Seadrill Announces Brazil Contract Award for West Jupiter

Rhea-AI Summary

Seadrill (NYSE: SDRL) has secured a significant contract for its ultra-deepwater drillship, West Jupiter, in Brazil. The contract, awarded by Petrobras following a competitive tender process, spans 1,095 days and will contribute approximately $493 million to Seadrill's order backlog, plus a $31.5 million mobilization fee. Operations are scheduled to begin in Q1 2026.

The company, recently named 'Drilling Contractor of the Year' by Petrobras in 2024, now operates six drillships in Brazil, strengthening its position in the deepwater market with industry-leading contract durations.

Positive

• Secured substantial $493 million contract for West Jupiter
• Additional $31.5 million mobilization fee
• Long-term contract duration of 1,095 days providing stable revenue
• Strong market position with six drillships operating in Brazil
• Recent recognition as 'Drilling Contractor of the Year' by Petrobras

Negative

• Contract commencement delayed until Q1 2026

Insights

Financial Analyst

This contract win significantly strengthens Seadrill's financial position, adding $493 million to their backlog plus a $31.5 million mobilization fee. The 3-year duration provides excellent revenue visibility through 2029. With six drillships now operating in Brazil's premium deepwater market, Seadrill is capitalizing on strong day rates and extended contract terms. Brazil's offshore sector remains robust, driven by Petrobras's aggressive production targets. The West Jupiter contract reinforces Seadrill's market position and demonstrates their ability to secure work with major operators. The timing aligns well with their fleet deployment strategy, maintaining high utilization rates in key markets.

Market Research Analyst

The Brazilian offshore drilling market continues to demonstrate remarkable resilience, with Petrobras leading substantial deepwater development programs. This contract award reflects the strong demand for high-specification assets in the region, where day rates have remained robust despite global market fluctuations. Seadrill's growing presence in Brazil, now with six drillships, positions them as a dominant player in one of the world's most active offshore markets. The long-term nature of Brazilian contracts, exemplified by this 1,095-day commitment, provides exceptional earnings visibility and stability - a important advantage in the cyclical offshore drilling sector.

HAMILTON, Bermuda--(BUSINESS WIRE)-- Seadrill Limited ("Seadrill" or the "Company") (NYSE: SDRL) today announced the ultra-deepwater drillship, West Jupiter, was awarded a 1,095-day contract in Brazil following a competitive tender process. The contract, awarded by Petrobras, will contribute approximately $493 million to Seadrill’s order backlog, including additional services and excluding a mobilization fee of $31.5 million. The program is expected to commence in the first quarter of 2026.

“Seadrill is pleased to have successfully re-contracted the West Jupiter with Petrobras. We were recognized as ‘Drilling Contractor of the Year’ by Petrobras earlier in 2024 and we look forward to continuing our successful relationship with this key customer,” said President and Chief Executive Officer, Simon Johnson. “With six drillships in Brazil, Seadrill is well-positioned in a resilient deepwater market with industry leading contract durations providing unparalleled visibility to Seadrill’s future earnings profile.”

About Seadrill

Seadrill is setting the standard in deepwater oil and gas drilling. With its modern fleet, experienced crews, and advanced technologies, Seadrill safely, efficiently, and responsibly unlocks oil and gas resources for national, integrated, and independent oil companies. For further information, visit www.seadrill.com.

Forward-Looking Statements

This news release includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements other than statements of historical facts included in this news release, including, without limitation, those regarding the Company’s plans, strategies, business prospects and rig activity, including with respect to backlog and contract commencement dates and durations, and changes and trends in its business and the markets in which it operates, are forward-looking statements. These statements may include words such as “assumes”, “projects”, “forecasts”, “estimates”, “expects”, “anticipates”, “believes”, “plans”, “intends”, “may”, “might”, “will”, “would”, “can”, “could”, “should” or, in each case, their negative, or other variations or comparable terminology in connection with any discussion of the timing or nature of future operating or financial performance or other events. These statements are based on management’s current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: those described under Item 3D “Risk Factors” in the Company’s Annual Report on Form 20-F for the year ended December 31, 2023, filed with the U.S. Securities and Exchange Commission (“SEC”) on March 27, 2024, offshore drilling market conditions, including supply and demand, day rates, customer drilling programs and effects of new or reactivated rigs on the market, fluctuations in the international price of oil, international financial market conditions, inflation, changes in governmental regulations that affect the Company or the operations of the Company’s fleet, the review of competition authorities, the impact of global economic conditions and global health threats, pandemics and epidemics, political and other uncertainties, including those related to the conflicts in Ukraine and the Middle East, and any related sanctions, fluctuations in interest rates or exchange rates and currency devaluations relating to foreign or U.S. monetary policy, tax matters, changes in tax laws, treaties and regulations, legal and regulatory matters in the jurisdictions in which we operate, customs and environmental matters, the potential impacts on our business resulting from decarbonization and emissions legislation and regulations, the impact on our business from climate-change generally, the occurrence of cybersecurity incidents, attacks or other breaches to our information technology systems, including our rig operating systems, and other important factors described from time to time in the reports filed or furnished by us with the SEC.

The foregoing risks and uncertainties are beyond our ability to control, and in many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or to persons acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. We expressly disclaim any obligations or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations or beliefs with regard to the statement or any change in events, conditions or circumstances on which any forward-looking statement is based, except as required by law.

Investors should note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the Investors section of our website (www.seadrill.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated into, this news release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241216144007/en/

Kevin Smith

Vice President – Corporate Finance and Investor Relations

ir@seadrill.com

Source: Seadrill Limited

FAQ

What is the value of Seadrill's (SDRL) new Petrobras contract for West Jupiter?

The contract is valued at approximately $493 million, plus a $31.5 million mobilization fee.

When will Seadrill's West Jupiter begin its new contract with Petrobras?

The contract is expected to commence in the first quarter of 2026.

How long is the duration of SDRL's new West Jupiter contract in Brazil?

The contract duration is 1,095 days (approximately 3 years).

How many drillships does Seadrill (SDRL) currently operate in Brazil?

Seadrill operates six drillships in Brazil.

What recent recognition did Seadrill receive from Petrobras in 2024?

Seadrill was recognized as 'Drilling Contractor of the Year' by Petrobras in 2024.