Seadrill Limited · NYSE:SDRL
Seadrill — Investor Presentation (June 2023)
39 slides from Seadrill's investor presentation, June 2023
Slide 1: Investor Presentation June 2023
Investor Presentation June 2023
Slide 2: Forward-looking statements
This communication includes forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. All statements other than statements of historical facts included in this communication, including those regarding future guidance, including total reve
Slide 3: I. Executive Summary
I. Executive Summary
Slide 4: Introducing the new, transformed Seadrill
Introducing the new, transformed Seadrill Leading ultra-deepwater Large, premium, and Best-in-class financial Unique platform to focused driller high specification fleet position create value The ultimate platform Amongst the world’s Conservative, best-in-class Prioritised, through-cycle transformed
Slide 5: Seadrill at a glance
Seadrill at a glance Market Modern Average Fleet Contracted Capitalization1 Fleet of Age3 Share of Fleet $3.0bn 21 rigs2 11 years 86% 1Q23 Adjusted CDP Carbon Total Backlog4 Leverage6 EBITDA5 Ranking $2.6bn $99mm (0.8x) B Source: Company information, Bloomberg Footnote: Pro forma for Aquadrill acqui
Slide 6: Seadrill at a glance: Overview of our fleet
Seadrill at a glance: Overview of our fleet 12 Floaters 3 Harsh Environment Rigs Average age: 11 years Average age: 14 years 4 Jack-Ups 2 Managed Rigs1 Average age: 12 years Average age: 8 years Footnote: Age calculated as difference between the current year (2023) and year of entering service; Excl
Slide 7: Overview of recent strategic initiatives
Overview of recent strategic initiatives February April September October October October/November November December February/March June 2022 2022 2022 2022 2022 2022 2022 2022 2023 2023 New York Emergence Euronext Saudi Paratus 2L debt Oslo Stock Aquadrill all- 2L debt Sale of tender- Stock from Ex
Slide 8: Overview of Aquadrill acquisition
Overview of Aquadrill acquisition Strategic rationale Overview of the transaction Highly synergistic and easy-to-integrate platform 1 Management Logistics / fee supply chain Enhanced fleet and scale optimization3 optimization At least Consideration Valuation Closing $70mm Estimated annual 2 synergie
Slide 9: A world class management team…
A world class management team… Simon Johnson Grant Creed Leif Nelson Samir Ali Torsten Sauer-Petersen Todd Strickler President & Executive Vice President & Executive Vice President & Chief Executive Vice President & Chief Executive Vice President & Chief Senior Vice President & General Chief Executi
Slide 10: …combined with a Board of Directors with extensive industry and leadership experience
…combined with a Board of Directors with extensive industry and leadership experience 40+ years 40+ years 40+ years 35+ years Julie Johnson Robertson Mark McCollum Jean Cahuzac Jan Kjaervik Chair of the Board Chairman of the Audit Committee Independent Director Independent Director 30+ years 30+ yea
Slide 11: II. Key Credit Highlights
II. Key Credit Highlights
Slide 12: Key credit highlights
Key credit highlights Large scale, globally diversified portfolio of premium rigs with a focus on the favorable 1 ultra-deepwater segment 2 Well positioned to capitalize on very attractive market fundamentals Strong contract coverage underpinned by strategic relationships with a diverse set of 3 cus
Slide 13: Large scale, diversified portfolio of premium rigs
1 Large scale, diversified portfolio of premium rigs Floaters Harsh Environment Jack-ups Managed Rigs1 West Saturn West Phoenix West Castor Sonangol Quenguela Active / idle rigs 11 / 1 2/1 3/1 2/– • 7 dual-activity 7G drillships • 2 HE 6G semi-submersibles • 3 premium JU2000E jack-ups Fleet • 3 dual
Slide 14: One of the youngest fleets globally, featuring high specification floaters
1 One of the youngest fleets globally, featuring high specification floaters Seadrill has the youngest fleet of scale… … with high specification floaters Average fleet age (years)1 3 15 14 12 12 112 11 Modern floaters 12 10 7 6 Rigs capable of Dual-activity 7th generation MPD4 operating at rigs dril
