Seadrill Ltd

Previous wording

Seadrill Limited is an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Our primary business is the ownership and operation of drillships and semi-submersible rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. We contract our drilling units to drill wells for our customers on a dayrate basis. Our customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. In addition, we provide management services to certain affiliated entities.

Current wording

We are an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Our primary business is the ownership and operation of drillships and semi-submersible rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. We contract our drilling units to drill wells for our customers on a dayrate basis. Our customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. In addition, we provide management services to certain affiliated entities.

Previous wording

As of September 30, 2025, we owned a total of 15 drilling rigs, of which nine were operating, two were undergoing capital upgrade projects, one was preparing for contract commencement in late 2025 or early 2026, following completion of its special periodic survey, and three were stacked. The operating units include eight floaters (comprising six 7th generation drillships, one 6th generation drillship and one benign environment semi-submersible) and one harsh environment jackup. In addition to our owned assets, as of September 30, 2025, we managed two 7th generation drillships owned by Sonangol EP.

Current wording

As of March 31, 2026, we owned a total of 15 drilling rigs. In addition to our owned assets, as of March 31, 2026, we managed two 7th generation drillships owned by Sonangol EP.

Previous wording

The table below shows the average oil price for thenine months ended September 30, 2025 andyear ended December 31, 2024. The Brent oil price as of November 3, 2025 was $65/bbl.

Current wording

The table below shows the average oil price for thethree months ended March 31, 2026 andyear ended December 31, 2025. The Brent oil price as of May 6, 2026 was $101/bbl.

Previous 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.

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. Recently, however, the ongoing conflict in Iran and the unprecedented closure of the Strait of Hormuz have caused significant disruption in the normal flow of oil, refined petroleum products, and related commodities, resulting in higher oil prices.

Previous wording

Uncertainty persists in the market in light of concerns over global economic conditions, government trade policies and output increases by the Organization of Petroleum Exporting Countries 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 is shaping up to be 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.

Current wording

Uncertainty persists in the market, particularly in light of concerns over global economic conditions (including the current conflict in Iran), government trade policies and output increases by the Organization of the Petroleum Exporting Countries and other major international producers. This has led to the continued deferral of offshore capital expenditures 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.

Previous wording

The table below shows the global number of rigs on contract and marketed utilization for the nine months ended September 30, 2025 and year ended December 31, 2024:

Current wording

The table below shows the global number of rigs on contract and marketed utilization for the three months ended March 31, 2026 and year ended December 31, 2025:

Previous wording

The average number of rigs on contract remained consistent at 10 in each of the three months ended September 30, 2025 and 2024. However, there was a minor increase in the total days on contract resulting in higher contract revenues of $2 million in the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Current wording

The average number of rigs on contract remained consistent at nine in each of the three months ended March 31, 2026 and 2025; however, there was a decrease in the total days on contract resulting in lower contract revenues of $11 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

The average contractual dayrate earned during the three months ended September 30, 2025 was $330 thousand compared to $304 thousand during the three months ended September 30, 2024, resulting in a $22 million increase in contract revenues in the three months ended September 30, 2025 compared to the three months ended September 30, 2024.

Current wording

The average contractual dayrate earned during the three months ended March 31, 2026 was $343 thousand compared to $323 thousand during the three months ended March 31, 2025, resulting in a $5 million increase in contract revenues in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

The increase was driven by higher-than-average dayrates for the West Auriga and West Polaris operating in Brazil and the West Neptuneand West Vela operating in the U.S. Gulf of America during the three months ended September 30, 2025, compared to the three months ended September 30, 2024. These impacts were partially offset by higher-than-average dayrates for the West Phoenix and West Capella during the three months ended September 30, 2024, in contrast to the third quarter of 2025, during which the rigs were not on contract, along with a decreased operating dayrate for the Sevan Louisiana operating in the U.S. Gulf of America during the three months ended September 30, 2025, compared to the three months ended September 30, 2024.

Current wording

The increase was driven by higher dayrates for the West Jupiter, West Auriga, West Polaris, West Tellus and West Carina operating in Brazil, the West Neptune operating in the U.S. Gulf of America, and the West Elara operating in Norway during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. These impacts were partially offset by lower dayrates for the West Vela and Sevan Louisiana operating in the U.S. Gulf of America during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.

Previous wording

The economic utilization for the three months ended September 30, 2025 was 91%, compared to 95% for the three months ended September 30, 2024, resulting in an $11 million decrease in contract revenues in the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease during the third quarter of 2025 was primarily due to downtime on the West Carinaand West Polaris, offset by improved economic utilization on the West Tellus compared to the third quarter of 2024.

Current wording

The economic utilization for the three months ended March 31, 2026 was 95%, compared to 84% for the three months ended March 31, 2025, resulting in a $36 million increase in contract revenues in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to improved economic utilization on the West Tellus, West Polaris, West Aurigaand Sevan Louisiana during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

Previous wording

The amortization of deferred mobilization revenues increased by $9 million during the three months ended September 30, 2025, compared to the three months ended September 30, 2024. The increase was primarily attributable to mobilization fees received on the West Polaris and West Auriga, which commenced operations within the last 12 months.

