Seadrill Announces First Quarter 2026 Results
Key Terms
contract backlog financial
adjusted ebitda financial
free cash flow financial
non-gaap financial
net debt financial
Highlights
-
Secured multiple contract awards across the
U.S. Gulf,Brazil andAngola , adding over$860 million $3.1 billion - West Capella and West Jupiter projects completed ahead of schedule and on budget.
-
Reported a net loss of
$7 million $97 million -
Increased full year 2026 Total operating revenues and Adjusted EBITDA(3) guidance ranges as follows: Total operating revenues range increased to
$1.43 $1.48 billion $1.40 $1.45 billion $50 million $370 $420 million $350 $400 million $200 $240 million
Financial Highlights
Figures in USD million, unless otherwise indicated |
Three months ended March 31, 2026 |
Three months ended December 31, 2025 |
||
Total operating revenues |
358 |
|
362 |
|
Contract revenues |
277 |
|
273 |
|
Net loss |
(7 |
) |
(10 |
) |
Adjusted EBITDA |
97 |
|
88 |
|
Adjusted EBITDA margin excluding Reimbursables(2) |
27.9 |
% |
25.4 |
% |
Diluted loss per share ($) |
(0.11 |
) |
(0.16 |
) |
“Seadrill delivered a solid quarter financially and operationally, including the completion of two major projects ahead of schedule and on budget. These achievements, together with recent commercial success, enhance visibility toward higher earnings and Free Cash Flow(4) in the second half of 2026 and into 2027,” said President and CEO Samir Ali. “Increasing demand for deepwater rigs is supported by multiple customers across multiple regions, and with a renewed global focus on energy security, we see growing tailwinds into 2027 to drive positive dayrate momentum.”
Financial and Operational Results
First quarter 2026 Total operating revenues decreased to
Net loss for the first quarter was
Balance Sheet and Cash Flow
At quarter-end, Seadrill had gross principal debt of
Commercial Activity and Contract Backlog
-
West Polaris was awarded a three-year contract extension with Petrobras in
Brazil , commencing in January 2028 and adding approximately$480 million -
West Neptune and West Vela both secured work in the
U.S. Gulf with LLOG, a subsidiary of Harbour Energy, adding$260 million -
Sonangol Quenguela secured a contract extension with TotalEnergies in
Angola . The additional term is for an estimated 480 days, committing the rig into July 2028. -
West Carina extended its current contract in
Brazil into June 2026.
As of May 11, 2026, Seadrill’s Contract Backlog was approximately
Conference Call Information
The Company will host a conference call to discuss its results on Monday, May 11, 2026 at 08:00 CT / 15:00 CET. Interested participants may join the call by dialing +1 (800) 715-9871 (Conference ID: 2874047) 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) Contract 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. |
(2) These are non-GAAP measures. For a definition and a reconciliation to the most comparable GAAP measure, see Appendices. |
(3) Due to the forward-looking nature of Adjusted EBITDA, management cannot reliably predict certain of the necessary components of the most directly comparable forward-looking GAAP measure, net income. 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 the Company's full year 2026 GAAP financial results. |
(4) Free Cash Flow is a non-GAAP measure, calculated as Net cash (used in)/provided by operating activities less Additions to drilling units and equipment. |
(5) 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 |
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, contract awards, financial performance, operations, litigation, 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, 2025, filed with
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 securities laws.
