SDRL 10-Q
SEADRILL Ltd (SDRL)
10-Q
2026-05-11
For: 2026-03-31
View Original
Added on
May 11, 2026
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
For the quarterly period ended March 31, 2026
OR
For the transition period from __ to __
Commission file number: 001-39327
| (Exact name of Registrant as specified in its charter) | ||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | ||||
| +1 | ||||||||
| (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 | ||||||||||||
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.
☒ | ☐ 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).
☒ | ☐ 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.
| 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).
☒ 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.
☒ | ☐ No | ||||
As of May 6, 2026, 62,530,508 common shares of the registrant were outstanding.
SEADRILL LIMITED
INDEX TO FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 2026
| PART I - FINANCIAL INFORMATION | ||||||||||||||
| ITEM 1. | ||||||||||||||
| ITEM 2. | ||||||||||||||
| ITEM 3. | ||||||||||||||
| ITEM 4. | ||||||||||||||
| PART II - OTHER INFORMATION | ||||||||||||||
| ITEM 1. | ||||||||||||||
| ITEM 1A. | ||||||||||||||
| ITEM 2. | ||||||||||||||
| ITEM 3. | ||||||||||||||
| ITEM 4. | ||||||||||||||
| ITEM 5. | ||||||||||||||
| ITEM 6. | ||||||||||||||
1
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.
2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
SEADRILL LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three months ended March 31, | ||||||||||||||
| (In $ millions, except per share data) | 2026 | 2025 | ||||||||||||
| Operating revenues | ||||||||||||||
| Contract revenues | ||||||||||||||
Reimbursable revenues (1) | ||||||||||||||
Management contract revenues (1) | ||||||||||||||
Leasing revenues (1) | ||||||||||||||
| Other revenues | ||||||||||||||
| Total operating revenues | ||||||||||||||
| Operating expenses | ||||||||||||||
| Vessel and rig operating expenses | ( | ( | ||||||||||||
| Reimbursable expenses | ( | ( | ||||||||||||
| Depreciation and amortization | ( | ( | ||||||||||||
| Management contract expenses | ( | ( | ||||||||||||
| Selling, general and administrative expenses | ( | ( | ||||||||||||
| Merger and integration related expenses | ( | |||||||||||||
| Total operating expenses | ( | ( | ||||||||||||
| Operating profit | ||||||||||||||
| Financial and other non-operating items | ||||||||||||||
| Interest income | ||||||||||||||
| Interest expense | ( | ( | ||||||||||||
| Equity in earnings of equity method investment (net of tax) | ||||||||||||||
| Other financial and non-operating items | ( | |||||||||||||
| Total financial and other non-operating items, net | ( | ( | ||||||||||||
| Profit before income taxes | ||||||||||||||
| Income tax expense | ( | ( | ||||||||||||
| Net loss | ( | ( | ||||||||||||
| Basic LPS ($) | ( | ( | ||||||||||||
| Diluted LPS ($) | ( | ( | ||||||||||||
(1) Includes revenue from related parties of $75 million and $79 million, for the three months ended March 31, 2026 and March 31, 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.
3
SEADRILL LIMITED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| (In $ millions, except share data) | March 31, 2026 | December 31, 2025 | ||||||||||||
| ASSETS | ||||||||||||||
| Current assets | ||||||||||||||
| Cash and cash equivalents | ||||||||||||||
| Restricted cash | ||||||||||||||
| Accounts receivables, net | ||||||||||||||
| Amounts due from related parties, net | ||||||||||||||
| Other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Non-current assets | ||||||||||||||
| Equity method investment | ||||||||||||||
Drilling units, net of accumulated depreciation of | ||||||||||||||
| Deferred tax assets | ||||||||||||||
| Equipment | ||||||||||||||
| Other non-current assets | ||||||||||||||
| Total non-current assets | ||||||||||||||
| Total assets | ||||||||||||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||||||||
| Current liabilities | ||||||||||||||
| Trade accounts payable | ||||||||||||||
| Other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Non-current liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Deferred tax liabilities | ||||||||||||||
| Other non-current liabilities | ||||||||||||||
| Total non-current liabilities | ||||||||||||||
Commitments and contingencies (see Note 13) | ||||||||||||||
| Shareholders' equity | ||||||||||||||
Common shares of par value $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated other comprehensive income | ||||||||||||||
| Retained earnings | ||||||||||||||
| Total shareholders' equity | ||||||||||||||
| Total liabilities and shareholders' equity | ||||||||||||||
The accompanying notes form an integral part of these unaudited Condensed Consolidated Financial Statements.
