Seadrill Stock

Seadrill Limited (Seadrill) operates as an offshore drilling contractor providing offshore drilling services to the oil and gas industry worldwide.

The company’s primary business is the ownership and operation of drillships, semi-submersible rigs, and jackup rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. The company contracts its drilling units to drill wells for its customers on a dayrate basis. The company’s customers are oil super-majors, state-owned national oil companies, and independent oil and gas companies.

As of December 31, 2022, the company owned 14 drilling rigs, and managed a further seven rigs that are owned by third parties; five rigs owned by SeaMex and two rigs owned by Sonangol.

The company operates through Floaters; Jackup Rigs, and Harsh Environment segments.

Floaters

The company’s floaters segment encompasses its drillships and benign environment semi-submersible rigs.

Drillships

Drillships are self-propelled ships equipped for drilling offshore in water depths ranging from 1,000 to 12,000 feet and are positioned over the well through a computer-controlled thruster system. Drillships are suitable for drilling in remote locations because of their mobility and large load-carrying capacity. Depending on country of operation, drillships operate with crews of 120 to 160 people.

Semi-Submersible Drilling Rigs

Semi-submersibles are self-propelled drilling rigs consisting of an upper working and living quarters deck connected to a lower hull consisting of columns and pontoons. Such rigs operate in a semi-submerged floating position, in which the lower hull is below the waterline and the upper deck protrudes above the surface.

Semi-submersible rigs can be either moored or dynamically positioned. Moored semi-submersible rigs are positioned over the wellhead location with anchors and typically operate in water depths ranging up to 1,500 feet. Dynamically positioned semi-submersible rigs are positioned over the wellhead location by a computer-controlled thruster system and typically operate in water depths ranging from 1,000 to 12,000 feet.

Jackup Rigs

Jackup rigs are mobile, self-elevating drilling platforms equipped with legs that are lowered to the seabed. A jackup rig is mobilized to the drill site with a heavy lift vessel or a wet tow. At the drill site, the legs are lowered until they penetrate the sea bed and the hull is elevated to an approximate operational airgap of 50 to 100 feet depending on the expected environmental forces. After completion of the drilling operations, the hull is lowered to floating draft, the legs are raised and the rig can be relocated to another drill site.

Harsh Environment

Harsh environment rigs include both semi-submersibles and jackups that have a number of design modifications to be able to handle weather conditions as seen in the North Sea and Canada.

Markets

The company’s operations are geographically dispersed in oil and gas exploration and development areas throughout the world. The company operates in a single, global offshore drilling market, as its drilling rigs are mobile assets and are able to be moved according to prevailing market conditions.

Seasonality

The company has operations in certain parts of the world where weather conditions during parts of the year (year ended December 31, 2022).

Customers

The company’s customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. In addition, the company provides management services to certain affiliated entities.

Drilling Contracts

In general, the company contracts its drilling units to oil and gas companies to provide offshore drilling services at an agreed dayrate for a fixed contract term or on a well completion basis.

Investments in Non-Consolidated Entities

In addition to owning and operating the company’s offshore drilling units through its subsidiaries, it had investments in other offshore drilling and oil services companies. Below are the company’s significant equity investments:

Gulfdrill LLC (Gulfdrill)

Seadrill owns a 50% stake in Gulfdrill, a joint venture that operates five premium jackups in Qatar with Qatargas. The remaining 50% interest is owned by Gulf Drilling International (GDI), which manages all five rigs. Three of Seadrill's jackup rigs are leased to the joint venture, namely the West Castor, West Telesto, and West Tucana through a bareboat charter arrangement on a fixed dayrate basis. The two additional units are leased from a third-party shipyard, and all costs associated with these units are borne by Gulfdrill.

Sonadrill Holding Ltd (Sonadrill)

Sonadrill is a joint venture that operates drillships focusing on opportunities in Angolan waters. The company has a 50% ownership stake in Sonadrill. The remaining 50% interest is owned by Sonangol. Both the company and Sonangol agreed to bareboat two units each into the joint venture with the company due to manage the two Sonangol owned drillships. On October 1, 2019, the first bareboat and management agreements for the Sonangol drilling unit, Libongos, became effective. The rig commenced its first drilling contract on October 10, 2019. The Libongos is operating in Angola while the Quenguela is contracted to start with Total in early 2022.

Sonadrill Holding Ltd (Sonadrill)

Sonadrill is a joint venture that operates drillships focusing on opportunities in Angolan waters. The company has a 50% ownership stake in Sonadrill. The remaining 50% interest is owned by Sonangol EP (Sonangol). Both companies initially committed to charter two units each into the joint venture. As of December 31, 2022, Sonadrill leased three drillships, including the Libongos and Quenguela from Sonangol, and the West Gemini from Seadrill. Seadrill manages all three units for the joint venture.

Paratus Energy Services Ltd

Paratus Energy Services Ltd (PES) holds investments in SeaMex (100%), Seabras Sapura (50%), and Archer (15.7%). As part of Seadrill's comprehensive restructuring process, the company disposed of 65% of the company’s equity interest in PES in January 2022.

SeaMex Limited (SeaMex), a fully owned subsidiary of PES, is a drilling contractor that owns and operates five jackup drilling units located in Mexico under contract with Pemex. SeaMex was a 50% owned joint venture until November 2, 2021, when PES acquired the remaining 50% interest in SeaMex through a restructuring arrangement. As Seadrill held a 100% interest in PES at that time, it consolidated the results of SeaMex, as a discontinued operation, between November 2021 and January 2022.

Seabras Sapura (Paratus Energy Services Ltd) is a group of related companies that own and operate six pipe-laying service vessels in Brazil. PES has a 50% ownership stake in each of these companies with the remaining 50% interest being owned by Sapura Energy. Archer is a global oilfield service company that specializes in drilling and well services. PES owns 15.7% of the issued and outstanding common shares of Archer and convertible loan note that has a conversion right into equity of Archer.

On September 30, 2022, Seadrill entered into share purchase agreements with certain other existing shareholders of PES to dispose of the company’s remaining 35% shareholding in PES. The sale closed on February 24, 2023. In connection with the sale, on March 14, 2023, the company provided each of PES and SeaMex Holdings with a termination notice regarding the Paratus MSA and the SeaMex MSA, respectively. The Paratus MSA will terminate effective July 12, 2023; and the SeaMex MSA will terminate effective September 10, 2023.

History

Seadrill Limited was founded in 2005. The company was incorporated in Bermuda under the Companies Act in 2005.