시드릴(SDRL) 2026년 3분기 실적 발표 콘퍼런스콜: 잉여현금흐름 1억 7,900만 달러 달성 속 가이던스 상향 조정

핵심 요약

• 시드릴(Seadrill)은 2026년 3분기 영업수익 4억 2,800만 달러, EBITDA 1억 2,100만 달러, 정산 환급금 제외 EBITDA 마진 30%를 기록했다고 발표했다. 경제적 가동률은 95%였다.
• 잉여현금흐름은 웨스트 텔루스(West Tellus)의 이동 배치비 4,100만 달러 수취와 운전자본 회수에 힘입어 1억 7,900만 달러에 달했다. 분기 말 기준 보유 현금은 5억 600만 달러로 증가했다.
• 회사는 3개 분기 연속으로 2026년 연간 가이던스를 상향 조정했다. 정산 환급 수익 9,000만 달러를 제외한 연간 영업수익은 15억 6,000만~15억 8,000만 달러, EBITDA는 4억 4,000만~4억 6,000만 달러로 예상된다.
• 시드릴은 8월 실적 발표 이후 약 8억 달러 규모의 계약 가치를 추가했다. 2027년 가용 드릴십 가동 일수의 85% 이상이 이미 예약되었다.
• 회사는 해당 분기 동안 2,200만 달러 규모의 자사주를 매입해 2026년 누적 자사주 매입액이 4,200만 달러에 달했다. 순레버리지는 0.6배를 기록했다.
• 경영진은 서아프리카와 아시아가 심해 시추 수요를 지속해서 견인할 것으로 예상하면서도, 미국 멕시코만의 단기 공급 과잉과 잠재적인 일정 공백 가능성을 인정했다.

주요 재무 데이터

사업 및 운영 실적

시드릴의 매출은 가동 일수 감소로 전 분기 대비 감소했으나, 일일 평균 용선료의 추가 상승으로 일부 상쇄되었다. 6월 중순에 개시된 브라질 고수익 계약에 따라 웨스트 텔루스가 분기 전체에 걸쳐 기여했다.

이러한 수혜 요인은 웨스트 카리나의 아시아 이동 배치와 세반 루이지애나, 웨스트 엘라라, 웨스트 벨라의 계약 공백으로 상쇄되었다. 세 시추선은 이후 모두 작업을 재개했다. 웨스트 카리나는 2027년 상반기 시작되는 인도네시아에서의 2.5년 확정 계약을 준비 중이며, 추가 2.5년 옵션과 8,500만 달러의 이동 배치비가 포함되어 있다.

말레이시아에서는 옵션 행사로 웨스트 카펠라의 작업 기간이 2028년 2월까지 연장되었다. 추가된 8개월 기간 중 절반은 부가 서비스를 제외하고 일일 용선료 40만 달러대 중반으로 책정되었다.

앙골라에서는 가격이 책정된 옵션을 통해 소난골 리봉고스의 계약 기간이 약 3년 연장되어 2030년까지 이어지게 되었다. 시드릴은 현재 유정 기준 계약이 2027년 1월 만료된 후를 대비해 앙골라와 서아프리카 기타 지역 및 아시아에서 웨스트 제미니의 일감 확보를 위한 마케팅을 지속하고 있다.

미국 멕시코만에서는 세반 루이지애나가 코스모스 및 LLOG와 11월부터 2027년 1월까지의 일감을 확보했다. 다만 2027년 후반의 가시성이 여전히 제한적이어서 경영진은 단기적인 일정 공백 가능성을 여전히 예상하고 있다. 웨스트 넵튠과 웨스트 벨라는 각각 2027년 말과 2028년 중반까지 계약되어 있다.

경영진 가이던스

경영진은 수정된 범위가 수리 및 유지보수 지출 시점, 웨스트 카리나 계약 준비 비용, 전 선단에 걸친 경제적 가동률 결과 범위를 반영한 것이라고 밝혔다.

4분기 비용은 주로 연말에 수리 및 유지보수 작업이 늘어나는 계절적 요인으로 인해 증가할 것으로 예상된다. 시드릴은 또한 인도네시아 계약 개시를 앞두고 웨스트 카리나에 대한 추가 일상 정비 작업을 마무리하고 있다.

회사는 공식적인 2027년 자본적 지출 가이던스를 제시하지 않았다. 그랜트 크리드 CFO는 내년 정기 특별 검사 지출이 제한적일 것으로 예상되는 만큼 2026년과 유사한 수준이 합리적인 지표라고 언급했다.

