Thank you for standing by. At this time, I would like to welcome everyone to the Seadrill Limited First Quarter 2026 Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer session. Today, we ask that you limit to one question and one follow-up. If you would like to ask a question, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Kevin Smith. Please proceed.

Hello, and welcome to Seadrill Limited's first quarter 2026 earnings call. I am Kevin Smith, vice president of corporate finance and investor relations, and I am joined today by our president and chief executive officer, our executive vice president and chief financial officer, and our vice president, commercial. Our call will include forward-looking statements that involve risks and uncertainty. Actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year and we assume no obligation to update them except as required by securities laws. Our filings with the U.S. Securities and Exchange Commission provide a more detailed discussion of our forward-looking statements and the risk factors affecting our business. During the call, we will also reference non-GAAP measures. Our earnings release furnished to the SEC and available on our website includes reconciliations with the nearest corresponding GAAP measures. Our use of the term EBITDA on today’s call corresponds with the term adjusted EBITDA as defined in our earnings release. I will now turn the call over to Samir Ali.

Thanks, Kevin. Welcome, everyone, and thank you for joining us. I will begin with Seadrill Limited’s key priorities, followed by first quarter highlights, including recent contract awards, and a brief market update. Grant will then review our financial results and speak to our improved full year 2026 guidance before I close with final remarks. Seadrill Limited’s priorities continue to be driven by our motto of focus on the drill bit. It reflects the fundamentals of our business and the standards we hold ourselves to every day. First and foremost, operational discipline underpins everything we do. Our goal is to deliver safe, efficient, and reliable operations across our fleet with a focus on zero incidents while maximizing uptime. This is supported by adherence to our procedures, disciplined risk management, and systematically learning from our experiences. By identifying issues early, closing gaps quickly, and applying lessons learned across our fleet, we seek to strengthen Seadrill Limited’s performance quarter over quarter. Next, we are sharpening our focus on free cash flow. This means winning the right contracts, and then effectively converting that backlog into cash. It also means delivering projects on time and on budget while continuing to simplify our onshore organization so every dollar spent supports value creation. Third, we are committed to capturing the upside ahead of us. Three legacy dayrate contracts roll off in 2026, and we have already recontracted two of the associated rigs—an important milestone that strengthens our earnings and cash flow profiles this year. As we look ahead, we believe the opportunity to reprice the West Carina at current market rates combined with our contracting leverage in an improving market positions us for meaningful earnings and free cash flow growth in 2027. Executing on these priorities is reflected in our first quarter performance. The West Telus reacceptance and the West Capella reactivation projects were completed ahead of schedule and on budget, enabling early startup and revenue generation. We delivered a solid quarter both financially and operationally, with EBITDA of $97 million and strong economic utilization. As a result of this performance, we are raising full year revenue and EBITDA guidance, which Grant will cover in more detail. Importantly, we remain on track for meaningful free cash flow generation starting in 2026. I want to extend a special thank you to our offshore crews for the tremendous work delivered this quarter. Our performance is driven by your collaboration and operational discipline, and your continued efforts to strengthen Seadrill Limited’s position as a leader in deepwater drilling. Turning to our contract awards since our last call, we have added approximately $860 million to our backlog. In the U.S. Gulf, industry-leading performance continues to translate into follow-on work. In April, West Neptune and West Vela each secured new contracts with LOG, adding approximately $260 million to our backlog. We are pleased to expand our relationship with LOG, now a subsidiary of Harbor Energy, and look forward to supporting their ambitions to establish a leading position in the U.S. Gulf with a second drillship now unlocking valuable resources. Last quarter, we noted that seven drillships were expected to roll off contract in the U.S. Gulf before year end. Removing white space for both of our drillships in the region significantly improves revenue visibility and reduces idle time in 2026. Both rigs are now positioned to capitalize on improving demand fundamentals in 2027 as other assets find work or leave the region. Ultimately, we believe improving market utilization will drive potential upward dayrate momentum. In Angola, the Gemini had a seven-well priced option exercised, committing the rig into mid-2028. Lastly, in Brazil, West Polaris was awarded a three-year extension with Petrobras in direct continuation of the current program, extending a sixth-generation drillship into the next decade. Consistent with our focus on free cash flow, this extension has no additional CapEx requirements and does not require lengthy acceptance testing normally found in Petrobras contracts. In addition, we now anticipate the West Carina will remain on contract until mid-June. We continue to see a strong demand pipeline driven by growing deepwater exploration as operators intensify efforts to secure future growth. There is a clear shift amongst majors and large independents towards allocating incremental capital to deepwater, addressing the exploration underinvestment of the past decade and offsetting production declines. At an industry conference in March, the largest operators in the world highlighted the reality of production declines and the maturation of onshore plays. Chevron’s CEO noted that the natural decline of existing fields is a growing supply challenge and described a loss equivalent to several million barrels per day over the next decade. Similarly, ConocoPhillips’ CEO noted that the peak in shale output has helped shape their strategy of targeting major new conventional discoveries. This decline, coupled with recent exploration successes from ENI in Indonesia, Egypt, and Libya, Petrobras in Brazil and Colombia, and Oxy in the U.S. Gulf, to name just a few, further strengthens our thesis that a new exploration cycle is emerging. Since the start of the year, geopolitical tensions pushed import-dependent economies to prioritize energy security, with examples such as India’s initiative to drill approximately 150 wells over seven years amid sanctions on Russian crude. The Iran conflict has further intensified this focus, reinforcing the need for domestically anchored supply, where deepwater will be the beneficiary. With production shortfalls already in the hundreds of millions of barrels and pressure to rebuild strategic reserves, deepwater resources are becoming increasingly attractive and even better positioned for development. Energy security is back in vogue. In summary, sentiment has improved since our last call. Demand in Brazil has crystallized, with several multiyear extensions recently awarded. Despite a softer 2026 in the U.S. Gulf, we have contracted both of our drillships in a highly competitive environment. Going forward, we expect available capacity to be redeployed across the Atlantic Basin towards the Eastern Hemisphere where demand continues to strengthen. Taken together, rising demand from deepwater exploration and a renewed focus on energy security increase our confidence in an improving 2027. A firmer commodity backdrop provides an additional tailwind for offshore project economics. With that, I will hand the call over to Grant.

