Seadrill Limited (SDRL) - Fourth Quarter 2022

Hamilton, Bermuda, April 5, 2023 - Seadrill Limited (“Seadrill” or the "Company") (NYSE & OSE: SDRL), a leader in offshore drilling, provides financial results for the three months ended December 31, 2022.

Q4 2022 Highlights

  • Seadrill relisted its common shares on the New York Stock Exchange (“NYSE”) with trading commencing on October 14, 2022, and following the NYSE relisting Seadrill’s status on the Euronext Expand changed from a primary listing to a secondary listing. Subsequently, Seadrill uplisted to the main list of the Oslo Stock Exchange with trading commencing on November 17, 2022.
  • Seadrill added approximately $187 million of Order Backlog2 during the quarter, bringing the total as of December 31, 2022 to approximately $2.3 billion.
  • Total Adjusted EBITDA1 for the full year of 2022 was $265 million, at the top end of Seadrill's 2022 financial guidance range.
  • Operating revenues decreased by 15% to $228 million in Q4 2022 largely due to fewer rig operating days overall across the fleet.
  • Total Adjusted EBITDA1 was $41 million in Q4 2022 in line with expectations and previous guidance, but lower than prior quarters primarily as a result of: (i) idle time for the West Tellus, which completed upgrades for its upcoming long-term campaign with Petrobras that commenced in early January 2023; (ii) fewer rig operating days for the West Hercules, which concluded its operations in Canada and subsequently demobilized to Norway; and (iii) not benefiting from a full quarter of operating results with respect to the rigs sold under the Jackup Sale.
  • Consistent operational performance in Q4 2022, resulting in 95% technical utilization.
  • Seadrill completed the sale of the legal entities that own and operate seven jackup rigs (AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida and West Leda) in the Kingdom of Saudi Arabia on October 18, 2022 (the "Jackup Sale"). The Jackup Sale triggered a mandatory payment of $204 million (inclusive of principal, accrued interest and exit fee) under Seadrill’s secured second lien debt facility (the "Second Lien Facility").
  • On November 14, 2022, Seadrill made a voluntary payment of $269 million (inclusive of principal, accrued interest and exit fee) under the Second Lien Facility.
  • Cash and cash equivalents, which excludes restricted cash, as at December 31, 2022 was $480 million. The increase was primarily driven by proceeds from the Jackup Sale, partly offset by debt payments made under the Second Lien Facility. In addition, restricted cash as at December 31, 2022 was $118 million.
  • On December 22, 2022, Seadrill entered into a definitive agreement to acquire Aquadrill LLC (formerly Seadrill Partners LLC) in an all-stock transaction.

Subsequent Events

  • On February 10, 2023, Seadrill made a voluntary payment of $118 million (inclusive of principal, accrued interest and exit fee) under 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) under the Second Lien Facility.
  • On February 24, 2023, Seadrill completed the sale of its 35% shareholding in Paratus Energy Services Limited (“PES”) (formerly Seadrill New Finance Limited) and certain other interests. PES is the entity which holds investments in SeaMex Group, Seabras Sapura and Archer Limited. We do not expect the sale to result in a material accounting gain or loss on closing.
  • 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 combined company Order Backlog2 as of April 5, 2023, was approximately $2.6 billion, with a fleet of 29 owned and managed units.

Financial Highlights
Figures in USD million, unless otherwise indicated Q4 2022 Q3 2022 % Change
Total Operating Revenue 228      269    (15) %
Adjusted EBITDA1 39        57    (32) %
Adjusted EBITDA Margin (%)1 17.1 % 21.2 % (19.3) %
Total Adjusted EBITDA1 -  continuing and discontinued  operations 41    71    (42) %
Operating (Loss)/Profit          (7)       20    (135) %

Simon Johnson, President & CEO, commented:

“2022 was an extraordinary year of transformation for Seadrill that began with our successful emergence from restructuring in February. We later completed the sale of our seven jackups in the Kingdom of Saudi Arabia which enabled us to reshape our capital structure through substantial debt prepayments. To conclude the year, we announced the return of Aquadrill to the Seadrill family. This transaction completed on April 3, 2023, and coupled with our other strategic initiatives over the course of 2022, we believe we have a solid platform for growth and enhanced performance in the future that will deliver value to our shareholders. We continued our excellent operational performance in 2022 and in turn delivered strong financial performance within our 2022 guidance.

The management team and I would like to thank both our onshore and offshore employees for their continued efforts throughout the year. Our strong operational record and continued commercial success is down to our staff, whose hard work has been instrumental in driving Seadrill’s development. As the industry continues its realignment, we look forward to continuing to play an active role through 2023.”


1        Total Adjusted EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are non-GAAP financial measures. For a definition of each such measure and a reconciliation to the most comparable GAAP financial measure, please see the Appendices.

2        For a definition of Order Backlog, please see "Commercial Review" section.

Forward-Looking Statements

This communication 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 future guidance, including total revenue, Adjusted EBITDA, Total Adjusted EBITDA and capital expenditures and long-term maintenance, and statements about 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 communication. 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 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 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, audits, assessments and contingencies, including any litigation related to the merger of the Company (the “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, and 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, 2021, filed with the SEC on April 29, 2022 (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.

April 5, 2023

The Board of Directors

Seadrill Limited

Hamilton, Bermuda

Questions should be directed to Seadrill Management Ltd. represented by:

Simon Johnson                                    President and Chief Executive Officer

Analyst and investor questions should be directed to:

David Warwick                                   Director of Investor Relations                              +971 58 687 4132

Media questions should be directed to:

Sara Dunne                                          Director of Communications                               +1 281 630 7064