Slide 15: Diversified, global presence in high demand regions…
1 Diversified, global presence in high demand regions… North Sea • Globally diversified portfolio of owned and Region 1 managed rigs Type # Select customers 2 • Established relationships with several major IOCs and NOCs Gulf of Mexico • Positioned in strategic basins for all segments Middle East 3 •
Slide 16: …with strong exposure to key strategic basins
1 …with strong exposure to key strategic basins US GULF OF MEXICO BRAZIL ANGOLA Growing position Among market-leading international drillers Strong market footprint • Long-standing track record • Well-positioned for recontracting / extensions with • Significant presence Petrobras and IOCs • Excellen
Slide 17: Very attractive market fundamentals with demand continuing to accelerate
2 Very attractive market fundamentals with demand continuing to accelerate in a tightening market… E&P spending expected to be buoyant in coming years Benign UDW fixtures reflect tightening market dynamics1 Offshore upstream capex ($bn) $kpd Other fixtures Seadrill fixtures Marketed utilization Curr
Slide 18: …with an improving market balance, particularly for the drillship market
2 …with an improving market balance, particularly for the drillship market Drillship supply and utilization Number of rigs Total Supply Marketed Supply Total Utilization% Marketed Utilization% Utilization (%) 140 100% 93% • Growth in demand for drillships in the Golden Triangle has driven increasing
Slide 19: Profitable $2.6bn backlog with a strong contract win record…
3 Profitable $2.6bn backlog1 with a strong contract win record… Diversified backlog across key geographies… …with solid earnings visibility Total order backlog per year ($mm) Floaters Harsh Environment Other 2 $1,200 $1,000 $1.9bn $0.5bn $0.2bn Golden Triangle Norway Rest of World $800 $600 $400 $20
Slide 20: …with diversity across regions and customers
3 …with diversity across regions and customers Total revenue backlog by geography Total revenue backlog by customer Other1 Indonesia Other customers 5% 4% Angola 21% Brazil 26% 12% 38% 5% $2.6bn $2.6bn 6% 19% 14% Norway 8% 2 8% 12% 22% USA Balanced revenue streams from diversification across clients
Slide 21: Seadrill ranks among the highest in terms of backlog coverage across industry peers
3 Seadrill ranks among the highest in terms of backlog coverage across industry peers Backlog coverage benchmarking – Total backlog / LTM revenue Backlog ($bn) $8.6 $2.61 $1.8 $4.6 $2.8 3.3x 2.1x 2 2.0x 1.9x 3 1.6x Seadrill’s long-dated, profitable backlog provides significant revenue and earnings v
Slide 22: Strategic, established relationships with a diverse set of customers…
3 Strategic, established relationships with a diverse set of customers… Benign UDW1 rig years awarded per operator since 2012 – Top 10 operators 19% 182 1% 124 20% 84 2% 78 35% 64 55% 64 28 67% 28 Seadrill 2 24 Others Seadrill is well-positioned with strong relationships with key ultra deepwater cus
Slide 23: …helping secure premium contracts at better terms than peers
3 …helping secure premium contracts at better terms than peers Consistently securing contracts at the upper end of the market… … at longer contract durations Average announced benign UDW dayrate ($k/d)1 Average benign UDW contract length (rig years)1,2 Others Seadrill +9% +23% +12% 552 1.5 518 506 4
Slide 24: Strong earnings and cashflow generation potential…
4 Strong earnings and cashflow generation potential… Significant earnings potential in a rising market Illustrative annual EBITDA Illustrative annual unlevered FCF $1.6bn +c.30% $1.3bn $1.2bn +c.40% $0.9bn $0.9bn $0.6bn Illustrative Scenario A B C Floaters $400 k/d $450 k/d $500 k/d Harsh Environmen
Slide 25: …combined with an exceptional cost and capital discipline
4 …combined with an exceptional cost and capital discipline Focus on lowering costs Materially lower operating expenses… …and a lower G&A cost base Rig operating expenses (benign floaters), $k/day Seadrill G&A • Disciplined approach to fleet management -20% ‒ Retired 12 rigs from its fleet to -24% e
