Contract Overview - Seadrill's West Auriga has a contract with Petrobras in Brazil, running from December 2024 to December 2027, valued at approximately $577 million, including mobilization and additional services[9] - West Carina is contracted with Petrobras in Brazil from November 2022 to January 2026, with a dayrate of $262,000[9] - West Jupiter has a contract with Petrobras in Brazil from December 2022 to November 2025, with a dayrate of $261,600, and a total contract value at signing was approximately $525 million, including mobilization and additional services, with a follow-on contract from March 2026 to March 2029[9] - West Polaris is contracted with Petrobras in Brazil from February 2025 to February 2028, with a total contract value at signing of approximately $518 million, including mobilization and additional services[9] - West Tellus has a contract with Petrobras in Brazil from January 2023 to February 2026, with a dayrate of $246,100, and a total contract value at signing was approximately $539 million, including mobilization and additional services, with a follow-on contract from June 2026 to June 2029[9] - West Neptune is contracted with LLOG in the U S Gulf from May 2025 to November 2025, with a total contract value of approximately $86 million, excluding additional services, for an approximate 180-day duration, with a follow-on contract from November 2025 to May 2026[9] Harsh Environment & Joint Venture Rigs - West Elara is operating in Norway under a market-indexed rate with ConocoPhillips, with the contract running from May 2018 to March 2028[10] - West Gemini, managed by Seadrill through the Sonadrill joint venture, is operating in Angola with TotalEnergies from November 2024 to June 2025, with a dayrate of $404,800, and experienced an out-of-service period of approximately 60 days due to SPS, commencing in June[10] Stacked Rigs - West Capella is currently stacked in Malaysia[10]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $282 million and free cash flow of $107 million for Q2 2025, with a total revenue of €812 million [6][34] - The capital return program has returned over $1.1 billion to shareholders since Q4 2022 through dividends and share repurchases, with an additional $80 million returned this quarter [7][8] - The total backlog as of August 5 stands at €6.9 billion, with €1.1 billion scheduled for revenue conversion for the remainder of the year [35] Business Line Data and Key Metrics Changes - The company secured new contracts with a total contract value of $2.8 billion year-to-date, indicating strong commercial activity [15] - The Noble Stanley LaFos was extended for five additional wells, and the Noble Viking received a one-well contract valued at $34 million [10][11] - The Noble Globetrotter I secured a two-well contract in the Black Sea valued at approximately $82 million [12] Market Data and Key Metrics Changes - The global contracted rig count currently stands at 97 rigs, down from a peak of 105-106 during 2023-2024 [18] - In South America, contracted UDW demand is 43 units, with a strong outlook supported by recent tenders from Petrobras [19] - U.S. Gulf demand has softened, with 21 contracted UDW rigs, down from 22-24 last year [20] Company Strategy and Development Direction - The company is focused on optimizing its fleet following the successful integration of the Diamond acquisition, achieving a $100 million synergy target ahead of schedule [8][34] - The strategy includes managing costs and active fleet posture based on current market realities, with a focus on high-end drillships [27][28] - The company anticipates a potential rebound in the deepwater market by late 2026 or 2027, supported by a credible path back to a contracted UDW rig count of around 105 [27][40] Management's Comments on Operating Environment and Future Outlook - Management noted significant macro uncertainties affecting upstream spending, but remains optimistic about the long-term market outlook [17][38] - The company expects adjusted EBITDA to decline sequentially in Q3 due to contract rollovers and planned downtime, but anticipates a material rebound starting in 2026 [36][38] - Management emphasized the importance of cash flow maximization and returning capital to shareholders, with a target annualized free cash flow run rate of $400 million to $500 million by the second half of next year [40] Other Important Information - The company is actively pursuing opportunities in various regions, including Southeast Asia and the Americas, with significant planning and coordination required for new projects [15][16] - The harsh environment North Sea market currently represents six units of UDW demand, with expectations of muted market conditions