4
SEADRILL LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
| Three months ended March 31, | ||||||||||||||
| (In $ millions) | 2026 | 2025 | ||||||||||||
| Cash flows from operating activities | ||||||||||||||
| Net loss | ( | ( | ||||||||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||||
| Depreciation and amortization | ||||||||||||||
| Equity in earnings of equity method investment (net of tax) | ( | ( | ||||||||||||
| Deferred tax expense | ||||||||||||||
| Unrealized gain on foreign exchange | ( | |||||||||||||
| Amortization of bond issuance costs | ||||||||||||||
| Share based compensation expense | ||||||||||||||
| Other | ||||||||||||||
| Other cash movements in operating activities | ||||||||||||||
| Additions to long-term maintenance | ( | ( | ||||||||||||
| Changes in operating assets and liabilities | ||||||||||||||
| Accounts receivable, net | ( | |||||||||||||
| Trade accounts payable | ( | |||||||||||||
| Prepaid expenses | ( | |||||||||||||
| Deferred revenue | ( | ( | ||||||||||||
| Deferred contract costs | ( | |||||||||||||
| Related party receivables | ( | |||||||||||||
| Other assets | ( | ( | ||||||||||||
| Other liabilities | ( | |||||||||||||
| Net cash used in operating activities | ( | ( | ||||||||||||
| Cash flows from investing activities | ||||||||||||||
| Additions to drilling units and equipment | ( | ( | ||||||||||||
| Other | ( | |||||||||||||
| Net cash used in investing activities | ( | ( | ||||||||||||
| Cash flows from financing activities | ||||||||||||||
| Taxes withheld on employee stock transactions | ( | |||||||||||||
| Net cash used in financing activities | ( | |||||||||||||
| Effect of exchange rate changes on cash | ||||||||||||||
| Net decrease in cash and cash equivalents, including restricted cash | ( | ( | ||||||||||||
| Cash and cash equivalents, including restricted cash, at beginning of the period | ||||||||||||||
| Cash and cash equivalents, including restricted cash, at the end of period | ||||||||||||||
The accompanying notes form an integral part of these unaudited Condensed Consolidated Financial Statements.
5
SEADRILL LIMITED
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(Unaudited)
(Unaudited)
| (In $ millions) | Common shares | Additional paid-in capital | Accumulated other comprehensive income | Retained earnings | Total shareholders' equity | |||||||||||||||||||||||||||
| Balance as of January 1, 2026 | ||||||||||||||||||||||||||||||||
| Share based compensation | — | — | — | |||||||||||||||||||||||||||||
| Shares withheld for taxes on equity transactions | — | ( | — | — | ( | |||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Balance as of March 31, 2026 | ||||||||||||||||||||||||||||||||
| (In $ millions) | Common shares | Additional paid-in capital | Accumulated other comprehensive income | Retained earnings | Total shareholders' equity | |||||||||||||||||||||||||||
| Balance as of January 1, 2025 | ||||||||||||||||||||||||||||||||
| Share based compensation | — | — | — | |||||||||||||||||||||||||||||
| Net loss | — | — | — | ( | ( | |||||||||||||||||||||||||||
| Balance as of March 31, 2025 | ||||||||||||||||||||||||||||||||
The accompanying notes form an integral part of these unaudited Condensed Consolidated Financial Statements.
