Seadrill Limited (“Seadrill” or the “Company”) (NYSE: SDRL)
today announced its first quarter 2025 results.
Quarterly Highlights
- Reported a net loss of $14 million and Adjusted EBITDA(1) of
$73 million
- West Auriga and West Polaris commenced their respective
contracts in December 2024 and February 2025
- Maintains the previously issued 2025 guidance ranges
Financial Highlights
Figures in USD million, unless otherwise
indicated
Three months ended March 31,
2025
Three months ended December
31, 2024
Total operating revenues
335
289
Contract revenues
248
204
Net (loss)/income
(14
)
101
Adjusted EBITDA(1)
73
28
Adjusted EBITDA Margin(1)
21.8
%
9.7
%
Diluted (loss)/earnings per share ($)
(0.23
)
1.54
“Our strategy to operate a floater-focused fleet at the heart of
the deepwater market positions Seadrill well to navigate near-term
volatility," said President and CEO Simon Johnson. "We remain
focused on adding to our durable backlog, which extends
meaningfully through 2028, and we are actively engaged with
customers for opportunities starting in the next 12 months. This
proactive approach and our robust financial position provide a
platform for long-term value creation."
Financial and Operational Results First quarter 2025
total operating revenues increased $46 million to $335 million,
compared to $289 million in the prior quarter. Contract revenues,
up $44 million to $248 million, drove almost all the sequential
improvement. An increase in operating days attributable to the West
Auriga and West Polaris, which commenced their respective contracts
in December 2024 and February 2025, was partially offset by lower
economic utilization principally related to rigs operating in
Brazil.
First quarter 2025 total operating expenses decreased by $6
million to $317 million, compared to $323 million in the previous
quarter. The decrease reflects a reduction in merger and
integration costs following the handover of the final two Aquadrill
rigs in 2024, and lower selling, general and administrative
expenses. These decreases were partially offset by increases in
vessel and rig operating expenses and depreciation and amortization
following recent contract commencements for the West Auriga and
West Polaris.
Net loss for the first quarter was $14 million. Adjusted
EBITDA(1) was $73 million, compared to $28 million in the prior
quarter.
Balance Sheet and Cash Flow At quarter-end, Seadrill had
gross principal debt of $625 million and $430 million in cash and
cash equivalents, including $26 million of restricted cash. Net
cash used in operating activities during the first quarter of 2025
was $27 million and payments for capital additions captured in net
cash used in investing activities were $45 million. Free Cash
Flow(1) was negative $72 million. Free Cash Flow(1) in the first
quarter included payments for contract preparation and
mobilization, primarily related to the West Auriga and West
Polaris, in addition to other working capital movements.
Order Backlog As of May 12, 2025, Seadrill’s Order
Backlog(2) was approximately $2.8 billion. The Company today
provided an updated fleet status report on the Investor Relations
section of its website, www.seadrill.com.
Outlook For the full year 2025, Seadrill maintains the
previously issued guidance for total operating revenues in the
range of $1,300 million to $1,360 million, which excludes
reimbursable revenues of $35 million, Adjusted EBITDA(3) in the
range of $320 million to $380 million, and capital expenditures in
the range of $250 million to $300 million.
Conference Call Information The Company will host a
conference call to discuss its results on Monday, May 12 at 08:00
CT / 15:00 CET. Interested participants may join the call by
dialing +1 (800) 715-9871 (Conference ID: 5348977) at least 15
minutes prior to the scheduled start time. The Company will webcast
the call live on the Investor Relations section of its website,
where a replay will be available afterwards.
(1)
These are non-GAAP measures. For a definition and a reconciliation
to the most comparable GAAP measure, see Appendices.
(2)
Order Backlog includes all firm contracts at the contractual
operating dayrate multiplied by the number of days remaining in the
firm contract period. It includes management contract revenues and
leasing revenues from bareboat charter arrangements and excludes
revenues for mobilization, demobilization, contract preparation,
and other incentive provisions and backlog relating to
non-consolidated entities.