Thanks, Samir. I will now walk through our first quarter 2026 financial results before providing an update on our outlook for the balance of the year. First quarter results surpassed expectations due to early contract commencements, solid economic utilization, and the timing of operating expenditures. During the quarter, the West Jupiter underwent reacceptance testing and began its new contract with Petrobras in late March. The West Capella was successfully reactivated and commenced operations late in the quarter, and the West Telus entered reacceptance testing following the completion of its contract in mid-March. Contract drilling revenues were $277 million, up $4 million quarter on quarter. The key drivers were more operating days and higher dayrates for the West Vela, and higher economic utilization across the fleet, with increased uptime driven by strong operational execution. This offset the impact of fewer operating days for the West Jupiter and fewer operating days for the Savannah, Louisiana, which had a short gap between programs. Reimbursable revenues decreased, offset by a corresponding movement in reimbursable expenses. Management contract revenues decreased by $2 million to $63 million, due to the timing of add-on services, which can fluctuate quarter on quarter. Leasing revenues were consistent with the prior quarter at $8 million. Now moving to operating expenses, which were $334 million in the first quarter, down $10 million from the prior quarter. The movement was attributable to a reduction in vessel and rig operating expenses related to the capitalization of mobilization costs for the West Jupiter, with the cost to be amortized over the three-year contract term, partially offset by higher costs related to preparation and commencement of the West Capella contract. Resulting EBITDA was $97 million, a sequential increase of $9 million compared to the prior quarter. Turning to the balance sheet and cash flow statements, we ended the quarter with total cash of $329 million. The $35 million use of cash in the first quarter included $13 million of capital expenditures captured in investing activities, and $38 million of long-term maintenance recorded in operating activities. As anticipated, our cash position was largely impacted by the reactivation and contract preparations for West Capella, the reacceptance testing for West Jupiter, as well as timing of working capital. We are increasingly confident in our return to strong cash flow generation in 2026. We expect cash receipts totaling approximately $70 million over the next two quarters relating to lump-sum mobilization revenues from Petrobras, as reimbursement for reacceptance projects for both the West Jupiter and West Telus. These receipts, as well as benefiting from dayrate revenues from the West Jupiter, West Capella, and West Telus contracts, will mark the inflection points in our cash profile this year. Overall, our capital structure remains robust. Gross principal debt was $625 million at quarter end, with maturities extending through 2030, and we have access to $482 million of total liquidity when including available borrowing capacity on our revolving credit facility. Now turning to our outlook for the remainder of the year. First quarter EBITDA was stronger than anticipated, with a portion of the outperformance attributable to the timing of repair and maintenance expenses that are expected to occur later in the year. We are updating our revenue and EBITDA guidance ranges to reflect project execution, as demonstrated by the early commencement for the West Jupiter and West Capella contracts in the first quarter, and additional operating days for the West Carina, which is now expected to work through mid-June. For the full year 2026, we are updating our guidance for operating revenues to $1.43 billion to $1.48 billion, which excludes $50 million of reimbursable revenues, and our EBITDA range to $370 million to $420 million. That EBITDA guidance includes a non-cash net expense of $26 million related to the amortization of mobilization costs and revenues, of which $7 million has been recognized at the end of the first quarter. Full year capital expenditure guidance range is maintained at $200 million to $240 million. I will now hand the call back to Samir for his closing remarks.