위험 요인 및 주요 관전 포인트

• 경영진은 미국 멕시코만에 드릴십 수 척이 초과 공급된 상태인 것으로 추정하고 있다. 2027년에 추가 시추선이 해당 지역을 이탈할 경우 지역 내 수급 균형이 개선될 수 있으나, 이러한 재균형 여부는 여전히 불확실하다.
• 세반 루이지애나는 계약 가시성이 제한적이어서 2027년 후반에 일정 공백을 겪을 수 있다.
• 페트로브라스는 2027년 상반기까지 다음 차례 드릴십 계약을 발주하지 않을 것으로 예상되며, 이는 브라질 내 사업 기회의 시점에 영향을 미칠 전망이다.
• 장기 보존 보관(cold-stacked) 중인 웨스트 아쿠아리어스와 웨스트 피닉스를 재가동하려면 막대한 자금이 필요하다. 경영진은 고객 자금 지원을 통한 재가동이나 충분한 총 계약 가치가 뒷받침되어야 할 것이라고 밝혔다.
• 국제 석유기업들은 여전히 자본 규율을 유지하고 있으며, 구체적인 수요 없이 용량을 선확보하기보다는 일반적으로 확정된 프로그램에 맞춰 시추선을 계약하고 있다.
• 웨스트 카리나에 대한 추가 작업을 포함해 선단 전반에 걸쳐 4분기 수리 및 유지보수 지출이 증가할 것으로 예상된다.

애널리스트 질의응답(Q&A) 하이라이트

일일 용선료 및 계약 구조: 경영진은 최상위(leading-edge) 일일 용선료가 대체로 예상대로 형성되고 있으나, 시드릴은 단순 표면상 용선료보다는 총 계약 가치, 이동 배치비, 부가 서비스 및 잉여현금흐름을 우선시한다고 밝혔다. 회사는 장기 계약 확보와 향후 용선료 상승 가능성에 대한 노출 사이의 균형을 맞추는 것을 목표로 하고 있다.

2028년 시장 전망: 경영진은 더 많은 시추선이 해당 지역을 떠날 경우 2028년까지 미국 멕시코만 수급이 타이트해질 수 있다고 예상했다. 웨스트 오리가는 2028년경 시작되는 브라질 또는 기타 해외 프로젝트 수주에 유리한 위치에 있는 것으로 평가되며, 웨스트 넵튠은 운영 성과가 유지될 경우 기존 고객과의 계약을 이어갈 가능성이 있다.

웨스트 카리나의 수익성: 경영진은 8,500만 달러의 이동 배치비에 상당한 마진이 포함되어 있으며 계약에 요구되는 자본적 지출은 미미하다고 밝혔다. 해당 수수료는 계약 개시 시점에 청구되어 개시 전후 또는 그 직후에 수취될 예정이다.

자본 배분: 시드릴은 자사주 매입 및 기타 현금 활용에 있어 기회주의적이면서도 규율 있는 접근 방식을 유지할 계획이다. 경영진은 웨스트 카리나가 계약을 개시하고 관련 이동 배치비를 수취함에 따라 잉여현금흐름이 개선될 것으로 기대하고 있다.

보존 시추선 재가동: 시드릴은 웨스트 아쿠아리어스와 웨스트 피닉스에 대해 적극적인 수주 활동을 펼치고 있다. 경영진은 고객 자금 지원이나 전반적인 계약 수익성이 잉여현금흐름 창출을 뒷받침할 경우 재가동을 고려할 수 있다고 밝혔다.

서아프리카 확장: 경영진은 적합한 프로그램이 도출될 경우 소나드릴 합작회사에 4번째 시추선을 추가하는 방안을 고려할 것이라고 밝혔다. 해당 시추선은 앙골라에 국한되지 않고 서아프리카의 다른 지역에서도 운영될 수 있다.

실적 발표 컨퍼런스 콜 전문

전체 실적 발표 컨퍼런스 콜 녹취록

경영진 발표

Operator

Hello, everyone. Welcome, and thank you for joining us to the Seadrill Third Quarter 2026 Earnings Call. [Operator Instructions]

I will now hand the conference over to Kevin Smith, Vice President of Corporate Finance and Investor Relations. Please go ahead.

Kevin Smith

Hello, and welcome to Seadrill's Third Quarter 2026 Earnings Call. I'm Kevin Smith, Vice President of Corporate Finance and Investor Relations, and I'm joined today by Samir Ali, President and Chief Executive Officer; Grant Creed, Executive Vice President and Chief Financial Officer; and Jacob Taylor, Vice President, Commercial.

Our call will include forward-looking statements that involve risks and uncertainty. Actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year, and we assume no obligation to update them, except as required by securities laws. Our filings with the U.S. Securities and Exchange Commission provide a more detailed discussion of our forward-looking statements and the risk factors affecting our business.

