Seadrill Limited (NYSE:SDRL) Q2 2024 Earnings Conference Call August 6, 2024 10:00 AM ET

Company Participants

Lydia Mabry - Director of IR
Simon Johnson - President and CEO
Grant Creed - EVP and CFO
Samir Ali - EVP and Chief Commercial Officer
Marcel Wieggers - SVP of Operations

Conference Call Participants

Scott Gruber - Citi
Ben Nolan - Stifel
Fredrik Stene - Clarkson Securities
Hamed Khorsand - BWS Financial
Greg Lewis - BTIG
Noel Parks - Tuohy Brothers
Josh Jayne - Daniel Energy Partners

Operator

Thank you for standing by, and welcome to the Seadrill's Second Quarter Earnings Conference Call. [Operator Instructions] Thank you.

I would now like to turn the call over to Lydia Mabry, Director of Investor Relations. You may begin.

Lydia Mabry

Thank you, operator. Welcome to Seadrill's second quarter 2024 earnings call.

Today's call will feature prepared remarks from Simon Johnson, our President and Chief Executive Officer; Samir Ali, Executive Vice President and Chief Commercial Officer; and Grant Creed, Executive Vice President and Chief Financial Officer. Also joining is Marcel Wieggers, Senior Vice President of Operations.

Today’s call may include forward-looking statements that involve risks and uncertainty. Actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year, and we assume no obligations to update. Our latest Forms 20-F and 6-K filed with the U.S. Securities and Exchange Commission provide a more detailed discussion of our forward-looking statements and the risk factors affecting our business.

During the call, we may also refer to non-GAAP measures. Our earnings release filed with the SEC and available on our website, includes reconciliations to the nearest corresponding GAAP measures. Our use of the term EBITDA on today's call corresponds with the term adjusted EBITDA as defined in our earnings release.

Now, let me turn the call to Simon.

Simon Johnson

Thank you for joining us on today's call.

The second quarter Seadrill delivered EBITDA of $133 million on $375 million of total operating revenues for an EBITDA margin of 35.5%. Seadrill had a strong first half of the year with a combined $257 million in EBITDA. However, we are lowering our second half expectations based on revised estimates for contract start dates for the two rigs we're moving to Brazil and uncommitted near-term availability on other rigs within our fleet.

We entered 2024 knowing it would be a transition year. We've operated fewer rigs while preparing units for long-term contracts and performing necessary calendar-based maintenance on several others. We've acknowledged our willingness to incur idle time early in the cycle as we sought to reprice, relocate and reintegrate rigs. This was exemplified by the West Polaris, which we moved from a third-party managed contract in India, where it operated alone to a market rate term contract in Brazil, where we operate at scale.