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) |
|
2026 |
|
2025 |
||
Operating revenues |
|
|
|
|
||
Contract revenues |
|
277 |
|
|
248 |
|
Reimbursable revenues (1) |
|
10 |
|
|
15 |
|
Management contract revenues (1) |
|
63 |
|
|
61 |
|
Leasing revenues (1) |
|
8 |
|
|
8 |
|
Other revenues |
|
— |
|
|
3 |
|
Total operating revenues |
|
358 |
|
|
335 |
|
Operating expenses |
|
|
|
|
||
Vessel and rig operating expenses |
|
(181 |
) |
|
(179 |
) |
Reimbursable expenses |
|
(10 |
) |
|
(15 |
) |
Depreciation and amortization |
|
(71 |
) |
|
(55 |
) |
Management contract expenses |
|
(46 |
) |
|
(45 |
) |
Selling, general and administrative expenses |
|
(25 |
) |
|
(23 |
) |
Merger and integration related expenses |
|
(1 |
) |
|
— |
|
Total operating expenses |
|
(334 |
) |
|
(317 |
) |
Operating profit |
|
24 |
|
|
18 |
|
Financial and other non-operating items |
|
|
|
|
||
Interest income |
|
2 |
|
|
4 |
|
Interest expense |
|
(15 |
) |
|
(15 |
) |
Equity in earnings of equity method investments (net of tax) |
|
4 |
|
|
8 |
|
Other financial and non-operating items |
|
1 |
|
|
(14 |
) |
Total financial and other non-operating items, net |
|
(8 |
) |
|
(17 |
) |
Profit before income taxes |
|
16 |
|
|
1 |
|
Income tax expense |
|
(23 |
) |
|
(15 |
) |
Net loss |
|
(7 |
) |
|
(14 |
) |
Basic LPS ($) |
|
(0.11 |
) |
|
(0.23 |
) |
Diluted LPS ($) |
|
(0.11 |
) |
|
(0.23 |
) |
(1) Includes revenue from related parties of |
||||||
SEADRILL LIMITED |
|||
CONDENSED CONSOLIDATED BALANCE SHEETS |
|||
(Unaudited) |
|||
(In $ millions, except share data) |
March 31,
|
|
December 31,
|
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
304 |
|
339 |
Restricted cash |
25 |
|
26 |
Accounts receivables, net |
214 |
|
162 |
Amounts due from related parties, net |
7 |
|
— |
Other current assets |
261 |
|
231 |
Total current assets |
811 |
|
758 |
Non-current assets |
|
|
|
Equity method investment |
62 |
|
58 |
Drilling units, net of accumulated depreciation of 754 as of March 31, 2026 (December 31, 2025: 682) |
2,950 |
|
2,969 |
Deferred tax assets |
29 |
|
44 |
Equipment |
15 |
|
8 |
Other non-current assets |
125 |
|
110 |
Total non-current assets |
3,181 |
|
3,189 |
Total assets |
3,992 |
|
3,947 |
LIABILITIES AND SHAREHOLDERS' EQUITY |
|
|
|
Current liabilities |
|
|
|
Trade accounts payable |
80 |
|
61 |
Other current liabilities |
337 |
|
313 |
Total current liabilities |
417 |
|
374 |
Non-current liabilities |
|
|
|
Long-term debt |
614 |
|
613 |
Deferred tax liabilities |
16 |
|
14 |
Other non-current liabilities |
94 |
|
88 |
Total non-current liabilities |
724 |
|
715 |
Shareholders' equity |
|
|
|
Common shares of par value |
1 |
|
1 |
Additional paid-in capital |
1,986 |
|
1,986 |
Accumulated other comprehensive income |
1 |
|
1 |
Retained earnings |
863 |
|
870 |
Total shareholders' equity |
2,851 |
|
2,858 |
Total liabilities and shareholders' equity |
3,992 |
|
3,947 |
SEADRILL LIMITED |
||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||
(Unaudited) |
||||||
|
|
Three months ended March 31, |
||||
(In $ millions) |
|
2026 |
|
2025 |
||
Cash flows from operating activities |
|
|
|
|
||
Net loss |
|
(7 |
) |
|
(14 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
||
Depreciation and amortization |
|
71 |
|
|
55 |
|
Equity in earnings of equity method investment (net of tax) |
|
(4 |
) |
|
(8 |
) |
Deferred tax expense |
|
17 |
|
|
3 |
|
Unrealized gain on foreign exchange |
|
— |
|
|
(1 |
) |
Amortization of bond issuance costs |
|
1 |
|
|
1 |
|
Share based compensation expense |
|
1 |
|
|
4 |
|
Other |
|
— |
|
|
12 |
|
Other cash movements in operating activities |
|
|
|
|
||
Additions to long-term maintenance |
|
(38 |
) |
|
(54 |
) |
Changes in operating assets and liabilities |
|
|
|
|
||
Accounts receivable, net |
|
(52 |
) |
|
42 |
|
Trade accounts payable |
|
11 |
|
|
(35 |
) |
Prepaid expenses |
|
2 |
|
|
(2 |
) |
Deferred revenue |
|
(10 |
) |
|
(9 |
) |
Deferred contract costs |
|
(35 |
) |
|
6 |
|
Related party receivables |
|
(7 |
) |
|
— |
|
Other assets |
|
(12 |
) |
|
(2 |
) |
Other liabilities |
|
40 |
|
|
(25 |
) |
Net cash used in operating activities |
|
(22 |
) |
|
(27 |
) |
Cash flows from investing activities |
|
|
|
|
||
Additions to drilling units and equipment |
|
(13 |
) |
|
(45 |
) |
Other |
|
— |
|
|
(4 |
) |
Net cash used in investing activities |
|
(13 |
) |
|
(49 |
) |
Cash flows from financing activities |
|
|
|
|
||
Taxes withheld on employee stock transactions |
|
(1 |
) |
|
— |
|
Net cash used in financing activities |
|
(1 |
) |
|
— |
|
Effect of exchange rate changes on cash |
|
— |
|
|
1 |
|
Net decrease in cash and cash equivalents, including restricted cash |
|
(36 |
) |
|
(75 |
) |
Cash and cash equivalents, including restricted cash, at beginning of the period |
|
365 |
|
|
505 |
|
Cash and cash equivalents, including restricted cash, at the end of period |
329 |
430 |
||||
Appendix I - Reconciliation of Net loss to Adjusted EBITDA (Unaudited)
Adjusted EBITDA represents Net loss before depreciation and amortization, loss on impairment of long-lived assets, gain on disposals, income tax expense/benefit, total financial and non-operating items, 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 expense/benefit, total financial items and non-operating items, merger and integration related expenses, loss on impairment of long-lived assets, 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 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 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, the most directly comparable GAAP measure, to Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA excluding Reimbursables and Adjusted EBITDA Margin excluding Reimbursables.
