- Delivered $159 million of
Adjusted EBITDA(1) on $414 million of
revenue, resulting in an Adjusted EBITDA Margin(1) of 38.4%, and
net income of $94 million, or
$1.16 per diluted share
- Closed Aquadrill transaction on April 3, increasing contracted floater count for
the quarter by four to 12
- After the quarter, successfully issued $575 million of 8.375% senior secured second lien
notes due 2030 and executed a new $225
million revolving credit facility with an accordion feature
of up to $100 million
- On July 28, completed the sale of
three tender-assist units for approximately $85 million, as the Company focuses
on deepwater
- Initiated shareholder return program with share repurchase
authorization of up to $250
million
HAMILTON, Bermuda, Aug. 15,
2023 /PRNewswire/ -- Seadrill Limited ("Seadrill" or
the "Company") (NYSE: SDRL) (OSE: SDRL) today reported
strong second quarter 2023 results, which reflect a full
quarter's contribution from contracted rigs acquired as part of the
Aquadrill transaction, completed on April 3, 2023. Seadrill now owns 12 benign
deepwater floaters, beyond the two it manages as part of a 50:50
joint venture with Sonangol; three harsh-environment rigs; and
four jackups, three of which it plans to sell consistent with
ongoing fleet refinement.
|
Financial
Highlights
|
Three months
ended
|
Figures in USD
million, unless otherwise indicated
|
June 30,
2023
|
March 31,
2023
|
Total Operating
Revenues
|
414
|
266
|
Contract
Revenues
|
329
|
186
|
Operating
Profit
|
109
|
51
|
Adjusted
EBITDA
|
159
|
85
|
Adjusted EBITDA
Margin
|
38.4 %
|
32.0 %
|
Diluted Earnings Per
Share ($)
|
1.16
|
0.83
|
"We delivered strong results this quarter, and the full year
continues to be in line with previous guidance. This quarter, we
executed decisively on strategic initiatives that simplify and
strengthen our organization," stated President and Chief Executive
Officer, Simon Johnson. "We established greater scale with the
closing of the Aquadrill acquisition. We continued to refine our
fleet through value-accretive asset divestitures, completing the
sale of three tender-assist units at attractive valuations and
announcing intentions to sell our jackup fleet in Qatar. We also strengthened our financial
position, refinancing our secured debt at competitive rates to
reduce our cost of capital and improve our strategic
flexibility."
Johnson further explained, "We remain committed to prioritizing
a conservative capital structure, a refined fleet, and a
disciplined, value- accretive approach to growth. Our new
repurchase authorization will allow us to evaluate opportunities to
return capital to shareholders when available and prudent,
driving further value creation."
Financial and Operational Results
Seadrill generated $414 million in
total operating revenues, a sequential increase of $148 million, or 56%. During the quarter,
Seadrill operated an average of 13 rigs(2) that contribute to
contract revenues at an average day rate of $276 thousand and
economic utilization of 93%, compared to an average of nine
rigs in the first quarter. This translated into contract revenues
of $329 million, an increase of
$143 million, or 77%, from the prior quarter, primarily due to
a greater number of total operating days reflecting contracted
Aquadrill rigs now included in Seadrill's results. In
addition, the Company generated $66
million in management contract revenues, largely related to
the rigs the Company manages under its 50:50 joint venture
with Sonangol, and $19 million in
reimbursable and other revenues.
Seadrill incurred $308 million in
operating expenses, an increase of $89
million, or 41%, from the previous quarter, primarily due
to higher vessel and rig operating expense consistent with the
growth in the Company's fleet size. One-time merger and
integration-related expenses of $16
million also contributed to the increase.
Adjusted EBITDA nearly doubled from $85
million in the prior quarter to $159
million, or 38.4% of Adjusted EBITDA Margin.
Net cash provided by operating activities totaled $20 million, compared to $15 million in the prior quarter. Adverse working
capital movements negatively impacted operating cash flows.
Long-term maintenance costs of $23
million, included within operating activities, and
$14 million of capital upgrades
resulted in total capital expenditures of $37 million, as the Company supported a larger
fleet of contracted rigs.
Share Repurchase Authorization
Seadrill's Board of Directors has authorized a share repurchase
program that allows the Company to repurchase up to $250 million of its outstanding common
shares. The $250 million
authorization does not have a fixed expiration, and may be
modified, suspended, or discontinued at any time. The Company
is under no obligation to purchase any shares under the program.
Shares may be repurchased at any time and from time to time
under the program in open market purchases, privately negotiated
purchases, block trades, tender offers, accelerated share
repurchase transactions or other derivative transactions, through
the purchase of call options or the sale of put options, or
otherwise, or by any combination of the foregoing. The manner,
timing, pricing and amount of any repurchases will be subject to
the discretion of the Company and may be based upon a number
of factors, including market conditions, the Company's financial
position and capital requirements, financial conditions,
competing uses for cash, the restrictions in the Company's credit
agreements and other factors.
Balance Sheet and Debt Refinancing
At quarter-end, Seadrill had total debt of $355 million and $539
million in cash and cash equivalents, including $127 million in restricted cash. After the
quarter, Seadrill refinanced its secured debt, issuing $575 million in aggregate principal amount of
8.375% senior secured second lien notes due 2030 and
establishing a $225 million senior
secured five-year revolving credit facility with an accordion
feature of up to a further $100
million. Importantly, the refinancing removes certain
restrictive covenants, allowing the Company greater
flexibility to act on accretive opportunities that maximize
shareholder value.
Operational and Commercial Activity
Throughout the last year, Seadrill has focused increasingly on
the floater segment, through continued accretive acquisitions
and divestitures, believing that this part of the rig market
will produce the most growth and value for shareholders. The
Company announced the potential sale of three jackup rigs and
related interest in its 50:50 joint venture with Gulf Drilling
International ("GDI") and completed the sale of its three
tender-assist units to certain affiliates of Energy Drilling Pte.
