NYSE:SDRL Seadrill Q3 2023 Earnings Report $22.50 +1.96 (+9.53%) Closing price 05/1/2025 03:59 PM EasternExtended Trading$22.48 -0.02 (-0.10%) As of 04:20 AM Eastern Extended trading is trading that happens on electronic markets outside of regular trading hours. This is a fair market value extended hours price provided by Polygon.io. Learn more. Earnings HistoryForecast Seadrill EPS ResultsActual EPS$1.10Consensus EPS $0.67Beat/MissBeat by +$0.43One Year Ago EPS-$0.36Seadrill Revenue ResultsActual Revenue$414.00 millionExpected Revenue$408.00 millionBeat/MissBeat by +$6.00 millionYoY Revenue GrowthN/ASeadrill Announcement DetailsQuarterQ3 2023Date11/27/2023TimeAfter Market ClosesConference Call DateTuesday, November 28, 2023Conference Call Time10:00AM ETUpcoming EarningsSeadrill's Q1 2025 earnings is scheduled for Monday, May 12, 2025, with a conference call scheduled at 9:00 AM ET. Check back for transcripts, audio, and key financial metrics as they become available.Q1 2025 Earnings ReportConference Call ResourcesConference Call AudioConference Call TranscriptPress Release (8-K)Earnings HistoryCompany ProfilePowered by Seadrill Q3 2023 Earnings Call TranscriptProvided by QuartrNovember 28, 2023 ShareLink copied to clipboard.There are 13 speakers on the call. Operator00:00:00Morning, and welcome to Seadrill's Third Quarter 2023 Earnings Call. All participants are in a listen only mode. After the speakers' presentation, we will conduct a question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the call over to Benjamin Wiseman, Corporate Finance Manager and Investor Relations. Operator00:00:26Thank you. Please go ahead. Speaker 100:00:28Thank you, operator. Welcome to Seadrill's Q3 2023 earnings call. With me today are Simon Johnson, our President and Chief Executive Officer Grant Creed, Executive Vice President and Chief Financial Officer Sameer Ali, Executive Vice President and Chief Commercial Officer and Leif Nelson, Executive Vice President and Chief Operating and Technology Officer. Before we begin, I would like to remind you that some of today's comments are forward looking statements within the meaning of securities laws. They involve risks and uncertainties and actual results may differ materially. Speaker 100:01:05No one should assume these forward looking statements remain valid later in the quarter or year. For a more detailed discussion of the major risk factors affecting our business, please refer to our latest Forms 20F and 6 K filed with the U. S. Securities and Exchange Commission. Our comments also include non GAAP measures. Speaker 100:01:25Reconciliations to the nearest corresponding GAAP Measures are in the earnings release available on our website. Later in the call, following our prepared remarks, we will host a question and answer session. Please limit yourself to one question and one follow-up to permit more participation. Now, let me turn the call over to Speaker 200:01:43Simon. Hello, everyone, and thank you for joining us today. I'll begin with some opening comments about the Q3 results, followed by a few corporate updates Before Samir covers our recent commercial activity and the market outlook, Grant will then provide a financial overview before opening up for Q and A. For the Q3 of 2023, Seadrill reported adjusted EBITDA of $151,000,000 on $414,000,000 of revenues, Resulting in a margin of 36.5 percent which screens favorably across our peer group. Adjusted EBITDA was robust And therefore, we have increased our full year 2023 guidance with the range now $485,000,000 to $505,000,000 Moving to shareholder returns, we initiated a $250,000,000 buyback program in mid September and as of last week's It executed 85% of the total facility at an average of $42.76 per share. Speaker 200:02:42By our estimation, this is highly accretive for shareholders and we are pleased with the progress to date. Given the success of the existing program, The company's robust financial position and our constructive view on the market outlook, we're delighted to announce today that Seadrill's Board of Directors Has increased our share repurchase authorization by a further $250,000,000 taking the aggregate authorization To an industry leading $500,000,000 Now I'd like to touch on the potential sale of our cutter jackup fleet and related joint venture interest. There's been a strong level of interest in these assets, but we have not concluded a sale at this time. Put simply, we intend to transact at a level that reflects Our beliefs as to jackup asset values and the underlying day rate environment, both of which continue to develop positively. We firmly believe that these are attractive drilling rigs in arguably the most prospective jackup market on the planet right now. Speaker 200:03:39Although we remain focused on our strategy of exiting non core asset categories and simplifying our company's value proposition, we're in no rush to sell these non operated rigs And we will do so only if a buyer meets our pricing expectations. On the topic of our ongoing initiatives to simplify and realize cost efficiencies, We can announce today that we've decided to close our London office and consolidate our corporate headquarters in Houston, Texas. We anticipate this will occur before the end of the Q1 in 2024. 1st and foremost, I'd like to take this opportunity to personally thank the dedicated And talented team in London. The London office has been the hub of entrepreneurship and excellence, and everyone who's been a part of that can be justifiably proud of what has been achieved, especially in the past 2 years. Speaker 200:04:27In addition to the executive team, only a modest number of staff will transition to Houston. Nevertheless, looking ahead, the management team and I are excited about the opportunities for improved collaboration and for cost efficiencies That we anticipate will result from centralizing our executive, operational and functional leadership under one roof In much closer proximity to key customers, suppliers and target markets. In our view, fundamentals remain robust. We believe in the length and durability of this cycle and also crucially Seadrill's advantageous positioning relative to most of our trade rivals. Looking forward to 20252026, we expect a reduction in the impact of SPSs, Boosting our revenues and cash flow profile and we anticipate a significant uptick in earnings, particularly as the West Carina, West Jupiter and West Thales roll off existing legacy contracts. Speaker 200:05:24We're very positive about the outlook for South America And last week's 5 year plan from Petrobras only confirmed this view with total E and P spending up 14% And notably, exploration up 25% compared to the prior plan. Now I hand the line over to Sameer to take us through the commercials in more detail. Over to you, Samir. Speaker 300:05:46Thank you, Simon. I'll begin with 2 recent fixtures, both in the Gulf of Mexico. First, The West Neptune secured an extension with Outlog, representing a total contract value of approximately $76,000,000 The extension will be in direct continuation of the current term, Keeping the rig busy until the Q2 of 2025. We are proud to continue this long standing partnership with Out Log that started 9 years ago when the West Neptune was delivered to Seadrill. Next, the West Stella secured a short term campaign with Core North Energy, representing a total contract value of approximately $45,000,000 This is a well based contract and the estimated term is approximately 3 months. Speaker 300:06:22As a reminder, the Westfellow was acquired