Seadrill Limited: First Half 2021 Results

HAMILTON, Bermuda, Aug. 20, 2021 /PRNewswire/ -- Seadrill Limited ("Seadrill" or "the Company") (OSE: SDRL) (OTCPK: SDRLF), a world leader in offshore drilling, announces a commercial update and provides financial results for the six months ended June 30, 2021.  

Highlights   

Operational/Commercial     

• Technical utilization of 92% and economic utilization of 88% due to downtime incidents on West Saturn and West Tellus. Excluding these units, technical utilization and economic utilization stood at 98% and 94% respectively.

• Thirteen owned units operating as of June 30, 2021, with three additional units returning to operations in the second half of 2021. In addition, ten non-owned units remain under Seadrill's management.

• Total backlog of $2.1 billion with approximately $0.5 billion added during the first half of the year.

Health, Safety, and Environment ("HSE")   

• Record safety performance with Total Injury Frequency Rate ("TRIR") better than industry average.

• Maintained our industry-leading carbon management position.

Financial

• Operating loss decreased to $252 million, includes non-cash impairment of $152 million against the West Hercules rig.

• Cash and cash equivalents as at June 30, 2021 of $644 million of which $428 million was unrestricted.

Subsequent Events

• Major milestones reached towards emergence from Chapter 11 bankruptcy by entering restructuring agreements with certain senior secured lenders and senior note holders, representing 58% and 79% of debt outstanding, respectively. The proposed plan leaves current shareholders with approximately 0.25% of the go forward equity and as a consequence they face a significant deterioration in value.

• Separate agreements reached with SFL Corporation, to reduce our commitments on the lease agreement for the West Hercules, and with Northern Ocean Ltd., to close out all outstanding balances and claims.

• Approximately $120 million of backlog added after the period end, including contracts secured for the West Hercules in Canada and the West Gemini in Angola. 

Stuart Jackson, CEO, commented:

"Seadrill has continued to operate effectively and safely throughout H1 2021, despite ongoing disruptions caused by COVID-19 challenging the industry's logistical capabilities. We are delighted to have increased our order backlog during the period after signing agreements with a number of customers, and we continue to execute on our plan to positively streamline our operations, taking out assets that will not go back to work and addressing the broader leverage issues through the Chapter 11 process.

Looking forward, we will continue to leverage our technical and functional excellence to maintain our leading position in the offshore drilling industry, evident by our West Saturn drillship where the introduction of hydrogen fuel is set to significantly reduce fuel consumption and our carbon footprint.

Addressing the leverage of offshore drilling entities and progressing on the journey on asset rationalization are the first important steps prior to looking to the next stage of industry rationalization through consolidation, where I expect we will play an active part.  The filing of our Plan Support Agreement with strong creditor support marked the next step in this journey for Seadrill."

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 across the globe. Seadrill's high-quality, technologically advanced fleet spans all asset classes allowing its experienced crews to conduct its operations from shallow to ultra-deep-water environments. The Company operates 42 rigs, which includes drillships, jack-ups and semi-submersibles.

Seadrill is listed on the Oslo Børs and OTC Pink markets. For more information, visit https://www.seadrill.com/.

Forward-Looking Statements

This news release includes forward-looking statements. Such statements are generally not historical in nature, and specifically include statements about the Company's plans, strategies, business prospects, changes and trends in its business and the markets in which it operates.  These statements are made based upon 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, 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 and the impact of future negotiations with its lenders to obtain amendments to credit facilities and any related contingency planning efforts, the impact of active negotiations, contingency planning efforts, rulings and outcomes with respect to a comprehensive restructuring of our debt under Chapter 11 Proceedings with the U.S. Bankruptcy Court for Southern District of Texas, the outcome of which is uncertain, our ability to maintain relationships with suppliers, customers, employees and other third parties as a result of our Chapter 11 filing and the related increased performance and credit risks associated with our constrained liquidity position and capital structure, our ability to maintain and obtain adequate financing to support our business plans post-emergence from Chapter 11, the length of time that we will operate under Chapter 11 protection, risks associated with third-party motions in the Chapter 11 Proceedings that may interfere with the solicitation and ability to confirm and consummate a plan of reorganization, the dispute over production levels among members of the Organization of Petroleum Exporting Countries and other oil and gas producing nations, downtime and other risks associated with offshore rig operations and ability to successfully employ our drilling units, our expected debt levels, the ability of our affiliated or related companies to service their debt requirements, credit risks of our key customers, the concentration of our revenues in certain geographical jurisdictions, limitations on insurance coverage, such as war risk coverage, in certain regions, any inability to repatriate income or capital, import-export quotas, wage and price controls and the imposition of trade barriers, our ability to attract and retain skilled personnel on commercially reasonable terms, whether due to labor regulations, unionization, or otherwise, or to retain employees, customers or suppliers as a result of our financial condition generally or as a result of the Chapter 11 Proceedings, internal control risk due to significant employee reductions, tax matters, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, including those associated with our activities in Bermuda, Brazil, Norway, the United Kingdom, Nigeria, Mexico and the United States, customs and environmental matters and potential impacts on our business resulting from climate-change or greenhouse gas legislation or regulations, and the impact on our business from climate-change related physical changes or changes in weather pattern, 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 keep in mind the risks described from time to time in the Company's filings with the SEC, including its 2020 Annual Report on Form 20-F (File No. 333-224459).

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.

August 20, 2021

The Board of Directors
Seadrill Limited
Hamilton, Bermuda

CONTACT:

seadrill@hawthornadvisors.com  
020 3745 4960

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