Seadrill, as a major player in the offshore drilling industry, announced on November 3, 2023, that its existing contracts have reached a value of approximately $3.3 billion. The company has managed to contract over 85% of its drilling rig days for the year 2027.
Details of Contracts and New Projects
In recent months, new contracts and extensions worth approximately $800 million have been added to this figure. One of the most significant of these contracts is for the West Carina drilling rig in Indonesia, signed with an unnamed operator, valued at around $420 million for a specified period of 880 days. This project is expected to commence in the first half of 2027.
Financial Performance Analysis and Future Outlook
Samir Ali, President and CEO of Seadrill, stated that with 85% contracted drilling rig days for 2027, a better outlook for revenues and cash flow for the coming year has been established. He also noted that the West Carina contract has helped revise three older contracts and will implement a higher day rate from 2027. According to him, the presence of a healthy pipeline from tenders and growing demand in the deepwater sector strengthens their confidence in the market outlook.
In the third quarter of this year, Seadrill had an average of 9 drilling rigs under contract, down from 10 rigs in the second quarter. The average day rate for contracts has increased to $376,000, while the day rate in the second quarter was $360,000. Additionally, the economic utilization of the rigs has reached 94.5%. However, the company's operating revenues have decreased to $428 million, down from $449 million in the previous period, due to a reduction in operational days for West Carina and idle time between contracts for the West Vela, West Elara, and Sevan Louisiana rigs.
In this context, adjusted EBITDA has decreased to $121 million, which is lower than $144 million in the same period last year. Seadrill has managed to generate $179 million in free cash flow and has reported a net loss of $30 million.
Furthermore, Seadrill has raised its revenue forecast for 2026 to $1.56 to $1.58 billion (excluding reimbursable costs) and adjusted the range for adjusted EBITDA to $440 to $460 million.
