Shelf Drilling has announced results for the second quarter of 2025 ended June 30.
Greg O’Brien, Chief Executive Officer, commented: 'Shelf Drilling continued to deliver strong operating and financial performance in the second quarter of 2025 generating EBITDA of $94 million, corresponding to a 39% margin, and we have revised upwards our financial guidance range slightly for the full year 2025. We also increased our cash position by $19 million and repaid $48 million of debt during the first half of 2025.
Over the last two months, we have secured a series of new contracts and extensions in the Middle East, India, Mediterranean, North Sea and Southeast Asia improving visibility for 2025 and 2026, and we remain actively engaged with customers on additional contracting opportunities in our core markets.'
O’Brien added: 'While the uncertain macroeconomic environment has resulted in near-term market volatility and we see near-term dayrate pressure, we remain confident in the long-term fundamentals for the jack-up market. Shallow water activity will continue to play a crucial role in meeting the world’s expanding energy needs. We remain focused on delivering safe and best-in-class services to our customers and value for our shareholders.'
Second Quarter Highlights and Subsequent Events
- Q2 2025 adjusted revenues of $239.7 million.
- Q2 2025 adjusted EBITDA of $94.0 million, representing an adjusted EBITDA margin of 39%, including $21.0 million adjusted EBITDA from Shelf Drilling (North Sea), Ltd. ("SDNS") and $73.0 million from the rest of the business.
- Q2 2025 net income of $11.2 million.
- Q2 2025 capital expenditures and deferred costs totaled $18.0 million.
- The Company’s cash and cash equivalents balance at June 30, 2025 was $171.5 million.
- Key rig updates include:
- – Five-year contract extension for the High Island V in Saudi Arabia until July 2030.
- – Three-year new contract for the J.T. Angel expected to commence in October 2025.
- – One-year contract extension for the Key Manhattan in Italy until November 2026.
- – One-year contract extension for the Rig 141 in Egypt until February 2027.
- – One well contract for the Shelf Drilling Fortress in the United Kingdom, expected to commence in September 2025.
- – One well contract for the Shelf Drilling Enterprise in Vietnam, expected to commence in September 2025.
- – Trident XII is intended to be divested for non-drilling purposes.
- Financial guidance for the full year 2025 has been revised and is included in the '2025 Financial Guidance' section of the Q2 2025 results highlights presentation on the website.
Second Quarter Results
Adjusted revenues marginally decreased to $239.7 million in Q2 2025 compared to the prior quarter, primarily due to contract completions for two rigs in India and the United Kingdom. This was partially offset by a higher average dayrate for one rig in Denmark and a full quarter of operations for one rig in Egypt following its contract commencement in February 2025.
Effective utilization marginally decreased to 78% in Q2 2025 from 79% in Q1 2025 mainly due to two rigs in India and the United Kingdom that completed contracts in late Q1 2025 and Q2 2025, respectively. This was partially offset by one rig in Egypt following contract start-up in February 2025. Average dayrate increased to $96.7 thousand in Q2 2025 from $94.2 thousand in Q1 2025, primarily due to a higher dayrate for one rig in Denmark.
Total operating and maintenance expenses were relatively unchanged at $129.6 million in Q2 2025 compared to prior quarter. The marginal increase was primarily due to higher operating costs for one rig in Norway that commenced drilling operations in May 2025 and higher expenses for fleet spares, mostly offset by lower costs for two rigs that were redeployed to West Africa in Q1 2025 and two rigs in India that completed their contracts in Q1 2025.
]General and administrative expenses decreased by $2.4 million in Q2 2025 to $14.4 million as compared to $16.8 million in Q1 2025. The sequential decrease was primarily due to a decrease in provision for credit losses and lower compensation and benefits expenses.
Adjusted EBITDA for Q2 2025 was $94.0 million compared to $96.2 million for Q1 2025. The adjusted EBITDA margin of 39% for Q2 2025 marginally decreased as compared to 40% in Q1 2025. The adjusted EBITDA for SDNS sequentially decreased to $21.0 million from $28.0 million, primarily due to one rig in the United Kingdom that completed its contract in late Q2 2025.
Capital expenditures and deferred costs increased to $18.0 million from $15.5 million in Q1 2025. The sequential increase was primarily due to higher spending on fleet spares. This was partially offset by lower regulatory and capital maintenance expenditures for three rigs in West Africa, Denmark and Qatar as well as two rigs redeployed to West Africa in Q1 2025.
Q2 2025 ending cash and cash equivalents balance was $171.5 million. The decrease of $35.1 million from $206.6 million at the end of Q1 2025 was primarily due to debt service payments in Q2 2025 ($47.5 million of principal payments and $67.0 million of interest payments). This was partially offset by a decrease in working capital in Q2 2025.
The Form 10-Q Equivalent, which includes the condensed consolidated financial statements, and a corresponding slide presentation to address the results highlights for Q2 2025 are available on the Company’s website.
Source: Shelf Drilling