by our AquaDrill transaction, which closed earlier this year and is currently managed by 3rd party drilling contractor. Once the current program is completed, the rig will undergo a short reintegration into the Seadrill platform and then commence with the Quarter North campaign. Moving to some comments on the upcoming rollovers. We currently anticipate that Savant Louisiana will finish its work with Talos next month, subject to well in progress, Then undertake its 10 year SPS. Despite the contract churn that we've served here in the Gulf of Mexico, we remain cautiously optimistic about securing further work. Speaker 300:06:57Shifting east, the West Polaris is scheduled to conclude early next year in India. The rig is currently managed by a third party drilling contractor, But you will transition to Seadrill once the campaign finishes. As stated previously, we may choose to opportunistically relocate rigs to more attractive markets, Where we see more demand and where we can achieve economies of scale. With this in mind, we do expect several months of idle time on the West Polaris in 2020 Currently, our active fleet contracted utilization for 2024 through 2026 stands at 77%, 47% and 21%, respectively, providing a smooth contract rollover profile. We're increasingly excited as we look to the future anticipating a considerable repricing from rigs rolling on prevailing market rates. Speaker 300:07:42Our order backlog currently stands at $2,200,000,000 as of November 27, 2023. Turning to an overview of the market. The IEA recently published its World Energy Outlook forecasting a meaningful need for hydrocarbons through 2,000 and While OPEC has projected that oil demand will continue to expand until 2,045, primarily driven by population growth in the developing world, Taken together with the low breakeven points of deepwater projects and the support of commodity prices, we believe in the long term outlook of our industry. Taking a closer look at offshore, drillship marketed utilization continues to track in the 90s, while the leading edge day rates recently breached the much anticipated five $100,000 per day mark, albeit for a one well job. Even so, this is just the beginning. Speaker 300:08:26Demand is expected to increase over the coming years, particularly in the Golden Triangle. And in our view, there are major barriers to additional additions of new supply. The lead times and cost of delivery are meaningful and should not be underestimated. As the market continues to develop, we've averaged lead times to secure drillships increased to 3 19 days, an almost 60% improvement compared to 2020. Operators are focused on synchronizing startups with the delivery of well equipment, which continues to slip to the right. Speaker 300:08:55Admittedly, we haven't hit the average lead time seen in the last peak when operators often had a year between fixing and commencement, but the fact that we're even making a comparison is a testament to the current strength of the market And the prospects for this upcycle. Our view and duration remains consistent. At a high level, it's increasing on average, mainly driven by fixtures in Brazil. We anticipate average duration continue its upward trend, especially as operators trade term for favorable day rates in the near term. We're also expecting operators to barter with other aspects of total contract value to mitigate day rate progression, a positive signal we believe. Speaker 300:09:31The market naturally focuses on headline day rates, but this is just the tip of the iceberg. We are just as focused on other terms and conditions below the water surface, Such as escalation mechanisms to help improve margins. As the offshore market further tightens, we will target such terms and conditions Given they can have a meaningful impact on stakeholder value. With that, I'll hand it over to Grant. Speaker 400:09:53Thanks, Sameer. I'll discuss our 3rd quarter results Before giving some other financial updates, in the Q3, Seadrill generated $414,000,000 in total operating revenues, Consistent with the prior quarter. This includes $324,000,000 of contract drilling revenues, which decreased sequentially by $5,000,000 Primarily due to planned out of service days on the West Phoenix and Savant, Louisiana. We reported economic utilization of 93% for the 3rd quarter, was negatively impacted by the above mentioned other service time. Beyond contract drilling revenues, we generated additional revenues from management contracts, Largely relating to Sonadrill joint venture totaling $68,000,000 We also earned an additional $22,000,000 in reimbursable and other revenues, The majority of which relates to bareboat charter income for the 3 Gulf Dall rigs. Speaker 400:10:48Operating expenses for the quarter reduced by $4,000,000 sequentially to $304,000,000 primarily due to one time expenses in the prior quarter relating to AquaDryl acquisition and subsequent integration. This translated into adjusted EBITDA of $151,000,000 resulting in a margin of 36.5%. Net income for the Q3 was $90,000,000 or $1.10 per diluted share. Now onto the balance sheet and cash flow statement. As of September 30, 2023, Seadrill gross principal debt of $625,000,000 comprising $575,000,000 in secured second lien notes And $50,000,000 in unsecured convertible notes. Speaker 400:11:30The secondary notes were issued at our refinancing in July, raising net proceeds of approximately $230,000,000 After redeeming the existing secured debt, at the same time, we established a new first lien revolving facility of 2 $5,000,000 which remains undrawn. At the end of the quarter, we had approximately $837,000,000 of unrestricted cash. This includes $82,000,000 of cash previously pledged as collateral for a tax case in Brazil. This case remains ongoing, but We are able to agree a new arrangement thereby unrestricting this cash. Total CapEx for the Q3 was $61,000,000 Approximately half of this was long term maintenance and the other half related to rig equipment additions. Speaker 400:12:14In line with U. S. GAAP, Long term maintenance costs are included in operating activities on the cash flow statement. The $61,000,000 of total CapEx represents a sequential increase of $24,000,000 compared to the prior quarter, driven by long lead items related to the upcoming SPSs. Looking ahead to the Q4, we do expect a quarter on quarter uptick once again. Speaker 400:12:36Cash flow from operations was $112,000,000 for the 3rd quarter. This represents a sequential increase in operational cash flow of $92,000,000 compared to the prior quarter as we were no longer impacted by adverse one off Moving to our updated full year guidance for 2023. Our total revenues are now expected to be between 1.495 to be between $1,495,000,000 $1,515,000,000 While our adjusted EBITDA range has also increased, now $485,000,000 to $505,000,000 The increase primarily relates to strong operational performance across the fleet, planned maintenance moving to 2024 and a higher number of operating days on the West Polaris. With our year to date results and the updated guidance range, you'll note that we anticipate a sequential decrease in adjusted EBITDA in the 4th quarter. This is mainly driven by planned out of service time for maintenance, higher operating costs related to special projects, fewer operating days on the Savanna, Louisiana And higher personnel costs due to our initiatives to retain talent in an increasingly tight labor market. Speaker 400:13:48Lastly, on the CapEx guidance, Our CapEx range now stands at $185,000,000 to $205,000,000 for 