sdrl-20250930

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __ to __

Commission file number: 001-39327


SEADRILL LIMITED
(Exact name of Registrant as specified in its charter)


Bermuda						98-1834031
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


11025 Equity Dr., Suite 150, Houston, Texas, United States of America			77041
(Address of principal executive offices)			(Zip Code)


+1	(713)	329-1150
(Registrant's telephone number, including area code)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common Shares, par value $0.01 per share

SDRL

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


☒ Yes			☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).


☒ Yes			☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☒			Accelerated filer ☐


Non-accelerated filer ☐			Smaller reporting company ☐


			Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act).


☐ Yes			☒ No

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.


☒ Yes			☐ No

As of November 3, 2025, 62,374,171 common shares of the registrant were outstanding.

SEADRILL LIMITED

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED SEPTEMBER 30, 2025

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

Condensed Consolidated Statements of Operations for the three and nine months ended September 30, 2025 and 2024

Condensed Consolidated Balance Sheets as of Sep tember 30, 2025 and December 31, 2024

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024

Condensed Consolidated Statements of Equity for the three and nine months ended September 30, 2025 and 2024

Notes to the unaudited Condensed Consolidated Financial Statements

ITEM 2.

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

ITEM 4.

CONTROLS AND PROCEDURES.

PART II - OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS.

ITEM 1A.

RISK FACTORS.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

ITEM 3.

DEFAULTS UPON SENIOR SECURITIES.

ITEM 4.

MINE SAFETY DISCLOSURES.

ITEM 5.

OTHER INFORMATION.

ITEM 6.

EXHIBITS.

SIGNATURES

FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, without limitation, those regarding the Company's outlook, plans, strategies, business prospects, financial performance, operations, litigation, rig activity and changes and trends in its business and the markets in which it operates, are forward-looking statements. These forward-looking statements can often, but not necessarily, be identified by the use of forward-looking terminology, including the terms "assumes", "projects", "forecasts", "estimates", "expects", "anticipates", "believes", "plans", "intends", "may", "might", "will", "would", "can", "could", "should" or, in each case, their negative, or other variations or comparable terminology. These statements are based on management's current plans, expectations, assumptions and beliefs concerning future events impacting the Company and therefore involve a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to: those described under Part I, Item 1A. "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2024, filed with the United States ("U.S.") Securities and Exchange Commission (the "SEC") on February 27, 2025 (the "2024 10-K"), offshore drilling market conditions including supply and demand, dayrates, customer drilling programs and effects of new or reactivated rigs on the market, contract awards and rig mobilizations, contract backlog, dry-docking and other costs of maintenance, special periodic surveys, upgrades and regulatory work for the drilling units in the Company's fleet, the performance of the drilling units in the Company's fleet, delay in payment or disputes with customers, the Company's ability to successfully employ its drilling units, procure or have access to financing, ability to comply with loan covenants, fluctuations in the international price of oil, international financial market conditions, U.S. trade policy and tariffs and worldwide reactions thereto, inflation, changes in governmental regulations that affect the Company or the operations of the Company's fleet, increased competition in the offshore drilling industry, the review of competition authorities, the impact of global economic conditions and global health threats, pandemics and epidemics, our ability to maintain relationships with suppliers, customers, employees and other third parties, our ability to maintain adequate financing to support our business plans, our ability to successfully complete and realize the intended benefits of any mergers, acquisitions and divestitures, and the impact of other strategic transactions, our liquidity and the adequacy of cash flows to satisfy our obligations, future activity under and in respect of the Company's share repurchase program, our ability to satisfy (or timely cure any noncompliance with) the continued listing requirements of the New York Stock Exchange, the cancellation of drilling contracts currently included in reported contract backlog, losses on impairment of long-lived fixed assets, shipyard, construction and other delays, the results of meetings of our shareholders, political and other uncertainties, including those related to the conflicts in Ukraine and the Middle East, and any related sanctions, the effect and results of litigation, regulatory matters, settlements, audits, assessments and contingencies, including any litigation related to acquisitions or dispositions, the concentration of our revenues in certain geographical jurisdictions, limitations on insurance coverage, our ability to attract and retain skilled personnel on commercially reasonable terms, the level of expected capital expenditures, our expected financing of such capital expenditures and the timing and cost of completion of capital projects, fluctuations in interest rates or exchange rates and currency devaluations relating to foreign or U.S. monetary policy, tax matters, changes in tax laws, treaties and regulations, tax assessments and liabilities for tax issues, legal and regulatory matters in the jurisdictions in which we operate, customs and environmental matters, the potential impacts on our business resulting from decarbonization and emissions legislation and regulations, the impact on our business from climate change generally, the occurrence of cybersecurity incidents, attacks or other breaches to our information technology systems, including our rig operating systems, and other important factors described from time to time in the reports filed or furnished by us with the SEC. The foregoing risks and uncertainties are inherently subject to significant business, economic, competitive, regulatory and other risks and uncertainties, many of which are difficult to predict and beyond our control. In many cases, we cannot predict the risks and uncertainties that could cause our actual results to differ materially from those indicated by the forward-looking statements. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated. All subsequent written and oral forward-looking statements attributable to us or to any person(s) acting on our behalf are expressly qualified in their entirety by reference to these risks and uncertainties. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. We expressly disclaim any obligations or undertaking to release publicly any updates or revisions to any forward-looking statement to reflect any change in our expectations or beliefs with regard to the statement or any change in events, conditions or circumstances on which any forward-looking statement is based, except as required by securities laws.