Thanks, Grant. In closing, I would like to reiterate our priorities: safe, reliable operations; free cash flow generation; and capturing the upside. We are proud of our performance to start 2026—executing key projects ahead of schedule, adding meaningful backlog, delivering first quarter EBITDA that exceeds expectations, and raising our full year revenue and EBITDA guidance. Collectively, these achievements enhance our line of sight to higher earnings and free cash flow in 2026 and in 2027. We will now open the call for questions.

At this time, I would like to remind everyone, in order to ask a question, please press star then the number one on your telephone keypad. Your first question comes from the line of Fredrik Stene with Clark Securities. Please go ahead.

Thanks, Samir and team. Hope you are well, and congratulations on a very solid first quarter performance. I wanted to kick it off here with maybe a high-level question. You paint a relatively supportive demand story, which I definitely agree with. But the start of 2026 has been quite, eventful from a geopolitical perspective. My take on this is that the pivot towards more exploration—more conventional oil and gas activity rather than just M&A to replace reserves—is something that was on the way of happening anyway. Would you agree with that, and any additional commentary you might have around it? And, also, with the war in the Middle East now adding aspects around energy security on top of that, how has that changed, if anything? Are we starting to see any impacts of that work into tenders at the moment, or is that too early? Thanks.

Yeah, absolutely. Afternoon, Fredrik. If you roll the clock back to January 1—just to pick a date—when we did our forecast and looked out at demand, we saw clients already starting to talk about investing in new regions and going back and finding hydrocarbons through the drill bit. Historically, many bought a lot of their hydrocarbons via M&A, but there was that pivot of: we have to go invest in places like Namibia or Angola or even Mozambique, just to pick a few. We saw that coming early this year. On top of that, you now have what is going on in Iran, which has helped commodity prices—adding cash to our customers’ balance sheets and allowing them to spend. Beyond that, you have energy security. Long way of saying: yes, we saw that demand coming already, and what you have seen with Iran has just added fuel to that fire of energy security and a higher commodity price for them to go explore even more.

Alright, thank you. And as a follow-up to that: if you think about the share of exploration drilling versus development drilling over the last, say, five years—given this new exploration cycle—are you able to in some way quantify how much additional demand can come from exploration versus what you have seen historically over the last five years?

It is hard to quantify right now. Historically, exploration by definition is a little less efficient than development because you are not doing exploration wells within eyesight of each other. With a development program, you are rinse and repeat on the same field. With exploration, you have one well here, one well there, so by definition that will take a bit more time and add more incremental demand for our assets and our peers’ assets. Hard to quantify exactly how much more demand comes from exploration, but we definitely see more exploration coming, and that will drive more demand going forward. Thanks, Fredrik.

Your next question comes from the line of Eddie Kim with Barclays. Please go ahead.