2023, a reduction compared to prior guidance. However, this is largely a timing issue as opposed to a permanent reduction in CapEx altogether. And as such, we do expect these items will push into next year. Next, I'd like to take a moment to provide more color on our upcoming SBS and rig maintenance schedule. These projects can affect our financials on two fronts. Speaker 400:14:191st, out of service times undertake the work negatively affects revenue and in turn earnings and second, CapEx Looking forward to next year, the Savanna, Louisiana and West Neptune will each have an estimated 40 We expect to undertake regulatory work on the West Phoenix at some point following the conclusion of the VAR Energy contract And elsewhere across the fleet, we anticipate SBS related work to be completed on our 4 drill ships in Brazil, but with no associated out of service time. Despite this, we do expect to be cash flow positive next year. Now, I'd like to briefly comment on synergies for our AquaDryl acquisition. As Samir outlined, we recently secured work for the West Vela with Quarter North. This campaign startup will signify the return of the second of AquaDrill's 4 drillships to Seadrill. Speaker 400:15:10After the transition of the West Polaris in the Q1 of 2024. What's more, we expect West Auriga and West Capella to return after their respective contracts Next year, while the West Aquarius semi submersible transitioned back to us earlier this year, which remains cold stacked. Overall, we continue to be on track to realize the previously guided synergies. Furthermore, as part of our continued efforts to simplify the organization, Following the sale of Piratas Energy Services earlier this year, we have now terminated the associated management agreements, program in mid September. As of last Friday, we had repurchased 6.2% of our share capital or 5,000,000 shares At an average of $42.76 per share, this translates to a total value of $213,000,000 We're delighted with both the speed and realized price level to date and we anticipate concluding the program in the next few weeks subject to market conditions. Speaker 400:16:20Next, We've announced today that Seadrill's Board of Directors has increased our share repurchase authorization by a further $250,000,000 Taking the aggregate authorization to $500,000,000 Any purchases we make in connection with this additional Authorization will be at the discretion of our Board and in accordance with our capital allocation principles. We cannot predict when or if we will make any purchases under this facility. We are proud to be a shareholder friendly company. As we have said before, returning capital to shareholders is central to our capital allocation strategy. And with that, we'll open up for Q and A. Speaker 400:16:55Operator, over to you. Operator00:16:58Thank you. Our first question comes from Greg Lewis from BTIG. Please go ahead. Your line is open. Speaker 500:17:16Yes. Thank you and good afternoon and Speaker 600:17:46We can't hear you, Chris. Sure. Operator00:17:48Is this better? Speaker 700:17:49Yes. Thank you. Speaker 500:17:50Okay. Hey, guys. Thanks. Sorry about that. I was hoping to get some comments on the broader market. Speaker 500:18:01Clearly, White space has been something that's been talked about. Congrats on getting that quarter north contract in the Gulf of Mexico. It looks like maybe there's going to be 30, 40 days of downtime in between. As you look at the market In 2024 realizing there is activity coming, but there's always looks like to be a little bit of a timing issue. Any kind of broad strokes how we should be thinking about idle time between contracts As rigs roll off? Speaker 800:18:35Yes. Thanks for the question, Greg. Perhaps let me kick off and then I'll pass to Sameer. So Look, I think the thing to realize is that markets evolve through time. They rarely take a straight path. Speaker 800:18:47We're not concerned by what we see as some near term supply congestion. The fundamentals are just so strong. So what's most important for us is to see consistent measured improvement in demand. That's what we're focused on and that's what the market is delivering through time. I think it's important to reflect on the fact that day rates are now almost back to pre downturn levels, The sort of levels that we were seeing in Q1 'fourteen, Q4 'thirteen. Speaker 800:19:14So there's been tremendous improvement since early 'twenty one. But most of the momentum has obviously been delivered over the last 2 years. So I think That's not always a straight walk and what we're seeing is just a short term fluctuation. Speaker 900:19:31Yes. Greg, the only thing I'd add is We've been pretty consistent that there was some churn and some headwinds kind of coming early probably first half of next year. As we go into the second half of next year in 'twenty five, Demand is starting to stack up and looks pretty good. So I think it is transitory. And I think I'd reiterate, we've been pretty consistent that we saw it coming, and It's not a surprise to us. Speaker 500:19:56Yes, absolutely. And then I did have I was hoping to get a little bit more color on The Louisiana, that's kind of the semi in the Gulf As you kind of look at the opportunities, one of the things we've been hearing is, just given the configuration or structure of the rig, It might be better suited in an area like West Africa. Any kind of thoughts around that? And really what I'm kind of wondering If it were to leave, since it's not a drillship, if it were to leave the Gulf of Mexico and relocate, Any kind of color around the time it would take to reposition that rig and maybe some expenses, if that is indeed What could happen for that rig as you market it globally? Speaker 900:20:48Yes, sure. So I'd say she has a unique design, but she's well loved around here. I'd say we are marketing her globally, obviously. She will roll off contract next month, as I said in my prepared remarks. We're looking at opportunities, we've got an SPS due. Speaker 900:21:04And then after that, we're looking at opportunities both in the Gulf and abroad. I'd say for us, if we're going to move it, we're going to to get the customer to pay for it. So for us, it is a it's a value maximization and we're not going to limit ourselves to one market with that asset. Speaker 500:21:21Okay. Operator00:21:24Our next question comes from Eddie Kim from Barclays. Please go ahead. Your line is open. Speaker 1000:21:30Hi, good morning. Just wanted to get your preliminary thoughts on 2024, if I could. The current consensus has you pegged at around $510,000,000 in EBITDA. Just based on where things stand today, do you believe that's a fairly reasonable estimate? Or would a lot of things sort of Need to break your way in order to hit that target. Speaker 400:21:53Hey, Eddie. Thanks for the question. And look, I'll say that we're not in a position to provide guidance for next year, and that's really just because certain revenue and cost items are still in flux and Really need to firm up before we can provide precise reliable guidance. I think doing anything now would be premature. So I'd rather just stay away from that if you don't mind on the call today. Operator00:22:18Okay. Okay, understood. Speaker 1000:22:23Just my follow-up is just a clarification on the day rate on the Vela. Sameer, you highlighted $45,000,000 in backlog over 3 months, which Works up to a day rate of exactly $500,000 a day on MyMath. First of all, is that math correct? And if so, is that a fairly clean day rate? Or does that $45,000,000 in