Seadrill Limited, a world leader in offshore drilling provides a market update for the third quarter of 2021.
During the quarter, Seadrill continued to sign high-quality contracts contributing $145m to backlog, reflecting the depth of its customer relationships. Total backlog as of September 30, 2021 stood at $2.1bn. Highlights during the period included:
- West Gemini - a four well contract plus options in Angola contributing $35m in backlog. Commencement is currently targeted for 4Q21.
- West Neptune – secured a 90-day contract with Talos in the US Gulf of Mexico contributing $26m in backlog. The contract is expected to commence in direct continuation of the current LLOG contract.
- West Hercules – awarded a one well contract with Equinor in Canada adding $57m in backlog. Operations are set to commence in April 2022. Additionally, Equinor exercised another one well option in Norway for the rig under a continuous optionality provision adding $9m in backlog.
- West Tellus – Shell exercised the options on the contract adding $18m backlog.
Post period, Seadrill added over $0.5bn in backlog, continuing to demonstrate its ability to execute contracts while restructuring its balance sheet.
- West Carina and West Tellus – signed two contracts with one of its longstanding customers, Petrobras. Both rigs have been signed on 3-year fixed term contracts for work on the Búzios field in offshore Brazil, commencing September 2022. Total contract value is $549m.
- Sevan Louisiana – awarded a one firm well contract with Eni in US GOM. The contract is expected to commence late December 2021 and continue until late May 2022.
- West Neptune – further activity in US GOM with LLOG exercising an option adding $10m in backlog.
On October 26, 2021, Seadrill’s Plan of Reorganization was approved by the US Bankruptcy Court for the Southern District of Texas. The plan raises $350m in new financing and reduces Seadrill’s liabilities by $4.9bn to $0.7bn, while leaving customer, trade and employee claims unaffected. Existing shareholders will see their holding in the post emergence entity decrease to 0.25%. The completion of the reorganization is expected in early 2022.
On November 17, 2021, Seadrill announced a new, independent, seven-member Board of Directors who will take up their positions in the successor company upon emergence from Chapter 11. The Board will be comprised of high-caliber professionals who collectively bring extensive industry and leadership experience, including Julie Johnson Robertson who will join as Chair of the Board and Mark McCollum who will join as Chair of the Audit and Risk Committee.
Stuart Jackson, Seadrill Chief Executive Officer, commented: “The offshore drilling industry has experienced a period of turbulence in recent times and many companies have undertaken significant corporate changes to align to a new market environment. While market conditions are improving, further asset rationalization and market consolidation is needed to provide a more secure footing for offshore drillers to grow value for their stakeholders.”