During the call, we will also reference non-GAAP measures. Our earnings release furnished to the SEC and available on our website includes reconciliations with the nearest corresponding GAAP measures. Our use of the term EBITDA on today's call corresponds with the term adjusted EBITDA as defined in our earnings release.

I'll now turn the call over to Samir.

Samir Ali

Thanks, Kevin. Welcome, everyone. Thank you for joining us. I'll begin with our third quarter highlights and progress against our core priorities, then turn to the market outlook. Jacob will cover our recent contracting success before Grant reviews our financial results and updated full year 2026 guidance. The third quarter demonstrated strong execution against our core priorities, delivering safe, reliable operations, generating free cash flow and capturing the upside ahead of us.

Starting with our first priority, safe and reliable operations. We delivered another solid operational quarter, achieving 95% economic utilization and EBITDA of $121 million. Revenue and EBITDA again exceeded expectations, leading us to raise full year guidance for the third consecutive quarter. Our customers value safe, efficient and reliable execution.

Consistent delivery strengthens our customer relationships and supports our long-term backlog visibility as demonstrated by recent contract awards. In Angola, the Sonangol Libongos secured an extension of approximately 3 years, keeping the rig contracted into 2030. With an average technical uptime of greater than 98% since 2019, this extension underscores the value of Seadrill's operational and technical expertise.

In Malaysia, the client's exercise of options will keep the West Capella working in direct continuation through February 2028, building on the rig's strong operating history in the region. And in the U.S. Gulf, the Sevan Louisiana was awarded a 60-day contract with LLOG. When the rig commences this contract later this year, all 3 of our rigs in the region will be working for LLOG. We are pleased to expand on what has already been a highly successful long-term partnership built on performance. Safety remains fundamental to everything we do. We are encouraged by our progress, but we recognize that sustained improvement requires continuous focus, disciplined execution and an unwavering commitment across the organization.

Moving to our second priority, free cash flow generation. On our prior call, we said we were on track to generate meaningful free cash flow in the second half of 2026. This quarter, we delivered on that expectation, generating $179 million in free cash flow and demonstrating our ability to convert backlog into cash. We also continued returning capital to shareholders, opportunistically repurchasing $22 million of shares during the quarter and bringing total repurchases for the year to $42 million.

And to our third priority, capturing the upside. Since our August call, we have added approximately $800 million of total contract value through new awards in Indonesia and the U.S. Gulf, together with extensions in Malaysia and Angola. Our drillship fleet is fully contracted or preparing for upcoming contracts with more than 85% of available days already booked for 2027. This strong contract coverage gives us clear visibility into the earnings growth and substantial free cash flow generation we expect next year.

The West Carina award in Indonesia marks an important milestone in our commercial strategy, specifically repricing of 3 legacy day rate contracts to current market levels. The West Tellus and West Jupiter successfully commenced operations in Brazil at substantially higher rates earlier this year, and the West Carina will follow in 2027.

Turning to the market outlook. The tender pipeline remains healthy. Several multiyear contracts are expected to be awarded over the coming months, which would drive drillship utilization higher next year. The longer-term outlook is equally compelling. After a decade of underinvestment, oil companies are refocusing on their core businesses and placing greater emphasis on production growth. At the same time, peak oil demand expectations have shifted further into the future, while U.S. shale production is expected to plateau.

In its 2026 Global Outlook, Exxon estimates an underlying natural production decline rate of approximately 15% annually, reflecting the growing contribution of faster declining unconventional resources. Without new investment, it is projected global oil supply would fall approximately 80 million barrels per day short of demand within 10 years. With the reserves declining and the hydrocarbon cycle extending, operators are renewing their focus on frontier exploration. Recent discoveries, planned exploration wells and license awards across multiple regions provide tangible evidence. [Technical Difficulty]

Operator

Hello, everyone. We are experiencing some technical difficulties. Give us one moment as we try to address the issue. Thank you. Thank you for holding, everyone. We will be starting where we left off.

Jacob Taylor

Thank you, Samir, and good morning, good afternoon, everyone. I'll provide a summary of our recent contracting activity, a regional overview and the contracting outlook to our fleet. Since our last call, we have signed contracts with a total value of approximately $800 million.

Our commercial approach remains disciplined, prioritize work in direct continuation, secure attractive margins with swift payback and retain exposure to improving market conditions across the portfolio. In Southeast Asia, the awards for both the West Carina and West Capella demonstrate demand in a region of growing importance.

Looking ahead, based on our ongoing tenders and customer discussions, Indonesia alone could absorb more than 3 drillships by 2028. The West Carina will fill one of those requirements, beginning a 2.5-year firm assignment in the first half of 2027 and options that could extend the program by a further 2.5 years. The contract also includes an $85 million mobilization fee, front-loading a sizable share of the contract's value at the start of the program.