backlog include maybe some move fees or other services that would maybe take that clean day rate a bit lower? Speaker 400:22:50So we're not going to get into Speaker 700:22:51the contract specifics, Speaker 900:22:53but we did say approximately around a lot of things. So it is a well based On track, so things can ebb and flow is what I'd tell you. Operator00:23:03Okay. Okay, understood. All right, that was all I had. I'll turn it back. Thank you. Operator00:23:10Our next question comes from Frederic Steyn from Clarkson Jerties, please go ahead. Your line is open. Speaker 600:23:17Hey, guys. Hope you are well, Solid quarter and good to see that you continue to return cash or at least You're paying your shareholders to do share repurchases. I have a couple of questions. You have starting actually with the jackups that you announced earlier this year that you were in the process of selling or at least having advanced discussions Customers, as you said, now they're no longer held for sale and you're in no rush to sell them. Are you able to give some color on whether or not that's because your price expectations have changed or because the Potential counterparties' expectations or willingness to pay have changed. Speaker 800:24:10Hey, Frederic, it's Simon. Look, it's a little bit of both. As we said in the prepared remarks, we've had a lot of interest. Frankly, we had strong Expectations about how the jackup market will continue to develop through time. And the opposite in front of us just simply didn't match those expectations. Speaker 800:24:29So it takes time to get deals done. We know that the market for jackup assets has lots of upside, we believe. And as we said, we're not in a hurry and we're not So we're not in a hurry and we believe that that market will continue to develop through time. So It's an informal process we're running and we'll continue to review offers as we receive them. Speaker 600:24:57Right. Thanks. Turning to some of your comments, Samir, about TNCs In the contracts that day rates are one thing, but clearly total economics and whatever gets you the most cash is what Should matter the most, even though the stock market might look more on headline rates than anything else. You also said that Q4 Would be impacted by higher personnel costs. So I was wondering first, Are you able to give any indications on how you see costs for people and equipment developing over the They are in maybe even 2 years. Speaker 600:25:43And as you're working on these other TNCs That relates to pass through mechanisms for or escalation mechanisms for costs. How much do you think you're able to Pause on to your customers. Speaker 900:26:00Hey, Frederic. This is Leif. Speaker 1100:26:01I'll take one of your questions regarding the people and Cost of services, I'll pass over to Samir on the Ts and Cs. I mean, generally speaking, globally, we're seeing inflationary pressures on The labor side in the high single digits, driven predominantly across Brazil, Angola, U. S. Gulf of Mexico. Some of the pressure is coming from the ramp up in activity of our own industry, but also heavy industry elsewhere is attracting people to their services. Speaker 1100:26:30That's putting inflationary pressures to retain and maintain our workforce. I think with that, I'll pass over to Sameer on the other Ts and the Cs. Speaker 900:26:38Yes. So on inflationary pressures, our goal is always to do 100% pass through. I'm going to go with that's our goal and that's the most desirable outcome. But where we landed, it varies client to client and kind of their understanding, but it also varies market to market, right? So for us, it's also looking at Contract duration and our ability to reprice and pass some of those costs on because for us, we want to make sure we're maintaining that margin that we signed up for When we originally signed that contract. Speaker 600:27:10Perfect. Thanks. Final one for me, just a clarification on the Neptune contract. I think you said in the fleet status report that There's been some variations to the well schedule on the existing term. And I'm sorry if I missed this initially, but are you able To give an indication how long this sorry, the extension is or if the rate on the extension is Comparable to what you're earning on the current contracts because initially it seemed to be a bit Lower on what I had to work with here. Speaker 900:27:50The extension was approximately 6 months. Operator00:27:56Perfect. Thanks. That's all for me. Thanks, Our next question comes from Hamed Khorsand from BWS Financial, please go ahead. Your line is open. Speaker 1200:28:15Good morning. This is actually Vahid calling in for Hamed. Question on The contract extension and if that's going to have any impact on the SPS timeline? Speaker 700:28:27So which rig? Speaker 1200:28:31You know what, that's a good question and I don't have an answer to that. I'm just asking a question for Speaker 900:28:39Neptune, Louisiana. No. I don't think it will have an impact on the SPS Speaker 800:28:44schedule. We have some discretion as to when we conduct these SPSs, Wade. So typically there's a window within which we must perform it. We do have the opportunity To get a dispensation from our classification society in certain cases to extend that, the same applies with regulatory work that we have to do to some extent. So we try to do it to minimize the inconvenience in our operators' work programs and also obviously to Opportunistically schedule it in relation to what else we have going on within the organization. Speaker 800:29:17So, they shouldn't be seen as like firm anniversary dates. There's some flexibility there, isn't there, Les? Speaker 1100:29:23Yes, agreed. We have windows to work with and flexibility to work within the well schedule and contract end dates. Speaker 1200:29:32That was the question. Thank you and thanks for the flexibility and not making me look stupid about not knowing which way to ask for. Operator00:29:39Thank you. Our next question comes from Charles Olson from Fearnley Securities. Please go ahead. Your line is open. Speaker 700:29:49Thank you. Hi, Simon. Hi, Simon. Thank you for taking my call. You've added comments on a couple of rigs. Speaker 700:29:56Let me just throw One additional rig in there, and that's the West Phoenix. Now it's coming off contract, I think it's in August next year, and SPS deal and some projects related Probably a bit that into the Neptune Deep, I think it is, it's called. It's been a bit back in the 4th around that Projects and probably other things going around there. Any updates relating to that, Reagan? What's the plan? Speaker 700:30:23Thanks. Speaker 900:30:24Sure. So we're not going to speak to any specific tenders, but what I will say is she does roll off contract later next year. We do have some SPS and some upgrades to do to that rig, and we're actively marketing for opportunities in Norway and other markets as well, and we remain cautiously optimistic. Speaker 700:30:48Thank you. Thanks, Charles. Operator00:30:52We have no further questions. This will conclude today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by Conference Call Audio Live Call not available Earnings Conference CallSeadrill Q3 202300:00 / 00:00Speed:1x1.25x1.5x2x Earnings DocumentsPress Release(8-K) Seadrill Earnings HeadlinesFinancial Survey: Seadrill (NYSE:SDRL) and Onyx (OTCMKTS:ONXC)May 2 at 1:27 AM | americanbankingnews.comIs Seadrill Ltd. (NYSE:SDRL) the Most Promising Small-Cap Stock According to Analysts?April 26, 2025 | msn.comThe next market Nvidia is positioned to