Seadrill Ltd
For the period ended Dec 31, 2025. Filed Feb 26, 2026.
View on SEC.govAbout this filing
A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 26, 2026
SDRL$42.20+2.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-27.
0001628280-25-008662
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-26.
0001737706-26-000010
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONSThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 178 previous paragraphs and 166 current paragraphs.
75 unchanged; 49 reworded; 38 added; 51 removed; 3 previous and 4 current paragraphs rearranged.
Tables are not compared: 17 previous and 16 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (38)
Current report
U.S. global trade policy changes
Current report
Ongoing and recently proposed changes to U.S. global trade policy, along with potential international retaliatory measures, have continued to cause high volatility in global markets and uncertainty around short- and long-term economic impacts in the U.S., including concerns over inflation, recession and slowing growth. We continue to evaluate and monitor the potential impacts of these changes and measures, including the imposition of tariffs and any legal challenges to such tariffs, on our business and operations; however, it is not possible to predict the impact, if any, of any changes or proposed changes to the U.S. global trade policy, or any international retaliatory measures, on our business and operations.
Current report
Source: RigLogix
Current report
Marketed utilization decreased in 2025 compared to the prior year, mainly due to fewer contracted floaters, which were primarily benign environment semi-submersibles.
Current report
Marketed utilization for harsh environment floaters and jackups declined in 2025 compared to the prior year, primarily reflecting reduced capital spending on drilling activities.
Current report
The average number of rigs on contract increased to 10 in the year ended December 31, 2025 from nine in the year ended December 31, 2024, resulting in a $27 million increase in contract revenues in the year ended December 31, 2025 compared to the year ended December 31, 2024.
Current report
The increase was primarily related to the West Auriga and West Polaris having commenced work in Brazil in December 2024 and February 2025, respectively, and therefore, were operating for more days during the year ended December 31, 2025, compared to the year ended December 31, 2024, along with the Sevan Louisianaand West Neptune operating for more days during the year ended December 31, 2025 due to special periodic survey activities during the year ended December 31, 2024.
Current report
The increase was partially offset by the impact of the West Phoenixand West Capella being stacked for the majority of the year ended December 31, 2025, compared to operating for most of the year ended December 31, 2024.
Current report
The increase was driven by higher-than-average dayrates for the West Neptuneand West Vela operating in the U.S. Gulf, the West Auriga and West Polaris operating in Brazil, and the West Elara operating in Norway during the year ended December 31, 2025, compared to the year ended December 31, 2024. These impacts were partially offset by higher-than-average dayrates for the West Phoenix and West Capella during the year ended December 31, 2024, in contrast to the year ended December 31, 2025, during which such rigs were predominately not on contract.
Current report
The economic utilization was 90% forthe year ended December 31, 2025, compared to 95% forthe year ended December 31, 2024, resulting in a $37 million decrease in contract revenues in the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease during the year ended December 31, 2025 was primarily due to unplanned downtime related to regulatory matters impacting the West Tellusand downtime on the West Polaris, West Auriga, West Elara, West Carinaand Sevan Louisiana, partially offset by improved economic utilization on the West Neptune, West Saturnand West Jupiter compared to the year ended December 31, 2024.
Current report
v. Other items
Current report
Contract revenues include add-on services and performance bonuses.
Current report
There was a decrease in contract revenues, from add-on services and performance bonuses of $12 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily attributable to the West Phoenix earning revenues from add-on services and a performance bonus during the year ended December 31, 2024, which did not recur during the year ended December 31, 2025.
Current report
Management contract revenues for the year ended December 31, 2025 increased by $7 million compared to the year ended December 31, 2024, primarily driven by higher management fees and add-on services on the three managed rigs.
Current report
Vessel and rig operating expenses increased by$55 million during the year ended December 31, 2025 compared to the year ended December 31, 2024. During the year ended December 31, 2025, there was a $155 million increase in vessel and rig operating expenses compared to the year ended December 31, 2024, primarily related to the West Aurigaand West Polaris commencing operations in Brazil, of which $43 million related to increased amortization of deferred mobilization costs, along with higher repair and maintenance costs across the fleet. This was partially offset by a $73 million decrease in vessel and rig operating expenses during the year ended December 31, 2025 primarily related to the West Phoenixand West Capella, which were stacked for the majority of the year ended December 31, 2025, and lower managed service agreement fees of $27 million, as the rigs acquired through the Aquadrill transaction are now managed by Seadrill, rather than by third parties.
Current report
The$70 million increase in depreciation and amortization forthe year ended December 31, 2025 compared tothe year ended December 31, 2024 was mainly attributable to the capital projects on the West Auriga and West Polarisand unfavorable contracts being fully amortized during 2024.
Current report
Depreciation increased by $60 million inthe year ended December 31, 2025 compared tothe year ended December 31, 2024, mainly attributable to the capital projects on the West Auriga and West Polaris related to their respective contracts in Brazil.
Current report
Management contract expenses increased by $57 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily attributable to estimated damages following the unfavorable court judgment related to fees for arranging the Sonadrill joint venture.
Current report
iv. Merger and integration related expenses
Current report
Merger and integration related expenses include costs related to Seadrill's acquisition of Aquadrill, completed during the second quarter of the year ended December 31, 2023.
Current report
Merger and integration related expenses decreased by $22 million during the year ended December 31, 2025, compared to the year ended December 31, 2024, primarily attributable to lower integration costs incurred related to the acquisition of Aquadrill.
Current report
i. Loss on impairment of long-lived assets
Current report
Loss on impairment of long-lived assets of $22 million for the year ended December 31, 2025 related to an impairment of the West Eclipse due to a sustained lack of future utilization plans.