(3)
Due to the forward-looking nature of Adjusted EBITDA, the Company
cannot reliably predict certain of the necessary components of the
most directly comparable forward-looking GAAP measure, net
income/(loss). Accordingly, the Company is unable to present a
quantitative reconciliation of such forward-looking non-GAAP
financial measure to the most directly comparable forward-looking
GAAP financial measure without unreasonable effort. The unavailable
information could have a significant effect on Seadrill’s full year
2025 GAAP financial results.
About Seadrill Seadrill is setting the standard in
deepwater oil and gas drilling. With its modern fleet, experienced
crews, and advanced technologies, Seadrill safely, efficiently, and
responsibly unlocks oil and gas resources for national, integrated,
and independent oil companies. For further information, visit
www.seadrill.com.
Forward-Looking Statements This news release includes
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements other
than statements of historical facts included in this news release,
including, without limitation, those regarding the Company’s
outlook and guidance, plans, strategies, business prospects,
financial performance, operations, rig activity and changes and
trends in its business and the markets in which it operates, are
forward-looking statements. These forward-looking statements can
often, but not necessarily, be identified by the use of
forward-looking terminology, including the terms "assumes",
"projects", "forecasts", "estimates", "expects", "anticipates",
"believes", "plans", "intends", "may", "might", "will", "would",
"can", "could", "should" or, in each case, their negative, or other
variations or comparable terminology. These statements are based on
management’s current plans, expectations, assumptions and beliefs
concerning future events impacting the Company and therefore
involve a number of risks, uncertainties and assumptions that could
cause actual results to differ materially from those expressed or
implied in the forward-looking statements. Important factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to: those
described under Part I, Item 1A, “Risk Factors” in the Company’s
Annual Report on Form 10-K for the year ended December 31, 2024,
filed with the U.S. Securities and Exchange Commission (the “SEC”)
on February 27, 2025, offshore drilling market conditions including
supply and demand, dayrates, customer drilling programs and effects
of new or reactivated rigs on the market, contract awards and rig
mobilizations, contract backlog, dry-docking and other costs of
maintenance, special periodic surveys, upgrades and regulatory work
for the drilling units in the Company’s fleet, the performance of
the drilling units in the Company’s fleet, delay in payment or
disputes with customers, the Company’s ability to successfully
employ its drilling units, procure or have access to financing,
ability to comply with loan covenants, fluctuations in the
international price of oil, international financial market
conditions, United States ("U.S.") trade policy and tariffs and
worldwide reactions thereto, inflation, changes in governmental
regulations that affect the Company or the operations of the
Company’s fleet, increased competition in the offshore drilling
industry, the review of competition authorities, the impact of
global economic conditions and global health threats, pandemics and
epidemics, our ability to maintain relationships with suppliers,
customers, employees and other third parties, our ability to
maintain adequate financing to support our business plans, our
ability to successfully complete and realize the intended benefits
of any mergers, acquisitions and divestitures, and the impact of
other strategic transactions, our liquidity and the adequacy of
cash flows to satisfy our obligations, future activity under and in
respect of the Company’s share repurchase program, our ability to
satisfy (or timely cure any noncompliance with) the continued
listing requirements of the New York Stock Exchange, the
cancellation of drilling contracts currently included in reported
contract backlog, losses on impairment of long-lived fixed assets,
shipyard, construction and other delays, the results of meetings of
our shareholders, political and other uncertainties, including
those related to the conflicts in Ukraine and the Middle East, and
any related sanctions, the effect and results of litigation,
regulatory matters, settlements, audits, assessments and
contingencies, including any litigation related to acquisitions or
dispositions, the concentration of our revenues in certain
geographical jurisdictions, limitations on insurance coverage, our
ability to attract and retain skilled personnel on commercially
reasonable terms, the level of expected capital expenditures, our
expected financing of such capital expenditures and the timing and
cost of completion of capital projects, fluctuations in interest
rates or exchange rates and currency devaluations relating to
foreign or U.S. monetary policy, tax matters, changes in tax laws,
treaties and regulations, tax assessments and liabilities for tax
issues, legal and regulatory matters in the jurisdictions in which
we operate, customs and environmental matters, the potential
impacts on our business resulting from decarbonization and
emissions legislation and regulations, the impact on our business
from climate change generally, the occurrence of cybersecurity
incidents, attacks or other breaches to our information technology
systems, including our rig operating systems, and other important
factors described from time to time in the reports filed or
furnished by us with the SEC.