dominate …Robots — built by Nvidia. Forbes says this could be " a $24 trillion opportunity for investors." Huang said, "The ChatGPT moment for robotics is right around the corner." In fact, I believe these robots could impact 65 million Americans lives — this year. And one stock — currently priced around $7 — could be the biggest winner.May 2, 2025 | Weiss Ratings (Ad)Seadrill Stock Short Interest Report | NYSE:SDRL | BenzingaApril 21, 2025 | benzinga.comSeadrill Announces First Quarter 2025 Earnings Release and Conference CallApril 15, 2025 | businesswire.comSeadrill (SDRL): Among Paul Singer’s Latest Portfolio’s Top Stock PicksMarch 21, 2025 | msn.comSee More Seadrill Headlines Get Earnings Announcements in your inboxWant to stay updated on the latest earnings announcements and upcoming reports for companies like Seadrill? Sign up for Earnings360's daily newsletter to receive timely earnings updates on Seadrill and other key companies, straight to your email. Email Address About SeadrillSeadrill (NYSE:SDRL) Ltd. engages in the provision of offshore drilling services to the oil and gas industry. It operates through the following segments: Floaters, Jack-up rigs, and Other. The Floaters segment encompasses drilling, completion, and maintenance of offshore exploration and production wells. the Jack-up Rigs segment includes drilling contracts relate to jack-up rigs for operations in harsh and benign environments in shallow water. The Other segment represents management services to third parties and related parties. 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There are 13 speakers on the call. Operator00:00:00Morning, and welcome to Seadrill's Third Quarter 2023 Earnings Call. All participants are in a listen only mode. After the speakers' presentation, we will conduct a question and answer session. As a reminder, this conference call is being recorded. I would now like to turn the call over to Benjamin Wiseman, Corporate Finance Manager and Investor Relations. Operator00:00:26Thank you. Please go ahead. Speaker 100:00:28Thank you, operator. Welcome to Seadrill's Q3 2023 earnings call. With me today are Simon Johnson, our President and Chief Executive Officer Grant Creed, Executive Vice President and Chief Financial Officer Sameer Ali, Executive Vice President and Chief Commercial Officer and Leif Nelson, Executive Vice President and Chief Operating and Technology Officer. Before we begin, I would like to remind you that some of today's comments are forward looking statements within the meaning of securities laws. They involve risks and uncertainties and actual results may differ materially. Speaker 100:01:05No one should assume these forward looking statements remain valid later in the quarter or year. For a more detailed discussion of the major risk factors affecting our business, please refer to our latest Forms 20F and 6 K filed with the U. S. Securities and Exchange Commission. Our comments also include non GAAP measures. Speaker 100:01:25Reconciliations to the nearest corresponding GAAP Measures are in the earnings release available on our website. Later in the call, following our prepared remarks, we will host a question and answer session. Please limit yourself to one question and one follow-up to permit more participation. Now, let me turn the call over to Speaker 200:01:43Simon. Hello, everyone, and thank you for joining us today. I'll begin with some opening comments about the Q3 results, followed by a few corporate updates Before Samir covers our recent commercial activity and the market outlook, Grant will then provide a financial overview before opening up for Q and A. For the Q3 of 2023, Seadrill reported adjusted EBITDA of $151,000,000 on $414,000,000 of revenues, Resulting in a margin of 36.5 percent which screens favorably across our peer group. Adjusted EBITDA was robust And therefore, we have increased our full year 2023 guidance with the range now $485,000,000 to $505,000,000 Moving to shareholder returns, we initiated a $250,000,000 buyback program in mid September and as of last week's It executed 85% of the total facility at an average of $42.76 per share. Speaker 200:02:42By our estimation, this is highly accretive for shareholders and we are pleased with the progress to date. Given the success of the existing program, The company's robust financial position and our constructive view on the market outlook, we're delighted to announce today that Seadrill's Board of Directors Has increased our share repurchase authorization by a further $250,000,000 taking the aggregate authorization To an industry leading $500,000,000 Now I'd like to touch on the potential sale of our cutter jackup fleet and related joint venture interest. There's been a strong level of interest in these assets, but we have not concluded a sale at this time. Put simply, we intend to transact at a level that reflects Our beliefs as to jackup asset values and the underlying day rate environment, both of which continue to develop positively. We firmly believe that these are attractive drilling rigs in arguably the most prospective jackup market on the planet right now. Speaker 200:03:39Although we remain focused on our strategy of exiting non core asset categories and simplifying our company's value proposition, we're in no rush to sell these non operated rigs And we will do so only if a buyer meets our pricing expectations. On the topic of our ongoing initiatives to simplify and realize cost efficiencies, We can announce today that we've decided to close our London office and consolidate our corporate headquarters in Houston, Texas. We anticipate this will occur before the end of the Q1 in 2024. 1st and foremost, I'd like to take this opportunity to personally thank the dedicated And talented team in London. The London office has been the hub of entrepreneurship and excellence, and everyone who's been a part of that can be justifiably proud of what has been achieved, especially in the past 2 years. Speaker 200:04:27In addition to the executive team, only a modest number of staff will transition to Houston. Nevertheless, looking ahead, the management team and I are excited about the opportunities for improved collaboration and for cost efficiencies That we anticipate will result from centralizing our executive, operational and functional leadership under one roof In much closer proximity to key customers, suppliers and target markets. In our view, fundamentals remain robust. We believe in the length and durability of this cycle and also crucially Seadrill's advantageous positioning relative to most of our trade rivals. Looking forward to 20252026, we expect a reduction in the impact of SPSs, Boosting our revenues and cash flow profile and we anticipate a significant uptick in earnings, particularly as the West Carina, West Jupiter and West Thales roll off existing legacy contracts. Speaker 200:05:24We're very positive about the outlook for South America And last week's 5 year plan from Petrobras only confirmed this view with total E and P spending up 14% And notably, exploration up 25% compared to the prior plan. Now I hand the line over to Sameer to take us through the commercials in more detail. Over to you, Samir. Speaker 300:05:46Thank you, Simon. I'll begin with 2 recent fixtures, both in the Gulf of Mexico. First, The West Neptune secured an extension with Outlog, representing a total contract value of approximately $76,000,000 The extension will be in direct continuation of the current term, Keeping the rig busy until the Q2 of 2025. We are proud to continue this