Seadrill Limited (SDRL) - Fourth Quarter 2022 Results

05 Apr 2023 07:00 CEST

Hamilton, Bermuda, April 5, 2023 - Seadrill Limited (“Seadrill” or the
"Company") (NYSE & OSE: SDRL), a leader in offshore drilling, provides financial
results for the three months ended December 31, 2022.

Q4 2022 Highlights

• Seadrill relisted its common shares on the New York Stock Exchange (“NYSE”)
with trading commencing on October 14, 2022, and following the NYSE relisting
Seadrill’s status on the Euronext Expand changed from a primary listing to a
secondary listing. Subsequently, Seadrill uplisted to the main list of the Oslo
Stock Exchange with trading commencing on November 17, 2022.
• Seadrill added approximately $187 million of Order Backlog2 during the
quarter, bringing the total as of December 31, 2022 to approximately $2.3
billion.
• Total Adjusted EBITDA1 for the full year of 2022 was $265 million, at the top
end of Seadrill's 2022 financial guidance range.
• Operating revenues decreased by 15% to $228 million in Q4 2022 largely due to
fewer rig operating days overall across the fleet.
• Total Adjusted EBITDA1 was $41 million in Q4 2022 in line with expectations
and previous guidance, but lower than prior quarters primarily as a result of:
(i) idle time for the West Tellus, which completed upgrades for its upcoming
long-term campaign with Petrobras that commenced in early January 2023; (ii)
fewer rig operating days for the West Hercules, which concluded its operations
in Canada and subsequently demobilized to Norway; and (iii) not benefiting from
a full quarter of operating results with respect to the rigs sold under the
Jackup Sale.
• Consistent operational performance in Q4 2022, resulting in 95% technical
utilization.
• Seadrill completed the sale of the legal entities that own and operate seven
jackup rigs (AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida
and West Leda) in the Kingdom of Saudi Arabia on October 18, 2022 (the "Jackup
Sale"). The Jackup Sale triggered a mandatory payment of $204 million (inclusive
of principal, accrued interest and exit fee) under Seadrill’s secured second
lien debt facility (the "Second Lien Facility").
• On November 14, 2022, Seadrill made a voluntary payment of $269 million
(inclusive of principal, accrued interest and exit fee) under the Second Lien
Facility.
• Cash and cash equivalents, which excludes restricted cash, as at December 31,
2022 was $480 million. The increase was primarily driven by proceeds from the
Jackup Sale, partly offset by debt payments made under the Second Lien Facility.
In addition, restricted cash as at December 31, 2022 was $118 million.
• On December 22, 2022, Seadrill entered into a definitive agreement to acquire
Aquadrill LLC (formerly Seadrill Partners LLC) in an all-stock transaction.

Subsequent Events

• On February 10, 2023, Seadrill made a voluntary payment of $118 million
(inclusive of principal, accrued interest and exit fee) under the Second Lien
Facility. On March 15, 2023, Seadrill made a further voluntary payment of $44
million (inclusive of principal, accrued interest and exit fee) under the Second
Lien Facility.
• On February 24, 2023, Seadrill completed the sale of its 35% shareholding in
Paratus Energy Services Limited (“PES”) (formerly Seadrill New Finance Limited)
and certain other interests. PES is the entity which holds investments in SeaMex
Group, Seabras Sapura and Archer Limited. We do not expect the sale to result in
a material accounting gain or loss on closing.
• On April 3, 2023, Seadrill completed the all-stock acquisition of Aquadrill
LLC (“Aquadrill”), at which point Aquadrill became a wholly owned subsidiary of
Seadrill. The combined company Order Backlog2 as of April 5, 2023, was
approximately $2.6 billion, with a fleet of 29 owned and managed units.


