Seadrill Ltd
F:S9AD
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Seadrill Ltd
F:S9AD
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Seadrill Ltd
Seadrill Ltd is an offshore drilling contractor. It owns and operates drilling rigs that oil and gas companies use to drill wells at sea, especially in deepwater and other technically difficult offshore fields. Its main business is not selling oil or gas itself, but providing the rig, crew, and operating expertise needed to drill safely and efficiently. The company earns money by contracting its rigs to customers, usually large energy producers and national oil companies. Those customers pay for access to the rigs and the drilling service, so Seadrill’s revenue mainly depends on keeping its equipment working under long-term drilling contracts. Its customers use these rigs when they need a specialist contractor rather than building and running the equipment themselves. What makes Seadrill’s business different is that it sits in a very specialized part of the energy chain. Offshore drilling requires expensive rigs, technical know-how, strict safety standards, and the ability to work in harsh marine conditions. That makes Seadrill more like a heavy industrial service provider than an energy producer, with its value coming from operating complex equipment that its customers cannot easily replace.
Seadrill Ltd is an offshore drilling contractor. It owns and operates drilling rigs that oil and gas companies use to drill wells at sea, especially in deepwater and other technically difficult offshore fields. Its main business is not selling oil or gas itself, but providing the rig, crew, and operating expertise needed to drill safely and efficiently.
The company earns money by contracting its rigs to customers, usually large energy producers and national oil companies. Those customers pay for access to the rigs and the drilling service, so Seadrill’s revenue mainly depends on keeping its equipment working under long-term drilling contracts. Its customers use these rigs when they need a specialist contractor rather than building and running the equipment themselves.
What makes Seadrill’s business different is that it sits in a very specialized part of the energy chain. Offshore drilling requires expensive rigs, technical know-how, strict safety standards, and the ability to work in harsh marine conditions. That makes Seadrill more like a heavy industrial service provider than an energy producer, with its value coming from operating complex equipment that its customers cannot easily replace.
EBITDA Beat: Seadrill delivered full-year 2025 EBITDA of $353 million, exceeding the midpoint of its guidance range despite tough market conditions.
Strong Safety Results: The company reported its best-ever safety performance, with a total recordable incident rate 50% better than the offshore industry benchmark.
Contracting Momentum: Seadrill added $0.5 billion to its backlog since the last update, bringing total contracted backlog to about $2.5 billion, and secured several new contracts and extensions across multiple regions.
Positive Market Outlook: Management expressed optimism about the offshore drilling market, noting tightening supply, rising day rates, and growing demand projected through 2027 and beyond.
Raised Guidance: For 2026, Seadrill guided to total operating revenues of $1.4–1.45 billion and EBITDA of $350–400 million, anticipating stronger performance in the second half as key rigs start new contracts.
Capital Allocation: Liquidity remains robust, and management signaled that increased free cash flow in the second half of 2026 could support share buybacks or other shareholder returns.
Consolidation & Strategy: Seadrill affirmed a disciplined approach to potential M&A, noting its position as the third largest deepwater driller and ongoing industry consolidation.
Backlog Visibility: 90% of the midpoint of 2026 revenue guidance is already covered by firm backlog, providing strong earnings visibility.