6
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 drillships and semi-submersible 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) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Accounts receivable, net | ||||||||||||||
| Current contract liabilities (classified within other current liabilities) | ( | ( | ||||||||||||
| Non-current contract liabilities (classified within other non-current liabilities) | ( | ( | ||||||||||||
Changes in the contract liabilities balances during the three months ended March 31, 2026 are as follows:
| (In $ millions) | Contract Liabilities | |||||||
| Contract liabilities as of January 1, 2026 | ( | |||||||
| Amortization of revenue included in the January 1, 2026 contract liability balance | ||||||||
| Additional contract liabilities recognized, excluding amounts recognized as revenue | ( | |||||||
| Contract liabilities as of March 31, 2026 | ( | |||||||
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 March 31, | ||||||||||||||
| (In $ millions) | 2026 | 2025 | ||||||||||||
| Brazil | ||||||||||||||
| United States | ||||||||||||||
| Angola | ||||||||||||||
| Norway | ||||||||||||||
Other (1) | ||||||||||||||
| Total operating revenues | ||||||||||||||
(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.
7
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 March 31, | ||||||||||||||
| 2026 | 2025 | |||||||||||||
| Petrobras | % | % | ||||||||||||
| Sonadrill | % | % | ||||||||||||
| LLOG | % | % | ||||||||||||
| Talos | % | % | ||||||||||||
| Other | % | % | ||||||||||||
Note 3 – Taxation
For the three months ended March 31, 2026, income tax expense was $23 million, compared to income tax expense of $15 million for the three months ended March 31, 2025.
The increase in tax expense for the three months ended March 31, 2026, relative to the three months ended March 31, 2025, primarily reflects changes in the Company's mix of pre-tax income and loss among tax jurisdictions and lower utilization of tax loss carryforwards.
On July 4, 2025, the U.S. enacted the One Big Beautiful Bill Act ("OBBBA"). The OBBBA includes many tax provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act and provisions allowing accelerated tax deduction for qualified property. The legislation does not have a material impact to our unaudited Condensed Consolidated Financial Statements.
Note 4 – Loss per share
The computation of basic loss per share ("LPS") is based on the weighted average number of common shares of the Company, par value $0.01 per share (the "Shares"), outstanding during the period. Diluted LPS includes the effect of the assumed conversion of potentially dilutive instruments related to the effect of the unsecured senior convertible bond and share based compensation. Refer to Note 9 – "Debt" for further details on the unsecured senior convertible bond.
The components of the numerator for the calculation of basic and diluted LPS were as follows:
| Three months ended March 31, | ||||||||||||||
| (In $ millions) | 2026 | 2025 | ||||||||||||
| Net loss available to stockholders | ( | ( | ||||||||||||
| Effect of dilution (interest on unsecured senior convertible bond) | ||||||||||||||
| Diluted loss available to stockholders | ( | ( | ||||||||||||
The components of the denominator for the calculation of basic and diluted LPS were as follows:
| Three months ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Basic loss per share: | ||||||||||||||
| Weighted average number of common shares outstanding | ||||||||||||||
| Diluted loss per share: | ||||||||||||||
| Effect of dilution | ||||||||||||||
| Weighted average number of common shares outstanding adjusted for the effects of dilution | ||||||||||||||
The basic and diluted LPS were as follows:
| Three months ended March 31, | ||||||||||||||
| (In $) | 2026 | 2025 | ||||||||||||
| Basic loss per share | ( | ( | ||||||||||||
Diluted loss per share (1) | ( | ( | ||||||||||||
(1) For the three months ended March 31, 2026 and March 31, 2025, the effect of including all potentially dilutive instruments in the calculation resulted in decreased loss per share, which is anti-dilutive. As a result, the basic and diluted loss per share are equal.