Obviously, the world has changed since your last earnings call three months ago. I wanted to ask if you could remind us how you see the trajectory or progression of leading-edge pricing, which I assume has probably improved since three months ago. We are kind of still in the low $400,000s today for leading-edge drillships. Do you suspect we will see contract announcements by the end of this year in the mid-$400,000s or even the high-$400,000s? Any thoughts there based on the customer conversations you are having today would be great.

Sure. I will start and then hand it over to our commercial team to provide some more color. When we look at dayrates, Eddie, for us it is about free cash flow generation. Internally on bidding, dayrate matters, but it is how much free cash flow you can generate off that contract. I would frame it that way for how we think about dayrates at Seadrill Limited. As we look forward, demand continues to improve, and utilization is picking up across the world. That should lead to dayrate progression as we move into 2026 and into 2027. I will let the team add to that.

Hi, Eddie. If we look back over the last three to four months, we have had the strongest backlog cycle since 2012. I think we have had over 71 years of contracted term being awarded throughout the industry, and that was predicated on a market that was materializing before the war broke out. I think this is going to bring momentum and a windfall of cash to some of our customers who are going to continue to invest. What we have going forward are opportunities within Indonesia, Namibia, Nigeria, Suriname, and the U.S. Gulf, with long-term contracts anywhere from two to three years that we expect to be awarded before 2026. That definitely creates an opportunity for rates to be pushed up further than they are today.

Great, thanks for that. My follow-up is on potential M&A and perhaps increasing the size of your fleet. It would seem that having more rigs and rig availability in this rising pricing environment would be a good thing. Are there obvious acquisitions of one-off drillships out there or even larger corporate M&A? And what is your willingness to increase the size of your fleet, or are you comfortable with the size of your fleet at this stage?

I would say we are at minimum efficient scale. Our focus is on, if we are going to do M&A, making sure it is an accretive deal for us. We are not looking to do a deal for the sake of it. If it makes financial sense, absolutely we would look at it, and we would look at it on the other side as well. We are a public company. Our job is to make sure we maximize shareholder return, and that is going to be the focus.

Your next question comes from the line of Keith Beckmann with Pickering Energy Partners. Please go ahead.

Hey, thanks for taking my question. Congrats on the quarter, guys. I wanted to hit a little bit more on free cash flow. You talked about the $70 million that you expect to be paid back through the rest of the year, and then 2027 should also be a really strong free cash flow year for you. Can you talk about how you are thinking about free cash flow conversion through the balance of the year? And when you get all this free cash flow, how do you plan to deploy it? Is that via buybacks or potentially M&A similar to what Eddie was talking about?

Thanks, Keith. You are dead right. We have been looking to this inflection point for some time, with great enthusiasm, and it is now upon us.

Of course, cash flow was not the strongest in Q1, and that was entirely as anticipated given the reactivation of Capella and the reacceptance of Jupiter. In Q2, we have the reacceptance of Telus as a headwind as well. On the tail side, we have lump-sum mobilizations of $70 million due to us from Petrobras in respect of Jupiter and Telus. Importantly, the Jupiter and Telus move off legacy contracts and legacy dayrates that were lower, onto market rates in Brazil, and that is going to be instrumental to free cash flow generation starting in the middle of the year. On what we do with that cash: as a management team, we are focused on generating the cash, and that is our number one priority. How we distribute it, we will decide at that point in time. We have demonstrated in the past that returning capital to shareholders is extremely important to us, but we do not want to get ahead of ourselves on how and what we do. We just want to focus on generating it for now.

Keith, just to put a pin on that, our job as a management team is to maximize free cash flow generation, and that is what this team is going to be focused on.

Perfect. That is awesome. My second question: you have done a really good job contracting several—like the two Gulf rigs, in particular—but thinking about the Carina, what is the outlook after the extension through June with Petrobras?

For the Carina, we are finishing up the well currently with Petrobras. We have said it is probably mid-June. After that, we are chasing opportunities both inside of Brazil, in South America, and other markets. These are mobile rigs, and we will chase opportunities around the world for that asset. Nothing to announce at this point, but we have until mid-June, and we are pursuing those opportunities actively.

One thing I would add is we have been successful in recently contracting some of our seventh-generation rigs and covering that white space in 2026–2027. We like the idea of having the Carina available to us for playing the upside going into 2027, which we feel is going to be a strong year.