Current wording

The amortization of deferred mobilization revenues decreased by $1 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily attributable to mobilization fees received on the West Capella recognized during the first quarter of 2025.

Previous wording

For the three months ended September 30, 2025 and the three months ended September 30, 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.

Current wording

For the three months ended March 31, 2026 and the three months ended March 31, 2025, reimbursable revenues primarily related to rigs managed for the Sonadrill joint venture for long-term maintenance projects on the Libongos and Quenguela, along with reimbursable revenues related to services provided across various customers.

Previous wording

The $9 million decrease in the three months ended September 30, 2025 compared to the three months ended September 30, 2024 was primarily due to reduced reimbursable services provided to the Libongos and Quenguela for long-term maintenance during the third quarter of 2025, compared to the third quarter of 2024.

Current wording

The $5 million decrease in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to reduced reimbursable services provided to the West Gemini and Quenguela during the first quarter of 2026, compared to the first quarter of 2025.

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, 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.

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.

Previous wording

Vessel and rig operating expenses increased by $19 million during the three months ended September 30, 2025 compared to the three months ended September 30, 2024. During the three months ended September 30, 2025, there was a $46 million increase in vessel and rig operating expenses compared to the three months ended September 30, 2024, primarily related to the West Aurigaand West Polaris commencing operations in Brazil, of which $13 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 $21 million decrease in vessel and rig operating expenses during the three months ended September 30, 2025 related to the West Phoenixand West Capella, which were stacked during the third quarter of 2025, and lower managed service agreement fees of $6 million, as the rigs acquired through the Aquadrill transaction are now managed by Seadrill, rather than by third parties.

Current wording

Vessel and rig operating expenses increased by $2 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. During the three months ended March 31, 2026, there was an $9 million increase in vessel and rig operating expenses compared to the three months ended March 31, 2025, primarily related to the West Polaris commencing operations in February 2025 in Brazil, along with higher repair and maintenance costs across the fleet. This was partially offset by a $7 million decrease in vessel and rig operating expenses during the three months ended March 31, 2026, attributable to lower deferred mobilization costs related to contracts in Brazil completing during the first quarter of 2026.

Previous wording

The $46 million increase in depreciation and amortization for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 is mainly attributable to the capital projects on the West Auriga and West Polarisand unfavorable contracts being fully amortized during 2024.

Current wording

The $16 million increase in depreciation and amortization for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is mainly attributable to long-term maintenance and capital projects across the fleet, and unfavorable contracts being fully amortized during 2025.

Previous wording

Depreciation increased by $40 million in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, mainly attributable to the capital projects on the West Auriga and West Polaris related to their respective contracts in Brazil.

Current wording

Depreciation increased by $11 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, mainly attributable to long-term maintenance and capital projects across the fleet, primarily related to West Neptune, West Gemini and Sevan Louisiana during the second half of 2025.

Previous wording

Amortization expense increased by $6 million during the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, mainly attributable to unfavorable contracts being fully amortized during 2024 related to the West Auriga and West Vela.

Current wording

Amortization increased by $5 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, mainly attributable to unfavorable contracts recorded as liabilities being fully amortized during 2025 related to the West Tellus, West Jupiterand West Carina.

Previous wording

b) Equity in losses of equity method investment (net of tax)

Current wording

a) Equity in earnings of equity method investment (net of tax)

Previous wording

The losses during the three months ended September 30, 2025 and the three months ended September 30, 2024 related to Seadrill's proportion of losses from Sonadrill.

Current wording

The earnings during the three months ended March 31, 2026 and the three months ended March 31, 2025 related to Seadrill's proportion of earnings from Sonadrill.

Previous wording

The $4 million increase in tax expense during the three months ended September 30, 2025 compared to the three months ended September 30, 2024 primarily reflects changes in the Company's mix of pre-tax income and loss among tax jurisdictions.

Current wording

The $8 million increase in tax expense during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily reflects changes in the Company's mix of pre-tax income and loss among tax jurisdictions, as well as lower utilization of tax loss carryforwards in the three months ended March 31, 2026.

Previous wording

During the three and nine months ended September 30, 2025, the Company did not repurchase Shares, and therefore, as of September 30, 2025, $208 million of the $500 million authorized amount remained available under the Current Repurchase Program.

Current wording

As of March 31, 2026, $208 million of the $500 million authorized amount remained available under the Current Repurchase Program.

Previous wording

As of September 30, 2025, Seadrill had available liquidity of $587 million, which consisted of unrestricted cash of $402 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.

Current wording

As of March 31, 2026, Seadrill had available liquidity of $482 million, which consisted of unrestricted cash of $304 million and available borrowings under our Revolving Credit Facility of $178 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

The table below shows unrestricted cash balances and total available liquidity as of each date presented.

