SDRL

Seadrill Limited

Next est. report 2026-11-04 · AMC

Energy Services '26: Offshore DrillersEnergy Services '26: Oilfield Services & Equipment Oversupply Risk '26: Offshore Drilling

Loading…

Loading chart…

Overview

Seadrill Limited provides offshore contract drilling services globally, utilizing a high-specification fleet of drillships, semi-submersible, and jack-up rigs.

Seadrill Limited provides offshore contract drilling services globally, utilizing a high-specification fleet of drillships, semi-submersible, and jack-up rigs. They enable oil and gas exploration and production for major international, state-owned, and independent oil and gas companies. Seadrill also offers operational support and management services to other entities.

Key Inputs And Sourcing

1. Labor (Crew Wages & Benefits)

labor · Global · 30-50%

Source Explicitly mentioned as subject to inflation in transcript. Industry standard for offshore drilling operational costs.

Confidence: medium

2. Repair & Maintenance Materials/Equipment

component · Global · 15-25%

Source Explicitly mentioned as a significant and increasing expense in transcript. Offshore rigs have higher maintenance costs due to harsh conditions.

Confidence: medium

3. Fuel (Marine Diesel/Bunkers)

energy · CL=F · Global (depending on operating region) · 10-20%

Source Mentioned in transcript as 'probably the most' significant cost, though often client-provided. A crucial operational cost for drilling rigs.

Confidence: medium

4. Logistics (Rig Mobilization & Supply Chain Services)

logistics · Global · 5-10%

Source Transcript states 'moving rigs is expensive'. Mobilization costs are a significant factor in offshore operations.

Confidence: medium

5. Drilling Equipment & Components (e.g., BOPs, engines, cranes)

component · Global · 5-15%

Source Major components like drilling equipment are significant expenditures for rigs, requiring ongoing maintenance and replacement.

Confidence: medium

6. Insurance (Hull & Machinery, P&I)

other · Global · 5-10%

Source Essential for operating high-value assets in a high-risk offshore environment, including inspection and certification costs.

Confidence: medium

7. Drilling Consumables (e.g., drilling fluids, bits, casing)

commodity · Global · 5-10%

Source Essential for the core drilling service, contributing to operational costs.

Confidence: low

Industry Publications

[]

Economic Data Watch

1. EIA — Spot Prices for Crude Oil and Petroleum Products

Metric/field Europe Brent Spot Price FOB (Dollars per Barrel)

Cadence daily

Why it matters Directly impacts the economic viability of deepwater projects and day rates for offshore drilling. Sustained high prices incentivize E&P spending.

Signal to watch Rising prices are bullish, falling prices are bearish.

Confidence: high

2. IEA — Oil Market Report

Metric/field World oil demand (million barrels per day)

Cadence monthly

Why it matters Indicates the overall global demand for oil, which drives the need for drilling services.

Signal to watch Increasing demand is bullish, decreasing demand is bearish.

Confidence: high

3. Wood Mackenzie — Global Project Tracker

Metric/field Upstream Final Investment Decisions (FIDs) value ($B)

Cadence quarterly

Why it matters FIDs represent commitments to new offshore projects, directly translating to future rig demand.

Signal to watch Increasing FID values are bullish, decreasing values are bearish.

Confidence: high

4. Baker Hughes — Worldwide Rig Count

Metric/field Worldwide Rig Count (Number of Rigs)

Cadence monthly

Why it matters A direct indicator of global drilling activity, reflecting demand for rigs.

Signal to watch Increasing rig count is bullish, decreasing count is bearish.

Confidence: high

5. EIA — Weekly U.S. Ending Stocks of Crude Oil and Petroleum Products

Metric/field U.S. Ending Stocks excluding SPR of Crude Oil (Thousand Barrels)

Cadence weekly

Why it matters Lower crude oil inventories often signal tighter supply and can support higher oil prices, incentivizing production.

Signal to watch Falling inventories are bullish, rising inventories are bearish.

Confidence: high

Free Alt Data Watch

1. Google Trends — Search Interest Index

Metric/field Search interest for 'offshore drilling' (worldwide, past 90 days, category: Science > Earth Sciences > Geology)

Cadence daily/weekly

Why it matters Provides a proxy for general public and industry interest in offshore drilling activity, potentially indicating sentiment and future demand.

Signal to watch Rising search interest is bullish, falling interest is bearish.

Confidence: medium

2. EIA — Weekly Petroleum Status Report

Metric/field U.S. Ending Stocks of Crude Oil (Thousand Barrels)

Cadence weekly

Why it matters Indicates the supply-demand balance in the crucial U.S. market, influencing global oil prices and E&P decisions.

Signal to watch Declining stocks are bullish, increasing stocks are bearish.

Confidence: high

3. Reddit (via public API access) — Subreddit Posts and Comments

Metric/field Number of daily/weekly posts and comments mentioning 'Seadrill' or 'SDRL' in r/investing or r/oilandgas

Cadence daily/weekly

Why it matters Gauges retail investor and industry professional sentiment and discussion volume around the company and sector.

Signal to watch Increased positive sentiment/discussion is bullish, increased negative sentiment/discussion is bearish.

Confidence: medium

4. MarineTraffic / Kpler (public data) — Vessel Positions API (filtered by vessel type)

Metric/field Number of Seadrill-owned/operated rigs currently active/moving (based on AIS data, filtered by vessel type 'Drilling Vessel')

Cadence daily

Why it matters Provides real-time, observable data on the operational status and deployment of Seadrill's fleet, indicating utilization.

Signal to watch More active/moving rigs are bullish, fewer are bearish.

Confidence: medium

5. Major Energy News Outlets (e.g., Reuters, Bloomberg, Upstream Online) — News Headlines and Articles

Metric/field Count of positive/negative headlines mentioning 'Seadrill' or 'offshore drilling' (manual aggregation)

Cadence daily

Why it matters Reflects overall market sentiment and significant industry developments impacting Seadrill.

Signal to watch Predominantly positive headlines are bullish, predominantly negative headlines are bearish.

Confidence: medium

Paid Alt Data Watch

1. Rystad Energy / Westwood Global Energy / Clarksons Research — RigCube / Offshore Rig Database / Industry Fixture Reports

Metric/field Average Global Drillship Day Rates (7th/8th Generation Rigs, USD per day)

Cadence monthly/quarterly

Why it matters This is the most direct indicator of pricing power and revenue potential for Seadrill's high-specification fleet.

Signal to watch Rising day rates are bullish, stagnant or falling rates are bearish.

Confidence: high

2. Westwood Global Energy / Rystad Energy / Clarksons Research — RigLogix / Offshore Rig Database

Metric/field Global Offshore Drilling Rig Utilization Rate (Floaters/Drillships, %)

Cadence monthly/quarterly

Why it matters High utilization indicates tight supply, which supports higher day rates and Seadrill's ability to secure contracts.

Signal to watch Increasing utilization (especially >90%) is bullish, decreasing utilization is bearish.

Confidence: high

3. Clarksons Research / Rystad Energy / Westwood Global Energy — Offshore Rig Database

Metric/field Number of New Drillship Orders and Deliveries (Units)

Cadence irregular (event-driven)

Why it matters A continued lack of new orders reinforces the limited supply narrative, mitigating oversupply risk and supporting higher day rates.

Signal to watch Few to zero new orders/deliveries are bullish, increased orders/deliveries are bearish.

Confidence: high

4. Kpler / MarineTraffic — Vessel Tracking and Maritime Analytics

Metric/field Real-time Vessel Positions and Status (Drilling Vessels, filtered by Seadrill fleet, including 'STATUS', 'DSRC', 'SPEED', 'DESTINATION' fields)

Cadence daily

Why it matters Provides granular, real-time insights into the movement, operational status, and contract fulfillment of Seadrill's specific rigs.

