Offshore contract driller Seadrill has emerged from Chapter 11 after successfully completing its reorganization plan confirmed by the US Bankruptcy Court for the Southern District of Texas last October.
The restructuring significantly de-levered the company’s balance sheet by equitizing $4.9 billion of secured bank debt previously held across twelve silos, resulting in a streamlined capital structure with a single collateral silo. The company also raised $350 million in new financing under its reorganization plan. Holders of existing shares in the company’s predecessor, Seadrill Limited, were reduced to 0.25% of their existing holdings, while the company’s employee, customer, and ordinary trade claims were unaffected by the restructuring.
“Our restructured balance sheet provides us greater liquidity and lower debt leverage,” said Stuart Jackson, chief executive of Seadrill, “With this firm financial footing established and market recovery well underway, Seadrill will focus on disciplined capital investment, cost containment, and contract risk management.”
Seadrill filed for bankruptcy protection in November 2020 seeking to restructure more than $3 billion in debt.
During the second half of 2021, Seadrill sold six cold-stacked rigs — West Orion, West Navigator, West Eminence, West Pegasus, West Freedom, and West Alpha. Proceeds from the sales totaled $36 million. Seadrill operates 14 rigs, including seven jackups, five floaters, and two harsh-environment units.
Contract backlog as of February 2022 was $2.2 billion. During the second half of 2021, the company secured new work for the West Hercules with Equinor for two wells off Canada. The West Gemini secured a four-well contract plus options contract in Angola with an unnamed party. Both of Seadrill’s US Gulf of Mexico rigs, the Seven Louisiana and West Neptune, received new deals and extensions that will keep them working through the bulk of the year.
As part of the reorganization plan, a newly constituted board of directors of the company was appointed. Chair of the board is former Noble Drilling boss Julie Johnson Robertson. Mark McCollum was selected as chair of audit committee. Other new board members include Karen Dyrskjot Boesen, Jean Cahuzac, Jan B. Kjærvik, Andrew Schultz, and Paul Smith.