Current wording

The table below shows total available liquidity, which consists of unrestricted cash and undrawn Revolving Credit Facility borrowings, as of each date presented.

Previous wording

Net cash provided by operating activities during the nine months ended September 30, 2025 was$12 million compared to$81 million for the nine months ended September 30, 2024. The$69 million decrease was primarily related to decreased operating results, the timing of receipts from customers, and increased disbursements to suppliers, partially offset by reduced mobilization costs incurred in the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024, which primarily related to contract preparation costs incurred for the West Polaris and West Auriga.

Current wording

Net cash used in operating activities during the three months ended March 31, 2026 was$22 million compared to$27 million for the three months ended March 31, 2025. The$5 million decrease in net cash used in operating activities in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by improved operating results and reduced disbursements to suppliers, partially offset by the impact of timing of receipts from customers and increased mobilization costs incurred primarily related to the West Tellus, West Jupiter and West Capella.

Previous wording

b) Net cash (used in)/provided by investing activities

Current wording

b) Net cash used in investing activities

Previous wording

The $91 million cash used in investing activities during thenine months ended September 30, 2025 was primarily related to capital expenditures on the West Neptune, West Elara and West Aurigaand the acquisition of capital spares.

Current wording

The$49 million cash used in investing activities during the three months ended March 31, 2025 was primarily related to capital expenditures on the West Neptune, West Elara and West Auriga and the acquisition of capital spares.

Previous wording

In July 2023, the Company entered into a $225 million, 5-year Senior Secured Revolving Credit Agreement in respect of the Revolving Credit Facility (the "Credit Agreement"). Seadrill Finance is the borrower under the Credit Agreement, and the facility is secured by first priority liens on substantially all of the Company's rigs and related assets, other than non-core assets. The Company, and certain of its subsidiaries that own collateral or are otherwise material, guarantee the obligations under the Credit Agreement. The loans outstanding under the Credit Agreement bear interest at a rate per annum equal to the applicable margin plus, at Seadrill Finance's option, either: (i) the Term SOFR (as defined in the Credit Agreement) plus 0.10%; or (ii) the Daily Simple SOFR (as defined in the Credit Agreement) plus 0.10%. For both the Term SOFR loans and Daily Simple SOFR loans, the applicable margin is initially 2.75% per annum and may vary based on Seadrill's Credit Ratings (as defined in the Credit Agreement), from 2.50% to 3.50% per annum. A commitment fee is incurred under the Revolving Credit Facility on undrawn amounts, at a rate of 0.5% per annum to and including July 27, 2026, 0.75% per annum from and including July 28, 2026 to and including July 27, 2027, and 1.00% per annum thereafter.

Current wording

In July 2023, the Company entered into the $225 million, five-year Credit Agreement in respect of the Revolving Credit Facility. Seadrill Finance is the borrower under the Credit Agreement, and the facility is secured by first priority liens on substantially all of the Company's rigs and related assets, other than non-core assets. The Company, and certain of its subsidiaries that own collateral or are otherwise material, guarantee the obligations under the Credit Agreement. The loans outstanding under the Credit Agreement bear interest at a rate per annum equal to the applicable margin plus, at Seadrill Finance's option, either: (i) the Term SOFR Rate (as defined in the Credit Agreement) plus 0.10%; or (ii) the Daily Simple SOFR (as defined in the Credit Agreement) plus 0.10%. For both the Term SOFR Rate loans and Daily Simple SOFR loans, the applicable margin was 2.75% per annum as of March 31, 2026, and may vary based on Seadrill's Credit Ratings (as defined in the Credit Agreement), from 2.50% to 3.50% per annum. A commitment fee is incurred under the Revolving Credit Facility on undrawn amounts, at a rate of 0.5% per annum to and including July 27, 2026, 0.75% per annum from and including July 28, 2026 to and including July 27, 2027, and 1.00% per annum thereafter. This facility has not been drawn to date.

Previous wording

In August 2025, the Company issued a NOK403 million guarantee ($40 million as of September 30, 2025) under the Revolving Credit Facility related to the SFL Hercules Ltd. claim, which reduced the available borrowings under the Revolving Credit Facility to $185 million.

Current wording

During the third quarter of 2025, the Company issued a NOK403 million guarantee ($41 million as of March 31, 2026) under the Revolving Credit Facility related to the SFL Hercules Ltd. claim. As of March 31, 2026, outstanding letters of credit and bank guarantees under the Revolving Credit Facility totaled approximately $47 million, which reduced the Company’s available capacity under the Revolving Credit Facility to $178 million.

Previous wording

For further details, please refer to Note 13 – "Commitments and contingencies" of our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, which are incorporated herein by reference.

Current wording

For further details, please refer to Note 13 – "Commitments and contingencies" of our unaudited Condensed Consolidated Financial Statements.

Previous wording

For further details on these facilities, please refer to Note 9 – "Debt" of our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, which are incorporated herein by reference.

Current wording

For further details on these facilities, please refer to Note 9 – "Debt" of our unaudited Condensed Consolidated Financial Statements.