Seadrill Limited Q2 FY2025 earnings call

Quarterly Performance - Delivered adjusted EBITDA of $106M and margin of 29% excluding reimbursables. - Two customer dialogues converted to new contracts: West Vela with Talos Energy and Sevan Louisiana with Murphy Oil. ### Contracting Updates - West Vela has a 90-day contract with Talos Energy starting mid-November. - Sevan Louisiana has a well intervention contract with Murphy Oil into November. - Active dialogues for Sonadrill joint venture rigs in Angola remain positive. ### Company Updates - Established West Minerva real-time operations center in Houston. - Seadrill Academy provides training, including managed pressure drilling course. ### Market Outlook - Key themes for market recovery in late 2026: exploration focus, FIDs increase, tendering activity, drillship supply/demand dynamics.

In the second quarter, Seadrill delivered adjusted EBITDA of $106 million with an adjusted EBITDA margin, excluding reimbursables, of 29%. Two new contracts were secured: the West Vela was awarded a two-well contract by Talos Energy beginning mid-November with an estimated term of 90 days, and the Sevan Louisiana commenced a well intervention contract with Murphy Oil in early August expected to work into November. The West Gemini in Angola marked 15 years of operation, achieving 97% uptime and a TRIR of 0.13 over a decade. Seadrill established the West Minerva real-time operations center and has a Seadrill Academy for training. Market outlook includes themes pointing to a recovery in late 2026, with exploration focus, FIDs forecasted to increase, tendering activity, and drillship supply/demand dynamics.

Adjusted EBITDA - Maintains range of $320M to $380M based on operating revenues $1.32B to $1.38B (excluding $50M reimbursable revenues). ### Capital Expenditure - Full-year guidance range remains $250M to $300M. ### Noncash Expense - Adjusted EBITDA guidance includes a noncash net expense of $33M related to amortization of mobilization costs and revenues, with $14M recognized by June 30.

• Legal judgment related to Sonadrill joint venture with a $51M accrual in management contract expenses. - Competitive market environment with downward pressure on near-term day rates. - Macroeconomic uncertainties affecting exploration and project FIDs.

Q: Touch upon contracting opportunities, specifically Sonadrill rigs and Búzios tender. Do you have a pipeline of potential work for all non-stacked rigs?

A: Samir Ali mentioned active dialogue for Angola rigs, strong position in Brazil with six drillships, and marketing rigs globally. Simon Johnson emphasized rig performance as key to winning contracts.

Q: Are there any rigs for which we should expect prolonged idle time in between contracts?

A: Simon William Johnson stated efforts to minimize white space, with small gaps for Louisiana, but marketing team working to keep rigs working and build backlog.

Q: Thoughts on operator behavior locking in rigs now despite near-term soft demand?

A: Simon William Johnson and Samir Ali believe operators are locking in rigs for future strong demand, seeing improving market dynamics and operating leverage advantage.

Q: View on well intervention market and Vela options?

A: Simon William Johnson said well intervention is for continuous utilization of Sevan Louisiana, with expanding market beyond P&A. Samir Ali noted Vela options are at strong rates similar to future work.

Q: Outlook on stacked rigs and buyback signs?

A: Simon William Johnson discussed potential recycling of some rigs but not immediate for Aquarius and Phoenix. Grant Creed mentioned focus on cash conservation and waiting for stability/economic outlook before buybacks.

Q: Number of drillships with MPD and MPD as competitive advantage?

A: 8 drillships have MPD, with MPD becoming a must-have, seen as safer and integral to future operations. Samir Ali noted MPD transitioning from rental to integrated operations.