Current report
ii . Gain on disposals
Current report
Other financial and non-operating items increased by $7 million during the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily related to the recognition of indirect tax liabilities and a provision related to assets sold in 2023. This was partially offset by favorable foreign exchange movements due to the depreciation of the USD against the Brazilian Real and Norwegian Krone.
Current report
Income tax (expense)/benefit
Current report
The $139 million increase in tax expense during the year ended December 31, 2025 compared to the year December 31, 2024, principally reflects resolution of significant uncertain tax positions in 2024, following settlement with Nigeria’s tax authority, partially offset by the resolution in 2025 of uncertain tax positions for Ghana, along with changes in valuation allowances established for Switzerland and Brazil and changes in the Company's mix of pre-tax income and loss among tax jurisdictions.
Current report
Refer to Note 9 –"Taxation" for further details.
Current report
b) Net cash (used in)/provided by investing activities
Current report
The $113 million net cash used in investing activities duringthe year ended December 31, 2025 was primarily related to capital expenditures on the West Neptune, West Elara, West Capella, West Gemini and West Aurigaand the acquisition of capital spares.
Current report
The$3 million net cash used in financing activities during the year ended December 31, 2025 was related to taxes withheld on vested employee share-based compensation awards.
Current report
In August 2025, the Company issued a NOK403 million guarantee (approximately $40 million as of December 31, 2025) under the Revolving Credit Facility related to the SFL Hercules Ltd. claim, which reduced the available borrowings under the Revolving Credit Facility to approximately $185 million.
Current report
For further details, please refer to Note 24–"Commitments and contingencies".
Current report
Bilateral Facility
Current report
Seadrill Rig Holding Company Limited, a subsidiary of Seadrill Limited, has an uncommitted bilateral facility with DNB Bank ASA (the “Bilateral Facility”), which permits the issuance of letters of credit and bank guarantees for our account. Up to $25 million of reimbursement obligations under the Bilateral Facility are secured on a pari passu basis with the collateral that secures the Credit Agreement, and any additional obligations under the Bilateral Facility would need to be secured by cash or other collateral. We pay a fee of 1% on outstanding letters of credit and bank guarantees issued under the Bilateral Facility. As of December 31, 2025, we had approximately $19 million of outstanding letters of credit and bank guarantees issued under the Bilateral Facility.
Current report
As of December 31, 2025, we do not have long-term debt due within the next 12 months. Principal payments of $625 million will be due in subsequent periods to 2026. Refer to Note 16 –"Debt" for further details of these facilities.
Current report
For a description for our operating lease obligations, refer to Note 18 - "Leases" for further details.
Current report
As of December 31, 2025, we had other commitments that we are contractually obligated to fulfill with cash if the obligations are called. These obligations include guarantees on our performance as it relates to our drilling contracts and as security for a legal matter. We expect to comply with the underlying performance requirements, and we expect obligations under these guarantees will not be called. Refer to Note 24 - "Commitments and contingencies" for further details.
Removed paragraphs (51)
Previous report
Share Repurchase Program
Previous report
On June 25, 2024, the Company announced it had completed the additional $250 million of share repurchases initiated in December 2023, having repurchased an aggregate of 5,250,707 common shares, with a weighted average share price of $47.61, amounting to $250 million.
Previous report
Refer to “Liquidity and Capital Resources - 2) Capital allocation framework and share repurchase program” and Note 22 - "Common shares" for additional information about the Company's share repurchases.
Previous report
Disposal of Jackup Rigs and Equity Interest in Gulfdrill Joint Venture
Previous report
On May 16, 2024, Seadrill entered into a definitive agreement to sell three jackup rigs, the West Castor, West Telesto, and West Tucana, and its 50% equity interest in the joint venture that operated these rigs offshore Qatar, to Seadrill's joint venture partner, Gulf Drilling International, for cash proceeds of $338 million. The closing of the sale occurred in June 2024, and a gain of $203 million, net of transaction costs, was recognized in the second quarter of 2024 associated with the disposal of these assets.
Previous report
On November 23, 2024, Seadrill executed a Sale and Purchase Agreement with Petrovietnam Drilling & Well Service Corporation to divest the West Prospero for cash proceeds of $45 million. The closing of the sale occurred in December 2024, and a gain of $31 million, net of transaction costs, was recognized in the fourth quarter of 2024 associated with the disposal of the jackup rig.
Previous report
OSE Delisting
Previous report
As contemplated by our proxy statement, dated March 21, 2024, we submitted an application to delist our common shares on the OSE, on April 30, 2024. Oslo Bors approved the Company’s delisting from the OSE, following an affirmative shareholder vote at the Company’s Annual General Meeting in April 2024. The last day of trading our common shares on the OSE was September 9, 2024, with our common shares being delisted from the OSE on September 10, 2024.
Previous report
Loss of Foreign Private Issuer Status
Previous report
We determined the Company ceased to qualify as a foreign private issuer effective as of January 1, 2025 and commenced reporting as a domestic issuer under the Exchange Act from that date. As a result, among other consequences, we are no longer permitted to follow certain home country practices in relation to our corporate governance instead of NYSE rules. See Part I, Item 1A, “Risk Factors - Regulatory and Legal Risks - The loss of our status as a “foreign private issuer” could result in additional cost.”
Previous report
In 2020, the oil and gas industry faced significant uncertainty due to a substantial reduction in oil and gas prices caused by the pandemic, despite Brent prices stabilizing in previous years. However, production cuts by OPEC and non-OPEC members, along with effective vaccination campaigns, had positive impacts on the industry, leading to a recovery in oil demand throughout 2021 and 2022.
