Seadrill Limited (NYSE: SDRL) experienced a positive uptick in its shares during premarket trading on Wednesday following the announcement of several significant rig contracts covering key offshore regions around the globe, including Malaysia, Norway, and Brazil. These newly secured agreements collectively bolster Seadrill’s contracted revenue visibility into the years 2026 and 2027.
Contract Award in Malaysia
The ultra-deepwater drillship West Capella was awarded a firm-term contract in Malaysia, set to commence in the second quarter of 2026. This engagement is expected to involve a well-based drilling program with an anticipated duration of approximately 440 days. The agreement additionally includes priced options for drilling three additional wells beyond the initial program.
The contract's firm-term value is established at about $157 million, which includes a mobilization fee of $5 million. This figure does not account for additional services, which may entail supplementary fees. The deployment of West Capella in Malaysia represents a substantial addition to Seadrill's forward workload and is integral to its earnings forecast.
Operations Secured in Norway
Separately, Seadrill announced that its West Elara rig had secured an accommodation contract with Equinor AS on the Norwegian Continental Shelf. This contract is projected to start in the third quarter of 2026, extending into the fourth quarter of 2027. The firm contract value is quoted at $78 million and features three options, each priced for an additional three months of operation.
Furthermore, Seadrill conveyed that it reached a mutual agreement with the previous contract holder, allowing the company to release the rig and thereby enhance the net contract value by $23 million. This arrangement reflects a strategic collaboration with customers that helps optimize asset utilization and revenue generation.
Contract Extension in Brazil
In Brazil, Seadrill has extended the current contract for its West Carina rig, securing its deployment through April 2026. This extension ensures continued operations for the rig in one of the company's pivotal offshore markets, thus maintaining a steady contribution to cash flow from this region.
Leadership Perspective and Market Response
Simon Johnson, President and CEO of Seadrill, highlighted the significance of these contract awards, stating, "We are excited to confirm these important contracts with several of our long-standing customers." He emphasized that the restart of the West Capella rig markedly improves Seadrill's earnings outlook as offshore drilling demand strengthens globally.
Regarding the agreement with Equinor, Johnson noted that it helps prevent an operational gap in Norway and exemplifies Seadrill’s cooperative approach to servicing customer needs.
Following the contract announcements, Seadrill’s stock edged higher in premarket trading, registering a gain of 0.63 percent to a price of $35.25, according to data sourced from Benzinga Pro.
Conclusion
These contract awards collectively reinforce Seadrill’s positioning in the offshore drilling sector by extending its backlog and ensuring asset utilization across multiple regions. The company continues to focus on maintaining a strong balance sheet and enhancing earnings visibility amidst evolving market conditions.