long standing partnership with Out Log that started 9 years ago when the West Neptune was delivered to Seadrill. Next, the West Stella secured a short term campaign with Core North Energy, representing a total contract value of approximately $45,000,000 This is a well based contract and the estimated term is approximately 3 months. Speaker 300:06:22As a reminder, the Westfellow was acquired by our AquaDrill transaction, which closed earlier this year and is currently managed by 3rd party drilling contractor. Once the current program is completed, the rig will undergo a short reintegration into the Seadrill platform and then commence with the Quarter North campaign. Moving to some comments on the upcoming rollovers. We currently anticipate that Savant Louisiana will finish its work with Talos next month, subject to well in progress, Then undertake its 10 year SPS. Despite the contract churn that we've served here in the Gulf of Mexico, we remain cautiously optimistic about securing further work. Speaker 300:06:57Shifting east, the West Polaris is scheduled to conclude early next year in India. The rig is currently managed by a third party drilling contractor, But you will transition to Seadrill once the campaign finishes. As stated previously, we may choose to opportunistically relocate rigs to more attractive markets, Where we see more demand and where we can achieve economies of scale. With this in mind, we do expect several months of idle time on the West Polaris in 2020 Currently, our active fleet contracted utilization for 2024 through 2026 stands at 77%, 47% and 21%, respectively, providing a smooth contract rollover profile. We're increasingly excited as we look to the future anticipating a considerable repricing from rigs rolling on prevailing market rates. Speaker 300:07:42Our order backlog currently stands at $2,200,000,000 as of November 27, 2023. Turning to an overview of the market. The IEA recently published its World Energy Outlook forecasting a meaningful need for hydrocarbons through 2,000 and While OPEC has projected that oil demand will continue to expand until 2,045, primarily driven by population growth in the developing world, Taken together with the low breakeven points of deepwater projects and the support of commodity prices, we believe in the long term outlook of our industry. Taking a closer look at offshore, drillship marketed utilization continues to track in the 90s, while the leading edge day rates recently breached the much anticipated five $100,000 per day mark, albeit for a one well job. Even so, this is just the beginning. Speaker 300:08:26Demand is expected to increase over the coming years, particularly in the Golden Triangle. And in our view, there are major barriers to additional additions of new supply. The lead times and cost of delivery are meaningful and should not be underestimated. As the market continues to develop, we've averaged lead times to secure drillships increased to 3 19 days, an almost 60% improvement compared to 2020. Operators are focused on synchronizing startups with the delivery of well equipment, which continues to slip to the right. Speaker 300:08:55Admittedly, we haven't hit the average lead time seen in the last peak when operators often had a year between fixing and commencement, but the fact that we're even making a comparison is a testament to the current strength of the market And the prospects for this upcycle. Our view and duration remains consistent. At a high level, it's increasing on average, mainly driven by fixtures in Brazil. We anticipate average duration continue its upward trend, especially as operators trade term for favorable day rates in the near term. We're also expecting operators to barter with other aspects of total contract value to mitigate day rate progression, a positive signal we believe. Speaker 300:09:31The market naturally focuses on headline day rates, but this is just the tip of the iceberg. We are just as focused on other terms and conditions below the water surface, Such as escalation mechanisms to help improve margins. As the offshore market further tightens, we will target such terms and conditions Given they can have a meaningful impact on stakeholder value. With that, I'll hand it over to Grant. Speaker 400:09:53Thanks, Sameer. I'll discuss our 3rd quarter results Before giving some other financial updates, in the Q3, Seadrill generated $414,000,000 in total operating revenues, Consistent with the prior quarter. This includes $324,000,000 of contract drilling revenues, which decreased sequentially by $5,000,000 Primarily due to planned out of service days on the West Phoenix and Savant, Louisiana. We reported economic utilization of 93% for the 3rd quarter, was negatively impacted by the above mentioned other service time. Beyond contract drilling revenues, we generated additional revenues from management contracts, Largely relating to Sonadrill joint venture totaling $68,000,000 We also earned an additional $22,000,000 in reimbursable and other revenues, The majority of which relates to bareboat charter income for the 3 Gulf Dall rigs. Speaker 400:10:48Operating expenses for the quarter reduced by $4,000,000 sequentially to $304,000,000 primarily due to one time expenses in the prior quarter relating to AquaDryl acquisition and subsequent integration. This translated into adjusted EBITDA of $151,000,000 resulting in a margin of 36.5%. Net income for the Q3 was $90,000,000 or $1.10 per diluted share. Now onto the balance sheet and cash flow statement. As of September 30, 2023, Seadrill gross principal debt of $625,000,000 comprising $575,000,000 in secured second lien notes And $50,000,000 in unsecured convertible notes. Speaker 400:11:30The secondary notes were issued at our refinancing in July, raising net proceeds of approximately $230,000,000 After redeeming the existing secured debt, at the same time, we established a new first lien revolving facility of 2 $5,000,000 which remains undrawn. At the end of the quarter, we had approximately $837,000,000 of unrestricted cash. This includes $82,000,000 of cash previously pledged as collateral for a tax case in Brazil. This case remains ongoing, but We are able to agree a new arrangement thereby unrestricting this cash. Total CapEx for the Q3 was $61,000,000 Approximately half of this was long term maintenance and the other half related to rig equipment additions. Speaker 400:12:14In line with U. S. GAAP, Long term maintenance costs are included in operating activities on the cash flow statement. The $61,000,000 of total CapEx represents a sequential increase of $24,000,000 compared to the prior quarter, driven by long lead items related to the upcoming SPSs. Looking ahead to the Q4, we do expect a quarter on quarter uptick once again. Speaker 400:12:36Cash flow from operations was $112,000,000 for the 3rd quarter. This represents a sequential increase in operational cash flow of $92,000,000 compared to the prior quarter as we were no longer impacted by adverse one off Moving to our updated full year guidance for 2023. Our total revenues are now expected to be between 1.495 to be between $1,495,000,000 $1,515,000,000 While our adjusted EBITDA range has also increased, now $485,000,000 to $505,000,000 The increase primarily relates to strong operational performance across the fleet, planned maintenance moving to 2024 and a higher number of operating days on the West Polaris. With our year to date results and the updated guidance range, you'll note that we anticipate a sequential decrease in adjusted EBITDA in the 4th