Investors should note that we announce material financial information in SEC filings, press releases and public conference calls. Based on guidance from the SEC, we may use the Investors section of our website (www.seadrill.com) to communicate with investors and we intend to post presentations and fleet status reports there, among other things. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of, and is not incorporated into, this Quarterly Report on Form 10-Q. Furthermore, references to our website URLs are intended to be inactive textual references only.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements.

SEADRILL LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)


	Three months ended September 30,		Nine months ended September 30,
(In $ millions, except per share data)	2025	2024	2025	2024
Operating revenues
Contract revenues	280	263	816	805
Reimbursable revenues (1)	11	20	42	55
Management contract revenues (1)	63	62	189	185
Leasing revenues (1)	9	9	25	46
Other revenues (1)	—	—	3	5
Total operating revenues	363	354	1,075	1,096
Operating expenses
Vessel and rig operating expenses	(191)	(172)	(550)	(517)
Reimbursable expenses	(11)	(19)	(42)	(53)
Depreciation and amortization	(58)	(42)	(169)	(123)
Management contract expenses	(49)	(45)	(187)	(124)
Selling, general and administrative expenses	(27)	(27)	(76)	(76)
Merger and integration related expenses	(1)	(2)	(1)	(7)
Total operating expenses	(337)	(307)	(1,025)	(900)
Other operating items
Gain on disposals	—	—	—	203
Other operating income	—	—	—	16
Total other operating items	—	—	—	219
Operating profit	26	47	50	415
Financial and other non-operating items
Interest income	4	6	11	20
Interest expense	(15)	(15)	(45)	(46)
Equity in (losses)/earnings of equity method investments (net of tax)	(11)	(2)	3	(13)
Other financial and non-operating items	(4)	3	(31)	(11)
Total financial and other non-operating items, net	(26)	(8)	(62)	(50)
Profit/(loss) before income taxes	—	39	(12)	365
Income tax expense	(11)	(7)	(55)	(20)
Net (loss)/income	(11)	32	(67)	345
Basic (LPS)/EPS ($)	(0.17)	0.49	(1.08)	4.97
Diluted (LPS)/EPS ($)	(0.17)	0.49	(1.08)	4.82

(1) Includes revenue from related parties of $77 million and $235 million, for the three and nine months ended September 30, 2025, respectively, and $74 million and $246 million for the three and nine months ended September 30, 2024, respectively. Refer to Note 10 - "Related party transactions" for further details.

The accompanying notes form an integral part of these unaudited Condensed Consolidated Financial Statements.

