Seadrill Limited (NYSE:SDRL) Q1 2023 Earnings Conference Call May 23, 2023 9:00 AM ET
Company Participants
Simon Johnson - President and CEO
Grant Creed - EVP and CFO
Samir Ali - EVP and Chief Commercial Officer
Conference Call Participants
Greg Lewis - BTIG
Fredrik Stene - Clarksons Securities
Hamed Khorsand - BWS Financial
Konstantin Chinarov - Aptior Capital LLP
Simon Johnson
Welcome all to our Second Quarterly Earnings Call this calendar year and the first call of the 2023 Financial Period. On the line today, Grant and I are joined by Leif Nelson, our Chief Operating and Technology Officer; and Samir Ali, our Chief Commercial Officer. Grant and I will shortly take you through our prepared remarks before we open up for a Q&A session. For further information regarding today's presentation on the first quarter earnings, I invite you to read the full earnings release published to the market earlier today, which is accessible on the Seadrill website.
On Slide 2, you'll find a disclaimer relating to today's presentation. This outlines important points around forward-looking statements made in the earnings report and to be discussed on this call, which are based on current expectations and are subject to certain risks and uncertainties. There are many factors that could cause actual performance and results to differ materially. For further information, please take the time after the call to read this disclaimer and refer to the full quarter earnings report as well as our other SEC filings.
In addition, please note that we'll be referencing non-GAAP measures on our call and a reconciliation of operating income to adjusted EBITDA can be found in today's full earnings release.
We've started this year strongly with adjusted EBITDA more than doubling on a quarter-on-quarter basis to $85 million. This represents a 32% EBITDA margin. The significant improvement in financial performance was mainly due to a full quarter of operations for our drillships operating in Brazil. As of today, Seadrill's backlog stands at approximately $2.6 billion, which is especially strong in the context of our fleet size. This backlog total includes a three month extension secured for the West Neptune, which added $39 million, reflecting our long-standing relationship with LLOG.
We ended the quarter with an adjusted net cash position of $133 million. Going forward, free cash flow generated by the enterprise will be a key metric. Across our own fleet, we had good operational performance, with technical utilization coming in at 96%, while our economic utilization was 95%. As Seadrill stands today, we have a fleet of 22 units, including 13 ultra-deepwater floaters. We're delighted that most floaters are contracted, including all of our 10 high-specification drillships, primarily deployed across the Golden Triangle.