Previous report
During the first quarter of 2024, Brent oil prices generally rose due to heightened geopolitical risks largely associated with the growing Middle East conflict. Brent crude oil prices were highest in 2024 during April, closing at $91 per barrel. Prices generally declined through the remainder of 2024, with smaller price rallies driven by OPEC and non-OPEC announcements in June and September regarding delayed production increases. Economic weakness and concerns about oil consumption, particularly regarding trends in consumption of diesel and gasoline in China weighed on prices during the second half of 2024.
Previous report
Source: S&P Global.
Previous report
In 2024, marketed utilization declined slightly mainly due to an increase in supply and a larger number of units rolling off contract. As of December 31, 2024, the drillship utilization performed better at around 88 % compared to 78% for semi-submersibles. While the utilization for drillships declined year on year, the benign-environment semi-submersibles utilization saw a slight improvement compared to 2023.
Previous report
Marketed utilization remained steady year on year in the harsh environment floater segment due to the supply and demand balance. Harsh environment jackup utilization improved at a faster rate through 2024 closing the year at 90%. The decrease in harsh environment floater contracted rigs is mainly attributable to the reduction in supply, as a number of harsh environment units were contracted in the benign environment segment.
Previous report
The decrease in managed jackup rigs during 2023 was due to the termination of the SeaMex MSA on November 17, 2023.
Previous report
(1) Decrease is primarily due to divestment of three Qatar jackup rigs, partially offset by increased bareboat charter rate on West Gemini.
Previous report
The average number of rigs on contract decreased from 11 in the year ended December 31, 2023 to 9 in the year ended December 31, 2024, resulting in a $170 million decrease in contract revenues in the year ended December 31, 2024 compared to the year ended December 31, 2023. The decrease is primarily related to the West Auriga and West Polaris operating for fewer days during the year ended December 31, 2024, as the rigs underwent preparation work for contracts with Petrobras in Brazil, with the West Auriga commencing work in late December 2024, and the West Polaris commencing work in the first quarter of 2025. In addition, the Sevan Louisiana was not operating during the first quarter of 2024 due to its special periodic survey, and the West Phoenixwas cold stacked in the fourth quarter of 2024. Therefore, each had fewer days on contract during the year ended December 31, 2024 compared to the year ended December 31, 2023.
Previous report
These decreases were partially offset by the West Capella and West Vela operating for more days during the year ended December 31, 2024, compared to the year ended December 31, 2023, as the rigs were acquired in April 2023 as a part of the Aquadrill acquisition.
Previous report
Economic utilization increased to 95% forthe year ended December 31, 2024, compared to 93% forthe year ended December 31, 2023, resulting in a $24 million increase in contract revenues in the year ended December 31, 2024 compared to the year ended December 31, 2023. The increase was primarily due to planned downtime and operational events related to blowout preventer reliability and weather-related impacts on certain rigs within the fleet in 2023.
Previous report
Please refer to Note 1 - "General information" for reclassifications of reimbursable revenues and reimbursable expenses related to our joint ventures, including$26 million of management contract revenues and management contract expenses forthe year ended December 31, 2023, reclassified to reimbursable revenues and reimbursable expenses, respectively.
Previous report
Management contract revenues for the year ended December 31, 2024 were relatively consistent with the year ended December 31, 2023. An increase in management fees on the three Sonadrill rigs during the year ended December 31, 2024 of $16 million, was offset by a $14 million decrease in management services provided to SeaMex during the year ended December 31, 2023, which ended in November 2023.
Previous report
The increase to leasing revenues of $21 million for the year ended December 31, 2024, compared to the year ended December 31, 2023, is primarily due to an amended bareboat charter rate for West Gemini, retroactively effective from January 1, 2024, as well as a higher bareboat charter rate for the West Castor, which was effective in September 2023, partially offset by a decrease of leasing revenues attributable to the Gulfdrill rigs, disposed in June 2024.
Previous report
Refer to Note 24 - "Related party transactions" for further details and to Note 1 - "General information" for reclassifications of leasing revenues, including $33 million of other revenues for the year ended December 31, 2023, reclassified to leasing revenues.
Previous report
The average number of rigs on contract decreased forthe year ended December 31, 2024 compared tothe year ended December 31, 2023, driven primarily by the West Auriga and West Polaris undergoing preparations for contracts with Petrobras in Brazil duringthe year ended December 31, 2024, with certain operating expenses being capitalized. In addition, there has also been a decrease in costs associated with MSA (as defined below) fees, as the majority of rigs acquired through the Aquadrill transaction are now managed by Seadrill, rather than by third parties. As a result, our vessel and rig operating expenses was $57 million lower forthe year ended December 31, 2024 compared tothe year ended December 31, 2023. This was partially offset by a $36 million increase in vessel and rig operating expenses attributable to the West Vela and West Capella operating for more days during the year ended December 31, 2024, compared to the year ended December 31, 2023, as the rigs were acquired in April 2023 as a part of the Aquadrill acquisition.
Previous report
The$13 million increase in depreciation and amortization forthe year ended December 31, 2024 compared tothe year ended December 31, 2023, was primarily due to a $10 million increase in the depreciation of drilling units and equipment as a result of the additional rigs from the Aquadrill acquisition completed in April 2023, partially offset by the disposal of the Gulfdrill rigs in June 2024.
Previous report
We record depreciation expense to reduce the carrying value of drilling unit and equipment balances to their residual value over their expected remaining useful economic lives.