Note 5 – Restricted cash
Restricted cash as of March 31, 2026 and December 31, 2025 was as follows:
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Cash held in escrow | ||||||||||||||
| Other | ||||||||||||||
| Total restricted cash | ||||||||||||||
8
SEADRILL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 6 - Other current assets
As of March 31, 2026 and December 31, 2025, other current assets included the following:
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Prepaid expenses | ||||||||||||||
| Deferred contract costs | ||||||||||||||
| Taxes receivable | ||||||||||||||
| Other | ||||||||||||||
| Total other current assets | ||||||||||||||
Note 7 – Equity method investment
As of March 31, 2026 and December 31, 2025, the carrying value of our equity method investment was as follows:
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Sonadrill | ||||||||||||||
| Total equity method investment | ||||||||||||||
Note 8 - Other current and non-current liabilities
Other current liabilities
As of March 31, 2026 and December 31, 2025, other current liabilities included the following:
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Accrued expenses | ||||||||||||||
| Contract liabilities | ||||||||||||||
| Employee withheld taxes, social security and vacation payments | ||||||||||||||
| Taxes payable | ||||||||||||||
| Accrued interest expense | ||||||||||||||
| Unfavorable drilling contracts | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total other current liabilities | ||||||||||||||
The amortization of unfavorable drilling contracts is recognized in the unaudited Condensed Consolidated Statements of Operations as "Depreciation and amortization". The weighted average remaining amortization for unfavorable contracts is three months.
Other non-current liabilities
As of March 31, 2026 and December 31, 2025, other non-current liabilities included the following:
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Uncertain tax positions | ||||||||||||||
| Contract liabilities | ||||||||||||||
| Lease liabilities | ||||||||||||||
| Other liabilities | ||||||||||||||
| Total other non-current liabilities | ||||||||||||||
9
SEADRILL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 9 – Debt
The table below sets out our debt agreements as of March 31, 2026 and December 31, 2025:
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Secured debt: | ||||||||||||||
$ | ||||||||||||||
| Total secured debt | ||||||||||||||
| Unsecured bond: | ||||||||||||||
| Unsecured senior convertible bond | ||||||||||||||
| Total unsecured bond | ||||||||||||||
| Total principal debt | ||||||||||||||
| Debt premium: | ||||||||||||||
| Premium on bond issuance | ||||||||||||||
| Total debt premium | ||||||||||||||
| Less: bond issuance costs | ( | ( | ||||||||||||
| Total debt | ||||||||||||||
$575 million secured bond
In July 2023, Seadrill Finance Limited ("Seadrill Finance") issued $500 million in aggregate principal amount of 8.375 % Senior Secured Second Lien Notes due 2030 in an offering conducted pursuant to Rule 144A and Regulation S under the Securities Act. In August 2023, Seadrill Finance issued an additional $75 million in aggregate principal amount of 8.375 % Senior Secured Second Lien Notes due 2030 (the "Incremental Notes"), maturing on August 1, 2030 (together the "Notes"). The Incremental Notes were issued at 100.75 % of par.
Revolving credit facility
On July 27, 2023, Seadrill, along with its subsidiary, Seadrill Finance, entered into a Senior Secured Revolving Credit Agreement (as amended, the "Credit Agreement"), which established a Senior Secured Revolving Credit Facility (the "Revolving Credit Facility"). The commitments under the Revolving Credit Facility, which carries a five-year term, became available for drawdown on July 27, 2023. The Revolving Credit Facility permits borrowings of up to $225 million in revolving credit for working capital and other corporate purposes and includes an "accordion feature" allowing Seadrill to increase this limit by up to an additional $100 million, subject to agreement from the lenders. As of March 31, 2026, it also included a provision for issuing letters of credit up to $50 million. On April 3, 2026, the Company amended the Credit Agreement to increase the letter of credit sub-limit from $50 million to $100 million.
