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Seadrill narrows losses, but floater reactivations on hold

Offshore rig contractor Seadrill narrowed its second quarter losses by delivering “solid operational performance”, characterised by a utilisation rate of 96%.

Net losses totalled £170m in the second quarter, an improvement on a deficit of £245m in the first quarter, while revenues increased by 6% quarter-on-quarter to £265m.

Eight of Seadrill’s wholly-owned floaters operated in the second quarter with four operating units commencing new contracts.

No floaters were reactivated as Seadrill continues to wait for further improvements in dayrates.

The Sevan Louisiana was removed from the operating fleet while repairs are being performed and returned to work in the third quarter.

Nine of Seadrill’s jack-ups operated in the second quarter and one operating unit commenced a new contract at a higher dayrate.

Two idle jack-ups were reactivated this year, but no further reactivations are expected in 2019.

Chief executive Anton Dibowitz said: “Operationally we performed well for our customers in the quarter, maintaining a high level of utilization across the active fleet and ensuring a safe operating environment for our people.

“From a market perspective we continue to see increased tendering activity and a favorable shift in contract terms.

“While the spot market for short term work remains competitive, rates for longer term work are improving and there are pockets of strength in the harsh environment, high-end ultra deepwater and premium jack-up markets.”

Since the period end, Seadrill and GDI, entered into a 50:50 joint venture, Gulfdrill, which will initially manage and operate five premium jack-ups in Qatar with Qatar Petroleum.

The five contracts will commence during 2020 and run into 2023 & 2024. The total
contract value is expected to be £540m.

The contracts have options which could add up to £580m in additional total contract value.

Gulfdrill will initially bareboat charter the West Telesto and West Castor from Seadrill and has secured bareboat charters for three additional units from a third-party shipyard.

Mr Dibowitz said: “We are excited to partner with GDI and grow our presence in an important jack-up market.

“Gulfdrill will give us the opportunity to improve our access to a significant premium jack-up market and strengthen our relationship with Qatar Petroleum.”

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