Signal to watch Consistent movement to contract locations and high operational status are bullish.

Confidence: high

5. Wood Mackenzie / Rystad Energy — Upstream Spending Forecasts / Global Project Tracker

Metric/field Offshore Exploration & Production (E&P) Spending Forecast ($B)

Cadence quarterly/annually

Why it matters Increased E&P spending by oil majors and NOCs directly translates to more drilling campaigns and demand for Seadrill's services.

Signal to watch Rising E&P spending forecasts are bullish, falling forecasts are bearish.

Confidence: high

Search Keywords Brand Product

West Tellus
West Vela
Sevan Louisiana
West Capella
West Gemini
West Jupiter
Sonadrill
Trendsetter Trident system
offshore drilling services
deepwater drilling
rig utilization
drillship day rates
oil and gas exploration
free cash flow
share buybacks

Search Keywords Event Phrases

Seadrill Q2 2026 earnings
West Vela Talos contract
West Capella Malaysia extension
Sevan Louisiana Walter Oil & Gas

Search Keywords Policy Regulatory

energy security policy

What They Do (Plain English & Analogies): Seadrill is like a specialized taxi service for the oil and gas industry, but instead of cars, they operate massive, high-tech floating platforms and self-elevating rigs. These include drillships, semi-submersible rigs, and jack-up rigs, which are capable of drilling wells deep into the ocean floor in various challenging conditions, from shallow to ultra-deep waters and in both calm and harsh environments. They provide the equipment and expert crews to help oil companies find and extract oil and gas from offshore locations. Their customers pay them a daily rate for the use of their rigs and services. Beyond drilling, Seadrill also offers operational support and management services to other companies, including joint ventures.
Very Brief History: Seadrill Limited was incorporated in 2005 and has grown to become a significant player in the offshore contract drilling services industry. The company has built and operated a fleet of advanced drilling units, serving major oil companies globally. It has navigated challenging market cycles, undergone restructuring, and has recently focused on optimizing its fleet and operational performance, positioning itself as a leading deepwater driller.
"Street Stereotype": The 'street stereotype' for Seadrill is that of a cyclical, capital-intensive offshore drilling company that has recently emerged from a challenging period. It is now perceived as a leaner, more efficient operator poised to benefit significantly from an anticipated upcycle in the deepwater market. Investors view it as a compelling value opportunity, trading at a discount to peers despite strong recent stock appreciation and a clear path to increased earnings and free cash flow. There's an expectation of further industry consolidation, with Seadrill being a potential consolidator or target.
Subsidiaries On Linked In*: Seadrill Deepwater Units Pte Ltd. — Singapore-based subsidiary
Seadrill Mobil Units (Nigeria) Ltd. — Nigeria-based subsidiary
Seadrill Management Ltd. — United Kingdom-based subsidiary
Asia Offshore Drilling Ltd. — Norway-based subsidiary
Seadrill Management A.M.E LTD. — United Arab Emirates-based subsidiary
Seadrill Ghana Operations Ltd. — Ghana-based subsidiary
Sevan Drilling Rig VI Pte Ltd. — Singapore-based subsidiary
Seadrill Hungary Kft. — Hungary-based subsidiary
Sonadrill Holding Ltd — 50:50 joint venture with an affiliate of Sonangol E.P., operating distinctly in Angola
Customer Sectors & Example Clients: Seadrill's customers are primarily in the oil and gas industry, specifically oil super-majors, state-owned national oil companies (NOCs), and independent oil and gas companies. Specific clients mentioned include Talos, Walter Oil & Gas, Guardian, LLOG, Harbour, Petrobras, TotalEnergies, Equinor, Chevron, and ExxonMobil.
New Customers / Segments They'Re Targeting: Seadrill is focused on securing direct continuation work and capturing upside in established deepwater geographies. While not explicitly targeting entirely new customer *types*, the company is expanding its relationships with independent oil and gas producers, as evidenced by recent contracts with Guardian, LLOG, and Harbour in the U.S. Gulf. Geographically, they are actively pursuing opportunities in Southeast Asia and West Africa, which they have repeatedly identified as sources of growing demand. They are also positioning rigs like the West Carina to access both Africa and Asia for potential follow-on work.
Sales Geographies And Expansion Plans: Seadrill currently operates in key deepwater geographies including the U.S. Gulf, Brazil, Southeast Asia (e.g., Malaysia), and West Africa (e.g., Angola, Ghana, Cote d'Ivoire, Nigeria, Namibia). The company also has a presence in Norway with one harsh-environment asset. Management is actively marketing rigs across West Africa and is in advanced discussions for follow-on opportunities in Brazil. They anticipate potential rig movements from the U.S. Gulf to undersupplied geographies like Africa and Southeast Asia due to long-term opportunities. The company's strategy is to cluster rigs in specific markets, indicating a focus on strengthening its presence in existing high-demand regions rather than broad, unfocused expansion.
How Key Themes May Help/Hurt: Seadrill is significantly helped by the 'Oversupply Risk '26: Offshore Drilling' theme, which actually reflects a structural *undersupply* of high-specification drillships. This tightening supply, coupled with increasing demand for deepwater exploration and production, drives higher day rates and utilization for Seadrill's fleet. The company benefits from the inelastic supply of rigs and growing demand, leading to increased pricing power and a stronger backlog. The projected rise in offshore project Final Investment Decisions (FIDs) and exploration activity directly translates to more contract opportunities for Seadrill. Geopolitical tensions, while potentially disruptive, can also underpin demand for offshore production by highlighting energy security concerns, further supporting Seadrill's services. The ongoing industry consolidation also reduces the competitive field, benefiting larger players like Seadrill. Conversely, a significant and sustained collapse in global oil prices below deepwater breakeven points could hurt demand, although deepwater projects are noted for their low breakevens. Slower-than-anticipated global oil demand or a rapid energy transition could also dampen the long-term outlook.

3 Main Long-Term Bull Details

Tightening Deepwater Market and Rising Utilization: The deepwater market is experiencing a significant tightening, with drillship utilization projected to reach the mid-90% range by 2027. This inelastic supply, coupled with growing demand driven by increasing offshore investment and exploration momentum, is expected to drive day rates higher and lead to longer contract durations.
Strong Free Cash Flow Generation and Shareholder Returns: Seadrill is at an inflection point, poised to generate meaningful free cash flow in the second half of 2026 and into 2027, primarily due to the repricing of legacy contracts at substantially higher day rates. This strong cash generation supports disciplined capital deployment, including opportunistic share repurchases, enhancing long-term shareholder value.
High-Specification Fleet and Operational Excellence: Seadrill operates a modern, high-specification fleet, including dual-activity 6th-generation rigs with MPD and 7th-generation drillships, which are in high demand. The company consistently delivers strong operational performance, achieving high economic utilization and successfully executing complex projects on schedule and budget, which strengthens customer relationships and secures future contracts.

3 Main Long-Term Bear Details

Market Cyclicality and Day Rate Volatility: Despite current optimism, the offshore drilling market remains inherently cyclical and sensitive to global oil and gas prices. While day rates are expected to climb, there's no guarantee that anticipated increases will materialize as quickly or broadly as expected, and market softness could persist in certain geographies, impacting revenue and profitability.
High Reactivation Costs for Stacked Rigs: Seadrill has stacked harsh-environment semis like the Phoenix and Aquarius, which would require over $100 million each to reactivate. The company is unwilling to undertake such investments without a meaningful contribution from the customer and a contract that justifies the cost, limiting their immediate market re-entry and tying up potential capital.
Visibility Gaps and Contract Timing Risks: While the overall market outlook is strong, visibility for certain rigs, like the Sevan Louisiana, can be limited for the near term, leading to potential gaps in utilization. The timing and certainty of new contract awards, especially for rigs rolling off existing programs, remain a risk, as delays can impact revenue streams and cash flow.