until policy-driven impediments are removed [29][30] - Recent disposals of cold stacked drillships reflect the company's commitment to maintaining a high-spec competitive fleet [31] Q&A Session Summary Question: Guidance update clarification - Management explained the revenue guidance was lowered by about 3% due to unexercised options, while EBITDA guidance was tweaked higher due to strong cost management [43][44] Question: Strategy around key rigs - Management highlighted a strong focus on the Black Rhino, Viking, and Jerry D'Souza, with ongoing discussions for contracts that could significantly impact earnings [46][47] Question: Brazil market outlook - Management expressed a positive outlook for Brazil, anticipating flat to slightly increasing rig demand, driven by Petrobras and ongoing tenders [52][54] Question: Rig sales and retirement plans - Management confirmed that the Highlander will go to a drilling project, while the Globetrotter and Reacher are not expected to be sold for drilling purposes [55][56] Question: Near-term pricing expectations - Management indicated that day rates are currently in the low to mid-400s, with expectations for stability or slight decreases due to near-term softness [63][64] Question: Timing of Exxon rig resets - Management confirmed that new rates for Exxon rigs go into effect on March 1 and September 1, with the mechanism tracking the market effectively [73][74] Question: Impact of recent jackup market consolidation - Management stated that recent M&A activity in the jackup market does not significantly change their demand outlook or strategy [78][80] Question: Economics of current contracts - Management noted that while there may be some economic leakage in contract terms, the broader pricing strategies remain unaffected [84][86] Question: Contracting behavior and lead times - Management acknowledged unusual contracting behavior with long lead times despite softer near-term demand, driven by optimism for future projects [92][94]

Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $282 million and free cash flow of $107 million for Q2 2025, with a total revenue of €812 million [5][33] - The adjusted EBITDA margin was 33%, and cash flow from operations was €216 million, with net capital expenditures of €110 million [33] - The company returned an additional $80 million to shareholders through a $0.50 per share quarterly dividend, totaling over $1.1 billion in capital returns since Q4 2022 [6][34] Business Line Data and Key Metrics Changes - The company secured new contracts with a total contract value of $2.8 billion, with a total backlog of $6.9 billion as of August 5 [14][34] - Significant contracts included a six-well contract with BP for carbon capture and storage in the UK North Sea and a two-well contract with OMV in the Black Sea [12][14] - The integration of the Diamond acquisition achieved a synergy target of $100 million ahead of schedule [6][34] Market Data and Key Metrics Changes - The global contracted rig count for ultra-deepwater (UDW) currently stands at 97 rigs, down from a peak of 105-106 in 2023-2024 [16][26] - UDW demand in South America remains strong, with 43 total units contracted, while West Africa shows softness with only 12 rigs currently contracted [18][21] - The U.S. Gulf has seen a decrease in contracted UDW rigs, currently at 21, down from 22-24 last year [20] Company Strategy and Development Direction - The company is focused on optimizing its fleet and managing costs effectively in a flat market while preparing for potential growth in 2026 and 2027 [26][30] - The strategy includes disposing of underperforming rigs to maintain a high-spec competitive fleet and maximize cash flow [30] - The company is actively pursuing contracts for its key rigs, including the Black Rhino, Viking, and Jerry D'Souza, which are seen as critical for future earnings [27][46] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the deepwater market firming up by late 2026 or 2027, despite current macro uncertainties [38][39] - The company anticipates a material rebound in EBITDA starting in 2026, supported by new long-term contracts and rising deepwater demand levels [36][37] - Management highlighted the importance of disciplined cost management and cash flow maximization in the current market environment [30][39] Other Important Information - The company updated its full-year 2025 guidance, lowering total revenue expectations to $3.2 billion to $3.3 billion while narrowing the adjusted EBITDA range to €1.075 billion to €1.15 billion [35] - Capital expenditures for 2025 are expected to increase to $400 million to $450 million, reflecting investments tied to recent long-term awards [36] Q&A Session