Previous report
Management contract expenses remained consistent during the year ended December 31, 2024, compared to the year ended December 31, 2023. During the year ended December 31, 2024, there was an increase of $11 million in the managed contract expenses, primarily related to higher repair and maintenance costs pertaining to the Sonadrill managed rigs. This was offset by a decrease of $10 million in the managed contract expenses related to managing the SeaMex jackup units in the first quarter of 2023, and therefore, no longer managed by Seadrill during the year ended December 31, 2024.
Previous report
iv. Selling, general and administrative expenses
Previous report
Selling, general and administrative expenses include the cost of our corporate and regional offices, certain legal and professional fees as well as the remuneration and other compensation of our officers, directors and employees engaged in central management and administration activities. Selling, general and administrative expense increased by$33 million duringthe year ended December 31, 2024 compared tothe year ended December 31, 2023, due to increased onshore employee costs, additional costs attributable to the closure of our London office and increased professional service fees.
Previous report
i. Gain on disposals
Previous report
ii. Share in results in associated companies (net of tax)
Previous report
Share in results in associated companies represents our share of profits or losses in our Sonadrill and Gulfdrill investments accounted under the equity method.
Previous report
The decrease of $46 million in the share in results from associated companies for the year ended December 31, 2024, compared to the year ended December 31, 2023 is due to a loss from Sonadrill, which primarily resulted from the amended bareboat charter rates and increased management fees for the Libongos, Quenguela and West Gemini, effective from January 1, 2024.
Previous report
iii. Other financial items
Previous report
Other financial items remained relatively consistent for the year ended December 31, 2024 compared to the year ended December 31, 2023. Movements to other financial items included increased foreign exchange losses of $19 million during the year ended December 31, 2024, primarily related to the strengthening of the U.S. Dollar against Brazilian Real, Indonesian Rupiah, Norwegian Krone and Angolan Kwanza denominated cash, accounts receivable and prefunding balances. This was partially offset by other financial items during the year ended December 31, 2023, including a make-whole fee of $10 million related to the prepayment of the first lien debt.
Previous report
Income tax benefit/expense
Previous report
The change from an income tax expense of $17 million for the year December 31, 2023, compared to an income tax benefit of $113 million for the year ended December 31, 2024, is primarily related settlements reached with tax authorities, along with the recognition of deferred tax benefits related to the partial release of the valuation allowance in Switzerland and Brazil during the year ended December 31, 2024.
Previous report
Refer to Note 11 –" Taxation" to the Consolidated Financial Statements included herein for further details.
Previous report
Emergence from Chapter 11 Proceedings
Showing the first 40 of 51 passages. Open the source sections for the rest.
Reworded paragraphs (49)
Previous wording
The discussion of our results of operations and liquidity in this section includes comparisons for the years ended December 31, 2024 and December 31, 2023. For a similar discussion, including comparisons for the year ended December 31, 2023, the periods from February 23, 2022 through December 31, 2022 (Successor) and from January 1, 2022 through February 22, 2022 (Predecessor), see Part I, Item 5, "Operating and Financial Review and Prospects” of our annual report on Form 20-F for the year ended December 31, 2023, filed with the SEC on March 27, 2024.
Current wording
The discussion of our results of operations and liquidity in this section includes comparisons for the years ended December 31, 2025 and December 31, 2024. For a similar discussion, including comparisons for the years ended December 31, 2024 and December 31, 2023, see Part II, Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations” of our annual report on Form 10-K for the year ended December 31, 2024, filed with the SEC on February 27, 2025.
Previous wording
As of December 31, 2024, we owned a total of 15 drilling units, of which 11 were operating (inclusive of one leased to the Sonadrill joint venture), one 6th generation drillship was undergoing contract preparations for a contract that commenced during February 2025, and three were cold stacked. The 11 operating units include 10 benign floaters (comprising seven 7th generation drillships, two 6th generation drillships and one benign environment semi-submersible) and one harsh environment unit (comprising of one jackup). In addition to our owned assets, as of December 31, 2024, we managed two drilling units owned by Sonangol.
Current wording
As of December 31, 2025, we owned a total of 15 drilling units, of which 10 were operating, one was undergoing capital upgrade projects for a contract commencing in the second quarter of 2026, one was undergoing repairs and maintenance projects and three were cold stacked. The 10 operating units include nine benign floaters (comprising six 7th generation drillships, two 6th generation drillships and one benign environment semi-submersible) and one harsh environment jackup. In addition to our owned assets, as of December 31, 2025, we managed two drilling units owned by Sonangol.
Previous wording
The below table shows the average annual oil price over the period from 2020 to 2024. The Brent oil price on February 20, 2025 was $76.48.
Current wording
The below table shows the average annual oil price over the period from 2021 to 2025. The Brent oil price on February 20, 2026 was $72.23.
Previous wording
Overall, in recent years, oil prices have generally remained at levels that are supportive of offshore exploration and development activity, and global rig demand has been steady. This level of demand has been sustained by the combination of growing confidence in commodity prices, heightened focus on energy security, and relative attractiveness of offshore plays with respect to both cost and carbon emissions.
Current wording
In recent years, oil prices have generally remained at levels that support offshore exploration and development activity, where global rig demand has been steady. This level of demand was sustained by the combination of commodity prices, heightened focus on energy security, and relative attractiveness of offshore plays with respect to both cost and carbon emissions.
Previous wording
The price of Brent crude oil averaged $80 per barrel in 2024, down from $82 per barrel in 2023. Global growth in the production of oil and slower demand growth has put downward pressure on prices, while heightened geopolitical risks and voluntary production restrictions among OPEC and non-OPEC members has supported prices.
