Seadrill (SDRL) Q2 2024 earnings summary

Executive summary

• Achieved Q2 EBITDA of $133 million on $375 million in revenues, with a 35.5% margin; H1 EBITDA totaled $257 million.

• Completed sale of three jack-up rigs and Gulfdrill JV interest, generating a $203 million gain and $338 million in proceeds.

• Repurchased $566 million in shares since September 2023, reducing share count by over 15%.

• Lowered H2 expectations due to delayed contract starts for two rigs moving to Brazil and uncommitted near-term rig availability.

• Maintains confidence in long-term deepwater drilling market despite short-term volatility and micro cycles.

Financial highlights

• Q2 contract drilling revenues were $267 million, down $8 million sequentially due to rig preparation downtime.

• Operating expenses decreased $13 million sequentially to $290 million, mainly from lower vessel and rig costs.

• Net income for Q2 2024 was $253 million, with diluted EPS of $3.49.

• Free cash flow for Q2 2024 was $36 million; cash flow from operations was $79 million, including $60 million in long-term maintenance CapEx.

• Ended Q2 with $862 million in cash and equivalents, $625 million in gross debt, and a net cash position of $237 million.

Outlook and guidance

• Full-year 2024 EBITDA guidance revised to $315–$365 million, reflecting contract delays and softer speculative rig outlook.

• Revenue guidance set at $1.355–$1.405 billion; CapEx guidance unchanged at $400–$450 million.

• Delayed Auriga and Polaris start dates push EBITDA into future periods but are not expected to impact 2025 and beyond.

• Approximately 67% of fleet contracted through 2025, providing strong coverage.

• Additional work for Sevan Louisiana could provide upside to guidance midpoint.