Your next question comes from the line of Greg Lewis with BTIG. Please go ahead.

Yes, hey, thank you, and good morning, good afternoon. Thanks for taking my question. Samir, I would like to talk a little bit about the outlook in Brazil. If you go back in time, Petrobras has clearly been very opportunistic in how it has contracted rigs. More recently, when we listen to these calls—the outlook for the floater industry as a whole is pretty positive. You have the rig rolling off in Brazil—you mentioned the Carina—and you mentioned potential opportunities whether with IOCs or maybe Petrobras. As we look at the outlook for Brazil rigs, I guess there are two questions. One: what is the opportunity for IOCs? And there was a growing consensus that Petrobras was going to shed two to three rigs. Could we be in an environment in 2027 where Petrobras is not as net negative from where they are today?

I think it is possible, but Petrobras are incredible acquirers of rigs given their size in the market. We still believe they are probably net down three to four rigs if you roll the clock forward a year from now. Could some of those get picked up by IOCs? Absolutely. The IOCs are starting to ramp up. I would not say it is likely, but it is definitely possible you could see that situation. Overall, demand is continuing to increase. I think Petrobras is probably back in the market later this year or next year. There will be other demand pulls from West Africa and from Southeast Asia. As we look forward, we are quite happy that we have the Carina to redeploy into a higher dayrate.

Your next question comes from the line of Hamed Khorsand with BWS Financial. Please go ahead.

Hey, good morning. Was there any update on the Gemini?

Nothing specific to mention, but the rig continues to perform quite well in Angola. We think there is more room in that JV and more demand as we look into 2027 in Angola and across West Africa, so we remain cautiously optimistic about the ability to continue finding work for the Gemini.

And is it too early to talk about bringing stacked ships back online?

As we look at our stacked fleet, we have two harsh environment semis that would probably be the most likely candidates to reactivate. We would look to reactivate them for the right contract. There is a gap between our cost of capital and our client’s cost of capital. If they are willing to fund a large portion of that reactivation, we would look at it. The harsh environment market continues to tighten, just like the rest of the floater market, and there is probably going to be a need for those assets. In the near term, it is a bit challenged, but longer term we could absolutely look at reactivating them. The key, given the focus on free cash flow, is that we are not going to fund that on our balance sheet; a client will have to fund that reactivation.

Star then the number one on your telephone keypad. Your next question comes from the line of Noel Parks with Tuohy Brothers. Please go ahead.

Hello. If we look at the current really encouraging environment for offshore and contrast it with the last big rally in the sector in 2023 into 2024, is it possible to contrast the relative capabilities of the global fleet in terms of efficiency and technical upgrades that could help make an argument for not just re-achieving prior levels but an even more robust cycle—above and beyond what we are seeing with the exploratory boost?

If I look at our fleet, we have continued to invest to ensure we are at the leading edge of technological upgrades and remain competitive. Do I think there is more efficiency to be had? Potentially, but I do not think there is a step change in efficiency coming with current technology. We have a bit more to do, but I would not say you are going to get a 40% or 50% increase in efficiency from here.

Gotcha. And any further thoughts—you mentioned the trend of equipment moving out of the Atlantic Basin and moving east. On the customer side, as they look to what costs might look like in the cycle heading up from here, for the multi-basin drillers, is there any degree of regional arbitrage they are looking at—keeping a rig in region for a little less upside to hold onto it in anticipation of a larger program next year, versus going totally on near-term economics for regional choices?

When you speak to our clients, they view their portfolios rationally and allocate capital where it makes the most sense. We have talked to certain clients that have said they are pulling capital away from a particular market and investing in the U.S. Gulf. We have talked to clients ramping up investments in Southeast Asia. It is really client-specific—where their acreage sits and how ready those programs are. When we talk to the bigger international oil companies, a lot of them do seem to be shifting capital to Southeast Asia and West Africa. It really does feel like there is a demand pull there, but that does not mean that is the only place we are seeing demand improve.

There are no further questions at this time. Ladies and gentlemen, that concludes today’s call. Thank you all for joining. You may now disconnect.