Current wording
The price of Brent oil averaged $68 per barrel in 2025, down from $80 per barrel in 2024. Global growth in oil production and slower growth in demand have put downward pressure on prices.
Previous wording
As a result, uncertainty persists in the market, which is primarily driven by concerns over the global economic conditions. Such concerns have led to continued deferral of offshore capital expenditures and contracting of offshore drilling services, and could have a negative impact on future demand for offshore drilling services, as the industry faces volatility in oil prices and growth trajectory for oil demand. In addition, inflationary pressures may impact the cost base in our industry, including personnel costs, and the prices of goods and services required to reactivate or operate rigs.
Current wording
Uncertainty persists in the market, particularly in light of concerns over global economic conditions, government trade policies and output increases by the OPEC and other major international producers. This has led to the continued deferral of offshore capital expenditures and contracting of offshore drilling services and could have a negative impact on near-term future demand for offshore drilling services. In addition, inflationary pressures may impact the cost base in our industry, including personnel costs and the prices of goods and services required to reactivate or operate rigs. As anticipated, 2025 was a year marked by softer utilization and a corresponding increase in competition, placing downward pressure on near term dayrates; however, as global tendering activity accelerates, we see signs that point towards a market recovery in 2027. In addition, we believe oil majors are calling for renewed focus on large-scale exploration and investment, and there is also growing consensus that U.S. shale production is plateauing. As a result, with projections of growing oil and gas demand and the lagging energy transition, operators are pivoting back towards deepwater exploration in order to replace reserves and sustain production growth.
Previous wording
The below table shows the global number of rigs on contract and marketed utilization for the year ended December 31, 2024, and for each of the four preceding years.
Current wording
The below table shows the global number of rigs on contract and marketed utilization for the years ended December 31, 2025 and December 31, 2024:
Previous wording
The decrease in benign environment jackup rigs during 2024 was due to the disposal of the West Castor, West Tucana, West Telesto and West Prospero. The increase in our owned fleet in 2023 was due to the acquisition of Aquadrill.
Current wording
The decrease in benign environment jackup rigs during 2024 was due to the disposal of the West Castor, West Tucana, West Telesto and West Prospero.
Previous wording
Our contract backlog includes only firm commitments represented by signed drilling contracts. The full contractual operating dayrate may differ to the actual dayrate we ultimately receive. For example, an alternative contractual dayrate, such as a waiting‑on‑weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances. The contractual operating dayrate may also differ to the actual dayrate we ultimately receive because of several other factors, including rig downtime or suspension of operations. In certain contracts, the dayrate may be reduced to zero if, for example, repairs extend beyond a stated period.
Current wording
Our contract backlog includes only firm commitments represented by signed drilling contracts. The full contractual operating dayrate may differ from the actual dayrate we ultimately receive. For example, an alternative contractual dayrate, such as a waiting‑on‑weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances. The contractual operating dayrate may also differ from the actual dayrate we ultimately receive because of several other factors, including rig downtime or suspension of operations. In certain contracts, the dayrate may be reduced to zero if, for example, repairs extend beyond a stated period.
Previous wording
The tables included below set out financial information for the years ended December 31, 2024 and December 31, 2023 (Successor).
Current wording
The tables included below set out financial information for the years ended December 31, 2025 and December 31, 2024.
Previous wording
Contract revenues represent the revenues we earn from contracting drilling units to customers, primarily on a dayrate basis, and are primarily driven by the average number of rigs under contract during a period, the average dayrates earned and economic utilization achieved by those rigs under contract.
Current wording
Contract revenues represent the revenues we earn from contracting our drilling units to customers, primarily on a dayrate basis, and are predominately driven by the average number of rigs under contract during a period, the average dayrates earned and economic utilization achieved by those rigs under contract. We have set out movements in these key indicators of performance in the sections below.
Previous wording
We calculate the average number of rigs on contract by dividing the aggregate days our rigs were on contract during the reporting period by the number of days in that reporting period.
Current wording
We calculate the average number of rigs on contract by dividing the aggregate days our rigs (excluding managed rigs) were on contract during the reporting period by the number of days in that reporting period.
Previous wording
The average contractual dayrate earned for the year ended December 31, 2024 was $296 thousand compared to $284 thousand for the year ended December 31, 2023, resulting in a $22 million increase in contract revenues in the year ended December 31, 2024 compared to the year ended December 31, 2023. Improvements during the year ended December 31, 2024 included higher dayrates for the West Neptune, the West Capella operating at higher dayrates in Indonesia and South Korea, along with a lower contractual rate for the T-15, which was disposed of in July 2023. These improvements were partially offset by the Sevan Louisiana operating at a below average dayrate for a well intervention contract during the year ended December 31, 2024, and the West Auriga earning an above average contractual rate for more days during the year ended December 31, 2023, which ended February 2024.
Current wording
The average contractual dayrate earned for the year ended December 31, 2025 was $326 thousand, compared to $296 thousand for the year ended December 31, 2024, resulting in a $75 million increase in contract revenues in the year ended December 31, 2025 compared to the year ended December 31, 2024.
Previous wording
We define economic utilization 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. If a drilling unit earns its full operating dayrate throughout a reporting period, its economic utilization would be 100%. However, there are many situations that give rise to a dayrate being earned that is less than a contractual operating rate, such as planned downtime for maintenance. In such situations, economic utilization reduces below 100%.
Current wording
We define economic utilization 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. If a drilling unit earns its full operating dayrate throughout a reporting period, its economic utilization would be 100%. However, there are many situations that give rise to a dayrate being earned that is less than the contractual operating rate, such as planned downtime for maintenance. In such situations, economic utilization reduces below 100%.