This is a clear example of our commercial strategy in action, prioritizing total contract value and cash generation over headline day rate alone. In Malaysia, exercised options have added approximately 8 months of work for the West Capella, extending its current program into February 2028.

Half of that additional term comes from unpriced options now exercised at a day rate in the mid-400s, excluding additional services. The West Capella is the only drillship currently working in the country with availability in 2028, and with several unpriced options remaining, the rig is well placed to capture the upside of demand in Malaysia. In Angola, the current customer exercised 3 years of priced options on the Sonangol Libongos, extending operations and direct continuation into 2030.

Seadrill is the largest drillship operator in Angola through our strategic joint venture with Sonangol. Of the 5 drillships currently working in the country, 2 have availability in 2027, including a competitor's rig and the Seadrill-owned West Gemini. As shown on our latest fleet status report, the current well-based contract will see the West Gemini working through January 2027, and we continue to market the rig in Angola and more broadly across West Africa and Asia.

In the U.S. Gulf, the Sevan Louisiana has secured contracts with Kosmos and LLOG, providing work in direct continuation from November through January 2027. The rig's versatility is attracting a growing customer base with capabilities spanning shallow and deepwater operations from well intervention through traditional drilling. We continue to market the rig for shorter-term opportunities, but visibility further into 2027 remains limited, and we continue to anticipate near-term gaps in the schedule.

Elsewhere, in the U.S. Gulf, the West Neptune and West Vela are contracted into late 2027 and mid-2028, respectively, providing coverage through a period we identified early as having a softer outlook. We currently estimate that the region is oversupplied by a few drillships. Growing demand predominantly in West Africa and Asia is expected to continue drawing some excess capacity out of the Gulf in 2027. If that occurs, it would improve the regional supply-demand balance and further day rate progression.

In Brazil, only the West Auriga currently has a clear availability in late 2027. Between April of 2026 and January of 2027, 5 drillships have left Petrobras' fleet, 3 of which have departed the region altogether. In addition to Petrobras' decision to release approximately 1/5 of its drillship fleet, they are not expected to award the next wave of drillship contracts until the first half of next year. We believe the West Auriga is well positioned for regional and international opportunities in the beginning of 2028.

Overall, deepwater continues to experience strong demand, led by West Africa and Asia. Recent contracting activity supports our long-held view of a sustained increase in demand for drillships. We have made significant progress in filling our 2027 availability and available drillship days have decreased from 30% to under 15% since our last call. Our strategy is to maximize the economic value of each contract, not simply the headline day rate, but with a focus on improved financial returns and most importantly, free cash flow.

With that, I'll hand it over to Grant.

Grant Creed

Thank you, Jacob. I'll now discuss our third quarter 2026 financial results and provide an update on our outlook for the balance of the year. In the third quarter, we reported EBITDA of $121 million and generated $179 million of free cash flow.

Turning to the income statement. Total operating revenues were $428 million, with a $21 million quarter-on-quarter decrease primarily driven by fewer operating days, and that was partially offset by another quarterly increase in the average day rate earned. In Brazil, the West Tellus contributed a full quarter of revenue following the mid-June commencement of its new contract at a substantially higher rate. These benefits were offset by fewer operating days in the West Carina, which recently mobilized to Asia in preparation for its upcoming contract as well as time between contracts on the Sevan Louisiana, West Elara and West Vela.

Those 3 rigs have all since resumed operations. Management contract revenues were $66 million, and that was in line with the prior quarter. These revenues include the daily fee Seadrill earns for management, operational and technical support to Sonadrill, together with revenue from additional services that can vary from quarter-to-quarter.

Reimbursable revenues increased by $5 million to $24 million, offset by a corresponding increase in reimbursable expenses. Third quarter total operating expenses were $384 million, and that was up $7 million from the prior quarter, resulting in EBITDA of $121 million. EBITDA margin, excluding reimbursables, was 30%.

In addition to the overarching priorities Samir mentioned earlier, last quarter, we also highlighted our focus on 3 financial priorities to enhance long-term shareholder value. Those were generating free cash flow, disciplined capital deployment and finally, maintaining a robust balance sheet. In the third quarter, we have made meaningful progress delivering on each of those priorities. We have been clear we anticipated an inflection in our ability to generate free cash flow in the second half of this year.

In the third quarter, we generated $179 million of free cash flow, and our cash balance increased to $506 million. In addition to the structural benefits of recent contracting activity, the cash position also benefited from the collection of the $41 million West Tellus mobilization fee and a working capital release. We maintained our disciplined approach to capital deployment, opportunistically repurchasing $22 million of shares in the third quarter. Our balance sheet remains robust with net leverage of 0.6x at quarter end. Gross principal debt was $750 million with maturities extending through 2034 following the June refinancing.