SEADRILL LIMITED

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(In $ millions, except share data)	September 30, 2025	December 31, 2024
ASSETS
Current assets
Cash and cash equivalents	402	478
Restricted cash	26	27
Accounts receivables, net	179	193

Other current assets	223	230
Total current assets	830	928
Non-current assets
Equity method investment	71	68
Drilling units, net of accumulated depreciation of 615 as of September 30, 2025 (December 31, 2024: 430)	2,992	2,946
Deferred tax assets	47	63
Equipment	4	5
Other non-current assets	123	146
Total non-current assets	3,237	3,228
Total assets	4,067	4,156
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	72	118
Other current liabilities	367	383
Total current liabilities	439	501
Non-current liabilities
Long-term debt	612	610
Deferred tax liabilities	14	11
Other non-current liabilities	137	116
Total non-current liabilities	763	737
Commitments and contingencies (see Note 13)
Shareholders' equity
Common shares of par value $0.01 per share: 375,000,000 shares authorized as of September 30, 2025 (December 31, 2024: 375,000,000) and 62,374,171 issued as of September 30, 2025 (December 31, 2024: 62,154,422)	1	1
Additional paid-in capital	1,983	1,969
Accumulated other comprehensive income	1	1
Retained earnings	880	947
Total shareholders' equity	2,865	2,918
Total liabilities and shareholders' equity	4,067	4,156

The accompanying notes form an integral part of these unaudited Condensed Consolidated Financial Statements.

SEADRILL LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Nine months ended September 30,
(In $ millions)		2025	2024
Cash flows from operating activities
Net (loss)/income		(67)	345
Adjustments to reconcile net (loss)/income to net cash provided by operating activities:
Depreciation and amortization		169	123
Gain on disposal of assets		—	(203)
Equity in (earnings)/losses of equity method investments (net of tax)		(3)	13
Deferred tax expense/(benefit)		19	(7)
Unrealized (gain)/loss on foreign exchange		(2)	5
Amortization of bond issuance costs		2	3
Share based compensation expense		14	12
Other		27	—
Other cash movements in operating activities
Additions to long-term maintenance		(167)	(167)
Changes in operating assets and liabilities
Trade accounts receivable		6	41
Trade accounts payable		(36)	55
Prepaid expenses/accrued revenue		1	(27)
Deferred revenue		(1)	19
Deferred mobilization costs		41	(62)

Other assets		(3)	(19)
Other liabilities		12	(50)
Net cash provided by operating activities		12	81

Cash flows from investing activities
Additions to drilling units and equipment		(87)	(119)
Other		(4)	—

Proceeds from disposal of assets		—	338
Net cash (used in)/provided by investing activities		(91)	219

Cash flows from financing activities
Shares repurchased		—	(431)



Net cash used in financing activities		—	(431)
Effect of exchange rate changes on cash		2	(5)
Net decrease in cash and cash equivalents, including restricted cash		(77)	(136)
Cash and cash equivalents, including restricted cash, at beginning of the period		505	728
Cash and cash equivalents, including restricted cash, at the end of period		428	592

The accompanying notes form an integral part of these unaudited Condensed Consolidated Financial Statements.

SEADRILL LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)


(In $ millions)	Common shares	Additional paid-in capital	Accumulated other comprehensive income	Retained earnings	Total shareholders' equity
Balance as of January 1, 2025	1	1,969	1	947	2,918
Share based compensation	—	4	—	—	4
Net loss	—	—	—	(14)	(14)
Balance as of March 31, 2025	1	1,973	1	933	2,908
Share based compensation	—	5	—	—	5

Net loss	—	—	—	(42)	(42)
Balance as of June 30, 2025	1	1,978	1	891	2,871
Share based compensation	—	5	—	—	5

Net loss	—	—	—	(11)	(11)
Balance as of September 30, 2025	1	1,983	1	880	2,865


(In $ millions)	Common shares	Additional paid-in capital	Accumulated other comprehensive income	Retained earnings	Total shareholders' equity
Balance as of January 1, 2024	1	2,480	1	501	2,983
Share based compensation	—	3	—	—	3
Shares repurchased	—	(119)	—	—	(119)
Net income	—	—	—	60	60
Balance as of March 31, 2024	1	2,364	1	561	2,927
Share based compensation	—	4	—	—

SEC Form 10-Q filed by Seadrill Limited