Competitors And Differentiation: Seadrill operates in a competitive market, but following recent industry consolidation, it is positioned as the third-largest deepwater driller globally. The company differentiates itself through its high-specification fleet, which includes dual-activity 6th-generation rigs with MPD (Managed Pressure Drilling) capabilities, and its 7th-generation units. Key differentiators highlighted by management include a 'one team culture,' superior operational execution, and a relentless focus on safe and reliable operations, achieving high economic utilization (e.g., 96% in Q2 2026). Commercially, Seadrill focuses on maximizing the total economic value of contracts, considering not just day rates but also mobilization fees and terms and conditions, aiming to minimize gaps between contracts.
Recent Performance & What The Market'S Focused On: Seadrill delivered very strong second-quarter 2026 financial performance, exceeding expectations with total operating revenues of $449 million and adjusted EBITDA of $144 million. This led to a second guidance increase for the full year 2026, with anticipated operating revenues of $1.5 billion to $1.55 billion and EBITDA of $420 million to $450 million. The company successfully completed the West Tellus reacceptance on schedule and budget, and repriced legacy contracts for the West Jupiter and West Tellus at substantially higher day rates, contributing to a stronger phase of cash generation. Seadrill resumed shareholder returns, repurchasing $20 million of shares in Q2 2026, and completed a refinancing that extended debt maturities to 2034. The market is focused on the company's ability to generate meaningful free cash flow in the second half of 2026, the pace and scale of future share buybacks, the continued upward trajectory of day rates, and the conversion of the tightening deepwater market into new, high-value contracts for its fleet.

Revenue Segments And Estimated Mix: Contract Drilling Revenues — Mix: ~96.7%; Source: Based on FY2026 guidance, excluding reimbursable revenues; Trend: Expected to increase significantly due to repricing of legacy contracts and new awards at higher day rates
Reimbursable Revenues (including management fees) — Mix: ~3.3%; Source: Based on FY2026 guidance of $50 million; Trend: Increased in Q2 2026 due to an uplift in daily management fees from Sonadrill
Product Brands: West Tellus
West Vela
Sevan Louisiana
West Neptune
West Capella
West Carina
West Gemini
West Jupiter
West Auriga
West Polaris
West Elara
Sonangol Quenguela
West Talara
West Saturn
West Eclipse
Phoenix
Aquarius
Trendsetter Trident system

Bull / Bear Details

Seadrill is poised for accelerated earnings and free cash flow expansion in 2026 and 2027, driven by a materially tightening ultra-deepwater market, inelastic s

Thesis

Seadrill is poised for accelerated earnings and free cash flow expansion in 2026 and 2027, driven by a materially tightening ultra-deepwater market, inelastic supply, and robust global oil and gas demand. Strong Q2 2026 performance, raised guidance, significant backlog growth, and strategic refinancing reinforce its position. As a leading deepwater driller, SDRL benefits from disciplined capital allocation and an improving market dynamic. (Updated: 2026-09-06)

Bull case

Seadrill delivered very strong Q2 2026 financial results, exceeding expectations and leading to its second full-year guidance increase for 2026, with anticipated EBITDA of $420M-$450M. The company achieved 96% economic utilization and is on track to generate meaningful free cash flow in the second half of 2026, driven by repricing legacy contracts at materially higher day rates.
The deepwater market is materially tightening, with drillship utilization projected to reach the mid-90% range by 2027, supported by a 132% increase in offshore project FIDs by 2027. Seadrill has capitalized on this, adding approximately $200 million to its backlog, including a 12-month contract for the West Vela at leading-edge day rates, strengthening 2027 revenue visibility.
Seadrill has significantly strengthened its financial position through a successful refinancing, extending debt maturities to 2034 and increasing its revolving credit facility. This, coupled with the resumption of opportunistic share repurchases in Q2 2026, demonstrates disciplined capital allocation and a commitment to enhancing long-term shareholder value as major project-related outflows are now behind the company.

Bear case

Despite overall market tightening, regional pockets of oversupply persist, such as in the U.S. Gulf where several drillships are expected to become available before year-end. This creates near-term contract uncertainty and limited visibility for certain rigs like the Sevan Louisiana for the remainder of 2026, potentially impacting utilization and day rates in specific geographies.
Reactivating Seadrill's stacked harsh environment semisubmersibles, the Phoenix and Aquarius, would require substantial capital investment, estimated at over $100 million per rig. This significant cost is contingent on a material contribution from the underlying customer, limiting the company's immediate flexibility to bring these assets online and potentially tying up capital for future fleet expansion.
The offshore drilling industry faces ongoing inflationary pressures on labor and material costs, which could impact operational profitability. Additionally, Seadrill anticipates higher repair and maintenance expenses in the second half of 2026. While the company aims to pass these costs onto clients through contract terms, sustained inflation could still pressure margins and overall cash flow generation.