Financial Highlights
Figures in USD million, unless otherwise indicated Q4 2022 Q3 2022 % Change
Total Operating Revenue 228 269 (15) %
Adjusted EBITDA1 39 57 (32) %
Adjusted EBITDA Margin (%)1 17.1 % 21.2 % (19.3) %
Total Adjusted EBITDA1 - continuing and discontinued
operations 41 71 (42) %
Operating (Loss)/Profit (7) 20 (135) %


Simon Johnson, President & CEO, commented:

“2022 was an extraordinary year of transformation for Seadrill that began with
our successful emergence from restructuring in February. We later completed the
sale of our seven jackups in the Kingdom of Saudi Arabia which enabled us to
reshape our capital structure through substantial debt prepayments. To conclude
the year, we announced the return of Aquadrill to the Seadrill family. This
transaction completed on April 3, 2023, and coupled with our other strategic
initiatives over the course of 2022, we believe we have a solid platform for
growth and enhanced performance in the future that will deliver value to our
shareholders. We continued our excellent operational performance in 2022 and in
turn delivered strong financial performance within our 2022 guidance.

The management team and I would like to thank both our onshore and offshore
employees for their continued efforts throughout the year. Our strong
operational record and continued commercial success is down to our staff, whose
hard work has been instrumental in driving Seadrill’s development. As the
industry continues its realignment, we look forward to continuing to play an
active role through 2023.”


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1 Total Adjusted EBITDA, Adjusted EBITDA and Adjusted EBITDA Margin are
non-GAAP financial measures. For a definition of each such measure and a
reconciliation to the most comparable GAAP financial measure, please see the
Appendices.
2 For a definition of Order Backlog, please see "Commercial Review" section.


Forward-Looking Statements

This communication includes forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Exchange Act. All
statements other than statements of historical facts included in this
communication, including those regarding future guidance, including total
revenue, Adjusted EBITDA, Total Adjusted EBITDA and capital expenditures and
long-term maintenance, and statements about the Company’s plans, strategies,
business prospects, changes and trends in its business and the markets in which
it operates are forward-looking statements. These forward-looking statements can
often, but not necessarily, be identified by the use of forward-looking
terminology, including the terms "assumes", "projects", "forecasts",
"estimates", "expects", "anticipates", "believes", "plans", "intends", "may",
"might", "will", "would", "can", "could", "should" or, in each case, their
negative, or other variations or comparable terminology. These statements are
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 communication. 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, inflation, 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, pandemics and epidemics, our ability to
successfully complete any acquisitions, divestitures and mergers, our liquidity
and the adequacy of cash flows for our obligations, our liquidity and the
adequacy of cash flows for our obligations, our ability to satisfy the continued
listing requirements of the New York Stock Exchange (“NYSE”) and the Oslo Stock
Exchange (“OSE”), or other exchanges where our common shares may be listed, or
to cure any continued listing standard deficiency with respect thereto, the
cancellation of drilling contracts currently included in reported contract
backlog, losses on impairment of long-lived assets, shipyard, construction and
other delays, the results of meetings of our shareholders, political and other
uncertainties, including those related to the conflict in Ukraine, the effect
and results of litigation, regulatory matters, settlements, audits, assessments
and contingencies, including any litigation related to the merger of the Company
(the “Merger”) with Aquadrill LLC (“Aquadrill”), our ability to successfully
integrate with Aquadrill following the Merger, the concentration of our revenues
in certain geographical jurisdictions, limitations on insurance coverage, our
ability to attract and retain skilled personnel on commercially reasonable
terms, the level of expected capital expenditures, our expected financing of
such capital expenditures, and the timing and cost of completion of capital
projects, fluctuations in interest rates or exchange rates and currency
devaluations relating to foreign or U.S. monetary policy, tax matters, changes
in tax laws, treaties and regulations, tax assessments and liabilities for tax
issues, legal and regulatory matters in the jurisdictions in which we operate,
customs and environmental matters, the potential impacts on our business
resulting from decarbonization and emissions legislation and regulations, the
impact on our business from climate-change generally, and 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 also keep in mind the
risks described from time to time in the Company’s filings with the SEC,
including its Annual Report on Form 20-F for the year ended December 31, 2021,
filed with the SEC on April 29, 2022 (File No. 001-39327) and subsequent reports
on Form 6-K.

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.


April 5, 2023
The Board of Directors
Seadrill Limited
Hamilton, Bermuda


Questions should be directed to Seadrill Management Ltd. represented by:
Simon Johnson President and Chief Executive Officer

Analyst and investor questions should be directed to:
David Warwick Director of Investor Relations +971 58 687 4132

Media questions should be directed to:
Sara Dunne Director of Communications +1 281 630 7064

More information:
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