Replies to post #2581 on Seadrill Ltd (SDRL)

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Seadrill says another bankruptcy is an option - WSJ
Jun. 3, 2020 2:44 PM ET|About: Seadrill Limited (SDRL)|By: Carl Surran, SA News Editor
Seadrill (SDRL -8.2%) tells WSJ that Chapter 11 bankruptcy is on the table, a day after CFO Stuart Jackson said the downturn due to the coronavirus and the Saudi-Russian oil price had forced the company to abandon what was an "interim solution" to its debt woes and focus on a comprehensive restructuring.

"We are considering all options at this stage, of which Chapter 11 is one," a Seadrill spokesman says, adding the restructuring situation is still fluid. "We anticipate this to take place over the coming year, but it is too early to say for certain."

On yesterday's conference call, Jackson said the company believes it has sufficient liquidity to manage its business as well as the restructuring process.

"From an investment perspective, we've also written down the value of our Seadrill Partners holding to zero, as we expect this entity will move into a comprehensive restructuring of its balance sheets in the coming future," Jackson said.

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Coronavirus company news summary – Seadrill reports $1.56bn net loss – US LNG exports slips to 13-month low
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3 June

Deepwater drilling contractor Seadrill has reported a net loss attributable to shareholder of $1.56bn in the first quarter as the company continues to combat the challenges arising due to the Covid-19 pandemic. The company has also appointed advisors to assess restructuring alternatives to reduce debt.

US LNG exports have fallen to a 13-month low as the Covid-19 pandemic triggered a global fall in demand according to Reuters who cited the fall in the amount of gas flowing to LNG export plants. In recent weeks, LNG prices crashed due to oversupplies.

Oilfield firm ProPetro Holding estimated that there are 20 hydraulic fracturing fleets operating in the Permian Basin. This is significant fall from 172 running in the US field a year ago, reported Reuters. It comes after several oil and gas companies trimmed spending following Covid-19 pandemic.

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June 3, 2020 Seadrill Q1 revenue was down 19% at $321 million with a lower proportion of reimbursable revenues.
Seadrill
SEADRILL Technical utilization was 95%
Highlights:

Topics: SEADRILL

Technical utilization of 95% and economic utilization of 93%.

Operating Loss of $1,284 million after making material asset impairments.

Adjusted EBITDA of $55 million, representing 17.1% margin.

Net loss attributable to shareholder of $1,564 million equivalent to net loss per share of $15.59.

During the quarter we added $77 million in backlog, maintaining a total backlog figure of $2.5 billion.

Closing cash of $1.2 billion.

Seadrill announces its intention to delist from the New York Stock Exchange (NYSE).

On March 26, 2020, Seadrill received written notice from the NYSE that it was not in compliance with the NYSE continued listing standard with respect to the minimum average share price required, because the average closing price of its common shares had fallen below $1.00 per share over a period of 30 consecutive trading days. On April 8, 2020, the Company provided the required notice to the NYSE, in which the Company stated its intent to seek a cure of its non compliance with the NYSE continued listing standard at that time

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Beware MONEY NEWSJUNE 2, 2020 / 10:17 AM / 5 DAYS AGO
Seadrill warns on future after taking $1.2 billion write-off
Nerijus Adomaitis
2 MIN READ

OSLO (Reuters) - Seadrill announced a writedown of $1.2 billion on the value of its oil drilling rigs on Tuesday and warned its survival hinges on converting parts of its $7.4 billion in debt into equity, sending its shares tumbling.

The company plans to cut 1,400 jobs and lower costs by $130 million over the next 18 months, Chief Financial Officer Stuart Jackson told a conference call.

“Until such time that an agreement is reached to restructure our borrowing commitments, substantial doubt remains over (the) ability to continue as a going concern,” Seadrill said in its first-quarter earnings report on Tuesday.

Seadrill’s Oslo-listed shares traded 15% lower at 1427 GMT and are down more than 80% year-to-date.

Controlled by Norwegian-born shipping tycoon John Fredriksen, the company struggled even before the COVID-19 pandemic as low oil prices curbed demand for rigs.

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Seadrill is hiring bankers and lawyers to overhaul its finances later this year, although it did not name the advisors.

“This industry has two fundamental challenges which are emphasised by recent events - there are too many rigs carrying too much debt,” CEO Anton Dibowitz said. “We recognise, along with others in the sector, that a number of our assets are increasingly unlikely to return to the market and need to be scrapped.”

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Seadrill’s impairment charge assumed that up to 10 of its 35 drilling rigs may be scrapped and the company hopes 50 floating rigs will eventually be removed from the global market, Dibowitz said.

Following the impairment, the company reported a net loss of $1.57 billion for the first quarter versus a loss of $295 million a year earlier.

The company on Monday announced its intention to delist from the New York Stock Exchange this month while maintaining an Oslo listing.

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Be Very Careful Of Seadrill paints a bleak picture for the rig sector
02 Jun 2020 12:09 (+01:00 GMT)
London, 2 June (Argus) — Rig operator Seadrill today painted a bleak picture for the drilling sector, which it said is characterised by "too many rigs carrying too much debt".

The Bermuda-based firm said the severity of capital expenditure (capex) cuts by upstream firms will lead to a reduction in exploration programmes and delays in the sanctioning of development programmes, and as a consequence a fall in rates and utilisation for drill rigs. It said this will be felt in the onshore and offshore sectors alike.

Half of Seadrill's fleet was idle as of the end of March, and it said that a number of its rigs "are increasingly unlikely to return to the market and need to be scrapped." To this end it took an impairment charge of $1.2bn in the first quarter of this year.

The firm, which came out of Chapter 11 bankruptcy proceedings two years ago, said there are "substantial doubts" about its ability to continue as a going concern. A process to renegotiate the high level of cash outflow required to service Seadrill's debt with 43 lenders has stalled because of uncertainty arising from low oil prices and the Covid-19 pandemic, although it said its $1.2bn of cash in hand should provide a cushion to allow for a restructuring. It plans to delist from the New York Stock Exchange in the coming months, but will retain a listing in Oslo.

Seadrill made a $1.56bn loss in the first quarter, compared with a $295mn loss a year earlier.

By Ben Winkley