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Offshore driller SeaDrill claims half year profits

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On the same day that it emerged from a chapter 11 bankruptcy process, Bermudian-based offshore drilling company Seadrill Limited has reported a net profit of $18 million in the second half of 2021.

That compares with a $605 million loss in the first half of the year.

The company reported a 23 per cent increase in operating revenues to $556 million driven by a number of rigs commencing new contracts after a period of inactivity.

Adjusted EBITDA increased to $118 million, representing a 21.2 per cent EBITDA margin.

Cash and cash equivalents at December 31 were $535 million, of which $312 million was unrestricted cash.

The company reported strong operational performance in 2H, 2021, resulting in 95 per cent technical utilisation.

The company had a backlog of $2.2 billion.

Seadrill New Finance Limited, renamed Paratus Energy Services, emerged from chapter 11 on January 20. Seadrill Limited retained a 35 per cent interest as a result of the restructuring.

Stuart Jackson, CEO, said: "Seadrill has finished 2021 strongly, evidenced by our top-line financial highlights underpinned by our operational excellence and continued commercial success.

“The formidable progress made over the course of 2021 is attributable to the tremendous effort our workforce made overcoming difficult economic and logistical challenges. I am proud of what they achieve on a daily basis.”

He added: “We have just emerged from a series of chapter 11 processes across our complex organisation involving not just the emergence of Seadrill Limited yesterday but also the restructurings that were completed in other parts of our business.

“Our emergence completes the second stage of our industry's rehabilitation. As a sector we have taken out non-performing rigs, we have reduced our collective debt burdens and now we need to reshape an industry that warrants investment to sustain our contribution to the evolving global energy mix.

“The operational and safety track record of Seadrill, together with our strong customer partnerships, puts us in a leadership position as we complete this industry realignment."

Seadrill 2021 Limited emerged from chapter 11 after successfully completing its reorganisation pursuant to its chapter 11 plan of reorganisation, which was confirmed by the US Bankruptcy Court for the Southern District of Texas last October.

The restructuring significantly delevered the company's balance sheet by equitising approximately $4.9 billion of secured bank debt previously held across 12 silos, resulting in a streamlined capital structure with a single collateral silo, the company said.

It also raised $350 million in new financing pursuant to the plan.

Holders of existing shares in the company's predecessor, Seadrill Limited, were reduced to 0.25 per cent of their existing holdings.

The company said its streamlined capital structure and the substantial liquidity raised pursuant to the plan provide the company with secure footing to pursue opportunities in the offshore drilling industry and grow value for its stakeholders.

The company said it has total cash of $486 million, inclusive of $151 million of restricted cash.

It has $300 million of first-lien new-money debt, comprised of a $175 million term loan facility and an undrawn $125 million revolving credit facility, and $683 million of second-lien take back debt, plus $50 million of unsecured convertible bonds.

In accordance with the reorganisation plan, a new board of directors of the company was appointed.

Julie Johnson Robertson is chair, and is joined by audit committee chair Mark McCollum, Karen Dyrskjot Boesen, Jean Cahuzac, Jan B Kjærvik, Andrew Schultz, and Paul Smith.

Stuart Jackson, president and chief executive officer of Seadrill (File photograph)
Bermudian-based rig operator Seadrill has emerged from the chapter 11 bankruptcy process (File photograph)

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Published February 24, 2022 at 7:55 am (Updated February 24, 2022 at 7:55 am)

Offshore driller SeaDrill claims half year profits

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