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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.
Financial Highlights
Figures in USD million, unless otherwise indicated 1H21 2H20 % Change
Total Operating Revenue 452 461 (2) %
Adjusted EBITDA 20 10 100 %
Adjusted EBITDA Margin (%) 4.4 2.2 100 %
Operating Loss (252) (3,110) (92) %
Net loss (605) (2,915) (79) %
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
seadrill@hawthornadvisors.com
020 3745 4960
Kilde
