Shelf Drilling (North Sea) (SDNS) Q4 2024 earnings summary

Executive summary

• Achieved $351M adjusted EBITDA for FY 2024, exceeding guidance, with a 36% margin and $81M net income attributable to controlling interest; maintained 99.3% uptime and industry-leading safety (TRIR 0.18 vs. IADC avg. 0.46).

• Ended 2024 with a $2.1B contract backlog across 31 rigs, including $600M for four suspended rigs in Saudi Arabia, and added over $900M in new backlog at a weighted average dayrate of ~$129k/d.

• Overcame Saudi Aramco rig suspensions and regulatory delays, redeploying rigs to West Africa and securing new contracts in Norway and Nigeria.

• Signed a strategic alliance/MoU with Arabian Drilling to expand premium rig deployment in West Africa, Southeast Asia, and internationally.

• Shelf Drilling (North Sea) Ltd. became a wholly-owned subsidiary in October 2024, operating five rigs focused on shallow water operations in the UK, Denmark, Qatar, Vietnam, and Norway.

Financial highlights

• Q4 2024 adjusted revenue was $225M, with adjusted EBITDA of $85M (38% margin); full year adjusted revenue reached $972M and adjusted EBITDA was $351M, exceeding guidance.

• Q4 net income attributable to controlling interest was $24M, including a $31M gain from Trident VIII insurance recovery; FY 2024 net income was $81M.

• Year-end consolidated cash balance was $152M, with total liquidity of $277M (including $125M undrawn RCF); SDNS cash and equivalents at $21.4M.

• FY 2024 capital expenditures and deferred costs totaled $152M, at the lower end of guidance.

• Shelf Drilling (North Sea) Ltd. total revenues reached $150.4M in 2024, up from $137.0M in 2023, but net loss widened to $(68.6)M due to higher costs and interest expense.

Outlook and guidance

• 2025 adjusted EBITDA guidance is $330–$380M, with SDNS expected to contribute $85–$100M; 2025 capital spending projected at $110–$140M, including $25–$30M at SDNS.

• Revenues and utilization are expected to improve in H2 2025 as rigs mobilized from the Middle East return to service in West Africa; no further rig mobilizations planned for 2025.

• The longest drilling contract extends through November 2026, providing revenue visibility; company expects to be impacted by global minimum tax rules in 2025.