rating on Valaris Limited, lowering the price forecast from $40 to $38, indicating concerns about the company's ability to meet its EBITDA guidance for 2025 despite fleet rationalization efforts [1] Financial Projections - The analyst has revised the 2025 EBITDA estimate down to $522 million from $539 million and the 2026 estimate to $656 million from $698 million, which are 0.8% and 2.8% below Wall Street's expectations respectively [4] - Free cash flow is now projected at $28 million for 2025 and $132 million for 2026, with capital expenditures estimated at $369 million for 2025 and $277 million for 2026 [4] Operational Challenges - There are concerns regarding a potential slowdown in demand in the ultra-deepwater market, utilization gaps from expiring contracts, and reduced opportunities for certain rigs [2] - An incident causing two weeks of downtime on the DS-17 drillship in Q1 2025 may impact operations, although reduced downtime could lead to a slight EBITDA beat compared to forecasts [2][3] Market Dynamics - The potential for more rig suspensions in Saudi Arabia exists, although some rigs leased to ARO are still operating under short-term extensions while longer-term agreements are being negotiated [3] - Investors may shift focus towards companies with a higher concentration of committed floater backlog due to ongoing challenges in the market [5]

Financial Data and Key Metrics Changes - For the full year 2024, the company delivered $378 million of adjusted EBITDA on $1.4 billion of revenue, with capital expenditures of $118 million [38][39] - The fourth-quarter total operating revenues were $289 million, primarily impacted by fewer operating days due to planned out-of-service time and cold stacking of rigs [40] - The company maintained a strong balance sheet with gross principal debt of $625 million and cash holdings of $505 million, resulting in a net debt position of $120 million [42] Business Line Data and Key Metrics Changes - The company returned over $500 million in capital to shareholders and had a contracted backlog of $1.3 billion, with $400 million from divesting non-core assets [8][9] - The share repurchase program returned a total of $792 million to shareholders, reducing the issued share count by 22% since September 2023 [9][44] - The West Vela secured additional work, adding $20 million to backlog, while the West Jupiter and West Telus were awarded three-year contracts with Petrobras, commencing in 2026, providing $1 billion in incremental backlog [28][30] Market Data and Key Metrics Changes - The drillship marketed utilization is currently in the mid-eighties, down from the high nineties in 2023, indicating a softening market [32] - The company has approximately 75% of available rig days contracted across its marketed fleet in 2025, insulating it from market volatility [32] - The market outlook indicates a slow pace of contracting in 2025 due to capital discipline and supply chain constraints, with around 30 floaters available globally without firm contracts [31] Company Strategy and Development Direction - The company aims to be a pure-play floater company, having executed a strategy to rationalize its fleet and divest non-core assets [49][50] - The focus remains on delivering safe and efficient operations while optimizing the cost base to navigate market volatility [25][140] - The company is positioned to capitalize on future demand increases, particularly in deepwater projects, which are expected to be more profitable with lower carbon emissions intensity [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about future demand, although visibility remains unclear due to current market conditions [12] - The company is prepared to navigate regulatory challenges in Brazil and is actively engaging with clients and regulatory bodies to address new expectations [55][90] - The management highlighted the importance of maintaining a low-cost operating structure to remain competitive in the industry [140] Other Important Information - The company reported legal matters involving Petrobras, with claims amounting to approximately $213 million related to delayed penalties from contracts dating back to 2012 [22][21] - The company intends to vigorously defend its position regarding these claims and is evaluating all options, including potential counterclaims [23][58] Q&A Session Summary Question: Can you provide details on the 50 days of downtime for the Telus? - Management confirmed the downtime was due to a protracted regulatory clearance process, not a change in rules [54][55] Question: Is the claim from Petrobras related to the Sete rigs a new claim? - Management indicated surprise at the claim and noted that penalties are capped at 10% of the contract value [57][58] Question: What is the tone of conversations with clients regarding project economics? - Management noted an increase in exploration activity and optimism for future demand, particularly for projects starting in 2026 and 2027 [66][68] Question: How will operating expenses be managed for rigs without clear work? - Management stated that they will be disciplined and may stack rigs if there is no clear line of sight for work [83] Question: What is the company's stance on share buybacks given the current uncertainty? - Management acknowledged the attractive share price but emphasized the need for cash conservation and board consultation before further buybacks [111][112] Question: How does the new leadership at ANP affect regulatory scrutiny? - Management noted that the regulatory focus can shift and emphasized the importance of adapting to new expectations [90][102]

