Seadrill Limited

Seadrill reported second-quarter 2026 operating revenues of $449 million and adjusted EBITDA of $144 million, versus $97 million of sequential EBITDA improvement implied by management’s discussion and a $47 million sequential EBITDA increase from the prior quarter. EBITDA margin, excluding reimbursables, was 33.5%. Operating expenses were $377 million, up $43 million from the prior quarter. Cash at quarter-end was $360 million, up $31 million sequentially. For full-year 2026, Seadrill raised guidance to operating revenues of $1.5 billion to $1.55 billion, excluding $50 million of reimbursable revenues, and EBITDA of $420 million to $450 million. Capital expenditures guidance was maintained at $200 million to $240 million. Management also said EBITDA guidance includes a noncash net expense of $30 million related to amortization of mobilization costs and revenues, with $16 million recognized through Q2.

Samir Ali framed the quarter as strong operational execution and evidence that Seadrill is now moving into a more favorable phase of the cycle. He highlighted 96% economic utilization, the on-time/on-budget West Tellus reacceptance, and around $200 million of backlog added since May, including direct continuation work that improves 2027 visibility. His tone was confident but disciplined, repeatedly stressing safe operations, free cash flow, and maximizing total contract value rather than chasing headline day rates alone.

Grant Creed focused on the financial inflection point, saying higher activity and better day rates drove the quarter and that major project outflows are now behind the company. He pointed to the June refinancing, which included $700 million of 6.75% senior notes due 2034, redemption of $575 million of 8.375% second lien notes due 2030, and an expanded revolver from $225 million to $300 million maturing in 2031. He also cited quarter-end cash of $360 million, $57 million of capex, a $16 million legal payment tied to Sonadrill, and a $20 million accelerated interest payment, while emphasizing that cash flow should strengthen in the second half as West Capella, West Jupiter, West Heller and the West Tellus mobilization receipt come through.

Analysts pressed management on the pace and scale of buybacks, why guidance was raised again, whether leading-edge day rates can keep rising, and how customers are behaving as the market tightens. Management said repurchases are to be determined and will depend on cash position, forecast cash, and capital allocation discipline, but described the current share price in the 30s as attractive. On guidance, Grant said the upside came mainly from strong execution on Jupiter, Capella and Tellus, longer-than-expected work for Carina, and more activity for the Sevan Louisiana. They also said customers are showing some willingness to contract further out, but not a wholesale change yet, and that any reactivation or major mobilization would need meaningful customer economics.