Previous wording
We receive fees for the mobilization of our rigs, where the associated revenue is recognized ratably over the expected term of the related drilling contract. As a result, we record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are rendered over the initial term of the related drilling contract.
Current wording
We receive fees for the mobilization of our rigs, where the associated revenue is recognized ratably over the expected term of the related drilling contract. As a result, we record a contract liability for mobilization fees received, which is amortized ratably to contract revenues as services are rendered over the initial term of the related drilling contract.
Previous wording
Amortization of deferred mobilization revenues decreased by $19 million during the year ended December 31, 2024, compared tothe year ended December 31, 2023. This was primarily related to the West Capella, West Polaris and West Phoenix, as their respective contracts ended in 2024.
Current wording
The amortization of deferred mobilization revenues increased by $27 million during the year ended December 31, 2025, compared tothe year ended December 31, 2024. The increase was primarily attributable to mobilization fees received on the West Capella, West Polaris and West Auriga, which commenced operations within the last 13 months.
Previous wording
Forthe year ended December 31, 2024, reimbursable revenues primarily related to rigs managed for the Sonadrill joint venture for long term maintenance projects on the Libongos and Quenguela, and forthe year ended December 31, 2023, reimbursable revenues related to services provided across various customers.
Current wording
Forthe years ended December 31, 2025 and December 31, 2024, reimbursable revenues primarily related to rigs managed for the Sonadrill joint venture for long term maintenance projects on the Libongos and Quenguela, along with some reimbursable revenues related to services provided across various customers.
Previous wording
The increase forthe year ended December 31, 2024 compared tothe year ended December 31, 2023 was primarily due to additional reimbursable services provided to the Libongos and Quenguela for long-term maintenance.
Current wording
The$12 million decrease forthe year ended December 31, 2025 compared tothe year ended December 31, 2024 was primarily dueto reduced reimbursable services provided to the Libongos and Quenguela for long-term maintenance during the year ended December 31, 2025, compared to the year ended December 31, 2024.
Previous wording
Management contract revenues include revenues related to contracts where we provide management, operational and technical support services and comprise revenue from our joint venture, Sonadrill, relating to the Libongos, Quenguela and the West Gemini.
Current wording
Management contract revenues include revenues related to contracts where we provide management, operational and technical support services and are comprised of revenues from our joint venture, Sonadrill, relating to the Libongos, Quenguela and West Gemini.
Previous wording
Refer to Note 24 - "Related party transactions" for further details on these related parties.
Current wording
Refer to Note 21 - "Related party transactions" for further details.
Previous wording
Leasing revenues relate to the charter of the West Castor, West Telesto and West Tucana to Gulfdrill prior to disposal in June 2024, and West Gemini to Sonadrill.
Current wording
Leasing revenues relate to the charter of the West Gemini to Sonadrill and the West Castor, West Telesto and West Tucana to Gulfdrill prior to their disposal in June 2024.
Previous wording
Depreciation increased by $10 million inthe year ended December 31, 2024 compared tothe year ended December 31, 2023, primarily due to the additional rigs from the Aquadrill acquisition completed in April 2023, partially offset by the disposal of the Gulfdrill rigs in June 2024.
Current wording
Leasing revenues decreased by $21 million for the year ended December 31, 2025 compared to the year ended December 31, 2024, primarily attributable to the disposal of the Gulfdrill rigs in June 2024.
Previous wording
Total operating expenses include vessel and rig operating expenses, depreciation of drilling units and equipment, amortization of intangibles, reimbursable expenses, management contract expenses, selling, general and administrative expenses and merger and integration related expenses.
Current wording
Total operating expenses include vessel and rig operating expenses, reimbursable expenses, depreciation of drilling units and equipment, amortization of intangibles, management contract expenses, merger and integration related expenses, and selling, general and administrative expenses.
Previous wording
Vessel and rig operating expenses represent the costs we incur to operate a drilling unit that is either in operation or stacked. This includes the remuneration of offshore crews, rig supplies, expenses for repair and maintenance and onshore support costs. Vessel and rig operating expenses are mainly driven by rig activity. On average, we incur higher vessel and rig operating expenses when a rig is operating compared to when it is stacked. For stacked rigs, we incur higher vessel and rig expenses for warm stacked rigs compared to cold stacked rigs. We incur one-time costs for activities such as preservation and severance when we cold stack a rig. We also incur significant costs when re-activating a rig from cold stack, a proportion of which is expensed as incurred. Where a rig is leased to another operator, the majority of vessel and rig expenses are incurred by the operator.
Current wording
Vessel and rig operating expenses represent the costs we incur to operate a drilling unit that is either in operation or stacked. This includes the remuneration of offshore crews, rig supplies, expenses for repair and maintenance, onshore support costs, and the amortization of deferred mobilization costs. Vessel and rig operating expenses are mainly driven by rig activity. On average, we incur higher vessel and rig operating expenses when a rig is operating compared to when it is stacked. For stacked rigs, we incur higher vessel and rig expenses for warm stacked rigs compared to cold stacked rigs. We incur one-time costs for activities such as preservation and severance when we cold stack a rig. We also incur significant costs when re-activating a rig from cold stack, a proportion of which is expensed as incurred. Where a rig is leased to another operator, the majority of vessel and rig expenses are incurred by the operator.
Previous wording
Amortization increased by $3 million during the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to unfavorable contracts being fully amortized related to the West Polaris, which was fully amortized in 2023, and the West Auriga and West Vela, which were fully amortized in February 2024. These were partially offset by lower amortization related to favorable contracts for the West Phoenix, Quenguela, West Capella and SeaMex, which were fully amortized during 2023.
