Seadrill Limited

What they do

Seadrill owns and operates drillships and semi-submersible rigs for shallow to ultra-deepwater work in benign and harsh environments, contracting units to oil super-majors, state-owned national oil companies and independents on a dayrate basis. As of December 31, 2025, the fleet totaled 15 owned units: 10 operating (nine benign floaters comprising six 7th generation drillships, two 6th generation drillships and one benign environment semi-submersible, plus one harsh environment jackup), one in capital upgrade, one in repairs and maintenance, and three cold stacked. It also manages two drillships owned by Sonangol EP. The company employed approximately 3,000 people as of December 31, 2025.

Revenue drivers

• Floating rig dayrate contracts — Revenue comes from firm contracts at a contractual operating dayrate multiplied by remaining contract days, with the fleet's benign floaters (drillships and one semi-submersible) the core earning assets. Second quarter 2026 contract revenues were $355 million of $449 million total operating revenues.
• Harsh environment jackup — One harsh environment jackup is included in the 10 operating units, serving harsher-environment dayrate work alongside the floater fleet. No standalone revenue figure for this unit is disclosed in the excerpts.
• Management and bareboat charter services — Seadrill provides management services to affiliated entities and manages two Sonangol-owned 7th generation drillships, with management contract revenues and bareboat charter leasing revenues reported as "other" in backlog tables. Contract backlog as of August 10, 2026 was approximately $2.9 billion.

Recent performance

Second quarter 2026 total operating revenues rose to $449 million from $358 million in the prior quarter, with contract revenues of $355 million versus $277 million. Net income was $29 million, or $0.47 per diluted share, compared with a net loss of $7 million ($0.11 per share) in the first quarter, and Adjusted EBITDA rose to $144 million from $97 million. The company cited more operating days for the West Jupiter and West Capella and an improved average fleet dayrate, partly offset by fewer operating days for the West Tellus. Total operating expenses increased by $43 million to $377 million, and economic utilization was 96%.

Strategy

Management's stated vision is to set the standard in deepwater oil and gas drilling, built on operational excellence, fleet and portfolio strength, and disciplined reinvestment to improve performance and extend asset longevity. In the second quarter of 2026 the company refinanced its 2030 senior notes with $700 million of 6.750% notes due 2034 and amended its revolving credit facility, raising commitments to $300 million from $225 million and extending maturity to 2031. It repurchased approximately $20 million of shares and extended the share repurchase program through December 31, 2026. Capital expenditure and long-term maintenance guidance was maintained at $200–$240 million.

Risks

• Oil and gas price and activity dependence — Seadrill's business depends on offshore exploration, development and production activity, which is driven by volatile oil and gas prices and customer capital allocation, factors it does not control.
• Fleet concentration and utilization — With only 15 owned units and 10 operating as of December 31, 2025, individual rig downtime or contract gaps can materially affect revenue, as seen with fewer West Tellus operating days in the second quarter of 2026.
• Geopolitical and trade disruption — The company flagged oil price volatility from the Middle East conflict and Strait of Hormuz blockades, and uncertainty from U.S. trade policy changes and potential retaliatory measures.
• Debt and covenant risk — Seadrill carries gross principal debt of $750 million and a $390 million net debt position as of June 30, 2026, and its risk factors cite the ability to comply with loan covenants and maintain adequate financing.

Outlook

Management increased full-year 2026 guidance, raising the Total operating revenues range to $1.50–$1.55 billion (previously $1.43–$1.48 billion), excluding $50 million of reimbursable revenues, and lifting the Adjusted EBITDA range to $420–$450 million from $370–$420 million. Capital expenditure and long-term maintenance guidance was maintained at $200–$240 million. The CEO stated that demand for the high specification fleet continues to strengthen and contract coverage is improving.