(In $ millions, unless otherwise indicated) |
Three months ended March 31, 2026 |
|
Three months ended December 31, 2025 |
||
Net loss (a) |
(7 |
) |
|
(10 |
) |
Depreciation and amortization |
71 |
|
|
69 |
|
Loss on impairment of long-lived assets |
— |
|
|
22 |
|
Gain on disposals |
— |
|
|
(1 |
) |
Income tax expense/(benefit) |
23 |
|
|
(29 |
) |
Total financial and other non-operating items, net |
8 |
|
|
36 |
|
Merger and integration related expenses |
1 |
|
|
1 |
|
Other adjustments (1) |
1 |
|
|
— |
|
Adjusted EBITDA (b) |
97 |
|
|
88 |
|
Total operating revenues (c) |
358 |
|
|
362 |
|
Net loss margin (a)/(c) |
(2.0 |
)% |
|
(2.8 |
)% |
Adjusted EBITDA margin (b)/(c) |
27.1 |
% |
|
24.3 |
% |
(In $ millions, unless otherwise indicated) |
Three months ended March 31, 2026 |
|
Three months ended December 31, 2025 |
||
Adjusted EBITDA (b) |
97 |
|
|
88 |
|
Reimbursable revenues |
(10 |
) |
|
(16 |
) |
Reimbursable expenses |
10 |
|
|
16 |
|
Adjusted EBITDA excluding Reimbursables (d) |
97 |
|
|
88 |
|
Total operating revenues (c) |
358 |
|
|
362 |
|
Reimbursable revenues |
(10 |
) |
|
(16 |
) |
Total operating revenues excluding Reimbursable revenues (e) |
348 |
|
|
346 |
|
Adjusted EBITDA margin excluding Reimbursables (d)/(e) |
27.9 |
% |
|
25.4 |
% |
(1) Primarily related to executive management separation costs. |
|||||
Appendix II - Contract Revenues Supporting Information (Unaudited)(1)
|
Three months ended March 31, 2026 |
|
Three months ended December 31, 2025 |
||
Average number of rigs on contract(2) |
9 |
|
|
10 |
|
Average contractual dayrates(3) (in $ thousands) |
343 |
|
|
319 |
|
Economic utilization(4) |
94.6 |
% |
|
91.0 |
% |
(1) Excludes three drillships managed on behalf of Sonadrill (West Gemini, Sonangol Quenguela, Sonangol Libongos). |
|||||
(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 |
|||||
Appendix III - Reconciliation of Net cash used in 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 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 used in operating activities, the most directly comparable GAAP measure, to Free Cash Flow for the three months ended March 31, 2026 and December 31, 2025.
Three months ended March 31, 2026 |
|
Three months ended December 31, 2025 |
|||
| (In $ millions) | |||||
Net cash used in operating activities |
(22 |
) |
|
(40 |
) |
Additions to drilling units and equipment |
(13 |
) |
|
(23 |
) |
Free Cash Flow |
(35 |
) |
|
(63 |
) |
View source version on businesswire.com: https://www.businesswire.com/news/home/20260510391490/en/
Kevin Smith
VP - Corporate Finance & IR
ir@seadrill.com
Source: Seadrill Limited