Summary Question: Guidance update clarification - The company lowered top-line guidance by about 3% but increased EBITDA guidance by about 1%, attributing the revenue decrease to unexercised options and strong customer management [42][44] Question: Strategy for key rigs - The focus is on securing contracts for the Black Rhino, Viking, and Jerry D'Souza, with strong conversations ongoing for these rigs [46][48] Question: Brazil market outlook - The company views Brazil's rig demand as stable to slightly increasing, with positive narratives from Petrobras regarding upcoming tenders [53][54] Question: Rig sales and retirement plans - The Highlander will go to a drilling project, while the Reacher and Globetrotter II are not expected to be sold for drilling purposes [56][58] Question: Day rates expectations - Current day rates for UDW rigs are in the low to mid-400s, with expectations that rates may hold firm despite near-term softness [64][66] Question: Rig reset timing and impact - Rig resets occur on March 1 and September 1, with rates set a few months prior, and the mechanism has tracked the market effectively [74][75] Question: Impact of recent M&A in the jackup market - The recent M&A activity in the jackup market does not significantly change the company's demand outlook or strategy [80][81]

Financial Performance - Second quarter Adjusted EBITDA was $282 million[6, 10], compared to $338 million in the prior quarter[10] - Free cash flow for the second quarter was $107 million[6, 10], down from $173 million in the first quarter[10] - Capital expenditures, net of insurance proceeds, were $110 million in the second quarter[10], compared to $98 million in the previous quarter[10] - The company returned over $1.1 billion to shareholders since Q4 2022, including a Q3 dividend of $0.50 per share[6] Contract Backlog and Fleet - Current contract backlog stands at $6.9 billion[10, 12], a decrease from $7.5 billion in the previous quarter[10] - Approximately $380 million in new contracts were secured[6] - 62% of floater rig days are committed for 2025, 49% for 2026, and 36% for 2027[13] - 20% of floater rig days are committed for 2028, and 5% for 2029-2031[13] Guidance and Fleet Rationalization - Full year 2025 Adjusted EBITDA guidance is $1.075 billion to $1.15 billion[32] - Full year 2025 capital additions, net of reimbursements, are guided at $400 million to $450 million[32] - Revenue guidance for 2025 is $3.2 billion to $3.3 billion[32] - The company completed the retirement of Meltem and Scirocco rigs and plans to retire Globetrotter II, Highlander, and Reacher rigs[8]

Core Viewpoint - Noble Corporation reported its second quarter 2025 results, highlighting resilient earnings and free cash flow despite macro volatility, with a focus on integration targets and backlog expansion [3]. Financial Performance - Total revenue for Q2 2025 was $849 million, a decrease from $874 million in Q1 2025 and an increase from $693 million in Q2 2024 [2]. - Contract drilling services revenue was $812 million in Q2 2025, down from $832 million in Q1 2025 and up from $661 million in Q2 2024 [2][3]. - Net income for Q2 2025 was $43 million, down from $108 million in Q1 2025 and $195 million in Q2 2024 [2][3]. - Adjusted EBITDA for Q2 2025 was $282 million, down from $338 million in Q1 2025 but up from $271 million in Q2 2024 [2][3]. - Basic and diluted earnings per share were both $0.27 for Q2 2025, compared to $0.68 and $0.67 respectively in Q1 2025 and $1.37 and $1.34 in Q2 2024 [2][3]. Cash Flow and Capital Expenditures - Net cash provided by operating activities in Q2 2025 was $216 million, with capital expenditures of $117 million and free cash flow of $107 million [3][34]. - The company reported total debt of $2 billion and cash equivalents of $338 million as of June 30, 2025 [4]. Dividend and Shareholder Returns - An interim quarterly cash dividend of $0.50 per share was approved for Q3 2025, with total capital returned to shareholders exceeding $1.1 billion since Q4 2022 [5][7]. Operational Highlights - The marketed fleet utilization for floaters was 70% in Q2 2025, down from 78% in Q1 2025, while jackup utilization was 61%, down from 74% in the previous quarter [3][8]. - The backlog as of August 5, 2025, stands at $6.9 billion, with approximately $380 million in new contract awards since April 2025 [6][9]. Guidance and Outlook - The company updated its 2025 guidance, reducing total revenue expectations to $3,200 to $3,300 million while increasing adjusted EBITDA guidance to $1,075 to $1,150 million [11][12]. - Management noted encouraging indicators of increasing demand in the deepwater market by late 2026 and into 2027, particularly in South America and Africa [12].

