Key Highlights

  • Total operating revenues were USD 428 million, and the net loss of USD 30 million included a legal provision.
  • Adjusted EBITDA was USD 121 million, Operating Cash Flow USD 195 million and free cash flow USD 179 million.
  • Awards and extensions added USD 800 million of total contract value, and Backlog was USD 3.3 billion on November 3.
  • Full-year guidance was increased and narrowed, with adjusted EBITDA now guided at USD 440 million to USD 460 million.

Revenue, Loss and Adjusted EBITDA

Offshore drilling contractor Seadrill Limited (NYSE:SDRL) reported third-quarter 2026 total operating revenues of USD 428 million, compared with USD 449 million in the second quarter. Contract revenues were USD 329 million versus USD 355 million. The company recorded a net loss of USD 30 million, or a diluted loss per share of USD 0.49, which includes the impact of a legal provision booked in the third quarter. In the second quarter it reported Net Income of USD 29 million, or Diluted Earnings per Share of USD 0.47.

Adjusted EBITDA was USD 121 million, compared with USD 144 million in the prior quarter. Adjusted EBITDA Margin excluding reimbursables was 29.7%, versus 33.5% in the second quarter. President and Chief Executive Officer Samir Ali said the company is delivering on its commitment to convert backlog into cash, and noted that over 85% of available drillship days are now contracted in 2027.

Net cash provided by Operating Activities was USD 195 million, and free cash flow was USD 179 million. The company repurchased USD 22 million of its shares in the quarter. Capital expenditures and long-term maintenance spending were USD 56 million. At quarter end, gross principal Debt was USD 750 million and cash was USD 506 million, which leaves net debt of USD 244 million.

Analyst estimates were EPS of USD 0.19 against reported EPS of negative USD 0.49, and revenue of USD 382.7 million against reported revenue of USD 428.0 million.

Contract Awards and Extensions

The awards and extensions added USD 800 million of total contract value after the August fleet status report. In Indonesia, the West Carina was awarded a contract with USD 420 million of firm contract value over 880 days, starting in the first half of 2027. In Malaysia, all remaining priced Options were exercised for the West Capella, extending current operations by 120 days and adding USD 41 million of total contract value, excluding additional services. Unpriced options were also exercised for a further 120 days, adding USD 53 million. The West Capella is now scheduled to work in direct continuation through February 2028.

In Angola, Sonadrill Holding, the 50:50 joint venture between Seadrill and an affiliate of Sonangol, was awarded an extension. All remaining priced options were exercised for the Sonangol Libongos, extending current operations by three years and committing the rig into 2030. In the U.S. Gulf, the Sevan Louisiana was awarded a 25-day contract with Kosmos starting in November 2026, followed by a 60-day contract with LLOG that secures the rig into 2027. Contract backlog was USD 3.3 billion as of November 3, 2026.

Full-Year 2026 Guidance

The company increased and narrowed its full-year 2026 ranges. Total operating revenues, excluding USD 90 million of reimbursables, are guided at USD 1.56 billion to USD 1.58 billion, compared with the earlier range of USD 1.50 billion to USD 1.55 billion excluding USD 50 million of reimbursables. Adjusted EBITDA is guided at USD 440 million to USD 460 million, up from USD 420 million to USD 450 million. Capital expenditures and long-term maintenance are guided at USD 210 million to USD 230 million, compared with USD 200 million to USD 240 million previously.

Items to Follow

Items to follow are the start of the West Carina contract in the first half of 2027, the West Capella operations through February 2028, further drillship contracting for 2027 and the pace of share repurchases.