Ltd. ("Edrill") for aggregate cash proceeds of approximately
$85 million at the end of July.
At quarter-end, Seadrill's Order Backlog(3) stood at
$2.6 billion, reflecting
approximately $203 million of
contract additions. During the quarter, the Company secured
multi-well contract extensions against existing agreements for two
drillships, the Sonangol Quenguela and the West Gemini,
operating in Angola through the
Company's 50:50 joint venture with Sonangol. These exercised
options will commence in direct continuation of the rigs'
existing contracts, committing the Sonangol Quenguela through
January 2025 and the West
Gemini through May 2025.
Additionally, the operator of the West Capella exercised a one-well
option, extending its operations by approximately two months.
Two of the Company's jackups, the West Castor and the West Tucana,
received contract extensions for continued operations offshore
Qatar through the Company's 50:50
joint venture with GDI. As of August 15,
2023, the Company's Order Backlog stands at $2.4
billion.
Conference Call Information
The Company will host a call to discuss its results today at
09:00 EST / 14:00 BST / 15:00
CET. Interested participants may join the call by
dialing +1 855 979 6654 or +44 800 358 1035 (Passcode: 610792) at
least 15 minutes prior to the scheduled start time. The
Company will also webcast the call live at
https://bit.ly/3rBMARr and provide a replay on its website
(www.seadrill.com/investors).
(1) Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP
measures. For a definition and a reconciliation to the
most comparable GAAP measure, see Appendices.
(2) The number of rigs contributing to contract revenue includes
fleet additions from the Aquadrill transaction (West Capella, West
Vela, West Auriga, West Polaris, T-15); excludes rigs managed
on behalf of Sonadrill (West Gemini, Sonangol Quenguela,
Sonangol Libongos); and excludes rigs managed on behalf of
Gulfdrill (West Telesto, West Castor, West Tucana).
(3) 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 lease revenues from bareboat charter arrangements and
excludes revenues for mobilization, demobilization, contract
preparation, and other incentive provisions and backlog relating to
non-consolidated entities.
Seadrill Contact Information
Lydia Mabry
Director of Investor Relations
T: +1 (832) 252-7064
E: lydia.mabry@seadrill.com
About Seadrill
Seadrill is a leading offshore drilling contractor utilizing
advanced technology to unlock oil and gas resources for clients
across harsh and benign locations around the globe. Seadrill's
high-quality, technologically-advanced fleet spans all asset
classes allowing its experienced crews to conduct operations
across geographies, from shallow to ultra-deepwater
environments.
Forward-Looking Statements
This news release includes forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of
the Exchange Act. All statements other than statements
of historical facts included in this communication, including those
regarding the Company's plans, strategies, business prospects,
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, which speak only as of the date of this
news release. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include, but are not limited to offshore
drilling market conditions including supply and demand, day
rates, customer drilling programs and effects of new rigs on the
market, contract awards and rig mobilizations, contract
backlog, dry-docking and other costs of maintenance of the drilling
rigs in the Company's fleet, the cost and timing of shipyard
and other capital projects, the performance of the drilling rigs in
the Company's fleet, delay in payment or disputes with
customers, Seadrill's ability to successfully employ its drilling
units, procure or have access to financing, ability to
comply with loan covenants, liquidity and adequacy of cash
flow from operations, fluctuations in the international price of
oil, international financial market conditions, 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 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 and our ability to maintain
adequate financing to support our business plans, our ability to
successfully complete any acquisitions, divestitures
and mergers, our liquidity and the adequacy of cash flows for
our obligations, our liquidity and the adequacy of cash flows for
our obligations, our ability to satisfy the continued listing
requirements of the New York Stock Exchange ("NYSE") and the Oslo
Stock Exchange ("OSE"), or other exchanges where our common
shares may be listed, or to cure any continued listing standard
deficiency with respect thereto, 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 conflict in Ukraine, the effect and results of litigation,
regulatory matters, settlements, audit, assessments
and contingencies, including any litigation related to the
Merger of the Company ("Merger") with Aquadrill LLC ("Aquadrill"),
our ability to successfully integrate with Aquadrill following
the Merger, 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 .
Consequently, no forward-looking statement can be
guaranteed. When considering these forward-looking
statements, you should also keep in mind the risks described from
time to time in the Company's filings with the SEC, including
its Annual Report on Form 20-F for the year ended December 31, 2022, filed with the SEC on
April 19, 2023 (File No. 001-39327)
and subsequent reports on Form 6-K.
The Company undertakes no obligation to update any
forward-looking statements to reflect events or circumstances after
the date on which such statement is made or to reflect the
occurrence of unanticipated events. New factors emerge from time to
time, and it is not possible for us to predict all of these
factors. Further, the Company cannot assess the impact of each such
factors on its business or the extent to which any factor, or
combination of factors, may cause actual results to be materially
different from those contained in any forward-looking
statement.
Contact: seadrill@hawthornadvisors.com
The following files are available for download:
https://mb.cision.com/Public/18925/3817709/a2df8528d313f606.pdf
|
Seadrill 6-K 2023
Q2
|
https://mb.cision.com/Public/18925/3817709/898aa599fb8a72a6.pdf
|
Seadrill Fleet Status
Report 2023 Q2
|
https://mb.cision.com/Public/18925/3817709/8f9d96abba1cacd1.pdf
|
Seadrill Press Release
2023 Q2
|
View original
content:https://www.prnewswire.com/news-releases/seadrill-announces-second-quarter-2023-results-and-250-million-share-repurchase-authorization-301900569.html
SOURCE Seadrill Limited