quarter. This is mainly driven by planned out of service time for maintenance, higher operating costs related to special projects, fewer operating days on the Savanna, Louisiana And higher personnel costs due to our initiatives to retain talent in an increasingly tight labor market. Speaker 400:13:48Lastly, on the CapEx guidance, Our CapEx range now stands at $185,000,000 to $205,000,000 for 2023, a reduction compared to prior guidance. However, this is largely a timing issue as opposed to a permanent reduction in CapEx altogether. And as such, we do expect these items will push into next year. Next, I'd like to take a moment to provide more color on our upcoming SBS and rig maintenance schedule. These projects can affect our financials on two fronts. Speaker 400:14:191st, out of service times undertake the work negatively affects revenue and in turn earnings and second, CapEx Looking forward to next year, the Savanna, Louisiana and West Neptune will each have an estimated 40 We expect to undertake regulatory work on the West Phoenix at some point following the conclusion of the VAR Energy contract And elsewhere across the fleet, we anticipate SBS related work to be completed on our 4 drill ships in Brazil, but with no associated out of service time. Despite this, we do expect to be cash flow positive next year. Now, I'd like to briefly comment on synergies for our AquaDryl acquisition. As Samir outlined, we recently secured work for the West Vela with Quarter North. This campaign startup will signify the return of the second of AquaDrill's 4 drillships to Seadrill. Speaker 400:15:10After the transition of the West Polaris in the Q1 of 2024. What's more, we expect West Auriga and West Capella to return after their respective contracts Next year, while the West Aquarius semi submersible transitioned back to us earlier this year, which remains cold stacked. Overall, we continue to be on track to realize the previously guided synergies. Furthermore, as part of our continued efforts to simplify the organization, Following the sale of Piratas Energy Services earlier this year, we have now terminated the associated management agreements, program in mid September. As of last Friday, we had repurchased 6.2% of our share capital or 5,000,000 shares At an average of $42.76 per share, this translates to a total value of $213,000,000 We're delighted with both the speed and realized price level to date and we anticipate concluding the program in the next few weeks subject to market conditions. Speaker 400:16:20Next, We've announced today that Seadrill's Board of Directors has increased our share repurchase authorization by a further $250,000,000 Taking the aggregate authorization to $500,000,000 Any purchases we make in connection with this additional Authorization will be at the discretion of our Board and in accordance with our capital allocation principles. We cannot predict when or if we will make any purchases under this facility. We are proud to be a shareholder friendly company. As we have said before, returning capital to shareholders is central to our capital allocation strategy. And with that, we'll open up for Q and A. Speaker 400:16:55Operator, over to you. Operator00:16:58Thank you. Our first question comes from Greg Lewis from BTIG. Please go ahead. Your line is open. Speaker 500:17:16Yes. Thank you and good afternoon and Speaker 600:17:46We can't hear you, Chris. Sure. Operator00:17:48Is this better? Speaker 700:17:49Yes. Thank you. Speaker 500:17:50Okay. Hey, guys. Thanks. Sorry about that. I was hoping to get some comments on the broader market. Speaker 500:18:01Clearly, White space has been something that's been talked about. Congrats on getting that quarter north contract in the Gulf of Mexico. It looks like maybe there's going to be 30, 40 days of downtime in between. As you look at the market In 2024 realizing there is activity coming, but there's always looks like to be a little bit of a timing issue. Any kind of broad strokes how we should be thinking about idle time between contracts As rigs roll off? Speaker 800:18:35Yes. Thanks for the question, Greg. Perhaps let me kick off and then I'll pass to Sameer. So Look, I think the thing to realize is that markets evolve through time. They rarely take a straight path. Speaker 800:18:47We're not concerned by what we see as some near term supply congestion. The fundamentals are just so strong. So what's most important for us is to see consistent measured improvement in demand. That's what we're focused on and that's what the market is delivering through time. I think it's important to reflect on the fact that day rates are now almost back to pre downturn levels, The sort of levels that we were seeing in Q1 'fourteen, Q4 'thirteen. Speaker 800:19:14So there's been tremendous improvement since early 'twenty one. But most of the momentum has obviously been delivered over the last 2 years. So I think That's not always a straight walk and what we're seeing is just a short term fluctuation. Speaker 900:19:31Yes. Greg, the only thing I'd add is We've been pretty consistent that there was some churn and some headwinds kind of coming early probably first half of next year. As we go into the second half of next year in 'twenty five, Demand is starting to stack up and looks pretty good. So I think it is transitory. And I think I'd reiterate, we've been pretty consistent that we saw it coming, and It's not a surprise to us. Speaker 500:19:56Yes, absolutely. And then I did have I was hoping to get a little bit more color on The Louisiana, that's kind of the semi in the Gulf As you kind of look at the opportunities, one of the things we've been hearing is, just given the configuration or structure of the rig, It might be better suited in an area like West Africa. Any kind of thoughts around that? And really what I'm kind of wondering If it were to leave, since it's not a drillship, if it were to leave the Gulf of Mexico and relocate, Any kind of color around the time it would take to reposition that rig and maybe some expenses, if that is indeed What could happen for that rig as you market it globally? Speaker 900:20:48Yes, sure. So I'd say she has a unique design, but she's well loved around here. I'd say we are marketing her globally, obviously. She will roll off contract next month, as I said in my prepared remarks. We're looking at opportunities, we've got an SPS due. Speaker 900:21:04And then after that, we're looking at opportunities both in the Gulf and abroad. I'd say for us, if we're going to move it, we're going to to get the customer to pay for it. So for us, it is a it's a value maximization and we're not going to limit ourselves to one market with that asset. Speaker 500:21:21Okay. Operator00:21:24Our next question comes from Eddie Kim from Barclays. Please go ahead. Your line is open. Speaker 1000:21:30Hi, good morning. Just wanted to get your preliminary thoughts on 2024, if I could. The current consensus has you pegged at around $510,000,000 in EBITDA. Just based on where things stand today, do you believe that's a fairly reasonable estimate? Or would a lot of things sort of Need to break your way in order to hit that target. Speaker 400:21:53Hey, Eddie. Thanks for the question. And look, I'll say that we're not in a position to provide guidance for next year, and that's really just because certain revenue and cost items are still in flux and Really need to firm up before we can provide precise reliable guidance. I think doing anything now would be premature. So I'd rather just stay away from that if you