Seadrill Swings to Profit, Raises Full-Year Outlook
The offshore driller raised its 2026 adjusted EBITDA forecast to $420 million-$450 million.
Seadrill (SDRL), the offshore drilling contractor, swung to a second-quarter profit of $29 million, or $0.47 a diluted share, from a year-earlier loss of $42 million, or $0.68 a share.
The quarter marked a reversal from the start of the year, when Seadrill lost $7 million, or $0.11 a share, and revenue declined sequentially. Adjusted EBITDA has now risen for two consecutive quarters, climbing to $144 million from $97 million in the first quarter and $88 million in the fourth quarter of 2024.
Revenue increased 19% from a year earlier to $449 million, including a 23% rise in contract revenue to $355 million. Total operating revenue had fallen to $358 million in the first quarter from $362 million in the preceding period.
More operating days for West Jupiter and West Capella and a higher fleetwide average dayrate drove the sequential rebound, partly offset by fewer operating days for West Tellus. The average number of rigs under contract increased to 10 from nine, while the average contractual dayrate rose to $360,000 from $343,000 and economic utilization improved to 95.5%.
Operating profit rose to $72 million from $6 million a year earlier as the increase in revenue outpaced a $6 million rise in operating expenses. Management-contract expenses fell to $42 million from $93 million, offsetting higher vessel and rig operating costs and increased depreciation and amortization. Adjusted EBITDA margin excluding reimbursables widened to 33.5% from 27.9% in the first quarter and 25.4% in the fourth quarter.
Seadrill now expects full-year operating revenue of $1.50 billion to $1.55 billion, up from its previous range of $1.43 billion to $1.48 billion. Its adjusted EBITDA forecast increased to $420 million–$450 million from $370 million–$420 million, while planned capital expenditures and long-term maintenance remain at $200 million–$240 million.
The company's backlog declined to about $2.9 billion as of Aug. 10 from $3.1 billion as of May 11, even after roughly $200 million of awards and extensions. Those additions included a one-year West Vela contract worth about $161 million and a roughly 75-day West Capella extension worth about $26 million.
Seadrill completed a refinancing that extended its senior-note maturity to 2034 and increased its revolving credit facility to $300 million. It also repurchased about $20 million of shares during the quarter and extended its $500 million authorization through year-end, while negative free cash flow widened to $43 million as equipment spending increased.