Seadrill Limited (“Seadrill” or the "Company") (NYSE & OSE:
SDRL) today reports its second quarter 2024 results.
Quarterly Highlights
- Delivered Operating Profit of $288 million and Adjusted
EBITDA(1) of $133 million on $375 million of Total Operating
Revenues for an Adjusted EBITDA Margin(1) of 35.5%
- Completed sale of three jack-up rigs and associated interest in
the Gulfdrill joint venture, supporting fleet refinement and
capital return program
- Repurchased total of $566 million of shares, or more than 15%
of its issued share count, since initiating repurchase program in
September 2023
Financial Highlights
Three months ended
Figures in USD million, unless otherwise
indicated
June 30, 2024
March 31, 2024
Total Operating Revenues
375
367
Contract Revenues
267
275
Operating Profit
288
80
Adjusted EBITDA (1)
133
124
Adjusted EBITDA Margin (1)
35.5
%
33.8
%
Diluted Earnings Per Share ($)
3.49
0.81
“Seadrill delivered a strong second quarter and generated a
combined $257 million in Adjusted EBITDA(1) during the first half
of year. Strong supply-side fundamentals underpin our faith in a
long and enduring upcycle. However, we continue to see volatility
that can affect financial outcomes,” Johnson continued. “Now, as
ever, through-cycle resiliency matters. As a company, we continue
to benefit from a highly standardized fleet strategically
positioned in advantaged geographies, a strong balance sheet, a
disciplined management team, and a pursuit of operational
excellence that allows us to deliver on our promise of safe,
efficient operations for the benefit of all our stakeholders.”
Financial and Operational Results
Second quarter 2024 operating revenues totaled $375 million, a
sequential increase of $8 million. Contract revenues were $267
million, a decrease of $8 million, primarily due to fewer operating
days on the West Auriga and the West Polaris and lower utilization,
partially offset by increased days on the Sevan Louisiana.
Management contract revenues were $65 million, a $7 million
sequential improvement reflecting an increased management fee
received on the three drillships Seadrill operates through
Sonadrill, its 50:50 joint venture with Sonangol, applied
retroactively to January 1. Leasing revenues were $26 million,
compared to $11 million the prior quarter. The increase is
attributable to a new bareboat charter rate, applied retroactively
to January 1, for the West Gemini, which Seadrill charters to
Sonadrill, as the joint venture partners began receiving additional
income proportional to their rig contributions.
Second quarter 2024 operating expenses totaled $290 million, a
sequential decrease of $13 million. Vessel and rig operating
expenses were $165 million, a decrease of $15 million, primarily
due to lower operating expenses on the West Auriga and West Polaris
as the rigs underwent preparation for upcoming Brazil contracts for
the duration of the quarter. Management contract expense was $41
million, a $3 million increase, reflecting the timing of repair and
maintenance expenses on the Sonadrill rigs. Selling, general, and
administrative expenses were $24 million and included $2 million of
non-recurring costs associated with the consolidation of the
Company's corporate offices to Houston. Other operating items
included a gain on sale of $203 million, associated with the
Company's sale of three jack-up rigs and associated interest in its
Gulfdrill joint venture, which closed on June 25, 2024, for cash
proceeds of $338 million.
Adjusted EBITDA(1) was $133 million, compared to $124 million
the prior quarter. Adjusted EBITDA Margin(1) was 35.5%.
Cash Flow and Balance Sheet
Cash flow from operations during the second quarter of 2024 was
$79 million, including $60 million of long-term maintenance costs.
Capital upgrades captured in investing cash flows were $43 million.
Resulting Free Cash Flow(1) was $36 million.
In the second quarter of 2024, Seadrill made $125 million of
share repurchases. On June 25, 2024, the Company initiated the
first $200 million tranche of its second $500 million share
repurchase authorization. Since initiating its repurchase program
in September 2023, the Company has returned a total of of $566
million to shareholders and repurchased a total of 12.3 million
shares, or 15% of issued share count.