The Revolving Credit Facility incurs interest at a rate equal to a specified margin plus, at Seadrill Finance’s option, either: (i) the Term Secured Overnight Financing Rate ("SOFR") Rate (as defined in the Credit Agreement) plus 0.10 %; or (ii) the Daily Simple SOFR (as defined in the Credit Agreement) plus 0.10 %. For both the Term SOFR Rate loans and Daily Simple SOFR loans, the applicable margin was 2.75 % per annum as of March 31, 2026, and may vary based on Seadrill’s Credit Ratings (as defined in the Credit Agreement), from 2.50 % to 3.50 % per annum. A commitment fee is incurred under the Revolving Credit Facility on undrawn amounts, at a rate of 0.5 % per annum to and including July 27, 2026, 0.75 % per annum from and including July 28, 2026 to and including July 27, 2027, and 1.00 % per annum thereafter. This facility has not been drawn to date.
During the third quarter of 2025, the Company issued a NOK403 million guarantee ($41 47 million, which reduced the Company’s available capacity under the Revolving Credit Facility to $178 million.
For further details, please refer to Note 13 – "Commitments and contingencies".
Unsecured senior convertible bond
The $50 million unsecured senior convertible bond (the "unsecured senior convertible bond"), issued on emergence from Chapter 11, has a maturity of August 2028 and bears interest, payable quarterly in cash, at the Term SOFR (as defined in the Note Purchase Agreement dated as of February 22, 2022, as amended (the "Note Purchase Agreement"), plus 6 % on the aggregate principal amount of $50 million. The bond is convertible (in full and not in part) into Shares at a conversion rate of 52.6316 Shares per $1,000 principal amount of the bond, subject to certain adjustments set forth in the Note Purchase Agreement relating to the unsecured senior convertible bond. If not converted, a bullet repayment will become due on the maturity date.
10
SEADRILL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 10 – Related party transactions
As of March 31, 2026, our major related party is the Sonadrill joint venture, over which we hold significant influence.
Related party revenues
Our related party revenues include the following:
| Three months ended March 31, | ||||||||||||||
(In $ millions) | 2026 | 2025 | ||||||||||||
Management fees revenues (a) | ||||||||||||||
| Add-on services | ||||||||||||||
Reimbursable revenues (b) | ||||||||||||||
Leasing revenues (c) | ||||||||||||||
| Total related party operating revenues | ||||||||||||||
(a) Seadrill provides management and administrative services and operational and technical support services to Sonadrill. These services are charged on a dayrate basis.
(b) Reimbursable revenues primarily relate to Sonadrill project work on the Libongos, Quenguela and West Gemini rigs.
(c) We earned leasing revenues on the charter of the West Gemini to Sonadrill.
Related party balances
As of March 31, 2026, Seadrill's related party receivable balance due from Sonadrill was $7 million, recorded in "Amounts due from related parties, net" within our unaudited Condensed Consolidated Balance Sheet as of March 31, 2026.
As of December 31, 2025, Sonadrill prepaid management fees of $3 million to Seadrill, which was recorded in "Other current liabilities" within our unaudited Condensed Consolidated Balance Sheet as of December 31, 2025.
Note 11 – Fair value of financial instruments
The carrying values and estimated fair values of certain of our financial instruments as of the dates specified were as follows:
| March 31, 2026 | December 31, 2025 | ||||||||||||||||||||||
| (In $ millions) | Fair value | Carrying value | Fair value | Carrying value | |||||||||||||||||||
| Liabilities | |||||||||||||||||||||||
$ | |||||||||||||||||||||||
Unsecured senior convertible bond - debt component (Level 3) | |||||||||||||||||||||||
Financial instruments categorized as level 1
The fair value of the $575 million secured bond is based on market traded value.
Financial instruments categorized as level 3
The fair value attributed to the unsecured senior convertible bond was bifurcated into two elements: the straight debt component was derived through a discounted cash flow approach, and the conversion option was derived through an option pricing model. The conversion option was recorded in equity at the point the bond was issued and, therefore, has not been included in the table above.
