Seadrill Raises 2026 Guidance After $800 Million of Awards

The Tip Desk · November 10, 2026 · 3 min read

The deepwater driller booked $179 million of free cash flow in the third quarter and lifted full-year Adjusted EBITDA guidance to $440 million–$460 million.

Seadrill Limited (SDRL) raised its full-year 2026 Adjusted EBITDA outlook to $440 million–$460 million after adding about $800 million of Total Contract Value in Indonesia, Malaysia, Angola and the U.S. Gulf, even as third-quarter revenue and profit receded from the second-quarter peak.

The deepwater oil and gas driller also lifted Total operating revenues guidance to $1.56 billion–$1.58 billion, excluding $90 million of reimbursable revenues, from $1.50 billion–$1.55 billion excluding $50 million of reimbursables. It narrowed the capital-expenditure and long-term-maintenance range to $210 million–$230 million from $200 million–$240 million.

Total operating revenues for the three months ended September 30, 2026, were $428 million, down from $449 million in the prior quarter. The company said the decline was driven primarily by fewer operating days for the West Carina, which completed its contract in the second quarter, and time between contracts for the West Vela, West Elara and Sevan Louisiana, partly offset by more days on the West Tellus after its June start. Contract revenues were $329 million.

The company swung to a net loss of $30 million, or $0.49 a share, from net income of $29 million, or $0.47 a share, including a legal provision booked in the third quarter. Adjusted EBITDA fell to $121 million from $144 million. Adjusted EBITDA margin excluding reimbursables compressed to 29.7% from 33.5%. Total operating expenses rose $7 million to $384 million.

Average rigs on contract were 9, versus 10 in the second quarter. Average contractual dayrates rose to $376 thousand from $360 thousand. Economic utilization slipped to 94.5% from 95.5%.

Cash generation reversed. Net cash provided by operating activities was $195 million, versus an $18 million outflow in the second quarter, and Free Cash Flow was $179 million versus a $43 million outflow. The company said third-quarter cash benefited from lump-sum mobilization revenue relating to the West Tellus and a working-capital release. Capital additions and long-term maintenance totaled $56 million. Seadrill repurchased about $22 million of shares.

At quarter-end, gross principal debt was unchanged at $750 million. Cash, cash equivalents and restricted cash rose to $506 million from $360 million, narrowing net debt to $244 million from $390 million.

Subsequent to the August fleet status report, Seadrill secured awards and extensions with Total Contract Value of about $800 million. In Indonesia, the West Carina was awarded a contract with an undisclosed operator of about $420 million for an estimated 880-day firm term, with priced options for up to another 880 days and a start expected in the first half of 2027. President and Chief Executive Officer Samir Ali said the award secures the third and final repricing of three legacy contracts, with an improved dayrate effective in 2027.

In Malaysia, all remaining priced options were exercised for the West Capella, extending operations by 120 days and adding about $41 million of Total Contract Value, excluding additional services; unpriced options added about $53 million. The rig is now expected to work in direct continuation through February 2028. In Angola, Sonadrill Holding Ltd, Seadrill’s 50:50 joint venture with an affiliate of Sonangol E.P., exercised all remaining priced options for the Sonangol Libongos, extending operations by about three years and committing the rig into 2030. In the U.S. Gulf, the Sevan Louisiana was awarded a 25-day contract with Kosmos commencing in November 2026, followed by an approximate 60-day contract with LLOG, securing the rig into 2027.

Contract Backlog was approximately $3.3 billion as of November 3, 2026. Ali said more than 85% of available drillship days are now contracted in 2027.