sdrl-20260630

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 June 30, 2026

☐ 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.)


4425 Westway Park Blvd., Suite 170, 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 August 6, 2026, 62,541,443 common shares of the registrant were outstanding.

SEADRILL LIMITED

INDEX TO FORM 10-Q

FOR THE QUARTER ENDED JUNE 30, 2026

PART I - FINANCIAL INFORMATION

ITEM 1.

FINANCIAL STATEMENTS.

Condensed Consolidated Statements of Operations for the three and six months ended June 30 , 2026 and 2025

Condensed Consolidated Balance Sheets as of June 3 0 , 2026 and December 31, 2025

Condensed Consolidated Statements of Cash Flows for the s ix months ended Ju ne 30 , 2026 and 2025

Condensed Consolidated Statements of Equity for the three and six months ended June 3 0 , 2026 and 2025

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, 2025, filed with the United States ("U.S.") Securities and Exchange Commission (the "SEC") on February 26, 2026 (the "2025 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 (including the current conflict in Iran), 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 June 30,		Six months ended June 30,
(In $ millions, except per share data)	2026	2025	2026	2025
Operating revenues
Contract revenues	355	288	632	536
Reimbursable revenues (1)	19	16	29	31
Management contract revenues (1)	67	65	130	126
Leasing revenues (1)	8	8	16	16
Other revenues	—	—	—	3
Total operating revenues	449	377	807	712
Operating expenses
Vessel and rig operating expenses	(215)	(180)	(396)	(359)
Reimbursable expenses	(19)	(16)	(29)	(31)
Depreciation and amortization	(72)	(56)	(143)	(111)
Management contract expenses	(42)	(93)	(88)	(138)
Selling, general and administrative expenses	(29)	(26)	(54)	(49)
Merger and integration related expenses	—	—	(1)	—
Total operating expenses	(377)	(371)	(711)	(688)




Operating profit	72	6	96	24
Financial and other non-operating items
Interest income	4	3	6	7
Interest expense	(16)	(15)	(31)	(30)
Equity in earnings of equity method investment (net of tax)	4	6	8	14
Other financial and non-operating items	(23)	(13)	(22)	(27)
Total financial and other non-operating items, net	(31)	(19)	(39)	(36)
Profit/(loss) before income taxes	41	(13)	57	(12)
Income tax expense	(12)	(29)	(35)	(44)
Net income/(loss)	29	(42)	22	(56)
Basic EPS/(LPS) ($)	0.47	(0.68)	0.36	(0.91)
Diluted EPS/(LPS) ($)	0.47	(0.68)	0.36	(0.91)

(1) Includes revenue from related parties of $82 million and $157 million, for the three and six months ended June 30, 2026, respectively, and $79 million and $158 million for the three and six months ended June 30, 2025, 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)	June 30, 2026	December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	337	339
Restricted cash	23	26
Accounts receivables, net	311	162
Amounts due from related parties, net	24	—
Other current assets	225	231
Total current assets	920	758
Non-current assets
Equity method investment	66	58
Drilling units, net of accumulated depreciation of 827 as of June 30, 2026 (December 31, 2025: 682)	2,926	2,969
Deferred tax assets	29	44
Equipment	17	8
Other non-current assets	148	110
Total non-current assets	3,186	3,189
Total assets	4,106	3,947
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Trade accounts payable	72	61
Other current liabilities	296	313
Total current liabilities	368	374
Non-current liabilities
Long-term debt	737	613
Deferred tax liabilities	17	14
Other non-current liabilities	120	88
Total non-current liabilities	874	715
Commitments and contingencies (see Note 13)
Shareholders' equity
Common shares of par value $0.01 per share: 375,000,000 shares authorized as of June 30, 2026 (December 31, 2025: 375,000,000) and 62,541,443 issued as of June 30, 2026 (December 31, 2025: 62,374,171)	1	1
Additional paid-in capital	1,970	1,986
Accumulated other comprehensive income	1	1
Retained earnings	892	870
Total shareholders' equity	2,864	2,858
Total liabilities and shareholders' equity	4,106	3,947

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

SEADRILL LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six months ended June 30,
(In $ millions)	2026	2025
Cash flows from operating activities
Net income/(loss)	22	(56)
Adjustments to reconcile net income/(loss) to net cash used in operating activities:
Depreciation and amortization	143	111

Equity in earnings of equity method investment (net of tax)	(8)	(14)
Deferred tax expense	18	14
Unrealized gain on foreign exchange	—	(2)
Amortization of debt issuance costs	2	2
Share based compensation expense	6	9
Loss on debt extinguishment	35	—
Other	—	27
Other cash movements in operating activities
Additions to long-term maintenance	(70)	(98)
Changes in operating assets and liabilities
Accounts receivable, net	(149)	(7)
Trade accounts payable	5	(41)
Prepaid expenses	3	1
Deferred revenue	(12)	(1)
Deferred contract costs	(31)	26
Related party receivables	(24)	—
Other assets	(8)	(4)
Other liabilities	28	17
Net cash used in operating activities	(40)	(16)
Cash flows from investing activities
Additions to drilling units and equipment	(38)	(68)
Other	—	(4)