Our cash and cash equivalents, restricted cash, accounts receivable, related party receivables and accounts payable are by their nature short-term. As a result, the carrying values included in our unaudited Condensed Consolidated Balance Sheets approximate fair value.
Note 12 – Common shares
Share capital as of March 31, 2026 and December 31, 2025 was as follows:
| Issued and fully paid share capital | ||||||||||||||||||||
| Shares | Par value per share ($) | $ thousands | ||||||||||||||||||
| As of December 31, 2025 | ||||||||||||||||||||
| Vesting of restricted stock units | ||||||||||||||||||||
| As of March 31, 2026 | ||||||||||||||||||||
11
SEADRILL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 13 – Commitments and contingencies
We recognize loss contingencies in the unaudited Condensed Consolidated Financial Statements where it is probable that an outflow of economic benefits will be required to settle an obligation and the amount is reasonably estimable. An adverse outcome in a matter described below could have an adverse effect on Seadrill's operating results, cash flows and financial position. Accruals for contingencies and uncertain tax positions related to matters described below, if any, are recorded in "Accrued expenses" within "Other current liabilities" and "Uncertain tax positions" within "Other non-current liabilities", respectively, in the unaudited Condensed Consolidated Balance Sheets.
Legal Proceedings
SFL Hercules Ltd.
In March 2023, Seadrill was served with a claim from SFL Hercules Ltd., filed in the Oslo District Court in Norway, relating to our redelivery of the rig West Hercules to SFL Corporation Ltd. ("SFL") in December 2022. In February 2025, the Oslo District Court delivered a judgment in favor of SFL Hercules Ltd. ordering Seadrill to pay SFL approximately $37 million, plus interest and legal costs of approximately $11 million, based on foreign exchange rates at the time of the judgment. Seadrill intends to vigorously contest the judgment and filed an appeal in March 2025. The appeal proceedings commenced in April 2026, and we expect the court to issue judgment in the second half of 2026. The ultimate amount due, if any, cannot be predicted at this time.
As is customary in Norway, Seadrill issued a guarantee in the amount of NOK574 million in August 2025 (approximately $59 million as of March 31, 2026) to the Norwegian Enforcement Authorities as security for the judgment. The issued guarantee consists of NOK403 million (approximately $41 171 million (approximately $18 million as of March 31, 2026) from our Bilateral Facility (as defined herein).
Sonadrill fees claim
In March 2023, Seadrill was served with a claim from an individual (the "Claimant") filed in the High Court of Justice, Business and Property Courts of England and Wales, King's Bench Division, Commercial Court (the "High Court"). The Claimant alleged breach of contract and unjust enrichment damages of approximately $72 million related to an alleged failure by the Company to pay the Claimant a fee for services in arranging the Sonadrill joint venture dating back to 2018. The case concluded in March 2025.
In July 2025, the High Court rendered judgment in favor of the Claimant. In October 2025, the High Court ruled on the first tranche of damages for the period prior to October 2024, including interest and legal fees, and Seadrill paid the first tranche of damages of $43 million. The parties are continuing to make submissions to the High Court on the issue of the quantum of damages to be paid for the second tranche of damages incurred subsequent to October 2024; however, Seadrill presently estimates that its aggregate liability following the High Court's judgment, including all interest and legal fees, is unlikely to exceed $61 million, subject to finalization of calculations relating to second tranche interest. Seadrill's request for permission for an appeal to the Court of Appeal was not granted.