Slide 26: Seadrill deleveraged significantly…
5 Seadrill deleveraged significantly… Gross principal debt – 3Q22 vs. 1Q23 ($mm) Convertible note 1L Term Loan1 2L Term Loan ~65% $50 $175 ($192) $938mm $713 ($250) $50 $343mm ($110) $175 ($44) $118 Sep-22 Oct-22 paydown Nov-22 paydown Feb-23 paydown Mar-23 paydown Mar-23 Source: Company information
Slide 27: …forming a strong balance sheet and ample liquidity…
5 …forming a strong balance sheet and ample liquidity… Build-up to net debt ($mm) Liquidity ($mm) Balances as of March 31, 2023, pro forma for Aquadrill acquisition $118mm Second Lien Term Loan $551 $175mm First Lien Term Loan $50mm Unsecured Convertible Bond $343 $426 Unrestricted $50 cash $175 $42
Slide 28: …resulting in an industry-leading leverage profile
5 …resulting in an industry-leading leverage profile Net debt benchmarking ($mm)1 Debt Cash $6,878 $1,510 $1,295 $7,625 $335 $1,769 $304 $1,439 $700 $343 $346 $600 ($545) ($41) ($265) ($144) ($259) ($957) ($747) ($202) ($257) Valaris Seadrill Diamond Noble Shelf Borr Transocean Net leverage benchmar
Slide 29: High quality, modern fleet offering solid asset coverage
5 High quality, modern fleet offering solid asset coverage Net debt, GAV and construction cost per rig type ($bn) Harsh environment rigs Gross debt1 $343mm Benign environment floaters Bengin environment jack-ups Gross asset value2 $3.9bn Loan to value1 ~8.7% $11.4 $1.8 $8.8 $3.9 $0.7 $2.9 $0.3 $0.4
Slide 30: Track record of operational excellence and safety
6 Track record of operational excellence and safety World-class safety standards High performance and utilization Industry leading business practices >2,835 wells across all PLATO Condition-Based Maintenance major basins in the world Live tracking of key performance % 95 Technical Utilization indica
Slide 31: A culture of innovation and sustainability
6 A culture of innovation and sustainability Committed to building sustainable operations A case study in Seadrill’s commitment to innovation Installations1 Projected Outcomes Carbon Disclosure Project Combined • 10-15% CO2 emission reduction Rankings hydrogen & • 10-15% fuel saving Seadrill........
Slide 32: III. Financial Overview
III. Financial Overview
Slide 33: FY23 guidance, including Aquadrill consolidation from April 3, 2023
FY23 guidance, including Aquadrill consolidation from April 3, 2023 Total Operating Revenues1 $1,435-1,485mm Adjusted EBITDA2 $435-485mm Capital Expenditure & Long-Term Maintenance $210-250mm Footnote: Company information as of May 2023; (1) Total Operating Revenues include $30mm of non-cash amortiz
Slide 34: Seadrill's current capital structure
Seadrill’s current capital structure Figures in USD million, unless otherwise indicated As of Mar-23 Unrestricted cash $426 Restricted cash 119 Cash & cash equivalents, including restricted cash $545 • Since emerging from Chapter 11 in February Secured credit facilities: 2022, Seadrill has deleverag
Slide 35: IV. Appendix
IV. Appendix
Slide 36: Simplified corporate structure
Simplified corporate structure Seadrill Limited $50mm Unsecured (Bermuda) Convertible Notes Seadrill Investment Holding Company Limited (Bermuda) $175mm Term Loan and $125mm Revolving Credit Facility Seadrill Rig Holding Seadrill Finance Limited Aquadrill LLC Company Limited (Bermuda) (Marshall Isla
Slide 37: Contract coverage
Contract coverage 22 2023 2024 2025 2026 D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D West Neptune 1 A Vela 2 A Auriga 3 West Carina 4 West Jupiter 5 West Tellus 6 West Saturn 7 A Polaris 8 Owned Rigs A Capella 9 West Gemini1 10 West Phoenix 11 Se
Slide 38: Reconciliation of Non-GAAP measures
Reconciliation of Non-GAAP measures Reconciliation of Operating Income to Adjusted EBITDA Three months ended March 31, 2023 Twelve months ended March 31, 2023 Seadrill Aquadrill Pro Forma Seadrill Aquadrill Pro Forma Figures in USD million, unless otherwise indicated Adjustments Adjustments Historic
Slide 39: Seadnill
Seadnill