Seadrill Limited issued its Q2 financial report and here are the highlights
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Technical utilization of 92% and economic utilization of 88% due to downtime incidents on West Saturn and West Tellus. Excluding these units, technical utilization and economic utilization stood at 98% and 94% respectively.
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Thirteen owned units operating as of June 30, 2021, with three additional units returning to operations in the second half of 2021. In addition, ten non-owned units remain under Seadrill's management.
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Total backlog of $2.1 billion with approximately $0.5 billion added during the first half of the year. Health, Safety, and Environment (“HSE”)
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Record safety performance with Total Injury Frequency Rate (“TRIR”) better than industry average.
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Maintained our industry-leading carbon management position. Financial
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Operating loss decreased to $252 million, includes non-cash impairment of $152 million against the West Hercules rig.
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Cash and cash equivalents as of June 30, 2021 of $644 million of which $428 million was unrestricted.
Subsequent Events
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Major milestones reached towards emergence from Chapter 11 bankruptcy by entering restructuring agreements with certain senior secured lenders and senior note holders, representing 58% and 79% of debt outstanding, respectively. The proposed plan leaves current shareholders with approximately 0.25% of the go forward equity and as a consequence they face a significant deterioration in value.
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Separate agreements reached with SFL Corporation, to reduce our commitments on the lease agreement for the West Hercules, and with Northern Ocean Ltd., to close out all outstanding balances and claims.
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Approximately $120 million of backlog added after the period end, including contracts secured for the West Hercules in Canada and the West Gemini in Angola.
Stuart Jackson, CEO, commented:
“Seadrill has continued to operate effectively and safely throughout H1 2021, despite ongoing disruptions caused by COVID-19 challenging the industry’s logistical capabilities. We are delighted to have increased our order backlog during the period after signing agreements with a number of customers, and we continue to execute on our plan to positively streamline our operations, taking out assets that will not go back to work and addressing the broader leverage issues through the Chapter 11 process. Looking forward, we will continue to leverage our technical and functional excellence to maintain our leading position in the offshore drilling industry, evident by our West Saturn drillship where the introduction of hydrogen fuel is set to significantly reduce fuel consumption and our carbon footprint. Addressing the leverage of offshore drilling entities and progressing on the journey on asset rationalization are the first important steps prior to looking to the next stage of industry rationalization through consolidation, where I expect we will play an active part. The filing of our Plan Support Agreement with strong creditor support marked the next step in this journey for Seadrill."
Source: Seadrill Limited
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