Seadrill’s contracted backlog climbed to about $2.5 billion after adding roughly $500 million since the prior update, including awards like $152 million for West Capella, and management says firm backlog covers about 90% of the midpoint of its 2026 revenue guidance.
The company reported full‑year 2025 EBITDA of $353 million and Q4 EBITDA of $88 million, ended 2025 with $365 million cash and $524 million total liquidity versus $625 million gross debt, with Q4 cash use driven by a $43 million legal payment and $69 million of accelerated capex.
For 2026 Seadrill guided total operating revenues of $1.4–$1.45 billion and EBITDA of $350–$400 million, trimmed capex to $200–$240 million, and expects a mid‑year inflection to stronger cash flow as higher‑priced contracts start and day rates rise amid a tightening market.
Seadrill (NYSE:SDRL) executives said the offshore deepwater market entered 2026 with renewed strength after a subdued 2025, pointing to tightening supply, rising utilization and improving contract terms as factors that could support higher day rates into 2027 and beyond.
During the company’s fourth-quarter 2025 earnings call, Seadrill reported full-year 2025 EBITDA of $353 million, which management said exceeded the midpoint of its original guidance range. Leadership also highlighted what it described as record operational and safety performance, alongside a series of contract awards and extensions that lifted backlog to approximately $2.5 billion.
President and CEO Simon Johnson said safety “is the foundation of everything we do,” and noted Seadrill delivered its best safety performance in company history as measured by total recordable incident rate, which he said was 50% better than the IADC offshore industry benchmark.
Johnson and other executives also emphasized operational execution across several rigs:
West Neptune delivered a record “six-zone completion” for LLOG in the U.S. Gulf, completing the program in 11 days and exceeding the prior benchmark by 60%, according to management.
West Polaris and West Neptune executed MPD programs using integrated riser joint technology, which management said saved more than 12 hours during rig up and rig down per well.
West Elara received ConocoPhillips’ Supplier of the Year Award, which the company linked to execution consistency and reliability.
West Tellus reached 400 consecutive days of BOP subsea deployment while delivering five wells offshore Brazil, described as the second-longest deployment in Seadrill’s fleet history.
Sevan Louisiana completed two well interventions in January using Trendsetter’s Trident system, its first deployment in the U.S. Gulf, which management said broadened the rig’s market potential.
Johnson said Seadrill continued to invest in its workforce in 2025 by expanding course offerings at the Seadrill Academy in Dubai, holding operational discipline and technical services workshops globally, and launching a safety leadership assessment program.
Chief Commercial Officer Samir Ali said the value of contracts secured increased in each of the last four quarters, despite a competitive market, and noted that Seadrill added “half a billion” to contracted backlog since its prior earnings update. Ali put total backlog at approximately $2.5 billion.
Recent awards and extensions discussed on the call included:
West Neptune: a four-month extension with LLOG, extending the schedule into September and adding $48 million to backlog.
Sevan Louisiana: a well intervention program with two different customers; management cited a completed campaign with Walter Oil & Gas and upcoming work with a “large IOC.”
Sonangol Quenguela: TotalEnergies exercised a priced option for an additional 10 months into February 2027.
West Elara: Equinor awarded a 450-day accommodation contract after Seadrill reached a mutual agreement with ConocoPhillips to make the rig available.
West Carina: Petrobras extended the contract through April 2026.
West Saturn: Equinor exercised a priced option, keeping the rig working through October 2027.
West Capella: a 14-month award from PTTEP in Malaysia, expected to begin in the second quarter of 2026 and add $152 million to backlog over an estimated 440 days; management said the award supports the rig’s reactivation and strengthens earnings potential for 2026 and 2027.
Ali said 90% of the midpoint of Seadrill’s 2026 revenue range is covered by firm backlog. He also described U.S. Gulf day rates as stable in the “low $400s,” adding that seven drillships are expected to become available in 2026 and that some rigs could be bid outside the region due to longer-term opportunities in “undersupplied” geographies.
Chief Financial Officer Grant Creed said fourth-quarter 2025 total operating revenues were $362 million, compared with $363 million in the prior quarter. Contract drilling revenues were $373 million, down $7 million sequentially due to fewer operating days for West Vela as it commenced a new contract in mid-November, partially offset by additional operating days for Sevan Louisiana. Reimbursable revenues increased $5 million to $16 million.
Total operating expenses were $344 million, up $7 million sequentially, primarily due to higher depreciation and amortization tied to recently completed SPS and capital projects. SG&A was flat at $27 million. Fourth-quarter EBITDA was $88 million, bringing full-year EBITDA to $353 million.
Creed said Seadrill ended 2025 with $365 million of total cash, including $26 million in restricted cash. The company’s $63 million use of cash in the quarter was primarily attributed to:
A $43 million payment for an unfavorable legal judgment related to the Sonadrill joint venture, which management said had been previously disclosed in 2025.
$69 million of accelerated capital and long-term maintenance expenditures in Q4, including spending brought forward for West Jupiter and West Tellus contract preparations and a new contract for West Capella.
Timing of accounts payable disbursements.
Total liquidity was $524 million at year-end, Creed said. Gross principal debt totaled $625 million, with maturities extending through 2030.
For full-year 2026, Seadrill guided to total operating revenues of $1.4 billion to $1.45 billion, excluding $50 million of reimbursable revenues. The company forecast EBITDA of $350 million to $400 million, which Creed said includes a $26 million non-cash expense related to amortization and mobilization costs and revenues.
Creed said the company expects first-quarter EBITDA to be lower than subsequent quarters as West Jupiter, West Tellus and West Capella undergo new contract preparations, followed by a step up in the second quarter after contract commencements. He noted West Jupiter and West Tellus are repricing to three-year contracts at day rates roughly $200,000 per day higher than before.
Seadrill guided to 2026 capital expenditures and long-term maintenance of $200 million to $240 million, which management described as a “significant step down” from the prior two years. Creed said the company expects an “inflection to strong cash flow generation” in the middle of 2026 after contracts commence and associated readiness capex and working capital investments subside.
In response to analyst questions, Johnson said he expects day rates to move higher than current levels as the market tightens, suggesting higher rates could be seen in 2026 and emphasizing that the path may not be “smooth” as operators and contractors work through near-term availability and scheduling.
Asked about Brazil and Petrobras “blend and extend” discussions, Johnson said Seadrill continues to have “really positive discussions” but does not control timing. Creed added that guidance is based on the “best information available” when the forecast was prepared.
On stacked rigs, Johnson said there was “nothing really to share” at this time. He described West Eclipse as a long-term stacked, low-spec asset with material reactivation investment needs and lower competitiveness, while calling West Phoenix and West Aquarius higher-spec but still burdened by high reactivation costs. Management said reactivation would require the right work term and a customer contribution to help defray capital investment.
Johnson also addressed industry consolidation, calling it “healthy” and saying Seadrill expects to be the third-largest deepwater driller following a peer transaction. He said the company would remain disciplined in evaluating any potential consolidation opportunities within its capital allocation framework.
Seadrill Limited, trading on the New York Stock Exchange under the symbol SDRL, is a leading provider of offshore drilling services to the global oil and gas industry. The company specializes in the design, construction, deployment and operation of mobile offshore drilling units, serving major exploration and production companies with turnkey drilling solutions.
Seadrill’s fleet comprises ultra-deepwater drillships, semi-submersible rigs and high-specification jack-up units capable of operating in some of the world’s most challenging offshore environments.
