Seadrill raises 2026 adjusted operating profit outlook to $450 million
Key Facts
On August 10, Seadrill raised its 2026 operating revenue outlook to $1.50–1.55 billion from $1.43–1.48 billion, and lifted its adjusted EBITDA outlook to $420–450 million from $370–420 million. The announcement accompanied second-quarter results; it was not a new update in November. The company excluded $50 million in reimbursable revenue when setting its revenue range. It kept its capital expenditure and long-term maintenance outlook unchanged at $200–240 million. The market is awaiting third-quarter results, due after the New York Stock Exchange closes on November 3, to assess the company’s performance following the revision.
Second-quarter results improved from the first quarter: operating revenue rose to $449 million from $358 million, and the company moved from a net loss of $7 million to net income of $29 million. Adjusted EBITDA also rose to $144 million from $97 million in the first quarter. The company attributed the revenue growth mainly to more operating days for the West Jupiter and West Capella rigs. An improvement in average day rates across the fleet also supported revenue. Fewer operating days for West Tellus partly offset the gains.
The company began the year with operating revenue guidance of $1.40–1.45 billion and adjusted EBITDA guidance of $350–400 million, while keeping capital expenditure and long-term maintenance at $200–240 million. On May 11, it raised its revenue range to $1.43–1.48 billion and its adjusted EBITDA range to $370–420 million. At the time, it said multiple contracts had added more than $860 million to backlog since the fleet status report issued in February. Backlog stood at $3.1 billion in May, before the company reported about $2.9 billion on August 10. This reflects successive adjustments to guidance and contracts during the year, while the capital expenditure and maintenance range remained unchanged between the initial outlook and the August update.
Since the May fleet status report, contracts and extensions in the U.S. Gulf of Mexico and Malaysia have added about $200 million to backlog. West Vela also won a one-year contract in the U.S. Gulf of Mexico, starting in June 2027 and adding about $161 million to backlog, excluding additional services. In May, the company announced a three-year extension of West Polaris’s contract with Petrobras in Brazil, starting in January 2028 and adding about $480 million. Chief Executive Samir Ali said demand for the high-specification fleet continues to strengthen and contract coverage is improving. He added that the company is entering a period in which its strategic decisions position it to capture market opportunities.
On the balance sheet, net debt was $390 million at the end of the second quarter, comprising gross debt of $750 million and $360 million in cash, cash equivalents and restricted cash. In its first-quarter results announcement, management said completing two major projects ahead of schedule and on budget, together with commercial success, had improved visibility toward higher earnings and free cash flow in the second half of 2026 and into 2027. First-quarter revenue had fallen to $358 million from $362 million in the fourth quarter of 2025, with the company attributing the decline mainly to fewer operating days and lower reimbursable revenue. Improved fleet utilization and average contracted day rates partly offset the decline. In February, management cited tightening supply, greater visibility from multiyear contracts and repricing of legacy contracts as factors supporting its 2027 outlook.
On October 12, Seadrill announced contracts and extensions in Indonesia, Malaysia, Angola and the U.S. Gulf of Mexico. The stock closed at $52.57 on October 30, according to EL7 data. The company will announce third-quarter results after the New York Stock Exchange closes on November 3. A conference call to discuss the results will follow on November 4 at 08:00 CT and 15:00 CET. The announcements come as markets track whether quarterly results will align with the guidance ranges the company raised in August.