Seadrill slips to operating loss in fourth quarter of eventful year

Drilling giant Seadrill rang up an operating loss in the final three months of 2022 with its shares on the slide in Oslo this morning.

Seadrill, which completed the takeover of Aquadrill this week, said the $7 million operating loss for the fourth quarter marked the end of an extraordinary year of transformation.

Simon Johnson, Seadrill’s chief executive, said the company delivered a strong financial performance within its 2022 guidance.

Seadrill said the fourth quarter saw a consistent operational performance with 95% fleet utilisation. Revenue fell 15% to $228 million in the quarter.

Gaps in fleet utilisation were attributed to downtime for the drillship West Tellus, which completed upgrades for a new long-term campaign with Petrobras,

There were also fewer operating days for the West Hercules semisubmersible rig, which concluded its operations in Canada and demobilised to Norway.

Article continues below the advert

Revenues were also impacted by the sale of jack-up rigs under the second part of a restructuring process, concluded in February.

This process saw John Fredriksen and other former investors lose much of their equity while Seadrill sold seven jack-ups to Saudi Arabia to fund major debt repayments.

Seadrill said it was encouraged by the fundamentals underpinning the oil and gas sector.

“Despite recent market turmoil, with recession fears and bank sector concerns, energy security will remain a key topic going forward, with strong global demand for affordable and reliable energy sources,” it said.

“Exploration and production companies are showing signs of increased capital expenditure to bring newly sanctioned projects online, as well as an increase in exploration activity, pointing to heightened demand for the services of the offshore drilling sector over the coming years.”

Seadrill stock was down 4.48% at NOK 405.00 ($38.92) per share during morning trading in Norway on Wednesday.

The slump in Seadrill stocks came amid a wider selldown on the Oslo Stock Exchange today with Aker BP and Equinor also heading into reverse, Upstream’s sister title DN reported.

Johnson said the Oslo and New York listed company now had a solid platform for growth and enhanced performance.