Financial Data and Key Metrics Changes - For the full year 2024, the company delivered $378 million of adjusted EBITDA on $1.4 billion of revenue, with capital expenditures of $118 million [38][39] - The fourth-quarter total operating revenues were $289 million, primarily impacted by fewer operating days due to planned out-of-service time and cold stacking of rigs [40] - The company maintained a strong balance sheet with gross principal debt of $625 million and cash of $505 million, resulting in a net debt position of $120 million [42] Business Line Data and Key Metrics Changes - The company returned over $500 million in capital to shareholders and had a contracted backlog of $1.3 billion, with $400 million from divesting non-core assets [8][9] - The share repurchase program returned a total of $792 million to shareholders, reducing the issued share count by 22% since September 2023 [9][44] - The company secured approximately 65% of the global backlog awarded to the four largest publicly traded offshore drillers, despite representing only 18% of the drillship fleet [27] Market Data and Key Metrics Changes - The drillship marketed utilization is now in the mid-eighties, down from the high nineties in 2023, indicating a softening market [32] - The company expects future demand to increase, but visibility remains unclear, with a strong balance sheet and 75% of the marketed fleet contracted for 2025 [12][32] - The company reported $3 billion in durable contract cover extending through 2028 and into 2029 [13] Company Strategy and Development Direction - The company aims to be a pure-play floater company, having executed a strategy to rationalize its fleet and divest non-core assets [49][50] - The focus remains on delivering safe and efficient operations while optimizing the cost base to navigate market volatility [25][138] - The company is committed to improving safety performance and maintaining a low-cost operating model [137][140] Management's Comments on Operating Environment and Future Outlook - Management noted that the immediate outlook for 2025 is uncertain, but they expect a rapid improvement in 2026 as deferred demand intersects with major projects [66] - The company is optimistic about the exploration activities, with around 30% of rigs currently drilling exploration wells, indicating a shift in market dynamics [65][131] - Management is actively engaged in discussions with clients to navigate new regulatory expectations and minimize potential non-revenue days [55][90] Other Important Information - The company is facing legal challenges from Petrobras, with claims amounting to approximately $213 million related to delayed penalties from contracts dating back to 2012 [22][21] - The company intends to vigorously defend its position and is evaluating all options, including potential counterclaims against Petrobras [23][24] Q&A Session Summary Question: Downtime for the Telus rig - Management confirmed 50 days of downtime due to a protracted regulatory clearance process, not due to changes in rules [54][55] Question: Petrobras litigation context - Management acknowledged the surprise regarding the $213 million claim and noted that penalties are capped at 10% of contract value [57][58] Question: Client conversations and project economics - Management indicated a mix of client responses, with some being cautious while others are ready to return to the market as day rates improve [62][68] Question: Operating expenses and guidance - Management provided insights on expected operating expenses, estimating $150k per day across the drillship fleet, excluding SG&A [75][76] Question: Share buyback program amid uncertainty - Management emphasized the importance of cash conservation while recognizing the attractiveness of current share prices for buybacks [110][111] Question: Exploration activities and client strategies - Management noted an increase in exploration activities and a growing demand for drilling in 2026 and beyond [126][131]

Financial Data and Key Metrics Changes - The company reported an adjusted EBITDA of approximately $132 million for Q4, down from $167 million in the previous quarter [33] - Net income for the quarter was around $20 million, or $0.15 per share, compared to approximately $44.5 million, or $0.34 per share, in the previous quarter [36] - The fixed-rate backlog stands at approximately $4.3 billion, with 2/3 of this backlog attributed to customers with investment-grade ratings [101][40] Business Line Data and Key Metrics Changes - The container fleet generated approximately $85 million in gross charter hire during Q4, down from the previous quarter due to scheduled dry dockings and efficiency upgrades [27] - The tanker fleet generated approximately $42 million in gross charter hire, an increase from approximately $37 million in the previous quarter [29] - The energy assets generated approximately $55 million in contract revenues, down from approximately $86 million in the previous quarter [32] Market Data and Key Metrics Changes - The overall utilization across the shipping fleet in Q4 was 98.3%, primarily affected by 108 days spent in dry dock [114] - The rig market index rate increased by 2.3% in Q4, with the Hercules rig recording revenue of $34 million and costs of approximately $26 million [116][24] - The company has a diversified fleet with 15 dry bulk vessels, 38 containerships, 18 tankers, 2 drilling rigs, and 7 car carriers [110] Company Strategy and Development Direction - The company has transformed its operating model over the last 10 years to focus on long-term charters with large end users [10] - There is a strong emphasis on investing in vessel maintenance and upgrades to meet tightening regulatory requirements and improve customer partnerships [112] - The company is segment agnostic and seeks to pursue the right deals with strong counterparties across various shipping segments [69] Management's Comments on Operating Environment and Future Outlook - Management expects a slow market for the Hercules rig in the first half of 2025, with more prospects anticipated in the second half [45] - The company believes that the dividend stability is tied to long-term prospects, with a focus on maintaining a strong cash flow foundation [50][52] - Management does not foresee a significant impact on profitability from the large delivery backlog of container ships due to the current long-term charters in place [92] Other Important Information - The company raised approximately $1.3 billion in financing, including $220 million in senior unsecured bonds in 2024 [104] - A recent court ruling ordered Seadrill to pay approximately $48 million in compensation, which is subject to appeal [105][76] - The company has a strong balance sheet with approximately $135 million in cash and cash equivalents at quarter-end [36] Q&A Session Summary Question: What are the operational expenses for the Hercules rig while warm stacked? - Management indicated that the Hercules rig is currently warm stacked and is being upgraded to enhance its attractiveness for future contracts [46][47] Question: How stable is the dividend payout? - The dividend is set on a quarter-over-quarter basis, with discussions focused on long-term prospects and cash flow stability [50][52] Question: What is the company's view on tariffs and their impact on shipping? - Management believes that strong counterparties like Volkswagen Group can absorb tariff impacts, and the company is not directly exposed to these risks [61][64] Question: What are the plans for redeploying proceeds from the sale of Capesize vessels? - The company is open to various segments and will focus on finding the right deals with strong structures and counterparties [68][72] Question: What is the expected timeline for the Seadrill appeal ruling? - The appeal period ends on March 5, and if appealed, it could take up to 12 months for a new ruling [76]