don't mind on the call today. Operator00:22:18Okay. Okay, understood. Speaker 1000:22:23Just my follow-up is just a clarification on the day rate on the Vela. Sameer, you highlighted $45,000,000 in backlog over 3 months, which Works up to a day rate of exactly $500,000 a day on MyMath. First of all, is that math correct? And if so, is that a fairly clean day rate? Or does that $45,000,000 in backlog include maybe some move fees or other services that would maybe take that clean day rate a bit lower? Speaker 400:22:50So we're not going to get into Speaker 700:22:51the contract specifics, Speaker 900:22:53but we did say approximately around a lot of things. So it is a well based On track, so things can ebb and flow is what I'd tell you. Operator00:23:03Okay. Okay, understood. All right, that was all I had. I'll turn it back. Thank you. Operator00:23:10Our next question comes from Frederic Steyn from Clarkson Jerties, please go ahead. Your line is open. Speaker 600:23:17Hey, guys. Hope you are well, Solid quarter and good to see that you continue to return cash or at least You're paying your shareholders to do share repurchases. I have a couple of questions. You have starting actually with the jackups that you announced earlier this year that you were in the process of selling or at least having advanced discussions Customers, as you said, now they're no longer held for sale and you're in no rush to sell them. Are you able to give some color on whether or not that's because your price expectations have changed or because the Potential counterparties' expectations or willingness to pay have changed. Speaker 800:24:10Hey, Frederic, it's Simon. Look, it's a little bit of both. As we said in the prepared remarks, we've had a lot of interest. Frankly, we had strong Expectations about how the jackup market will continue to develop through time. And the opposite in front of us just simply didn't match those expectations. Speaker 800:24:29So it takes time to get deals done. We know that the market for jackup assets has lots of upside, we believe. And as we said, we're not in a hurry and we're not So we're not in a hurry and we believe that that market will continue to develop through time. So It's an informal process we're running and we'll continue to review offers as we receive them. Speaker 600:24:57Right. Thanks. Turning to some of your comments, Samir, about TNCs In the contracts that day rates are one thing, but clearly total economics and whatever gets you the most cash is what Should matter the most, even though the stock market might look more on headline rates than anything else. You also said that Q4 Would be impacted by higher personnel costs. So I was wondering first, Are you able to give any indications on how you see costs for people and equipment developing over the They are in maybe even 2 years. Speaker 600:25:43And as you're working on these other TNCs That relates to pass through mechanisms for or escalation mechanisms for costs. How much do you think you're able to Pause on to your customers. Speaker 900:26:00Hey, Frederic. This is Leif. Speaker 1100:26:01I'll take one of your questions regarding the people and Cost of services, I'll pass over to Samir on the Ts and Cs. I mean, generally speaking, globally, we're seeing inflationary pressures on The labor side in the high single digits, driven predominantly across Brazil, Angola, U. S. Gulf of Mexico. Some of the pressure is coming from the ramp up in activity of our own industry, but also heavy industry elsewhere is attracting people to their services. Speaker 1100:26:30That's putting inflationary pressures to retain and maintain our workforce. I think with that, I'll pass over to Sameer on the other Ts and the Cs. Speaker 900:26:38Yes. So on inflationary pressures, our goal is always to do 100% pass through. I'm going to go with that's our goal and that's the most desirable outcome. But where we landed, it varies client to client and kind of their understanding, but it also varies market to market, right? So for us, it's also looking at Contract duration and our ability to reprice and pass some of those costs on because for us, we want to make sure we're maintaining that margin that we signed up for When we originally signed that contract. Speaker 600:27:10Perfect. Thanks. Final one for me, just a clarification on the Neptune contract. I think you said in the fleet status report that There's been some variations to the well schedule on the existing term. And I'm sorry if I missed this initially, but are you able To give an indication how long this sorry, the extension is or if the rate on the extension is Comparable to what you're earning on the current contracts because initially it seemed to be a bit Lower on what I had to work with here. Speaker 900:27:50The extension was approximately 6 months. Operator00:27:56Perfect. Thanks. That's all for me. Thanks, Our next question comes from Hamed Khorsand from BWS Financial, please go ahead. Your line is open. Speaker 1200:28:15Good morning. This is actually Vahid calling in for Hamed. Question on The contract extension and if that's going to have any impact on the SPS timeline? Speaker 700:28:27So which rig? Speaker 1200:28:31You know what, that's a good question and I don't have an answer to that. I'm just asking a question for Speaker 900:28:39Neptune, Louisiana. No. I don't think it will have an impact on the SPS Speaker 800:28:44schedule. We have some discretion as to when we conduct these SPSs, Wade. So typically there's a window within which we must perform it. We do have the opportunity To get a dispensation from our classification society in certain cases to extend that, the same applies with regulatory work that we have to do to some extent. So we try to do it to minimize the inconvenience in our operators' work programs and also obviously to Opportunistically schedule it in relation to what else we have going on within the organization. Speaker 800:29:17So, they shouldn't be seen as like firm anniversary dates. There's some flexibility there, isn't there, Les? Speaker 1100:29:23Yes, agreed. We have windows to work with and flexibility to work within the well schedule and contract end dates. Speaker 1200:29:32That was the question. Thank you and thanks for the flexibility and not making me look stupid about not knowing which way to ask for. Operator00:29:39Thank you. Our next question comes from Charles Olson from Fearnley Securities. Please go ahead. Your line is open. Speaker 700:29:49Thank you. Hi, Simon. Hi, Simon. Thank you for taking my call. You've added comments on a couple of rigs. Speaker 700:29:56Let me just throw One additional rig in there, and that's the West Phoenix. Now it's coming off contract, I think it's in August next year, and SPS deal and some projects related Probably a bit that into the Neptune Deep, I think it is, it's called. It's been a bit back in the 4th around that Projects and probably other things going around there. Any updates relating to that, Reagan? What's the plan? Speaker 700:30:23Thanks. Speaker 900:30:24Sure. So we're not going to speak to any specific tenders, but what I will say is she does roll off contract later next year. We do have some SPS and some upgrades to do to that rig, and we're actively marketing for opportunities in Norway and other markets as well, and we remain cautiously optimistic. Speaker 700:30:48Thank you. Thanks, Charles. Operator00:30:52We have no further questions. This will conclude today's conference call. Thank you for your participation. You may now disconnect.Read morePowered by