Bull / Bear Case

Bear Case: Despite the overall market tightening, regional pockets of oversupply persist, such as in the U.S. Gulf, where several drillships are expected to become available before year-end, creating near-term contract uncertainty and limited visibility for rigs like the Sevan Louisiana for the remainder of 2026. This could impact utilization and day rates in specific geographies. Reactivating Seadrill's stacked harsh environment semisubmersibles, the Phoenix and Aquarius, would require substantial capital investment, estimated at over $100 million per rig, contingent on significant customer contribution, limiting immediate fleet expansion flexibility. The offshore drilling industry also faces ongoing inflationary pressures on labor and material costs, and Seadrill anticipates higher repair and maintenance expenses in the second half of 2026. While the company aims to pass these costs onto clients, sustained inflation could pressure margins and overall cash flow generation, posing execution challenges.
Bull Case: Seadrill is poised for accelerated earnings and free cash flow expansion in 2026 and 2027, driven by a materially tightening ultra-deepwater market, projected to reach mid-90% drillship utilization by 2027. The company delivered very strong Q2 2026 financial results, exceeding expectations and leading to its second full-year guidance increase for 2026, with anticipated EBITDA of $420M-$450M. Seadrill achieved 96% economic utilization and is on track to generate meaningful free cash flow in the second half of 2026, primarily due to repricing legacy contracts at substantially higher day rates. Strategic refinancing has strengthened its financial position, extending debt maturities to 2034, and the company has resumed opportunistic share repurchases, demonstrating disciplined capital allocation and commitment to shareholder value. The inelastic supply of high-specification rigs in an increasing demand environment, coupled with rising offshore investment and exploration momentum, creates a highly favorable market dynamic for Seadrill's modern fleet.
More Compelling & Why: The Bull Case is more compelling. Despite recent stock appreciation, Seadrill likely trades at an attractive Free Cash Flow (FCF) yield relative to its projected FCF generation in H2 2026 and 2027, especially compared to peers. The strongest argument is the anticipated mid-90% drillship utilization by 2027 in an inelastic supply environment, which should significantly boost day rates and FCF. My view would flip to Bear if Seadrill fails to secure contracts for rigs with near-term availability (e.g., West Carina, West Gemini) at leading-edge day rates for H1 2027, or if the anticipated meaningful free cash flow generation in H2 2026 does not materialize as expected.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Free Cash Flow Generation and Share Repurchase Activity	Confirms the company's ability to generate significant cash, enabling shareholder returns and strengthening the balance sheet, which is a key component of the investment thesis and capital allocation strategy.	Actual free cash flow reported in H2 2026; amount of shares repurchased under the $208 million authorization by year-end 2026. The company repurchased $20 million in Q2 2026.	Bullish if FCF turns positive and exceeds expectations in H2 2026 with substantial share repurchases (e.g., >50% of $208M authorization utilized); Bearish if FCF remains negative or minimal share repurchases (e.g., <25% of $208M authorization utilized).	Company earnings releases, SEC filings (10-Q, 10-K), earnings call transcripts. Next earnings call for Q3 2026 (expected around November 2026).	Financial news outlets covering company announcements.	Bloomberg Terminal / Refinitiv Eikon: Cash flow statements, share repurchase data.
West Carina Contract Award and Commencement	Securing a new contract for the West Carina minimizes idle time and ensures continued revenue generation from a key asset, contributing to overall fleet utilization and cash flow in a tightening market.	Announcement of a new contract for the West Carina (duration, day rate, customer, start date); confirmation of work commencement in H1 2027. The rig was mobilized outside Brazil to Walvis Bay.	Bullish if a contract is secured with leading-edge day rates and minimal idle time for H1 2027 commencement; Bearish if contract is delayed beyond Q1 2027 award or secured at materially lower rates or with extended idle time.	Company press releases, SEC filings (10-Q), earnings call transcripts. Next earnings call for Q3 2026 (expected around November 2026).	Industry news sites (e.g., Upstream Online, Offshore Engineer) for reports on rig tenders and fixtures in West Africa/Southeast Asia.	Rystad Energy / Westwood Global Energy / Clarksons Research: Offshore Rig Database (rig status, contract updates).
Global Drillship Utilization and Leading-Edge Day Rates	These metrics are fundamental drivers of profitability in the offshore drilling industry, directly reflecting the supply-demand balance and pricing power, crucial for the long-term bullish thesis.	Reported global drillship utilization rates (expected to reach mid-90% range by 2027); leading fixture day rates for high-specification drillships (currently in the mid-$400s).	Bullish if drillship utilization consistently exceeds 90% (targeting mid-90% by 2027) and leading day rates are consistently above mid-$400k (e.g., >$475k/day); Bearish if utilization stalls below 90% or day rates are stagnant/decline (e.g., <$425k/day).	Company earnings calls (management commentary), industry reports (e.g., Rystad Energy, Westwood Global Energy, Clarksons Research), specialized offshore news outlets.	Industry association reports (e.g., IADC), energy news sites (e.g., Rigzone).	Rystad Energy / Westwood Global Energy / Clarksons Research: RigCube / Offshore Rig Database (utilization rates, day rates by rig type/region).
Updated Full-Year 2026 Financial Guidance	Provides a direct indication of management's confidence in operational performance and market conditions, impacting investor expectations for profitability and future earnings trajectory.	Any further revisions to the full-year 2026 operating revenue guidance ($1.5 billion to $1.55 billion) and EBITDA guidance ($420 million to $450 million).	Bullish if revenue guidance exceeds $1.55 billion and EBITDA guidance exceeds $450 million; Bearish if guidance is lowered or current raised targets are missed.	Company earnings releases, SEC filings (10-Q), earnings call transcripts. Next earnings call for Q3 2026 (expected around November 2026).	Analyst consensus estimates on financial news websites.	FactSet / S&P Capital IQ: Consensus estimates, company guidance tracking.
New Contract Awards and Backlog Additions	Demonstrates continued strong demand for Seadrill's rigs and provides future revenue visibility, directly supporting the bullish thesis of a tightening deepwater market and sustained profitability.	Total backlog reported in the next 10-Q; specific new contract awards (rig name, duration, estimated value); exercise of contract options. The West Vela contract added $161 million to backlog, and the West Capella option extended operations by 75 days.	Bullish if backlog grows materially from the implied ~$2.7 billion (after recent $200M additions) with leading-edge day rates and long durations; Bearish if backlog is stagnant/declining or contracts are at lower rates.	Company press releases, SEC filings (10-Q), earnings call transcripts. Next 10-Q for Q3 2026 (expected around November 2026).	Industry news sites (e.g., Upstream Online, Offshore Engineer) for reports on new rig fixtures and tenders.	Rystad Energy / Westwood Global Energy / Clarksons Research: Offshore Rig Database (new contract awards, day rates, duration).

Key Reported Metrics, Reratings Triggers & Results3 rows

Provides crucial visibility into future revenue streams and contract stability. A growing backlog at favorable rates indicates strong demand and pricing power,

Upcoming print · 2026-11-04

Key reported metrics
Metric	Last period	Why it matters
Order Backlog	17.20%	Provides crucial visibility into future revenue streams and contract stability. A growing backlog at favorable rates indicates strong demand and pricing power, supporting long-term valuation and demonstrating successful contract capture.
Total Operating Revenues	19.10%	Reflects the company's top-line growth, driven by increasing day rates and high fleet utilization. It's a key indicator of market demand for drilling services and overall business expansion in a recovering deepwater market.
Adjusted EBITDA	35.85%	Signals operational profitability and efficiency, directly impacting cash flow and the company's ability to fund operations, reduce debt, and return capital to shareholders. Investors watch for consistent growth and margin expansion in a tightening market.

Last reported · 2026-05-11

Key reported metrics
Metric	Last period	Why it matters
Order Backlog	-16.67%	A strong order backlog indicates future revenue visibility and stability, which is vital for an offshore drilling contractor. It signals sustained demand for Seadrill's rigs and provides a buffer against market fluctuations.
Adjusted EBITDA	214.29%	This metric provides insight into the operational profitability of the drilling fleet, excluding non-cash items and financing costs, which is crucial for evaluating core business efficiency and cash generation in the capital-intensive drilling industry.
Total Operating Revenues	25.26%	This is a fundamental measure of the company's top-line performance, reflecting demand for its drilling services and day rates. Investors watch it for overall business health and market position.

Key Questions

Can Seadrill maintain its strong operational execution and secure sufficient utilization for rigs like the Sevan Louisiana to achieve its raised full-year 2026

Can Seadrill maintain its strong operational execution and secure sufficient utilization for rigs like the Sevan Louisiana to achieve its raised full-year 2026 revenue and EBITDA guidance, or will higher H2 repair and maintenance expenses and limited near-term visibility for some rigs create headwinds?

Question 2: Will Seadrill successfully secure new contracts for its rigs with near-term availability, specifically the West Carina and West Gemini, at leading-edge day rates that exceed the current mid-$400s, thereby capitalizing on the projected tightening deepwater market and mid-90% drillship utilization by 2027, or will regional market softness and competitive pressures limit rate upside?
Question 3: How aggressively will Seadrill utilize the remaining $208 million of its share repurchase program in the second half of 2026, and will the company identify and secure contracts that justify the significant (over $100 million per rig) reactivation costs for its stacked harsh environment semis (Phoenix, Aquarius) to further expand its fleet?

