Seadrill Raises 2026 Guidance as New Contracts Add $800 Million

Seadrill Limited (SDRL) raised its full-year 2026 revenue and adjusted EBITDA guidance after securing contract awards and extensions worth about $800 million, strengthening its coverage for 2027. The offshore driller also generated $179 million of free cash flow in the third quarter, while quarterly revenue and adjusted EBITDA declined from the previous quarter.

For the year, Seadrill now expects total operating revenue of $1.56 billion to $1.58 billion, excluding approximately $90 million of reimbursable revenue. Its previous range was $1.50 billion to $1.55 billion. The company increased its adjusted EBITDA forecast to $440 million to $460 million from $420 million to $450 million.

Seadrill narrowed its expected capital expenditures and capitalized long-term maintenance costs to between $210 million and $230 million, compared with its prior range of $200 million to $240 million. The adjusted EBITDA outlook is a non-GAAP measure, and the company said it could not provide a forward-looking reconciliation to GAAP net income or loss without unreasonable effort because some required components cannot be reliably predicted.

Third-quarter results and cash generation

Total operating revenue was $428 million in the three months ended Sept. 30, down from $449 million in the second quarter but above $358 million in the first quarter. Adjusted EBITDA totaled $121 million, compared with $144 million in the preceding quarter and $97 million in the first quarter. Seadrill recorded a GAAP net loss of $30 million for the third quarter.

Capital expenditures and capitalized long-term maintenance costs were $56 million, broadly in line with $57 million in the second quarter. Net cash provided by operating activities reached $195 million, while additions to drilling units and equipment totaled $16 million, resulting in $179 million of free cash flow. That compared with negative free cash flow of $43 million in the second quarter, when operating activities used $18 million of cash.

Seadrill also repurchased $22 million of shares during the quarter. At Sept. 30, the company had $750 million of gross principal debt and $483 million of cash and cash equivalents, leaving net debt of $267 million. Net leverage, calculated as net debt divided by last-12-month adjusted EBITDA, was 0.6 times.

Contract coverage strengthens for 2027

Contract awards and extensions in Indonesia, Malaysia, Angola and the U.S. Gulf added approximately $800 million of total contract value. Seadrill calculates that measure using contractual operating dayrates over firm contract periods, together with mobilization, demobilization and management-contract revenue, while excluding additional services.

Following the awards, more than 85% of the company’s available drillship days are contracted for 2027. The fleet schedule showed operations across the U.S. Gulf, Angola, Brazil, Norway, Malaysia and Indonesia, with some future periods subject to priced options, contract preparation or planned out-of-service time.

The outlook remains subject to offshore drilling supply and demand, dayrates, customer drilling programs, contract awards and mobilizations, maintenance and regulatory costs, rig performance and the company’s ability to keep its units employed. Seadrill also identified oil-price volatility, inflation, tariffs, financing conditions, interest and exchange rates, geopolitical conflicts, regulatory and environmental requirements, cybersecurity incidents and climate-related legislation among the factors that could cause actual results to differ from management’s expectations.