And now turning our -- turning to our outlook for the remainder of the year. We are raising guidance for operating revenues, which is now $1.56 billion to $1.58 billion, and that excludes $90 million of reimbursable revenues. And we are raising the EBITDA range to $440 million to $460 million.

Our updated guidance ranges primarily reflect the timing of repair and maintenance expenses, including contract preparation for the West Carina and a range of outcomes for fleet-wide economic utilization. Our EBITDA guidance includes a noncash net expense of $33 million related to the amortization of mobilization costs and revenues, of which $24 million has been recognized through the end of the quarter. The midpoint of our full year guidance for capital expenditure and long-term maintenance remains unchanged, and we have narrowed the range to $210 million to $230 million.

To close, we generated significant free cash flow this quarter, continued to exercise capital discipline and maintained a robust balance sheet. These remain our financial priorities as we look ahead.

And with that, I'll hand back to Samir for his closing remarks.

Samir Ali

Thanks, Grant. Our third quarter performance demonstrates continued progress against our core priorities. We are executing consistently, converting our backlog into substantial free cash flow and returning capital to shareholders while strengthening our earnings visibility for 2027 and beyond. The tightening supply-demand balance and a growing investment required to sustain global energy supplies, we believe Seadrill is well positioned to convert these opportunities into sustained value.

With that, I'll hand it over for questions.

Operator

[Operator Instructions] Your first question comes from the line of Keith Beckmann with Pickering Energy Partners.

질의응답

Keith Beckmann

I just wanted to get your thoughts on maybe how you're thinking about the U.S. Gulf longer term. It seems next year, right, we have several rigs that seem to be leaving and probably a little bit oversupplied. But maybe how are you thinking about it longer term into 2028 and beyond? And if you think this is kind of the new normal next year or if you think there's a return to activity?

Samir Ali

Look, I'd say for the U.S. Gulf, we're still optimistic, and we still think it's a great market to be in. We saw it kind of coming early that there needed to be a rebalancing. You're seeing some rigs leave the market. But I think importantly, for Seadrill, what we ended up doing was we contracted through most of next year. So for us, contract through '27 and be ready for 2028. But I'll let Jacob add anything else he wants.

Jacob Taylor

Yes. The only thing I would say, and we mentioned this in our opening remarks is that we do expect some rigs to be leaving the region. And there is a possibility for maybe 1 to 2 more to be leaving as well. And with that rebalance, if that does materialize, we expect things to be tight in '28. And based on some dialogues we're having ongoing with customers that they see that on the horizon as well. And I think they're already starting to look at their long-term plans to mitigate that.

Keith Beckmann

Okay. Awesome. That's very helpful. And then I guess, kind of my follow-up to that, digging a little deeper is, I mean, obviously, you guys are very well contracted for 2027 for the most part. Trying to get a sense on how you're seeing opportunities maybe even further out. I know you guys mentioned Brazil awards potentially in '28, which I would think would be positive for the Auriga as well as the Neptune as well.

And what -- kind of following up on that first question being potentially more positive in 2028, maybe just how you're thinking about those 2 and any of the other rigs rolling off early '28 as well?

Samir Ali

Look, I think the Auriga is quite well placed in 2028 for potential work in Brazil. As Jacob said in his prepared remarks, we see some tendering coming for that market, call it early next year, most likely. For the Neptune, look, it's driven by performance. She's worked for the same client since effectively delivery. But that -- it's not given. It's not -- we don't take that for granted. We have to deliver every day. And as long as we continue to deliver on the Neptune, we think that there is a strong possibility that she stays where she is, but there are other opportunities in the U.S. Gulf and other markets as well for her.

Operator

Your next question comes from the line of Eddie Kim with Barclays.

Edward Kim

So we've seen kind of leading-edge day rates industry-wide, now firmly in the mid-400s. We've seen a couple of data points in the high 400s now. So just curious if that progression of day rates has increased faster than you would have expected at the beginning of the year or if that pace is sort of kind of in line with your expectations? And looking ahead, if you expect that momentum to continue from here through next year?

Samir Ali

Yes. Eddie, this is Samir. Yes, I'd say, look, did we expect it? Yes. But I would also say we at Seadrill at least, when we look at contracts, we look at total contract value, right? So it's not just day rate for us. It is mobilization fees, it is ancillary services. It's the whole thing that goes into it. And we look at total contract value and does it generate free cash flow, right? So yes, we are seeing -- day rates are tracking the way I think we expected them to. But I think for us, keep coming back to it is total contract value for us and does that contract generate free cash flow.