Current wording
Amortization expense increased by $10 million during the year ended December 31, 2025 compared to the year ended December 31, 2024 mainly attributable to unfavorable contracts being fully amortized related to the West Jupiter and West Tellus during the third quarter of 2025, and the West Auriga and West Vela during the year ended December 31, 2024.
Previous wording
Management contract expenses include costs related to Sonadrill's rigs, Quenguela and Libongos, and the Seadrill rig novated to Sonadrill, the West Gemini. For the year ended December 31, 2023, management contract expenses also included SeaMex's five jackup units.
Current wording
Management contract expenses include costs related to Sonadrill's rigs, Quenguela and Libongos, and the Seadrill rig leased to Sonadrill, the West Gemini.
Previous wording
Other operating items include gains on the sale of assets and other operating income.
Current wording
Other operating items include loss on impairment of long-lived assets, gain on the sale of assets and other operating income.
Previous wording
Gain on disposals of$234 million forthe year ended December 31, 2024 relates to the disposal of the West Castor, West Telesto and West Tucana jackup rigs, along with our 50% equity interest in the Gulfdrill joint venture during the second quarter of 2024, and the disposal of the West Prospero during the fourth quarter of 2024, compared to the gain on disposal of$14 million duringthe year ended December 31, 2023 of capital spares relating to jackup rigs and to the West Hercules, and spare parts on previously recycled rigs.
Current wording
Gain on disposal of $234 million during the year ended December 31, 2024 related to the disposal of the West Castor, West Telesto and West Tucana jackup rigs, along with our 50% equity interest in the Gulfdrill joint venture during the second quarter of 2024, and the disposal of the West Prospero during the fourth quarter of 2024.
Previous wording
Other operating income forthe year ended December 31, 2024 relates to the recovery of historical import duties in the form of tax credits following the approval by the applicable tax authorities.
Current wording
Other operating income for the year ended December 31, 2024 related to the recovery of historical import duties in the form of tax credits following the approval by the applicable tax authorities, which did not recur during the year ended December 31, 2025.
Previous wording
Interest income relates to interest earned on bank deposits. The decrease in interest income forthe year ended December 31, 2024 compared tothe year ended December 31, 2023, is primarily attributable to the decrease in cash and cash equivalents.
Current wording
Interest income relates to interest earned on bank deposits. The$11 million decrease in interest income forthe year ended December 31, 2025 compared tothe year ended December 31, 2024, was primarily attributable to lower cash balances.
Previous wording
So long as Seadrill is able to meet its net leverage and liquidity targets on a forward-looking basis, as well as comply with its Revolving Credit Facility covenant requirements, Seadrill would seek to provide a return to our shareholders of at least 50% of Free Cash Flow (defined as cash flows from operating activities minus capital expenditures) in the form of share repurchases or dividends. Seadrill will consider additional returns to shareholders from the proceeds of any asset sales in the absence of identified, accretive opportunities. Dividends and share repurchases will be authorized and determined by the Board of Directors in its sole discretion and depend upon a number of factors, including those described above, its future prospects, market trend evaluation and such other factors as the Board of Directors may deem relevant. Please see Part I, Item 1A, "Risk Factors — Financial and Tax Risks — We may be unable to meet our capital allocation framework goal of returning at least 50% of Free Cash Flow to shareholders through dividends and share repurchases, which could decrease expected returns on an investment in our Shares".
Current wording
Dividends and share repurchases will be authorized and determined by the Board of Directors in its sole discretion and depend upon a number of factors, including those described above, its future prospects, market trend evaluation and such other factors as the Board of Directors may deem relevant. Please see Part I, Item 1A, "Risk Factors — Financial and Tax Risks —We may be unable to meet our capital allocation framework goal of returning at least 50% of Free Cash Flow to shareholders through dividends and share repurchases, which could decrease expected returns on an investment in our Shares".
Previous wording
During the second quarter of 2024, the Company's Board of Directors authorized a new $500 million share repurchase program that will run for a period of two years from June 25, 2024, the date of completion for the programs initiated in 2023. In furtherance of the Current Repurchase Program, the Board authorized the Company to purchase up to $200 million of the Company's common shares (the "First Tranche") by September 30, 2024. The Company repurchased an aggregate of 4,213,349 common shares, with a weighted average share price of $46.77, amounting to $192 million of the First Tranche. On September 30, 2024, the Company cancelled the 4,213,349 treasury shares repurchased under the First Tranche.
Current wording
During the second quarter of 2024, the Board of Directors authorized a new $500 million share repurchase program that will run for a period of two years from June 25, 2024, the date of completion for the programs initiated in 2023 (the "Current Repurchase Program"). In furtherance of the Current Repurchase Program, the Board authorized the Company to purchase up to $200 million of the Company's common shares (the "First Tranche") by September 30, 2024. The Company repurchased an aggregate of 4,213,349 common shares, with a weighted average share price of $46.77, amounting to $192 million of the First Tranche. On September 30, 2024, the Company cancelled the 4,213,349 treasury shares repurchased under the First Tranche.
Previous wording
In aggregate, during the year ended December 31, 2024, the Company repurchased approximately 11.6 million common shares amounting to $527 million with a weighted average share price of $45.31, compared to 6.2 million common shares amounting to $266 million, with a weighted average share price of $43.12, during the year ended December 31, 2023. As of December 31, 2024, $208 million of the $500 million authorized amount remained available under the Current Repurchase Program.