Financial Data and Key Metrics Changes - In Q2 2025, the company reported contract drilling revenues of $988 million, aligning with guidance, with an average daily revenue of approximately $459,000 [20] - Operating and maintenance expenses were $899 million, below guidance due to lower costs from delays in maintenance and out-of-service projects [20] - Total liquidity at the end of the quarter was approximately $1.3 billion, including $377 million in unrestricted cash and $395 million in restricted cash [21] Business Line Data and Key Metrics Changes - The company is focused on managing its high-spec rig portfolio in a disciplined manner to maximize value [6] - The high specification ultra deepwater and harsh environment fleet has an industry-leading backlog of approximately $7 billion [8] - The company plans to sustainably reduce cash costs by about $100 million in each of 2025 and 2026, primarily from fleet operating and maintenance expenses [9] Market Data and Key Metrics Changes - The global active ultra deepwater fleet is expected to approach utilization exceeding 90% by late 2026, leading to upward pressure on day rates [13] - Deepwater and ultra deepwater development CapEx is projected to rise from $64 billion in 2025 to $79 billion in 2027, a 23% increase [13] - The company anticipates a tightening market by late 2026, with significant demand expected from Africa, the Mediterranean, and Asia [14][16] Company Strategy and Development Direction - The company aims to improve financial flexibility by reducing total debt and minimizing interest expenses [6] - A disciplined approach to managing the balance sheet is emphasized, with a clear path to significantly reduce debt over the next few years [10] - The company is committed to delivering best-in-class services and maintaining a competitive edge through technology and innovation [7] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the recovery of utilization rates and day rates as contracting activity increases [38] - The company is focused on maximizing cash flow and converting its backlog into revenue efficiently [27] - Management noted that the current slowdown is not typical of the service drilling business cycle, attributing it to market volatility and capital discipline [66] Other Important Information - The company has removed four lower specification rigs from its fleet to maintain competitiveness [19] - The company is actively engaged in multiple conversations with customers for future contracting opportunities [11] - The company expects capital expenditures for 2025 to be approximately $120 million, slightly above prior guidance due to customer upgrades [24] Q&A Session Summary Question: Expectations on leading edge day rates - Management expects utilization to bottom out in the mid-80s and anticipates rates to improve as contracting activity increases [35][38] Question: Future of drillships Proteus and Concorde in the Gulf of Mexico - Management is cautiously optimistic that these rigs will remain in the Gulf of Mexico due to customer interest [40] Question: Proceeds from rigs slated for disposal - Management indicated that proceeds from rig recycling are generally around cash breakeven, estimated at $8 to $12 million per asset [45] Question: Update on achieving 3.5 times net debt to EBITDA - Management aims to achieve this metric by late 2026 to consider shareholder distributions [49] Question: Involvement in deep sea mining - The company continues to pursue technical solutions for deep sea mining, with the Olympia asset being useful for potential future opportunities [55] Question: Spot activity and market trends - Management noted several spot jobs and tenders in regions like West Africa and the Gulf of Mexico, indicating positive market activity [60] Question: Impact of BP's Boomerang discovery on industry activity - Management sees the discovery as a positive indicator for increased exploration activity and potential future tenders [78][80]