Edward Kim

That makes sense and evident in the West Tellus mobilization lump sum payment you received. So that's good to see. Just my follow-up is a comment you mentioned in the prepared remarks, you said you expected several multiyear contracts to be awarded over the next few months, which I assume to be coming from the IOCs. One of your peers earlier this week indicated that IOCs in general, are still very capital disciplined and seem to be contracting rigs for their specific programs only and maybe less likely to lock into longer 2- to 3-year contracts at this stage. So just wanted to get your thoughts on the IOCs and how you expect contracting from this group to play out over the next 6 to 12 months?

Samir Ali

Sure. They're still being very disciplined, right? Commodity price has helped. But at the end of the day, they're still budgeting very low numbers relative to where the spot market is today, and we are seeing absolute discipline from the IOCs. They are contracting for discrete opportunities. When they know they have a long-term development program, they will contract for multiyears. But it is a discrete opportunity that they -- and they're tagging saying, look, we have need for a rig for x number of years, so we will contract for x number of years. But they have not -- they've got more money in their pockets right now, which is great for us, and we think that enhances '28 and '29 for us as an industry. But I would say discipline is still the name of the game here.

Operator

Your next question comes from the line of Scott Gruber with Citi.

Scott Gruber

I kind of want to follow on Eddie's question because contracting leverage has definitely swung back to you and peers as evidenced by day rates inflating. And yes, operators, particularly the majors are remaining "disciplined." But I wonder if there's an ability for you to push for term and would you push for greater term? If the market continues to tighten, we can obviously see day rates trending towards the $500,000 mark again.

But I wonder if you think you have an ability to push for term and whether operators would be kind of more willing to sign up for longer-term deals that extend beyond specific programs at that mid-400s rate rather than going to $500,000. So maybe you can just kind of talk through that dynamic for us.

Samir Ali

Absolutely, right? So I think it's a balancing act of -- for us, it's we like having a smooth slope in terms of our contract roll-off profile. So some term is always good, but we don't want to also term out every single rig we have. We want some torque to the near term as well. So it is a balancing act that we go through every day of making sure we have enough term in the system to keep the lights on, if you will. And then we also want some spot exposure as well, but I'll let Jacob kind of add to that.

Jacob Taylor

Yes, I think the only thing I would say is that as we look out into '28 and '29, the greenfield values that have been approved so far are going to be the highest we've seen over a decade. And so we anticipate that the demand is coming and it's going to be healthy for the market, and this may drive rates up higher and some of those operators may take the opportunity to go ahead and trade off rate for more term. And depending on the availability of assets in our portfolio, as Samir said, we kind of want to have a smooth falloff in our fleet status, we would consider taking advantage of that opportunity.

Scott Gruber

I appreciate that color. And then do you have an early read on CapEx for next year? I think there's a bit of spend on the Carina, but anything else to be aware of? And then obviously, the outlook for improved free cash flow in '27, '28 looks very strong. So just your thoughts on continuing to lean into the buybacks or any other use of cash we should be aware of?

Grant Creed

Yes, Scott, on the CapEx, of course, we're not guiding to next year at this point in time, but I can say that if you look across our fleet, the typical run rate long-term maintenance on the rigs would be same as it has been this year. And if you look -- and then the next variable that sort of drives the peaks and troughs in CapEx is SPS schedule, and there's not a great deal of that spend next year.

I'd say probably similar level to this year is a good indicator. And then, yes, you're right on free cash flow. We've been pointing to the inflection of free cash flow from the middle of this year, which you see is evident in our third quarter results, which we see continuing and improving as the Carina starts her contract and we collect the attractive mobilization fee on that contract. And the buyback is one, we just -- we continuously assess where we're at, and we're going to be opportunistic. And it's -- we talk about being disciplined with our capital. And yes, look, there's not anything I can say definitively, but you can look at the past and what we've done, and we'll continue to assess that going forward. But Samir, please add anything.

Samir Ali

The only thing I'd add on capital allocation is, look, historically, we've been disciplined. We've been opportunistic. Don't expect that to change, right? For us, we are very focused on deploying our capital in a wise way. And I know that sounds obvious, but we really do take that to heart around here.

Operator

Your next question comes from the line of Fredrik Stene with Clarksons Securities.

Fredrik Stene

Samir and team, very happy to see that working capital is working with you rather than against you, strong free cash flow numbers this quarter. My question -- or 2 specific questions really on a couple of rigs. First, on the Carina, it was mentioned in the prepared remarks that the mobilization fee is $85 million, which is obviously a significant amount. But I was wondering, are you able to give some color on the cost associated with the mobilization?

Because I guess at a high mobilization fee, day rates is reduced. But to me, what I really care about is like the cash equivalent day rate. So if there is not a one-to-one relationship with that mob fee, obviously, the earnings and cash flow from this contract would be higher in a way, if you get what I'm saying.

