Seadrill Limited, a leader in offshore drilling, provides financial results for the three months ended March 31, 2023.

Q1 2023 Highlights

• Seadrill added approximately $39 million of Order Backlog[1] during the quarter, bringing the total as of March 31, 2023, to approximately $2.2 billion. The addition related to the West Neptune drillship securing a three-month extension with LLOG Exploration Offshore, L.L.C (“LLOG”) in the U.S. Gulf of Mexico in direct continuation of the existing term.
• Total Adjusted EBITDA[2] was $85 million in Q1 2023, a significant increase compared to Q4 2022 primarily due to higher operating days overall across the fleet, including notably with respect to our four drillships operating offshore Brazil, and the West Neptune working at a higher dayrate with LLOG.
• Total Operating Revenues increased by 17% to $266 million in Q1 2023.
• Strong operational performance in Q1 2023 with technical utilization of 96%.
• On February 10, 2023, Seadrill made a voluntary payment of $118 million (inclusive of principal, accrued interest and exit fee) under its secured second lien debt facility (the “Second Lien Facility”). On March 15, 2023, Seadrill made a further voluntary payment of $44 million (inclusive of principal, accrued interest and exit fee) with respect to the Second Lien Facility.
• On February 24, 2023, Seadrill completed the sale of its 35% shareholding in Paratus Energy Services Ltd. (“PES”) (formerly Seadrill New Finance Ltd.) and certain other interests for total consideration of $44 million (the “PES Sale”). PES is the entity which holds investments in SeaMex Holdings Ltd. (“SeaMex”), Seabras Sapura and Archer Ltd. In connection with the PES Sale, on March 14, 2023, Seadrill issued each of PES and SeaMex with a termination notice in respect of the master service agreements under which Seadrill provides management services. The terminations will take effect from July 12, 2023, and September 10, 2023, respectively.
• On January 25, 2023, Seadrill announced the appointment of Ana Zambelli as a new member of the Board of Directors.

Subsequent Events

• On April 3, 2023, Seadrill completed the all-stock acquisition of Aquadrill LLC (“Aquadrill”), at which point Aquadrill became a wholly-owned subsidiary of Seadrill (the “Aquadrill Acquisition”). As a result of the Aquadrill Acquisition, Seadrill added $470 million in Order Backlog on April 3, 2023. The operating results and assets and liabilities of Aquadrill will be consolidated from April 3, 2023. As such, Seadrill’s Q1 2023 interim financial statements do not include the effects of the Aquadrill Acquisition. Conversely, Seadrill’s market guidance for its 2023 financial year contained in this Q1 2023 earnings release includes the consolidation of Aquadrill from April 3, 2023.
• In connection with the Aquadrill Acquisition, Harry Quarls and Jonathan Swinney were appointed to serve on Seadrill’s Board of Directors on April 3, 2023.
• Gulfdrill LLC (“Gulfdrill”), a 50:50 joint venture between Seadrill and Gulf Drilling International, was awarded contract extensions by a leading operator for three jackup rigs working in Qatar. The West Castor jackup rig, which is bareboat chartered to Gulfdrill by Seadrill, received a contract extension, together with the two jackup rigs that are bareboat chartered to Gulfdrill by a third-party shipyard. The total contract value of the three contract extensions is approximately $343 million and extends these contracts until 2026. The bareboat charter rates payable in connection with the associated extension periods represent a significant increase relative to the existing rates. Seadrill’s Order Backlog as of May 23, 2023, is $2.6 billion.

Simon Johnson, President & CEO, commented:

“Seadrill has started 2023 strongly, with a near-fully utilized fleet and the closing of our Aquadrill acquisition in April. We are pleased with our operational and financial performance as we move through the year, with our technical utilization at 96% and our operating revenues and adjusted EBITDA substantially increasing quarter-on-quarter. We benefited from our four drillships offshore Brazil operating for the full quarter and the West Neptune drillship working at a higher dayrate in the U.S. Gulf of Mexico. Furthermore, during the quarter we were delighted to announce that LLOG had extended its contract for the West Neptune, furthering Seadrill and LLOG’s long-term association.

We have a confident posture and remain constructive about this developing upcycle. Seadrill has an enhanced fleet following our acquisition of Aquadrill, which cemented our position as a key player in the offshore drilling sector, and we are highly focused on maximizing the value that it can generate for our shareholders.”
Source: Seadrill Limited