Current wording
In aggregate, during the year ended December 31, 2024, the Company repurchased approximately 11.6 million common shares amounting to $527 million with a weighted average share price of $45.31. The Company did not repurchase any common shares during the year ended December 31, 2025.
Previous wording
Seadrill successfully completed its comprehensive restructuring and emerged from Chapter 11 proceedings on February 22, 2022 (refer to Note 4 – "Chapter 11" of the accompanying financial statements). Since our emergence from Chapter 11, we successfully refinanced the First Lien Facility (as defined below) and the secured second lien debt facility ("Second Lien Facility") in July 2023 (refer to Note 19 – "Debt" of the accompanying financial statements). Our cash on hand, available borrowings under the Revolving Credit Facility, and contract and other revenues are expected to generate sufficient cash flow to fund our anticipated debt service and working capital requirements for the next twelve months.
Current wording
As of December 31, 2025, Seadrill had available liquidity of $524 million, which consisted of unrestricted cash of $339 million, and available borrowings under our Revolving Credit Facility of $185 million. Our cash on hand, available borrowings under the Revolving Credit Facility, and contract and other revenues are expected to generate sufficient cash flow to fund our anticipated debt service and working capital requirements for the next 12 months.
Previous wording
As of December 31, 2024, Seadrill had available liquidity of $703 million, which consisted of unrestricted cash of $478 million, and available borrowings under our Revolving Credit Facility of $225 million. The below table shows unrestricted cash balances, and total available liquidity, as of each date presented.
Current wording
The below table shows unrestricted cash balances and total available liquidity as of each date presented:
Previous wording
a) Net cash provided by operating activities
Current wording
a) Net cash (used in)/provided by operating activities
Previous wording
b) Net cash provided by investing activities
Current wording
Net cash used in operating activities duringthe year ended December 31, 2025 was $28 million compared to net cash provided by operating activities of $88 million forthe year ended December 31, 2024. The $116 million decrease was primarily related to decreased operating results and increased disbursements to suppliers and a payment of damages for a legal proceeding, partially offset by reduced mobilization costs incurred inthe year ended December 31, 2025 compared tothe year ended December 31, 2024, which primarily related to contract preparation costs for the West Polaris and West Auriga.
Previous wording
The $226 million cash provided by investing activities duringthe year ended December 31, 2024 is primarily related to the proceeds received on disposal of our three jackup rigs, West Castor, West Telesto and West Tucana, together with our 50% equity interest in the Gulfdrill joint venture of $338 million during the second quarter, and the proceeds related to the disposal of the West Prospero jackup rig of $45 million during the fourth quarter. This was partially offset by capital expenditures of $157 million primarily related to capital upgrades on the West Auriga and West Polaris during their preparations for Petrobras contracts, with the West Auriga having started in December 2024 and West Polaris starting during the first quarter of 2025.
Current wording
The $226 million net cash provided by investing activities duringthe year ended December 31, 2024 was primarily related to the proceeds received on the disposal of our three jackup rigs, West Castor, West Telesto and West Tucana, together with our 50% equity interest in the Gulfdrill joint venture of $338 million during the second quarter, and the proceeds related to the disposal of the West Prospero jackup rig of $45 million during the fourth quarter. This was partially offset by capital expenditures of $157 million primarily related to capital upgrades on the West Auriga and West Polaris during their preparations for Petrobras contracts, with the West Auriga having started in December 2024 and West Polaris starting during the first quarter of 2025.
Previous wording
The $532 million cash used in financing activities during the year ended December 31, 2024 is related to share repurchases.
Current wording
The$532 million net cash used in financing activities during the year ended December 31, 2024 was related to share repurchases.
Previous wording
An overview of our debt as of December 31, 2024, divided into (i) secured debt and (ii) unsecured senior convertible notes, is presented in the table below:
Current wording
An overview of our debt as of December 31, 2025, divided into (i) secured debt and (ii) unsecured debt, is presented in the table below:
Showing the first 40 of 49 pairs. Open the source sections for the rest.
Rearranged current paragraphs (4)
Current report — wording carried from elsewhere
Refer to Note 21 - "Related party transactions" for further details.
Current report — wording carried from elsewhere
ii. Other financial and non-operating items
Current report — wording carried from elsewhere
So long as Seadrill is able to meet its net leverage and liquidity targets on a forward-looking basis, as well as comply with its Revolving Credit Facility covenant requirements, Seadrill would seek to provide a return to our shareholders of at least 50% of Free Cash Flow (defined as cash flows from operating activities minus additions to drilling units and equipment) in the form of share repurchases or dividends. Seadrill will consider additional returns to shareholders from the proceeds of any asset sales in the absence of identified, accretive opportunities.
Current report — wording carried from elsewhere
As of December 31, 2025, $208 million of the $500 million authorized amount remained available under the Current Repurchase Program.
Rearranged previous paragraphs (3)
Previous report — wording carried elsewhere
During the second quarter of 2024, as announced on May 16, 2024, the Company's Board of Directors authorized a new $500 million share repurchase program that will run for a period of two years from June 25, 2024, the date of completion for the programs initiated in 2023. Under the Current Repurchase Program, the Company repurchased an aggregate of 6,714,252 Shares, with a weighted average share price of $43.52, amounting to $292 million. As of December 31, 2024, $208 million of the $500 million authorized amount remained available.
Previous report — wording carried elsewhere
Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax benefits of tax attributes.
Previous report — wording carried elsewhere
Critical accounting estimates in relation to fresh-start valuation of our drilling units and investments included: Off-contract revenue estimates, off-contract operating expense assumptions, contract probabilities, the WACC rate used to discount free cash flow projections and drilling unit market valuations.