Seadrill Limited (SDRL) - Third Quarter 2020 Trading Update
- Technical utilization1 of 94% and economic utilization2 of 92%
- Total backlog stands at $2.1 billion
- Cash and cash equivalents as at September 30, 2020 was $851m
- Stuart Jackson appointed Chief Executive Officer
- The role and responsibilities of the Chief Financial Officer are now divided into two new roles: Grant Creed is Chief Restructuring Officer and Neil Gilliver is Chief Accounting Officer
- Following quarter end, approximately $52 million of backlog added:
- The Sevan Louisiana was awarded a one firm, plus one optional, well contract with Walter Oil & Gas in US Gulf of Mexico adding $17m backlog over the firm term
- The West Neptune has been awarded a one firm well contract with Kosmos Energy in US-Gulf of Mexico, adding $9m backlog
- Equinor exercised additional wells on the West Hercules in Norway adding $26m in backlog
- Total Angola released the West Gemini from its obligations under the contract. Seadrill is entitled to compensation in the form of a lump sum fee
Stuart Jackson, CEO, commented:
“Seadrill continues to play its part in establishing a more viable market environment – taking action on scrapping rigs, reducing the cost of operation and support activities, and addressing our capital structure. In doing so, we remain committed to the delivery of safe and efficient operations for our customers.
“We continue to address the industry issue of too many rigs and too much debt. Managing our rig count is the necessary balance to bringing down our debt burden and we are progressing plans to safely recycle some of our rigs, subject to the approval of our lenders. We are engaged in constructive discussions with our financial stakeholders as we look to carry out a comprehensive restructuring of our balance sheet and our cash balance provides us with the necessary flexibility to manage this process.”
It should be noted that on conclusion of a comprehensive restructuring there is a high probability that the current value of equity will be reduced significantly or to zero value.
1 Technical utilization is calculated as the total hours available for work, excluding planned maintenance, divided by the total number of hours in the period.
2 Economic utilization is calculated as total revenue, excluding bonuses, for the period as a proportion of the full operating dayrate multiplied by the number of days on contract in the period.