Earnings Transcript Summary2 rows

2026-08-10 · 2026Q2 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused On1. Safe and Reliable Operations: Management emphasized achieving 96% economic utilization, successfully completing the West Tellus reacceptance on schedule and budget, and continuously investing in training, knowledge sharing, and leadership development to maintain high safety standards. 2. Free Cash Flow Generation and Shareholder Returns: The company remains on track to generate meaningful free cash flow in the second half of 2026, which enabled the resumption of shareholder returns through opportunistic share repurchases of $20 million in Q2. 3. Capturing Market Upside and Disciplined Contracting: Management highlighted recent contracting success, adding approximately $200 million to backlog, and focusing on winning direct continuation work and maximizing the total economic value of contracts, rather than solely the highest day rate, to minimize gaps.	Call Takeaway & ToneThe overall takeaway of the call was highly positive and confident. Seadrill delivered strong second-quarter financial performance, exceeding expectations, and marked its second guidance increase for the year. The company emphasized its continued execution against core priorities: safe and reliable operations, free cash flow generation, and capturing market upside through disciplined contracting. Management highlighted a materially tightening deepwater market for 2027, supported by improving fundamentals, rising offshore investment, and exploration momentum. The successful refinancing and resumption of shareholder returns further underscored a strengthened financial position. The tone was optimistic, forward-looking, and emphasized the company's strong position to capitalize on future opportunities.	Prior Quarter'S Y/Y Growth By SegmentTotal Operating Revenues: 6.87% y/y growth ($358 million in Q1 2026 vs. $335 million in Q1 2025). Contract Revenues: 11.69% y/y growth ($277 million in Q1 2026 vs. $248 million in Q1 2025). Reimbursable Revenues: -6.90% y/y growth ($81 million in Q1 2026 vs. $87 million in Q1 2025).	3 Things Analysts Most Pressed On (And Mgmt Responses)1. Scale and Pace of Share Buybacks: Analysts inquired about the future scale and pace of share repurchases. Management responded that their holistic job is to maximize free cash flow, and buybacks are considered an accretive use of capital when the share price is attractive, with decisions made in consultation with the Board. 2. Drivers of Consecutive Guidance Raises: Analysts asked about the reasons for the company's consistent upward revision of full-year guidance. Management attributed this primarily to strong operational execution, with projects like the West Jupiter, West Capella, and West Tellus delivered on time and budget, higher-than-anticipated utilization, and rigs like the West Carina and Sevan Louisiana working longer than initially expected in the first half of the year. 3. Outlook for Leading-Edge Day Rates and Potential Headwinds: Analysts questioned if leading-edge day rates, currently in the mid-$400s, would continue to rise in 2027. Management stated that day rate progression is purely driven by utilization, which they expect to improve, and that the global market will see rigs moving between hemispheres. They emphasized focusing on the full contract value (including mobilization fees, terms, and conditions) rather than just the highest day rate.	Revenue SegmentsTotal Operating Revenues: 19.10% y/y growth ($449 million in Q2 2026 vs. $377 million in Q2 2025). Contract Revenues: 23.26% y/y growth ($355 million in Q2 2026 vs. $288 million in Q2 2025). Reimbursable Revenues: 5.62% y/y growth ($94 million in Q2 2026 vs. $89 million in Q2 2025).

2026-02-26 · 2025Q4 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
3 Things Management Is Most Focused On1. Safety and Operational Excellence: Management emphasized achieving the "best safety performance in our history" and "uncompromising operational discipline," leading to record-breaking performance and customer recognition. 2. Maximizing Fleet Utilization and Backlog Growth in an Improving Market: Management highlighted maximizing utilization across their high-specification fleet, growing backlog for revenue visibility into 2026 and 2027, and capitalizing on the "most favorable" macro environment with tightening supply and increasing demand. 3. Disciplined Capital Allocation and Shareholder Returns: Management discussed the "inflection to strong cash flow generation" in mid-2026 and the framework for returning "no less than 50% of our free cash flow" to shareholders, while stressing being "disciplined" with equity currency for potential fleet expansion.	Call Takeaway & ToneThe overall takeaway of the call was highly positive and confident. Seadrill delivered solid Q4 2025 results, exceeding full-year 2025 EBITDA guidance, driven by strong operational performance and safety records. Management expressed strong optimism about the deepwater drilling market, anticipating significant earnings and free cash flow expansion in the second half of 2026 and into 2027 due to tightening supply, increasing demand, and the repricing of legacy contracts. The company is focused on disciplined capital allocation and is well-positioned to capitalize on the strengthening market and potential for further industry consolidation. The tone was optimistic and forward-looking.	Prior Quarter'S Y/Y Growth By SegmentContract revenues: 6.46% y/y growth ($280 million in Q3 2025 vs. $263 million in Q3 2024). Reimbursable revenues: -45.00% y/y growth ($11 million in Q3 2025 vs. $20 million in Q3 2024).	3 Things Analysts Most Pressed On (And Mgmt Responses)1. Day Rate Expectations for 2027 and Beyond: Analysts inquired about the trajectory of day rates. Management responded that they expect rates "in excess of those levels," potentially in 2026, driven by increasing demand and inelastic supply, though dependent on geography. 2. Strategic Positioning of the U.S. Gulf Fleet and Stacked Rigs: Analysts asked about moving U.S. Gulf rigs to other regions and updates on stacked assets. Management stated that rig movements are economic choices for the highest cash flow, not married to one geography, but moving rigs is expensive. For stacked rigs, they are waiting for the "right market dynamic" and "material contribution by the underlying customer" to fund reactivation, noting the harsh environment market has improved. 3. Use of Equity Capital for Fleet Expansion and ONGC Tender: Analysts questioned the use of SDRL's appreciated stock for fleet expansion and sought thoughts on the recent ONGC tender. Management emphasized being "disciplined" with capital allocation for strategically compelling opportunities, mindful of shareholder patience. Regarding ONGC, they see it as "really positive" and an "example of work programs that hadn't been previously anticipated," indicating intent to participate due to compelling local energy demand and broad-based demand in Asia.	Revenue SegmentsContract drilling revenues: 33.82% y/y growth ($273 million in Q4 2025 vs. $204 million in Q4 2024). Reimbursable revenues: 6.67% y/y growth ($16 million in Q4 2025 vs. $15 million in Q4 2024).