Financial Data and Key Metrics Changes - In Q2 2025, Transocean reported contract drilling revenues of $988 million, aligning with guidance, with an average daily revenue of approximately $459,000 [20] - Operating and maintenance expenses were $899 million, below guidance due to lower costs from service delays and out-of-service projects [20] - Total liquidity at the end of the quarter was approximately $1.3 billion, including $377 million in unrestricted cash and $395 million in restricted cash [21] Business Line Data and Key Metrics Changes - The company expects contract drilling revenues for Q3 2025 to be between $1 billion and $1.02 billion, driven by increased in-service days and efficiency [21][22] - Full-year contract drilling revenues are now projected to be between $3.9 billion and $3.95 billion, reflecting potential variances in revenue efficiency [24] Market Data and Key Metrics Changes - The global active ultra-deepwater fleet is expected to approach utilization exceeding 90% by late 2026, leading to upward pressure on day rates [14] - Wood Mackenzie projects deepwater and ultra-deepwater development CapEx to rise from $64 billion in 2025 to $79 billion in 2027, a 23% increase [14] Company Strategy and Development Direction - Transocean is focused on delivering best-in-class services, managing its high-spec rig portfolio, and improving financial flexibility by reducing debt and costs [6][11] - The company plans to reduce cash costs by approximately $100 million annually in 2025 and 2026, with additional efficiency improvements expected [10][11] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the market recovering, with increased contracting activity anticipated in 2026 and beyond [12][28] - The company is committed to maintaining a disciplined approach to managing its balance sheet and maximizing cash flow to reduce debt [11][28] Other Important Information - Transocean removed four lower specification rigs from its fleet in Q2 2025, contributing to improved industry dynamics [19] - The company is actively pursuing opportunities in various regions, including Africa, the Mediterranean, and Asia, with expectations for increased demand [15][16] Q&A Session Summary Question: Expectations on leading edge day rates - Management noted that while day rates have moderated, they expect utilization to recover and rates to improve as contracting activity increases [33][39] Question: Future contracts for drillships in the Gulf of Mexico - Management is optimistic that the Proteus and Concorde drillships will remain in the Gulf of Mexico due to customer interest [42] Question: Proceeds from rigs slated for disposal - Management indicated that proceeds from rig disposals are expected to be around breakeven, with no significant assumptions beyond that included in liquidity forecasts [46][48] Question: Exploration activity and implications - Management highlighted an increase in exploration activity and noted that successful discoveries, like BP's Boomerang, could lead to increased industry activity and CapEx levels [70][72]

Core Insights - Transocean Ltd. reported a net loss attributable to controlling interest of $938 million, or $1.06 per diluted share, for the three months ended June 30, 2025, reflecting significant financial challenges [1][2][9]. Financial Performance - Contract drilling revenues increased sequentially by $82 million to $988 million, driven by improved rig utilization and revenue efficiency, despite lower revenues from one idle rig [3][29]. - Operating and maintenance expenses decreased to $599 million from $618 million in the prior quarter, primarily due to the resolution of certain litigation costs [4]. - Adjusted EBITDA for the quarter was $344 million, with an adjusted EBITDA margin of 34.9%, up from 26.9% in the previous quarter [1][9][36]. Tax and Interest - The effective tax rate increased to 14.2% from a negative 95.8% in the prior quarter, largely due to losses on rig impairments [7]. - Interest expense was $141 million, down from $152 million in the previous quarter, reflecting a favorable adjustment for the fair value of asset impairment losses [5]. Cash Flow and Capital Expenditures - Cash provided by operating activities was $128 million, an increase of $102 million compared to the prior quarter, attributed to higher cash receipts from customers [8]. - Capital expenditures for the second quarter were $24 million, significantly lower than $60 million in the prior quarter [8]. Operational Efficiency - The company achieved a total fleet average rig utilization of 67.3%, up from 63.4% in the previous quarter, indicating improved operational performance [30]. - Revenue efficiency for the total fleet was reported at 96.6%, an increase from 95.5% in the prior quarter [30][31]. Backlog and Future Outlook - As of July 2025, Transocean's backlog stood at $7.2 billion, indicating a strong pipeline of future revenue opportunities [1].