At quarter-end, Seadrill had gross principal debt of $625
million and $862 million in cash and cash equivalents, including
$27 million in restricted cash, for a net cash position of $237
million.
Operational and Commercial Activity
As of August 5, 2024, Seadrill's Order Backlog(2) was
approximately $2.5 billion. During the quarter, the Sevan Louisiana
secured a one-well contract with an independent operator in the
U.S. Gulf of Mexico, that began in direct continuation of its
previous contract and secured the rig into August. The Company
today provided an updated fleet status report on the Investor
Relations section of its website, www.seadrill.com.
Outlook
Seadrill revised full year 2024 guidance based on the completion
of the Gulfdrill sale; current expectations for contract start
dates for the West Auriga and West Polaris that delay EBITDA
recognition into future periods; and near-term outlook for
uncommitted capacity on the Sevan Louisiana and the West Phoenix.
After adjusting for the $30 million of bareboat charter income the
Company expected the Gulfdrill assets to earn in the second half of
the year, the mid-point outlook for the previously-disclosed EBITDA
range would be $395 million. The Company now expects full year 2024
revenues between $1,355 million and $1,405 million; Adjusted EBITDA
of $315 million and $365 million; and capital expenditures and
long-term maintenance between $400 million and $450 million.
Guidance includes $75 million of reimbursable revenue and
expenses.
“Though a combination of supply chain, weather, and scope have
shifted West Auriga and West Polaris start dates, both rigs will
soon set sail for Brazil and should begin their contracts by
year-end, contributing meaningfully to Seadrill earnings and cash
flow in 2025," said Johnson. "Any additional work the Sevan
Louisiana secures this year would represent upside opportunities to
the mid-point of our guidance."
Other Corporate Items
As previously disclosed, Seadrill will delist from the Oslo
Stock Exchange on September 10, 2024 and maintain a single listing
on the New York Stock Exchange, consistent with efforts to simplify
the business. The Company will also begin reporting as a domestic
issuer under United States securities laws and regulations
beginning January 1, 2025.
Conference Call Information
The Company will host a conference call to discuss its results
on Tuesday, August 6 at 09:00 CT / 16:00 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
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.
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, rig activity, share repurchases and changes and
trends in its business and the markets in which it operates, are
forward-looking statements. These statements may include words such
as "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 in
connection with any discussion of the timing or nature of future
operating or financial performance or other events. 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 Item 3D, “Risk
Factors” in the Company’s Annual Report on Form 20-F for the year
ended December 31, 2023, filed with the U.S. Securities and
Exchange Commission (the “SEC”) on March 27, 2024, offshore
drilling market conditions including supply and demand, day rates,
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
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, 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 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 and the Oslo Stock Exchange, or other exchanges where our
shares may be listed, 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,
our ability to successfully integrate with Aquadrill LLC following
its merger with the Company, 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 beyond our ability to
control, and 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 persons
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. 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.