Transcript Tidbits3 rows

2026-08-10

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
About Expanding Eligible MarketThe U.S. Energy Information Administration's latest outlook shows OECD inventories falling to their lowest levels since at least 2003 as supply disruptions accelerate stock draws. Oil majors, including Chevron and ExxonMobil, have highlighted tightening supply conditions globally and in the U.S. Wood Mackenzie forecasts offshore project Final Investment Decisions (FIDs) to rise to $165 billion in 2027, a 132% increase from 2025, underscoring the strength of the offshore cycle. Offshore exploration activity is gaining momentum, driven by higher oil prices, renewed focus on energy security, slowing non-OPEC production growth, and the need for operators to rebuild reserve bases. Equinor plans to step up exploration along the Atlantic margin, guiding to an international exploration budget for the first time. Recent exploration agreements include TotalEnergies in Egypt and Syria, Chevron offshore Guinea, Exxon in Guyana, and Repsol in Venezuela. Southeast Asia is identified as a source of growing demand, with momentum building, evidenced by a leading-edge fixture for work commencing in mid-2028. In West Africa, particularly Angola, the Sonadrill joint venture continues to perform strongly, and upcoming FIDs and tenders in countries like Angola, Ghana, Cote d'Ivoire, Nigeria, and Namibia are expected to absorb significant available rig capacity. The Sevan Louisiana semisubmersible is versatile, equipped with a Trendsetter intervention system, enabling it to perform drilling, P&A, and intervention work, broadening its market potential. The harsh environment floater market is almost 100% utilized, presenting a desired growth area for Seadrill.	About CompetitionThe current tender pipeline indicates a materially tighter environment in 2027, with drillship utilization potentially reaching the mid-90% range by next year if tenders convert into awards as expected. Seadrill secured a 365-day contract for the West Vela in the U.S. Gulf at leading-edge day rates, despite near-term oversupply in the region. Brazil is expected to remain balanced and competitive, favoring rigs that align closely with customer needs and basin requirements. With limited drillship availability in Southeast Asia, the West Capella is well-positioned to capture potential upside. The broader deepwater market continues to tighten, supported by improving market fundamentals, rising offshore investment, and exploration momentum. The day rate progression is purely driven by utilization, which is expected to improve, and rigs are anticipated to move from the Western to Eastern Hemisphere, driving day rate momentum. Unlike previous cycles, there are not many newbuilds on the sideline, leading to a relatively inelastic supply in an increasing demand environment, which is perceived as a more favorable competitive landscape than the last cycle.	About The Broader IndustryThe current tender pipeline points to a materially tighter deepwater market in 2027, with drillship utilization potentially reaching the mid-90% range. Strategic reserves, offshore investment, and exploration activity collectively support growing demand for deepwater rigs. OECD inventories are falling to their lowest levels since at least 2003 due to supply disruptions. Oil majors like Chevron and ExxonMobil are noting tightening global supply conditions and unheard-of U.S. inventory levels. Wood Mackenzie forecasts offshore project FIDs to rise to $165 billion in 2027, a 132% increase from 2025. Offshore exploration activity is gaining momentum, driven by structurally higher oil prices, renewed focus on energy security, slowing non-OPEC production growth, and the need for operators to rebuild reserve bases. The industry is experiencing inflation in labor and material costs, with fuel being a significant factor, though most contracts pass fuel exposure to the client. The current market environment is reminiscent of the beginning of past upcycles, but with a key difference: a relatively inelastic supply of rigs in an increasing demand environment, as there are no significant newbuilds coming out of shipyards as in the 2008-2014 period.	Where Things Are HeadedSeadrill expects to generate meaningful free cash flow in the second half of 2026, supported by the repricing of legacy contracts for the West Jupiter and West Tellus at materially higher day rates, which is strengthening cash generation into 2027. The company has raised its full-year 2026 revenue guidance to $1.5 billion to $1.55 billion (excluding reimbursables) and EBITDA guidance to $420 million to $450 million, marking its second guidance increase this year. Full-year capital expenditure guidance is maintained at $200 million to $240 million. The U.S. Gulf market is expected to see an improved supply-demand balance for drillships in 2027, and the Sevan Louisiana is favorably positioned as market conditions strengthen. Seadrill is in advanced discussions for follow-on opportunities for the West Carina, with work expected to commence in the first half of 2027. In Southeast Asia, momentum is building, with customers willing to secure assets at leading-edge rates for future work (e.g., mid-2028 fixture), indicating an expected tightening of supply and demand. The company's commercial approach focuses on winning direct continuation work and maximizing total economic value from contracts, including mobilization fees and terms and conditions, rather than solely the day rate. Day rates are expected to continue moving higher, potentially pushing into the higher $400s if drillship utilization tightens above 95%. Seadrill's strategy for major mobilizations or sizable rig upgrades is to secure meaningful upfront fees from customers to cover costs. The company is considering reactivating its stacked harsh environment semis, the Phoenix and Aquarius, which would require over $100 million each, but only for contracts that justify the investment, potentially even short-term contracts at high day rates.	Updates On ThemeOffshore	Broader Themes EmergingEnergy security is coming back into vogue, driving offshore exploration activity. Operators are focused on rebuilding reserve bases. The industry is experiencing a dynamic of inelastic supply meeting increasing demand, a fundamental shift from previous cycles. Inflation on labor and material costs is a factor, with fuel prices also rising.	Bullish-Leaning Quotes (Short)Second quarter financial performance was very strong, exceeding expectations. We delivered EBITDA of $144 million, underpinning our decision to raise full year revenue and EBITDA guidance. This marks our second guidance increase this year. We delivered another solid quarter, achieving economic utilization of 96%. We remain on track to generate meaningful free cash flow in the second half of 2026. Our recent contracting success strengthens 2027 revenue visibility. The current tender pipeline points to a materially tighter environment in 2027. The broader deepwater market continues to tighten. Seadrill is entering 2027 from a position of strength. Repricing these legacy contracts... is now strengthening the cash generation. We are entering a stronger phase of cash generation. Seadrill is well positioned to generate meaningful free cash flow. The day rate progression is purely driven by utilization. The fundamental difference this time around is there's not a whole bunch of newbuilds sitting on the sideline. It feels even better than the last cycle. The harsh environment floater space is almost 100% utilized right now.	Bearish-Leaning Quotes (Short)Our call will include forward-looking statements that involve risks and uncertainty. No one should assume these forward-looking statements remain valid later in the quarter or year. Safety remains our top priority... but we are never satisfied with standing still. The U.S. Gulf remains in transition with several drillships expected to become available before year-end. Visibility for the balance of 2026 remains limited. We expect Brazil to remain balanced and competitive. The Sevan Louisiana... has less visibility for the remainder of 2026. Repair and maintenance expenses... we expect to be higher over the balance of the year. In the U.S. Gulf, we secured work for the West Vela... despite near-term oversupply. Moving rigs is expensive. Reactivations for the Phoenix or the Aquarius... is probably over $100 million. We're seeing some inflation that you would expect both on labor and material.	HiringBy continuing to invest in training, knowledge sharing and leadership development, we are building an even stronger organization for the future. The company also reminded its dedicated crews that everyone has stop-work authority and no task is worth compromising high safety standards.