The foregoing risks and uncertainties are inherently subject to
significant business, economic, competitive, regulatory and other
risks and uncertainties, many of which are difficult to predict and
beyond our control. In many cases, we cannot predict the risks and
uncertainties that could cause our actual results to differ
materially from those indicated by the forward-looking statements.
Should one or more of these risks or uncertainties materialize, or
should underlying assumptions prove incorrect, actual results may
vary materially from those indicated. All subsequent written and
oral forward-looking statements attributable to us or to any
person(s) acting on our behalf are expressly qualified in their
entirety by reference to these risks and uncertainties. You should
not place undue reliance on forward-looking statements. Each
forward-looking statement speaks only as of the date of the
particular statement. We expressly disclaim any obligations or
undertaking to release publicly any updates or revisions to any
forward-looking statement to reflect any change in our expectations
or beliefs with regard to the statement or any change in events,
conditions or circumstances on which any forward-looking statement
is based, except as required by law.
Investors should note that we announce material financial
information in SEC filings, press releases and public conference
calls. Based on guidance from the SEC, we may use the Investors
section of our website (www.seadrill.com) to communicate with
investors, and we intend to post presentations and fleet status
reports there, among other things. It is possible that the
financial and other information posted there could be deemed to be
material information. The information on our website is not part
of, and is not incorporated into, this news release. Furthermore,
references to our website URLs are intended to be inactive textual
references only.
SEADRILL LIMITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
Three months ended March
31,
(In $ millions, except per share data)
2025
2024
Operating revenues
Contract revenues
248
275
Reimbursable revenues (1)
15
20
Management contract revenues (1)
61
58
Leasing revenues (1)
8
11
Other revenues (1)
3
3
Total operating revenues
335
367
Operating expenses
Vessel and rig operating expenses
(179
)
(180
)
Reimbursable expenses
(15
)
(20
)
Depreciation and amortization
(55
)
(38
)
Management contract expenses
(45
)
(38
)
Selling, general and administrative
expenses
(23
)
(25
)
Merger and integration related
expenses
—
(2
)
Total operating expenses
(317
)
(303
)
Other operating items
Other operating income
—
16
Total other operating items
—
16
Operating profit
18
80
Financial and other non-operating
items
Interest income
4
7
Interest expense
(15
)
(15
)
Equity in earnings of equity method
investments (net of tax)
8
4
Other financial and non-operating
items
(14
)
(6
)
Total financial and other non-operating
items, net
(17
)
(10
)
Profit before income taxes
1
70
Income tax expense
(15
)
(10
)
Net (loss)/income
(14
)
60
Basic (LPS)/EPS ($)
(0.23
)
0.83
Diluted (LPS)/EPS ($)
(0.23
)
0.81
(1)
Includes revenue from related parties of $79 million and $76
million, for the three months ended March 31, 2025, and March 31,
2024, respectively.