Samir Ali

Yes. Look, we're not prepared to give kind of the cost involved, but I can tell you that there's a significant amount of margin in that $85 million mobilization fee, right? The CapEx is minimal -- the contract required CapEx is minimal. So it's really moving a rig from Namibia to Southeast Asia is the big -- is the bulk of the cost.

Jacob Taylor

Yes. Fredrik, I would just add that strategically for us, we wanted to get cash in the door and capture that as early as possible for that opportunity. If we're going to be moving the rig from one side of the world to the other, it's got to be quite commercially attractive for us to pull it out of the strategic location like we have in Brazil. So to be able to capture the inflow of cash early on in that opportunity was really important for us.

Fredrik Stene

All right. Just a quick one for that or follow-up. Is -- or can you tell us anything about the timing on the receipt of that mob fee? And if I missed it, I'm sorry, but it would be helpful to kind of get an idea.

Samir Ali

We have not said previously, but directionally, I can tell you it's close to contract commencement or shortly thereafter.

Fredrik Stene

Yes. All right. That's very helpful. And...

Jacob Taylor

To be frank, we would invoice it at contract commencement.

Fredrik Stene

Yes. No, that's very helpful. And the second rig I wanted to touch on West Gemini, you've got some life extensions on the joint venture in Africa and then you have the Gemini that's now extended well based into early next year. If and when that rig is negotiated for an extension, how should we think about the economics of the management revenue line potentially changing? Is that something you would earn more on if the rate on that one would kind of move to something that's more closer to the current market? Or should we expect similar economics also during an extension?

Grant Creed

Fredrik, I think for now -- well, I mean, look, I think your theory is correct that as day rates improve across all 3 rigs, so the average day rate across all 3 rigs in the JV to the extent that improves, would allow the JV to generate more cash flow, which in turn would be returned to the shareholders via a bareboat charter payment or lease payment. And so we could increase the lease payment.

I think for now, at least, we are anticipating or forecasting it to remain unchanged, but it's something we continue to evaluate going forward. And once the JV starts generating this cash and has it in the bank, and we feel confident in -- we can then take a decision to increase it. But for now, I think we're just -- we're thinking about it as the same as it has been throughout this year.

Fredrik Stene

All right. Congratulations on raising guidance 3x this year. I don't think there are too many carriers that have been able to do that.

Operator

Your next question comes from the line of Greg Lewis with BTIG.

Gregory Lewis

Sorry if this was already covered, but kind of curious, all signs point to the harsh environment, Norwegian semi market really tightening. We've seen durations move higher. Competitors are talking about pricing going higher. I believe there's a couple of new builds, harsh environment new builds that were kind of stranded that maybe you're now being toyed with in terms of finishing those and bringing those back to market.

I guess under that backdrop, is there any way that we should be thinking about either the Aquarius or the Phoenix? Or -- I mean, it seems like it's kind of now or never for those rigs. Just kind of curious how you're thinking about that? And if there's any dialogue potentially about reactivating one of those rigs?

Samir Ali

Greg, so look, we're actively marketing both of those assets. And yes, we think there is a path to bring them back. I think for us, there is a large reactivation fee. And our view is, look, it needs to be funded somewhere. And our approach is let the client fund it, right? And their cost of capital is lower than ours. We can reactivate it, but then it's just going to cost them more, right, because we have a higher cost of capital. So for us, it's -- if they're willing to fund the reactivation, we are absolutely there to bring those rigs back. And look, they're both stacked in Norway, right? So they are ready to be brought back to market. We just need to find the right client and the right contract.

Gregory Lewis

Okay. And so as seeing pricing now, it is, I guess, you call it high 4s. Is there any kind of framework? And hey, this to your point, Samir, this needs to be a multiyear deal to reactivate it. But is there kind of like a, I don't know a low -- however kind of like mark, is it, hey, multiyear deal at $500,000, the economics start to work? Or is this something where we'd need something even higher than that?

Samir Ali

No, look, I think you can take lower than that if you get a big upfront, right? I mean, back to that total contract value, if we get a big mobilization fee, we can have a lower rate or we could have a higher rate and a smaller mobilization fee. For us, it comes down to contract value. If we can kind of justify to the Board, look, we can generate free cash flow off the reactivation, we would look at it.

Gregory Lewis

Okay. And then my other question is around Angola. It seems like, I guess, Sonangol kind of was -- got involved in drilling their own wells. And I know they've done it in the past. But like it does seem like there's opportunities in Angola maybe for incremental rigs. I mean, how do you balance that? And if there were an opportunity to move, because I believe part of the JV allows Seadrill the ability or even you're almost incentivized to add another rig to that JV. I guess maybe is that -- I guess, one, is that something that is still on the table? And two, as you kind of see opportunities for the fleet developing, is that something we potentially could even see it over the next couple of years?

