Seadrill Posts Larger-Than-Expected 3Q Loss After Emerging From Chapter 11

  By Dominic Chopping 
 

Seadrill Ltd. (SDRL) posted a bigger-than-expected third-quarter net loss of $240 million on Tuesday, nearly five months after emerging from chapter 11 bankruptcy protection, but said it sees signs of improvement in the offshore drilling industry.

Seadrill, which operates a fleet of 35 drilling rigs and manages a further 18 on behalf of other companies, filed for bankruptcy protection last September after being hit by a perfect storm of tumbling oil prices that prompted oil companies to slash exploration plans while Seadrill was struggling to repay a mounting debt pile.

But in July the company emerged from chapter 11 after completing a restructuring that saw it equitize $2.4 billion in unsecured bond obligations, over $1 billion in contingent newbuild obligations, substantial unliquidated guaranty obligations, and $250 million in unsecured interest rate and currency swap claims. It also extended near-term debt maturities, providing the company with over $1 billion in fresh capital.

The $240 million net loss in the three months to Sept. 30 was larger than the $179 million loss expected in a FactSet analyst forecast.

Revenue came in at $249 million compared with a forecast of $284 million, while adjusted earnings before interest, tax, depreciation and amortization totaled $46 million.

Seadrill expects adjusted Ebitda for the fourth quarter will be lower than the third quarter, at around $35 million.

"Having restructured our business, we are now well positioned to capitalize on the recovery," said Chief Executive Anton Dibowitz.

"The fundamentals for our industry remain strong and there are improving signs through increased contracting activity, additional supply leaving the market and industry consolidation which should lead to better pricing in the future. We are already starting to see rate improvements for contracts starting in 2019/20."

The company said its backlog as of Nov. 27 totaled $2.1 billion and since the end of the second quarter it has added $296 million in backlog.

Write to Dominic Chopping at [e-mail]; @domchopping, @WSJNordics

(END) Dow Jones Newswires

November 27, 2018 02:09 ET (07:09 GMT)

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