SEADRILL LIMITED CONDENSED
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In $ millions, except share data)
March 31, 2025
December 31,
2024
ASSETS
Current assets
Cash and cash equivalents
404
478
Restricted cash
26
27
Accounts receivables, net
143
193
Other current assets
228
230
Total current assets
801
928
Non-current assets
Equity method investments
76
68
Drilling units (net of accumulated
depreciation of 491 as of March 31, 2025 (December 31, 2024:
430)
2,969
2,946
Deferred tax assets
60
63
Equipment
5
5
Other non-current assets
152
146
Total non-current assets
3,262
3,228
Total assets
4,063
4,156
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Trade accounts payable
78
118
Other current liabilities
321
383
Total current liabilities
399
501
Non-current liabilities
Long-term debt
611
610
Deferred tax liabilities
11
11
Other non-current liabilities
134
116
Total non-current liabilities
756
737
Commitments and contingencies
Shareholders' equity
Common shares of par value $0.01 per
share: 375,000,000 shares authorized as of March 31, 2025 (December
31, 2024: 375,000,000) and 62,163,028 issued as of March 31, 2025
(December 31, 2024: 62,154,422)
1
1
Additional paid-in capital
1,973
1,969
Accumulated other comprehensive income
1
1
Retained earnings
933
947
Total shareholders' equity
2,908
2,918
Total liabilities and shareholders'
equity
4,063
4,156
SEADRILL LIMITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Three months ended March
31,
(In $ millions)
2025
2024
Cash flows from operating
activities
Net (loss)/income
(14
)
60
Adjustments to reconcile net (loss)/income
to net cash (used in)/provided by operating activities:
Depreciation and amortization
55
38
Equity in earnings of equity method
investments (net of tax)
(8
)
(4
)
Deferred tax expense/(benefit)
3
(5
)
Unrealized (gain)/loss on foreign
exchange
(1
)
3
Amortization of debt issue costs
1
1
Share based compensation expense
4
3
Other
12
—
Other cash movements in operating
activities
Additions to long-term maintenance
(54
)
(29
)
Changes in operating assets and
liabilities
Trade accounts receivable
42
25
Trade accounts payable
(35
)
11
Prepaid expenses/accrued revenue
(2
)
(7
)
Deferred revenue
(9
)
5
Deferred mobilization costs
6
4
Related party receivables
—
(5
)
Other assets
(2
)
(21
)
Other liabilities
(25
)
(50
)
Net cash (used in)/provided by
operating activities
(27
)
29
Cash flows from investing
activities
Additions to drilling units and
equipment
(45
)
(23
)
Other
(4
)
—
Net cash used in investing
activities
(49
)
(23
)
Cash flows from financing
activities
Shares repurchased
—
(119
)
Net cash used in financing
activities
—
(119
)
Effect of exchange rate changes on
cash
1
(3
)
Net decrease in cash and cash
equivalents, including restricted cash
(75
)
(116
)
Cash and cash equivalents, including
restricted cash, at beginning of the period
505
728
Cash and cash equivalents, including
restricted cash, at the end of period
430
612
Appendix I - Reconciliation of Net (loss)/income to Adjusted
EBITDA (Unaudited)
Adjusted EBITDA represents Net (loss)/income before depreciation
and amortization, taxes, total financial items and other income and
similar non-cash charges. Additionally, in any given period, the
Company may have significant, unusual or non-recurring items which
may be excluded from Adjusted EBITDA for that period. When
applicable, these items are fully disclosed and incorporated into
the reconciliation provided below. Adjusted EBITDA Margin
represents Adjusted EBITDA as a percentage of Total operating
revenues. Adjusted EBITDA excluding Reimbursables, represents
Adjusted EBITDA, excluding Reimbursable revenues and Reimbursable
expenses. Adjusted EBITDA Margin excluding Reimbursables represents
Adjusted EBITDA excluding Reimbursables as a percentage of Total
operating revenues excluding Reimbursable revenues.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA
excluding Reimbursables and Adjusted EBITDA Margin excluding
Reimbursables are non-GAAP financial measures. The Company believes
that the aforementioned non-GAAP financial measures assist
investors by excluding the potentially disparate effects between
periods of depreciation and amortization, income tax
benefit/expense, total financial items and non-operating items,
merger and integration related expenses, gain on disposals and
other adjustments specified, which are affected by various and
possibly changing financing methods, capital structure and
historical cost basis and which may significantly affect Net
(loss)/income between periods.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA
excluding Reimbursables and Adjusted EBITDA Margin excluding
Reimbursables should not be considered as alternatives to Net
(loss)/income or any other indicator of Seadrill Limited’s
performance calculated in accordance with GAAP. Because the
definitions of Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted
EBITDA excluding Reimbursables and Adjusted EBITDA Margin excluding
Reimbursables (or similar measures) may vary among companies and
industries, they may not be comparable to other similarly titled
measures used by other companies.