Samir Ali

Yes. Look, I think we would love to put a fourth rig into the JV if there's the right opportunity. And we are seeing demand across West Africa and into East Africa. So for us, we like the JV position. We would happily put a fourth rig into the JV. It just we need to find the right program to justify putting that another rig into it.

Jacob Taylor

And I think just to add to that is that the JV is not just tied to Angola. We could add a fourth rig to the JV if we brought another rig into West Africa as well. And that's something that we are exploring.

Operator

Your next question comes from Doug Becker with Capital One Securities.

Doug Becker

Samir, I really appreciate Seadrill's focus on total contract value. I thought it was interesting that you highlighted ancillary services as part of that equation. And I generally thought of those as lower-margin offerings. So curious, is there potential to improve pricing and margins on ancillary services so they become a more meaningful part of the value of a contract?

Samir Ali

Not really, to be honest. But in certain circumstances, we're able to price them a little better. In more established markets, it's harder to drive a lot of extra cash out of ancillary services. But when you get into more remote locations, it becomes a bit easier to add some margin on to them because there's just not a plethora of people available to provide that service. So it depends on the market. But yes, there are places where we can add it, but I wouldn't say it's becoming ubiquitous.

Doug Becker

Got it. Got it. And then, Grant, maybe a little housekeeping. The annual guidance implies higher costs in the fourth quarter. Just want to get a little more color in the drivers behind that and just any trends to look for in 2027?

Grant Creed

Yes. It's primarily repairs and maintenance. And typically, our repairs and maintenance do spike in the fourth quarter. The way we end up, we get the budget approved and then place the orders and the work often ends up getting done in the fourth quarter, and that's what we anticipate to occur here in this fourth quarter. So that's across the fleet.

I would also highlight the Carina, which is, of course, currently off contract preparing for its new long-term contract with Eni in Indonesia. And so taking the opportunity whilst it's off contract to do, let's say, more routine repairs and maintenance now so that we don't have the burden to do that maintenance whilst we're on contract. So there'd be an incremental step on Carina, plus some slightly higher across the fleet relative to the first 3 quarters.

Operator

Your next question comes from the line of Hamed Khorsand with BWS Financial.

Hamed Khorsand

Just wanted to see, given the amount of rigs that are on contract in '27, are there any days that they could be off-line? Or is it pretty safe to assume that they're just going to generate revenue throughout '27?

Samir Ali

We take the normal operational sometimes things happen. But look, for the most part, we don't have any big planned out-of-service times. The Carina is obviously preparing for her contract. But beyond that, if I look across the fleet, there's not a lot of planned beyond that right now.

Hamed Khorsand

And is there any contract opportunity for Gemini in '27? Or is everything pushed out until late '27, early '28?

Samir Ali

Look, we're looking at opportunities kind of across '27. Some of them start later into '27, some start earlier into '27. I think the key for us is we remain very optimistic on the Gemini. It's one of our rigs that we think has performed incredibly well, and she's placed in the right market, right? West Africa is a market that continues to absorb rigs. So we are quite confident that we'll find work for that rig.

Operator

Your next question comes from Josh Jayne with Daniel Energy Partners.

Joshua Jayne

I just had one thing that I wanted to follow up on. Could you elaborate a bit more on the ONGC tenders just been, I guess, a little bit on again, off again, and it was alluded to in the comments. Maybe you could just talk about anything that's changed over the last 6 to 9 months, confidence there and just how that frames the difference in the outlook maybe today than you were facing 6 to 9 months ago for deepwater.

Samir Ali

Yes. So for -- you mentioned ONGC in India, correct?

Joshua Jayne

Correct.

Samir Ali

Yes. So for that opportunity, I mean, there recently was an award. They seem to have accelerated it quite quickly based off of how they've historically run those processes and secured an asset from outside the region. In parallel, you've had Oil India also in the market for an asset. We have chosen to kind of deliberately for the moment, exclude ourselves from pursuit of those opportunities, just given that, one, we haven't really had the availability of assets.

And then two, we would need to see some kind of changes in the contractual in order to make that more attractive for us, given that we felt that we -- just there were interesting or prospects and alternatives elsewhere for the rigs at that time. We do anticipate that ONGC is going to continue to follow through on this objective of increasing their domestic capacity of drillships.

They do kind of have a geopolitical agenda of increasing exploration and development. And I think that this was just the first piece of many. I think that they could increase actually probably 1 to 2 drillships into '27, '28. We do understand that they're currently in the market engaging with brokers on the possibility of even looking at buying a drillship. So yes, we're keeping a close eye on it. But for the opportunities that were recently in the market, we chose not to participate in those.

Operator

This concludes our question-and-answer session. And this also concludes today's call. Thank you for attending. You may now disconnect.