Seadrill Limited (SDRL) - Second Half 2021 Results
Hamilton, Bermuda, February 23, 2022 - Seadrill Limited (“Seadrill” or "the Company") (OSE:SDRL, OTCPK:SDRLF), a leader in offshore drilling, provides financial results for the six-month period ended December 31, 2021.
2H 2021 Highlights1
- Strong operational performance in 2H, 2021, resulting in 95% technical utilization.
- Leading safety performance with TRIR of 0.24 in 2H 2021, better than the industry average of 0.30.
- 23% increase in Operating Revenues to $556m driven by a number of rigs commencing new contracts after a period of inactivity.
- Adjusted EBITDA increased to $118m, representing 21.2% EBITDA margin.
- Cash and cash equivalents as at December 31, 2021 of $535 million of which $312 million was unrestricted cash.
- Backlog of $2.2bn, with over 8 years of term added in Brazil.
| Financial Highlights | |||
| Figures in USD million, unless otherwise indicated | 2H21 | 1H21 | % Change |
| Total Operating Revenue | 556 | 452 | 23 % |
| Adjusted EBITDA | 118 | 20 | 490 % |
| Adjusted EBITDA Margin (%) | 21.2 | 4.4 | 382 % |
| Operating Profit/(Loss) | 95 | (252) | 138 % |
| Net profit/(loss) | 18 | (605) | 103 % |
Restructuring Update
- Seadrill concluded its comprehensive restructuring process and emerged from Chapter 11 bankruptcy on February 22, 2022.
- Seadrill New Finance Limited (renamed to Paratus Energy Services), emerged from Chapter 11 on January 20, 2022. Seadrill Limited retained a 35% interest as a result of the restructuring. Going forward, financial information relevant to Paratus will be made available at www.paratus-energy.com.
Stuart Jackson, CEO, commented:
"Seadrill has finished 2021 strongly, evidenced by our top-line financial highlights underpinned by our operational excellence and continued commercial success. The formidable progress made over the course of 2021 is attributable to the tremendous effort our workforce made overcoming difficult economic and logistical challenges. I am proud of what they achieve on a daily basis.
We have just emerged from a series of Chapter 11 processes across our complex organization involving not just the emergence of Seadrill Limited yesterday but also the restructurings that were completed in other parts of our business. Our emergence completes the second stage of our industry’s rehabilitation. As a sector we have taken out nonperforming rigs, we have reduced our collective debt burdens and now we need to reshape an industry that warrants investment to sustain our contribution to the evolving global energy mix. The operational and safety track record of Seadrill, together with our strong customer partnerships, puts us in a leadership position as we complete this industry realignment."
--------------------------------------
1 The financial information presented excludes the impact for our discontinued operations held for sale, representing Seadrill New Finance Limited ("NSNCo") and its wholly owned subsidiaries.
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 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 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.
February 23, 2022
The Board of Directors
Seadrill Limited
Hamilton, Bermuda
Questions should be directed to Seadrill Management Ltd. represented by:
Stuart Jackson Chief Executive Officer
Media questions should be directed to:
Sara Dunne Director of Communications +1 (281) 630-7064
Analyst and investor questions should be directed to:
Hawthorn Advisors [email protected] +44 (0) 203 7454960