Discover Seadrill's Impressive Q2 2023 Results and Share Repurchase Plans
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August 16, 2023
Seadrill Limited (NYSE: SDRL), a prominent offshore drilling company, has revealed robust second-quarter 2023 financial results, showcasing its strengthened position in the industry. This quarter's performance is further highlighted by the company's strategic decision to authorize a share repurchase program. Let's delve into the details of Seadrill's impressive achievements.
In the quarter ending June 30, 2023, Seadrill reported total operating revenues of $414 million, marking a substantial sequential increase of $148 million or 56%. Contract revenues stood at $329 million, demonstrating an impressive increase of $143 million or 77% compared to the previous quarter. This growth was largely attributed to the inclusion of contracted Aquadrill rigs in Seadrill's results. The company operated an average of 13 rigs during the quarter, contributing to contract revenues at an average day rate of $276 thousand and an economic utilization rate of 93%.
Simon Johnson, Seadrill's President and Chief Executive Officer, expressed satisfaction with the quarter's performance, emphasizing the successful execution of strategic initiatives. The acquisition of Aquadrill facilitated greater scale, reinforcing Seadrill's position in the market. Additionally, the company continued its fleet refinement efforts by selling three tender-assist units and announcing intentions to divest its jackup fleet in Qatar. These initiatives aim to simplify and strengthen Seadrill's organization, leading to improved strategic flexibility.
In a significant move, Seadrill's Board of Directors has approved a share repurchase program, authorizing the company to buy back up to $250 million of its outstanding common shares. The program, which lacks a fixed expiration, offers flexibility for share repurchases through various methods such as open market purchases, block trades, or tender offers. The decision reflects Seadrill's commitment to enhancing shareholder value and prudent capital management.
Seadrill maintains a strong financial position, with total debt of $355 million and cash and cash equivalents of $539 million at the end of the quarter. To further solidify its financial structure, the company executed a debt refinancing strategy. This involved issuing $575 million in senior secured second lien notes due 2030 and establishing a $225 million senior secured five-year revolving credit facility. This move not only enhances financial flexibility but also empowers Seadrill to pursue value-maximizing opportunities.
Seadrill's operational achievements remain commendable. The company's order backlog reached $2.6 billion, reflecting contract additions totaling approximately $203 million. During the quarter, Seadrill secured contract extensions for two drillships, Sonangol Quenguela and West Gemini, through its joint venture with Sonangol. Furthermore, the company's jackups, West Castor and West Tucana, received contract extensions for ongoing operations offshore Qatar.
Seadrill's accomplishments in Q2 2023, combined with the share repurchase authorization, signify the company's determination to achieve growth and deliver value to its shareholders. As Seadrill continues its journey of innovation and strategic progress, industry stakeholders are keenly observing its trajectory.
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