2026-02-26

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)
About Expanding Eligible MarketSeadrill's Sevan Louisiana rig, equipped with Trendsetter's Trident system, is broadening its market potential by attracting customers who value its operational flexibility and proven effectiveness in both shallow and deepwater environments. The International Energy Agency projects oil and gas demand to grow through 2050, a reversal from previous expectations, indicating a sustained market for drilling services. The market will require approximately 25 million barrels per day of new production by 2035 to maintain balance. There is a growing trend of operators pivoting back to deepwater exploration, with significant new discoveries in Namibia and Cote d'Ivoire. India plans to drill 150 wells over the next seven years, potentially requiring up to five additional floaters. Shell is rebuilding its exploration pipeline, returning to Indonesia, and Chevron plans to increase annual exploration spending by about 50% in the coming years, including wells in the U.S. Gulf and West Africa. Petrobras is also returning to Namibia, and Libya recently awarded blocks in its first lease sale in 17 years, signaling a scaling up of exploration. Seadrill is reaffirming its presence in Southeast Asia, identified as one of the most exciting geographies for deepwater demand, following a contract award for the West Capella in Malaysia. The company anticipates some rigs may move from the U.S. Gulf to undersupplied geographies like Africa and Southeast Asia due to long-term opportunities. There are 44 years' worth of outsetting floater requirements with commencements across Africa and Asia alone. The Indian market, after being quiet, is showing unexpected activity with significant tenders from ONGC and Oil India, which is seen as positive and emblematic of broad-based demand across Asia, West Africa, and East Africa.	About CompetitionSeadrill reported separating itself from competitors in 2025 through superior performance. The company operates in a competitive market but maximizes utilization of its high-specification fleet. Seadrill is a preferred contractor in the U.S. Gulf due to its skilled teams and consistent high performance. The offshore drilling industry is experiencing tightening supply, with committed drillship utilization at 88% and limited sideline capacity, which is expected to intensify supply constraints as demand rises. Ongoing industry consolidation is fostering a more rational supply environment and supporting sustainable pricing improvements. Following recent industry consolidation, Seadrill will be the third-largest deepwater driller globally, with a significant gap between its fleet and smaller drillers. The company notes a reduced field of competition for tenders, particularly towards the end of the year. While there is a 'long tail of subscale competitors,' Seadrill emphasizes discipline in considering any expansion opportunities, ensuring they are strategically compelling and competitive within its capital allocation framework.	About The Broader IndustryThe macro environment for the offshore drilling industry is currently the most favorable in recent memory. After a subdued 2025, the ultra-deepwater market entered 2026 with renewed strength, anticipating a more robust 2027 with positive momentum in day rates, utilization, and contract durations. The International Energy Agency's outlook now projects oil and gas demand growth through 2050, a significant shift from prior expectations of a near-term peak. Declining production from existing fields and rising consumption are expected to quickly absorb any near-term oversupply, with 25 million barrels per day of new production needed by 2035 to maintain balance. The narrative around underinvestment in the industry is shifting, as operators, previously prioritizing shareholder returns over reserve replacement, are now facing increasing pressure to outline future growth plans and production visibility. Momentum for deepwater exploration is building, evidenced by new discoveries and increased exploration spending by majors like Shell and Chevron. Market research indicates that subsea tree installations have increased for five consecutive quarters, and floater utilization rates are forecast to recover to 91% in 2026 and 96% in 2027. Industry consolidation is seen as healthy, contributing to a more durable market structure and supporting sustainable pricing improvements. Exploration activity is improving across all areas, including new leasing rounds and seismic shooting, with FIDs and subsea tree awards showing year-on-year increases.	Where Things Are HeadedThe ultra-deepwater market is expected to become more robust in 2027, with day rates, utilization, and contract durations gaining positive momentum due to tightening supply and increasing visibility. The market will require approximately 25 million barrels per day of new production by 2035 to remain in balance, indicating a sustained need for drilling services. An upcycle is beginning, driven by growing oil demand, operators pivoting back to deepwater, and increasing confidence in the next exploration wave. Seadrill's forward earnings trajectory will be significantly enhanced by the West Capella's return to operations in the second quarter of 2026. The company maintains confidence in deepwater demand for 2026 and expresses even more optimism for 2027, expecting supply constraints to intensify as demand continues to rise. While some market softness may persist in certain geographies, the number and duration of opportunities are increasing, particularly in high-growth regions like Africa and Southeast Asia. Seadrill has 90% of its midpoint 2026 revenue range covered by firm backlog and is in active discussions for rigs with near-term availability. Day rates for top-tier drillships are anticipated to exceed current low $400s levels, potentially in 2026, with rates expected to climb as utilization improves, though this will be geographically dependent. Rigs may be moved from the U.S. Gulf to other regions for more attractive economic opportunities. Floater utilization rates are projected to reach 91% in 2026 and 96% in 2027. Seadrill expects a meaningful increase in earnings and free cash flow in the second half of 2026 and into 2027, driven by the repricing of legacy contracts for the West Jupiter, West Tellus, and West Saturn, and the West Capella resuming operations. For full year 2026, the company anticipates total operating revenues of $1.4 billion to $1.45 billion and EBITDA of $350 million to $400 million, with Q1 being lower than subsequent quarters due to contract preparations. Capital expenditure and long-term maintenance guidance for 2026 is $200 million to $240 million, a significant reduction from previous years, leading to an inflection to strong cash flow generation in mid-2026. Clients are increasingly looking at capacity for 2027, 2028, and even 2029, with increasing contract terms, indicating growing concern about future supply availability.	Updates On ThemeOffshore	Broader Themes EmergingA broader theme emerging is the shift in capital allocation and investor pressure within the energy sector. Operators, who previously prioritized shareholder returns over reserve replacement, are now facing increasing calls from investors and the sell-side to articulate their growth plans and ensure visibility of future production, indicating a focus on long-term supply longevity amid growing oil and gas demand.	Bullish-Leaning Quotes (Short)The current macro environment is the most favorable in recent memory. Tightening supply and increasing visibility point towards an even more robust 2027. The International Energy Agency's annual World Energy outlook now projects that oil and gas demand will grow through 2050. Exploration is back and it's scaling. We've added $0.5 billion to our contracted backlog. We maintain our confidence in deepwater demand in '26 with even more optimism looking into 2027. The sheer number of opportunities and the durations of programs are increasing. Floater utilization rates will recover, reaching 91% in 2026 and 96% in 2027. We are not just predicting increasing day rates, we are already securing them. We see a clear path to meaningful earnings and free cash flow expansion in the second half of 2026 and growing into 2027. I would expect our rates in excess of those levels, to be perfectly honest. You may see that in '26, in fact. As utilization continues to improve, we should see day rates continue to climb. The tone in the conversations is moving towards looking at capacity in '27, '28, '29 even.	Bearish-Leaning Quotes (Short)What proved to be a very challenging market. No one should assume these forward-looking statements remain valid later in the quarter or year. Despite a competitive environment in 2025. Although some market softness may persist in certain geographies during parts of the year. Recent day rates have remained stable in the low 400s. Current uncertainty around NOC plans. Moving rigs is expensive. The West Eclipse has been long-term stacked... least likelihood of reactivation. The Phoenix and the Aquarius... are also burdened with high reactivation costs. Some of them candidly may fall away.