The tables below reconcile Net (loss)/income, the most directly
comparable GAAP measure, to Adjusted EBITDA, Adjusted EBITDA
Margin, Adjusted EBITDA excluding Reimbursables and Adjusted EBITDA
Margin excluding Reimbursables.
Figures in USD million, unless otherwise
indicated
Three months ended March 31,
2025
Three months ended December
31, 2024
Net (loss)/income (a)
(14
)
101
Depreciation and amortization
55
45
Income tax expense/(benefit)
15
(133
)
Total financial and other non-operating
items, net
17
29
Merger and integration related
expenses
—
17
Gain on disposal
—
(31
)
Adjusted EBITDA (b)
73
28
Total operating revenues (c)
335
289
Net (loss)/income margin (a)/(c)
(4.2
)%
34.9
%
Adjusted EBITDA margin (b)/(c)
21.8
%
9.7
%
Figures in USD million, unless otherwise
indicated
Three months ended March 31,
2025
Three months ended December
31, 2024
Adjusted EBITDA (b)
73
28
Reimbursable revenues
(15
)
(15
)
Reimbursable expenses
15
15
Adjusted EBITDA excluding Reimbursables
(d)
73
28
Total operating revenues (c)
335
289
Reimbursable revenues
(15
)
(15
)
Total operating revenues excluding
Reimbursable revenues (e)
320
274
Adjusted EBITDA margin excluding
Reimbursables (d)/(e)
22.8
%
10.2
%
Appendix II - Contract Revenues Supporting Information
(Unaudited)
Contract Revenues Supporting
Information(1)
Three months ended March
31, 2025
Three months ended December
31, 2024
Average number of rigs on
contract(2)
9
8
Average contractual dayrates(3)
(in $ thousands)
323
289
Economic utilization(4)
83.9
%
93.0
%
(1) Excludes three drillships managed on behalf of Sonadrill (West
Gemini, Sonangol Quenguela, Sonangol Libongos); and excludes rigs
bareboat chartered to Sonadrill (West Gemini) and Gulfdrill, before
disposal in June 2024 (West Telesto, West Castor, West Tucana).
(2)
The average number of rigs on contract is calculated by dividing
the aggregate days the Company's rigs were on contract during the
reporting period by the number of days in that reporting period.
(3)
The average contractual dayrate is calculated by dividing the
aggregate contractual dayrates during a reporting period by the
aggregate number of days for the reporting period.
(4)
Economic utilization is defined as dayrate revenue earned during
the period, excluding bonuses, divided by the contractual operating
dayrate, multiplied by the number of days on contract in the
period. If a drilling unit earns its full operating dayrate
throughout a reporting period, its economic utilization would be
100%. However, there are many situations that give rise to a
dayrate being earned that is less than the contractual operating
rate, such as planned downtime for maintenance. In such situations,
economic utilization reduces below 100%.
Appendix III - Reconciliation of Net cash flows (used
in)/provided by operating activities to Free Cash Flow
(Unaudited)
The Company also presents Free Cash Flow as a non-GAAP liquidity
measure. Free Cash Flow is calculated as Net cash (used
in)/provided by operating activities less Additions to drilling
units and equipment. The Company believes Free Cash Flow is useful
to investors, as it allows greater transparency of the utilization
or generation of cash by the business. Because the definition of
Free Cash Flow may vary among companies and industries, it may not
be comparable to other similarly titled measures used by other
companies. The table below reconciles Net cash flows (used
in)/provided by operating activities, the most directly comparable
GAAP measure, to Free Cash Flow for the three months ended March
31, 2025 and December 31, 2024.
Figures in USD million
Three months ended March 31,
2025
Three months ended December
31, 2024
Net cash flows (used in)/provided
by operating activities
(27
)
7
Additions to drilling units and
equipment
(45
)
(38
)
Free Cash Flow
(72
)
(31
)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250512327559/en/
Kevin Smith VP - Corporate Finance & IR ir@seadrill.com
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