Net cash used in investing activities	(38)	(72)
Cash flows from financing activities
Proceeds from issuance of senior bond	700	—
Repayment of secured bond	(575)	—
Payment of make whole premium on secured bond	(25)	—
Payment of debt issuance costs	(8)	—
Shares repurchased	(17)	—
Taxes withheld on employee stock transactions	(2)	—
Net cash provided by financing activities	73	—
Effect of exchange rate changes on cash	—	2
Net decrease in cash and cash equivalents, including restricted cash	(5)	(86)
Cash and cash equivalents, including restricted cash, at beginning of the period	365	505
Cash and cash equivalents, including restricted cash, at the end of period	360	419

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, 2026	1	1,986	1	870	2,858
Share based compensation	—	1	—	—	1
Shares withheld for taxes on equity transactions	—	(1)	—	—	(1)
Net loss	—	—	—	(7)	(7)
Balance as of March 31, 2026	1	1,986	1	863	2,851
Share based compensation	—	5	—	—	5
Shares repurchased	—	(20)	—	—	(20)
Shares withheld for taxes on equity transactions	—	(1)	—	—	(1)
Net income	—	—	—	29	29
Balance as of June 30, 2026	1	1,970	1	892	2,864


(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

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

SEADRILL LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – General information

Seadrill Limited (along with any one or more of its consolidated subsidiaries, or to all such entities, referred to as "Seadrill", "we", "us", "our", and "the Company") is incorporated in Bermuda. We are an offshore drilling contractor providing worldwide offshore drilling services to the oil and gas industry. Our primary business is the ownership and operation of drilling rigs for operations in shallow to ultra-deepwater areas in both benign and harsh environments. We contract our drilling units to drill wells for our customers on a dayrate basis. Our customers include oil super-majors, state-owned national oil companies and independent oil and gas companies. In addition, we provide management services to certain affiliated entities.

Basis of presentation

The accompanying unaudited Condensed Consolidated Financial Statements of Seadrill Limited have been prepared in accordance with accounting principles generally accepted in the U.S. ("U.S. GAAP") for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the SEC. Accordingly, pursuant to such rules and regulations, they do not include all disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, the unaudited Condensed Consolidated Financial Statements includes all adjustments (consisting of normal recurring adjustments) necessary for a fair statement of financial position, results of operations and cash flows for the interim periods.

Results of operations for interim periods are not necessarily indicative of results of operations for the respective full years, or any future period. The accompanying unaudited Condensed Consolidated Financial Statements and related notes should be read in conjunction with our 2025 10-K.

Significant accounting policies

Refer to Note 2 - "Accounting policies" of our Consolidated Financial Statements from our 2025 10-K for additional information related to our significant accounting policies.

Note 2 - Revenue from contracts with customers

The following table provides information about receivables and contract liabilities from our contracts with customers, as of the dates presented:


(In $ millions)	June 30, 2026	December 31, 2025
Accounts receivable, net	311	162
Current contract liabilities (classified within other current liabilities)	(70)	(58)
Non-current contract liabilities (classified within other non-current liabilities)	(69)	(36)

Changes in the contract liabilities balances during the three and six months ended June 30, 2026 are as follows:


(In $ millions)
Contract liabilities as of January 1, 2026						(94)
Amortization of revenue included in the January 1, 2026 contract liability balance						19
Additional contract liabilities recognized, excluding amounts recognized as revenue						(38)
Contract liabilities as of March 31, 2026						(113)
Amortization of revenue included in the March 31, 2026 contract liability balance						21
Additional contract liabilities recognized, excluding amounts recognized as revenue						(47)
Contract liabilities as of June 30, 2026						(139)

Revenues are attributed to geographical locations based on the country of operations for drilling activities, i.e., the country where the revenues are generated. The following table presents our revenues by geographic area:


	Three months ended June 30,		Six months ended June 30,
(In $ millions)	2026	2025	2026	2025
Brazil	174	165	320	286
United States	118	106	221	186
Angola	87	84	164	166

Other (1)	70	22	102	74
Total operating revenues	449	377	807	712

(1) "Other" represents countries in which we operate that individually had revenues representing less than 10% of total operating revenues earned for any of the periods presented.

SEADRILL LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

We had the following customers with revenues greater than 10% of total operating revenues in any of the periods presented:


	Three months ended June 30,				Six months ended June 30,
	2026		2025		2026		2025
Petrobras	34	%	37	%	34	%	33	%
Sonadrill	18	%	21	%	19	%	22	%
Walter Oil & Gas	10	%	5	%	10	%	4	%
LLOG	9	%	11	%