2026-02-26

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)
About Expanding Eligible MarketSeadrill's Sevan Louisiana rig, equipped with Trendsetter's Trident system, is broadening its market potential by attracting customers who value its operational flexibility and proven effectiveness in both shallow and deepwater environments. The International Energy Agency projects oil and gas demand to grow through 2050, a reversal from previous expectations, indicating a sustained market for drilling services. The market will require approximately 25 million barrels per day of new production by 2035 to maintain balance. There is a growing trend of operators pivoting back to deepwater exploration, with significant new discoveries in Namibia and Cote d'Ivoire. India plans to drill 150 wells over the next seven years, potentially requiring up to five additional floaters. Shell is rebuilding its exploration pipeline, returning to Indonesia, and Chevron plans to increase annual exploration spending by about 50% in the coming years, including wells in the U.S. Gulf and West Africa. Petrobras is also returning to Namibia, and Libya recently awarded blocks in its first lease sale in 17 years, signaling a scaling up of exploration. Seadrill is reaffirming its presence in Southeast Asia, identified as one of the most exciting geographies for deepwater demand, following a contract award for the West Capella in Malaysia. The company anticipates some rigs may move from the U.S. Gulf to undersupplied geographies like Africa and Southeast Asia due to long-term opportunities. There are 44 years' worth of outsetting floater requirements with commencements across Africa and Asia alone. The Indian market, after being quiet, is showing unexpected activity with significant tenders from ONGC and Oil India, which is seen as positive and emblematic of broad-based demand across Asia, West Africa, and East Africa.	About CompetitionSeadrill reported separating itself from competitors in 2025 through superior performance. The company operates in a competitive market but maximizes utilization of its high-specification fleet. Seadrill is a preferred contractor in the U.S. Gulf due to its skilled teams and consistent high performance. The offshore drilling industry is experiencing tightening supply, with committed drillship utilization at 88% and limited sideline capacity, which is expected to intensify supply constraints as demand rises. Ongoing industry consolidation is fostering a more rational supply environment and supporting sustainable pricing improvements. Following recent industry consolidation, Seadrill will be the third-largest deepwater driller globally, with a significant gap between its fleet and smaller drillers. The company notes a reduced field of competition for tenders, particularly towards the end of the year. While there is a 'long tail of subscale competitors,' Seadrill emphasizes discipline in considering any expansion opportunities, ensuring they are strategically compelling and competitive within its capital allocation framework.	About The Broader IndustryThe macro environment for the offshore drilling industry is currently the most favorable in recent memory. After a subdued 2025, the ultra-deepwater market entered 2026 with renewed strength, anticipating a more robust 2027 with positive momentum in day rates, utilization, and contract durations. The International Energy Agency's outlook now projects oil and gas demand growth through 2050, a significant shift from prior expectations of a near-term peak. Declining production from existing fields and rising consumption are expected to quickly absorb any near-term oversupply, with 25 million barrels per day of new production needed by 2035 to maintain balance. The narrative around underinvestment in the industry is shifting, as operators, previously prioritizing shareholder returns over reserve replacement, are now facing increasing pressure to outline future growth plans and production visibility. Momentum for deepwater exploration is building, evidenced by new discoveries and increased exploration spending by majors like Shell and Chevron. Market research indicates that subsea tree installations have increased for five consecutive quarters, and floater utilization rates are forecast to recover to 91% in 2026 and 96% in 2027. Industry consolidation is seen as healthy, contributing to a more durable market structure and supporting sustainable pricing improvements. Exploration activity is improving across all areas, including new leasing rounds and seismic shooting, with FIDs and subsea tree awards showing year-on-year increases.	Where Things Are HeadedThe ultra-deepwater market is expected to become more robust in 2027, with day rates, utilization, and contract durations gaining positive momentum due to tightening supply and increasing visibility. The market will require approximately 25 million barrels per day of new production by 2035 to remain in balance, indicating a sustained need for drilling services. An upcycle is beginning, driven by growing oil demand, operators pivoting back to deepwater, and increasing confidence in the next exploration wave. Seadrill's forward earnings trajectory will be significantly enhanced by the West Capella's return to operations in the second quarter of 2026. The company maintains confidence in deepwater demand for 2026 and expresses even more optimism for 2027, expecting supply constraints to intensify as demand continues to rise. While some market softness may persist in certain geographies, the number and duration of opportunities are increasing, particularly in high-growth regions like Africa and Southeast Asia. Seadrill has 90% of its midpoint 2026 revenue range covered by firm backlog and is in active discussions for rigs with near-term availability. Day rates for top-tier drillships are anticipated to exceed current low $400s levels, potentially in 2026, with rates expected to climb as utilization improves, though this will be geographically dependent. Rigs may be moved from the U.S. Gulf to other regions for more attractive economic opportunities. Floater utilization rates are projected to reach 91% in 2026 and 96% in 2027. Seadrill expects a meaningful increase in earnings and free cash flow in the second half of 2026 and into 2027, driven by the repricing of legacy contracts for the West Jupiter, West Tellus, and West Saturn, and the West Capella resuming operations. For full year 2026, the company anticipates total operating revenues of $1.4 billion to $1.45 billion and EBITDA of $350 million to $400 million, with Q1 being lower than subsequent quarters due to contract preparations. Capital expenditure and long-term maintenance guidance for 2026 is $200 million to $240 million, a significant reduction from previous years, leading to an inflection to strong cash flow generation in mid-2026. Clients are increasingly looking at capacity for 2027, 2028, and even 2029, with increasing contract terms, indicating growing concern about future supply availability.	Updates On ThemeOffshore	Broader Themes EmergingA broader theme emerging is the shift in capital allocation and investor pressure within the energy sector. Operators, who previously prioritized shareholder returns over reserve replacement, are now facing increasing calls from investors and the sell-side to articulate their growth plans and ensure visibility of future production, indicating a focus on long-term supply longevity amid growing oil and gas demand.	Bullish-Leaning Quotes (Short)The current macro environment is the most favorable in recent memory. Tightening supply and increasing visibility point towards an even more robust 2027. The International Energy Agency's annual World Energy outlook now projects that oil and gas demand will grow through 2050. Exploration is back and it's scaling. We've added $0.5 billion to our contracted backlog. We maintain our confidence in deepwater demand in '26 with even more optimism looking into 2027. The sheer number of opportunities and the durations of programs are increasing. Floater utilization rates will recover, reaching 91% in 2026 and 96% in 2027. We are not just predicting increasing day rates, we are already securing them. We see a clear path to meaningful earnings and free cash flow expansion in the second half of 2026 and growing into 2027. I would expect our rates in excess of those levels, to be perfectly honest. You may see that in '26, in fact. As utilization continues to improve, we should see day rates continue to climb. The tone in the conversations is moving towards looking at capacity in '27, '28, '29 even.	Bearish-Leaning Quotes (Short)What proved to be a very challenging market. No one should assume these forward-looking statements remain valid later in the quarter or year. Despite a competitive environment in 2025. Although some market softness may persist in certain geographies during parts of the year. Recent day rates have remained stable in the low 400s. Current uncertainty around NOC plans. Moving rigs is expensive. The West Eclipse has been long-term stacked... least likelihood of reactivation. The Phoenix and the Aquarius... are also burdened with high reactivation costs. Some of them candidly may fall away.

NotesTable

Date	Comment	Comment Type	Comment Sentiment	Link	Price Reaction
2026-02-26	Seadrill reported Q4 2025 revenue beat but a significant EPS miss. Despite strong backlog growth to $2.5 billion and an optimistic outlook for rising day rates and cash flow in 2026/2027, the stock initially dropped 3.77% after-hours. It closed lower on February 27, indicating market concern over the earnings miss overshadowed positive guidance.	Other	Neutral		Deferred (realtime snapshot stale)

Upcoming Events7 rows

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
SDRL_b2e87a26	Awards, I would say, within the next quarter or 2.	2026-09-06	2026-12-31	Securing a follow-on contract for the West Carina rig.	This contract will ensure future revenue generation for the rig, which was mobilized outside Brazil, and capitalize on demand in West Africa or Southeast Asia.	Ticker	2026-08-10	earnings_transcript
SDRL_3fb22c26	due to roll off contract later this year	2026-09-06	2026-12-31	Securing a new contract for the West Gemini rig.	Ensures continuous utilization of a key asset, preventing revenue gaps and contributing to overall fleet profitability in the West Africa region.	Ticker	2026-08-10	earnings_transcript
SDRL_b93f6296	late this year, early next year	2026-10-01	2027-03-31	Awarding of the ONGC tender for 3 drillships and 2 semisubmersibles in India, in which Seadrill intends to participate.	Winning contracts from this significant tender would secure long-term work in a growing market, contributing to Seadrill's backlog, revenue, and market share in Asia.	Ticker	2026-02-26	earnings_transcript
SDRL_72216eec	working through the system	2026-02-28	2026-12-31	Conclusion of ongoing 'blend and extend' contract negotiations with Petrobras for Seadrill's rigs in Brazil.	The outcome could materially impact contract durations, day rates, and backlog for Seadrill's Brazilian fleet, potentially leading to an incremental impact on full-year guidance depending on the terms.	Ticker	2026-02-26	earnings_transcript
SDRL_8fbe54b7	second half of the year (for West Neptune, West Vela), second half of '26 and early '27 (for West Carina), late '26 and early 2027 (for West Gemini)	2026-05-01	2027-03-31	Seadrill securing new contracts for its rigs with near-term availability, including the West Neptune, West Vela, Sevan Louisiana, West Carina, and West Gemini.	Successful contracting at favorable day rates will ensure high utilization, contribute to revenue and EBITDA, and provide strong backlog visibility, positively impacting investor sentiment and valuation. Failure to secure contracts could lead to idle time and lower earnings.	Ticker	2026-02-26	earnings_transcript
SDRL_5c364ce2	waiting for the right market dynamic	2026-02-28	2027-02-28	Reactivation and contracting of Seadrill's stacked harsh environment rigs, Phoenix and Aquarius, contingent on suitable market conditions and customer commitment to fund reactivation costs.	Reactivation would add high-specification capacity to Seadrill's fleet, increasing earnings potential, but requires significant capital investment which needs to be justified by strong customer commitments and attractive returns.	Ticker	2026-02-26	earnings_transcript
SDRL_6efbbe20	middle of this year... as we go forward	2026-05-01	2027-02-28	Seadrill's decision on capital allocation, specifically regarding potential share buybacks or using equity for fleet expansion/consolidation, following the inflection to strong free cash flow generation.	This decision could significantly impact shareholder returns (via buybacks/dividends) or the company's strategic growth and market position (via M&A), influencing valuation and investor sentiment.	Ticker	2026-02-26	earnings_transcript