Company Overview - Valaris Limited (NYSE:VAL) is an offshore drilling company that leases rigs and drillships to major energy companies like Shell and Exxon, currently trading at a significant discount to its intrinsic value due to the industry's downturn during COVID, which led to bankruptcies and asset transfers to creditors [1] - Valaris has a stronger balance sheet and one of the youngest, most advanced fleets, positioning the company to benefit as deepwater drilling gains momentum with stable oil demand and rising cost competitiveness [2] Industry Insights - Deepwater offshore drilling is becoming increasingly important due to its cost competitiveness compared to other oil extraction methods, with breakeven prices falling to $30–$43 per barrel, making it cheaper than U.S. shale [4] - Offshore drilling accounts for approximately 30% of the world's total oil production, with deepwater drilling contributing 6-7% of the total supply [4] Market Position and Potential - Currently, 8.6% of Valaris's public float is sold short, and only one out of eight analysts covering the stock has a "Buy" rating, indicating a low market sentiment despite the company's potential [3] - Valaris trades at a steep discount to both replacement value and future free cash flow potential, with expectations of delivering a 3-7x return over the next 3-5 years due to low valuation, a new capital structure, rising demand, and constrained supply [3]

Financial Data and Key Metrics Changes - Total revenues for the second quarter were $615 million, a slight decrease from $621 million in the prior quarter, primarily due to the completion of a contract for Valaris DS-12 without follow-on work [28] - Adjusted EBITDA increased to $201 million from $181 million in the prior quarter, driven by a favorable arbitration outcome that provided a total benefit of $24 million [29] - Adjusted free cash flow for the quarter was $63 million, with cash and cash equivalents at $516 million, contributing to total liquidity of nearly $900 million [30][32] Business Line Data and Key Metrics Changes - The company added over $1 billion in new contract backlog, increasing total backlog to approximately $4.7 billion, the highest in a decade [5][34] - For floaters, $860 million was added to the backlog, while jackups contributed $145 million [16] - The jackup fleet maintained robust contract coverage, with over 70% of available days contracted for 2026 and 60% for 2027 [11] Market Data and Key Metrics Changes - Global marketed utilization for jackups ended the second quarter at 90%, driven by national oil companies prioritizing energy security [24] - The offshore drilling market is expected to see meaningful growth in deepwater project sanctioning in 2026 and 2027, with over 75% of deepwater spending expected to be sanctioned at breakeven prices below $50 per barrel [10][9] - The company is tracking more than 30 floater opportunities with planned start dates in 2026 or 2027, indicating a healthy pipeline for future contracts [10][18] Company Strategy and Development Direction - The company is focused on delivering operational performance, executing a commercial strategy, and maintaining disciplined cost and fleet management to drive long-term value for shareholders [4][12] - The strategy includes securing long-term contracts for high-specification assets and exploring short-term gap-fill opportunities as they arise [14][40] - The company plans to actively manage its fleet in response to market conditions, including retiring rigs when their economic benefit no longer justifies associated costs [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the offshore drilling market, noting that customers are prioritizing long-cycle offshore projects and that the demand for deepwater production remains strong [9][10] - The company anticipates additional contract awards across the industry in the coming months, supported by a healthy pipeline of opportunities [10][18] - Management highlighted a positive shift in customer sentiment, with increased confidence in contracting rigs and moving forward with developments [82] Other Important Information - The company completed the sale for recycling of three semisubmersibles, reflecting a proactive approach to fleet management [14] - The company expects total CapEx for the third quarter to be between $100 million and $110 million, including ongoing fleet maintenance and contract-specific upgrades [31][32] Q&A Session Summary Question: Can you provide more details on the shorter-term contracts for the drillships? - Management indicated that the average duration for shorter-term contracts varies and that they are well-positioned to service these opportunities with their high-spec fleet [38][39] Question: How many of the 30 planned floater opportunities have been pushed back? - Management clarified that while some opportunities have shifted, the pipeline remains robust with new work replenishing the opportunities [50][51] Question: What is the outlook for day rates on upcoming contracts? - Management expects day rates to remain stable in the low $400s for upcoming contracts, with potential for increases as utilization improves [58][62] Question: What are the expectations for Petrobras' rig count and tendering schedule? - Management expressed optimism about Petrobras maintaining a stable rig count and indicated that multiple tenders are expected, which could lead to increased contracting opportunities [70][73] Question: What is the company's approach to returning capital to shareholders? - Management remains committed to returning capital to shareholders and indicated that strong operational performance and upcoming rig sales will enhance flexibility for capital returns [88][89]