Seadrill Limited
UNAUDITED CONSOLIDATED STATEMENTS OF
OPERATIONS
Three months ended June
30,
Six months ended June
30,
(In $ millions, except per share data)
2024
2023
2024
2023
Operating revenues
Contract revenues
267
329
542
515
Reimbursable revenues (1)
15
14
35
23
Management contract revenues (1)
65
61
123
122
Leasing revenues (1)
26
7
37
14
Other revenues (1)
2
3
5
6
Total operating revenues
375
414
742
680
Operating expenses
Vessel and rig operating expenses
(165
)
(186
)
(345
)
(301
)
Reimbursable expenses
(14
)
(13
)
(34
)
(22
)
Depreciation and amortization
(43
)
(37
)
(81
)
(73
)
Management contract expense
(41
)
(42
)
(79
)
(84
)
Selling, general and administrative
expenses
(24
)
(14
)
(49
)
(28
)
Merger and integration related
expenses
(3
)
(16
)
(5
)
(19
)
Total operating expenses
(290
)
(308
)
(593
)
(527
)
Other operating items
Gain on disposals
203
3
203
7
Other operating income
—
—
16
—
Total other operating items
203
3
219
7
Operating profit
288
109
368
160
Financial and other non-operating
items
Interest income
7
5
14
12
Interest expense
(16
)
(13
)
(31
)
(29
)
Share in results from associated companies
(net of tax)
(15
)
11
(11
)
14
Other financial items
(8
)
(5
)
(14
)
(6
)
Total financial and other non-operating
items, net
(32
)
(2
)
(42
)
(9
)
Profit before income taxes
256
107
326
151
Income tax expense
(3
)
(13
)
(13
)
(14
)
Net income
253
94
313
137
Basic EPS ($)
3.61
1.18
4.41
2.11
Diluted EPS ($)
3.49
1.16
4.27
2.07
(1) Includes revenue received from related parties of $96
million and $172 million, for the three and six months ended June
30, 2024, respectively, and $72 million and $146 million for the
three and six,months ended June 30, 2023, respectively.
Seadrill Limited
UNAUDITED CONSOLIDATED BALANCE
SHEETS
(In $ millions, except per share data)
June 30, 2024
December 31,
2023
ASSETS
Current assets
Cash and cash equivalents
835
697
Restricted cash
27
31
Accounts receivable, net
185
222
Amounts due from related parties, net
31
9
Other current assets
210
199
Total current assets
1,288
1,158
Non-current assets
Investments in associated companies
66
90
Drilling units
2,792
2,858
Deferred tax assets
55
46
Equipment
8
10
Other non-current assets
88
56
Total non-current assets
3,009
3,060
Total assets
4,297
4,218
LIABILITIES AND SHAREHOLDERS'
EQUITY
Current liabilities
Trade accounts payable
80
53
Other current liabilities
324
336
Total current liabilities
404
389
Non-current liabilities
Long-term debt
609
608
Deferred tax liabilities
9
9
Other non-current liabilities
216
229
Total non-current liabilities
834
846
Commitments and contingencies
SHAREHOLDERS' EQUITY
Common shares of par value $0.01 per
share: 375,000,000 shares authorized (December 31, 2023:
375,000,000) and 68,813,132 issued at June 30, 2024 ( December 31,
2023: 74,048,962)
1
1
Additional paid-in capital
2,243
2,480
Accumulated other comprehensive income
1
1
Retained earnings
814
501
Total shareholders' equity
3,059
2,983
Total liabilities and shareholders'
equity
4,297
4,218
Seadrill Limited
UNAUDITED CONSOLIDATED STATEMENTS OF CASH
FLOWS
Six months ended June
30,
(In $ millions)
2024
2023
Cash Flows from Operating
Activities
Net income
313
137
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
81
73
Gain on disposal of assets
(203
)
(7
)
Share in results from associated companies
(net of tax)
11
(14
)
Deferred tax (benefit)/expense
(7
)
4
Unrealized loss/(gain) on foreign
exchange
5
(5
)
Amortization of discount on debt
2
—
Share based incentive compensation
7
—
Other cash movements in operating
activities
Payments for long-term maintenance
(89
)
(33
)
Changes in operating assets and
liabilities, net of effect of acquisitions and disposals
Trade accounts receivable
37
(20
)
Trade accounts payable
27
(38
)
Prepaid expenses/accrued revenue
(12
)
(3
)
Deferred revenue
21
7
Deferred mobilization costs
(23
)
5
Related party receivables
(22
)
20
Other assets
(3
)
(10
)
Other liabilities
(37
)
(81
)
Net cash flows provided by operating
activities
108
35
Cash Flows from Investing
Activities
Additions to drilling units and
equipment
(66
)
(25
)
Proceeds from disposal of assets
338
7
Sale of investment in PES
—
43
Acquisition of subsidiary
—
24
Deposit received on Tender-Assist Units
sale
—
17
Net cash flows provided by investing
activities
272
66
Cash Flows from Financing
Activities
Share repurchases
(241
)
—
Repayments of secured credit
facilities
—
(163
)
Share issuance costs
—
(4
)
Net cash used in financing
activities
(241
)
(167
)
Effect of exchange rate changes on
cash
(5
)
7
Net increase/(decrease) in cash and
cash equivalents, including restricted cash
134
(59
)
Cash and cash equivalents, including
restricted cash, at beginning of the period
728
598
Cash and cash equivalents, including
restricted cash, at the end of period
862
539
Appendix I - Reconciliation of Operating Profit to Adjusted
EBITDA (Unaudited)
Adjusted EBITDA represents operating profit before depreciation,
amortization 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 interest, other financial items, taxes and depreciation
and amortization, which are affected by various and possibly
changing financing methods, capital structure and historical cost
basis and which may significantly affect operating profit between
periods.
Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted EBITDA
excluding Reimbursables and Adjusted EBITDA Margin excluding
Reimbursables should not be considered as alternatives to operating
profit or any other indicator of Seadrill Limited’s performance
calculated in accordance with US GAAP.
The tables below reconcile operating profit 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 June 30,
2024
Three months ended March 31,
2024
Operating profit
288
80
Depreciation and amortization
43
38
Merger and integration related
expenses
3
2
Gain on disposal
(203
)
—
Other adjustments (1)
2
4
Adjusted EBITDA (a)
133
124
Total operating revenues (b)
375
367
Adjusted EBITDA margin (a)/(b)
35.5
%
33.8
%
Figures in USD million, unless otherwise
indicated
Three months ended June 30,
2024
Three months ended March 31,
2024
Adjusted EBITDA (a)
133
124
Reimbursable revenues
(15
)
(20
)
Reimbursable expenses
14
20
Adjusted EBITDA excluding Reimbursables
(c)
132
124
Total operating revenues (b)
375
367
Reimbursable revenues
(15
)
(20
)
Total operating revenues excluding
Reimbursable revenues (d)
360
347
Adjusted EBITDA margin excluding
Reimbursables (c)/(d)
36.7
%
35.7
%
The table below reconciles operating profit to Adjusted EBITDA
for the 2024 guidance numbers presented in the "Outlook"
section:
2024 Guidance
Figures in USD million, unless otherwise
indicated
Low end of the range
High end of the range
Operating profit
322
372
Depreciation and amortization
173
173
Merger and integration related
expenses
15
15
Gain on sale of assets
(203
)
(203
)
Other adjustments (1)
8
8
Adjusted EBITDA (a)
315
365
Total operating revenues (b)
1,355
1,405
Adjusted EBITDA margin (a)/(b)
23.2
%
26.0
%
(1) Primarily related to costs associated with the closure of
the Company's London office, announced in 2023.
Appendix II - Contract Revenues Supporting Information
(Unaudited)
Contract Revenues Supporting
Information(1)
Three months ended June
30, 2024
Three months ended March 31,
2024
Average number of rigs on contract(2)
10
10
Average contractual dayrates(3) (in $
thousands)
289
300
Economic utilization(4)
93.9
%
97.1
%
(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 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 provided by
operating activities less cash paid for additions to drilling units
and equipment. The table below reconciles Net cash flows provided
by operating activities to Free Cash Flow for the three months
ended June 30, 2024, and March 31, 2024.
Figures in USD million
Three months ended June 30,
2024
Three months ended March 31,
2024
Net cash flows provided by operating
activities
79
29
Additions to drilling units and
equipment
(43
)
(23
)
Free Cash Flow
36
6
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240805943310/en/
Lydia Brantley Mabry Director of Investor Relations
ir@seadrill.com
Seadrill (NYSE:SDRL)
과거 데이터 주식 차트
부터 11월(11) 2024 으로 12월(12) 2024
Seadrill (NYSE:SDRL)
과거 데이터 주식 차트
부터 12월(12) 2023 으로 12월(12) 2024
