Seadrill has announced its second quarter 2025 results.
Quarterly Highlights
- Reported a net loss of $42 million and Adjusted EBITDA (1) of $106 million
- Announced contract awards for West Vela and Sevan Louisiana in the U.S. Gulf
- Closed the second quarter with $419 million cash and net leverage (2) of 0.77
'We are pleased that the active customer dialogues referenced in the prior quarter are converting into new contracts. The West Vela's continued exceptional operating performance has enabled it to secure work in a competitive environment, and the Sevan Louisiana contract award expands our customer base, creating access to a broader spectrum of work opportunities. Furthermore, we expect material progress on additional fixtures in the near future,' said President and CEO Simon Johnson. 'With our disciplined approach to contracting, robust balance sheet and relentless focus on setting the standard in our operations, we remain confident in delivering long-term shareholder value as the market improves.'
Financial and Operational Results
Second quarter 2025 total operating revenues increased $42 million to $377 million, compared to $335 million in the prior quarter. Contract revenues, up $40 million to $288 million, drove almost all the improvement. The increase in contract revenues was primarily attributable to a quarter-on-quarter improvement in economic utilization(3) and an increase in operating days for West Polaris and West Neptune, partially offset by fewer operating days for West Capella.
Management contract revenues were $65 million, a $4 million sequential improvement, reflecting an agreed upon increase to the daily management fee Seadrill earns for providing management, operational and technical support to Sonadrill. The increase was retroactively applied from January 1, 2025.
Second quarter 2025 total operating expenses increased by $54 million to $371 million, compared to $317 million in the previous quarter. The increase is primarily attributable to the recognition of $51 million management contract expenses following an unfavorable legal judgment. As previously disclosed, the impact to 2025 Adjusted EBITDA(1) is estimated to be $10 million, $8 million of which has been recognized through the end of the second quarter.
Net loss for the second quarter was $42 million. Adjusted EBITDA(1) was $106 million, compared to $73 million in the prior quarter.
Balance Sheet and Cash Flow
At quarter-end, Seadrill had gross principal debt of $625 million and $419 million in cash and cash equivalents, including $26 million of restricted cash, for a net debt position of $206 million. Net cash provided by operating activities during the second quarter of 2025 was $11 million, including additions of $44 million for capitalized long-term maintenance. This was negatively impacted by a build in accounts receivables resulting from additional operating days and settlement of project costs incurred in prior periods. Payments for capital additions captured in net cash used in investing activities were $23 million. Free Cash Flow(1) was negative $12 million.
Commercial Activity and Order Backlog
- The West Vela was awarded a two-well contract by Talos Energy in the U.S. Gulf. The estimated term is 90 days, and the contract is expected to commence mid-November 2025.
- The Sevan Louisiana was awarded a three-well contract by Murphy Oil in the U.S. Gulf. The contract commenced in August 2025 and the rig is expected to work into November 2025.
As of August 6, 2025, Seadrill’s Order Backlog(4) was approximately $2.5 billion. The Company today provided an updated fleet status report on the Investor Relations section of its website, www.seadrill.com.
| (1) These are non-GAAP measures. For a definition and a reconciliation to the most comparable GAAP measure, see Appendices. |
| (2) Net leverage is calculated as net debt (excluding restricted cash of $26 million) as of June 30, 2025 of $232 million, divided by Adjusted EBITDA(1) for the 12 month period ended June 30, 2025 of $300 million. |
| (3) Economic utilization is defined as dayrate revenue earned during the period, excluding bonuses, divided by the contractual operating dayrate, multiplied by the number of days on contract in the period. |
| (4) Order Backlog includes all firm contracts at the contractual operating dayrate multiplied by the number of days remaining in the firm contract period. It includes management contract revenues and leasing revenues from bareboat charter arrangements and excludes revenues for mobilization, demobilization, contract preparation, and other incentive provisions and backlog relating to non-consolidated entities. |
Source: Seadrill