Nigerian Cabotage Act litigation
In November 2015, the Nigerian Maritime Administration and Safety Agency ("NMASA") issued a detention in respect of the rig West Capella for failure to comply with requirements of the Coastal and Inland Shipping (Cabotage) Act 2003 (the "Cabotage Act"), specifically, failure to pay a Cabotage fee of 2 % on contract revenue. While the named party is Seadrill Mobile Units Nigeria Ltd (previously an Aquadrill entity, acquired by Seadrill upon the merger of Seadrill and Aquadrill) ("SMUNL"), the matter relates to three rigs: the West Capella, West Saturn and West Jupiter. SMUNL commenced proceedings in May 2016 against the Honourable Minister for Transportation, the Attorney General of the Federation and NMASA with respect to interpretation of the Cabotage Act. In June 2019, the Federal High Court of Nigeria delivered a judgment (1) finding that: (a) Drilling operations fall within the definition of "Coastal Trade" or "Cabotage" under the Cabotage Act and (b) Drilling Rigs fall within the definition of "Vessels" under the Cabotage Act, and (2) directing SMUNL to deduct 2 %, or approximately $69 million, of their contract value and remit the same to NMASA. In June 2019, the Court of Appeals sitting in Lagos ("COA") issued a conflicting judgment in Transocean Support Services Nigeria & Ors v NIMASA & Anor, finding drilling units cannot be deemed vessels under the Cabotage Act pending appeal. SMUNL filed an appeal to the COA in July 2019, and applied to the Federal High Court for an injunction pending appeal to prevent enforcement. Due to the volume of cases currently being handled by the COA, the Registry of the COA is yet to schedule the hearing date for the appeal. Although we intend to strongly pursue this appeal, we cannot predict the outcome of this case.
Sete Brazil claim
In or around 2010, Petroleo Brasileiro S.A. ("Petrobras") initiated a project in Brazil to construct a fleet of 28 offshore drilling units to support Petrobras (the "Sete Brazil Project"). A Brazilian company ("Sete Brazil") was formed in Brazil as a vehicle for the Sete Brazil Project. The Sete Brazil Project was unable to obtain financing and none of the 28 offshore drilling units was ever constructed. Sete Brazil was eventually declared bankrupt by the Brazilian courts in December 2024 although that bankruptcy is presently suspended.
In January 2025, Seadrill Brazil received notices from Petrobras asserting "delay penalties" against Seadrill Brazil relating to three drillships to be constructed under the Sete Brazil Project and operated in Brazil by Seadrill Brazil under contracts awarded in 2012. The aggregate amount of the delay penalties claimed by Petrobras as of the date of receipt of the notices was approximately $213 million, with the potential for further delay penalties, which could be significant, to be assessed ratably over the remaining term of the drilling contracts for the three drillships. Petrobras indicated it may exercise set-off rights against certain amounts payable to Seadrill Brazil under its contracts with Petrobras for our five drillships (unrelated to the Sete Brazil Project) that are currently operating in Brazil, revenues related to which are included in our backlog as of March 31, 2026. No set-off right has been exercised to date. The contracts limit aggregate delay penalties to 10 % of the total "estimated contract value", as defined in the contracts.
12
SEADRILL LIMITED
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The Sete Brazil Project contracts also provide an alternative remedy to Petrobras of "compensatory damages" based upon termination of the contracts for which we would have joint and several liability if such damages were awarded to Petrobras. Petrobras could seek delay penalties or compensatory damages but could not seek both under the contracts. We were copied on correspondence between Petrobras and Sete Brazil (and certain of its related companies) in which Petrobras alleged that it is entitled to collect compensatory damages of approximately $825 million from these companies. Petrobras has not indicated to us that they intend to pursue these claims against us or set off these claims against our current drilling contracts. We dispute liability and do not believe any damages are due to Petrobras from us, Sete Brazil or any of its related companies in connection with the Sete Brazil Project as either delay penalties or compensatory damages.
Petrobras and Seadrill have agreed to participate in voluntary mediation, and Petrobras has committed to not exercise any set-off rights pending the outcome of the mediation. Petrobras has indicated that the mediation could commence in the third quarter of 2026, but there could be further delays. We cannot predict when the mediation will be completed, or what the outcome may be. Dialogue between the parties is ongoing. We are evaluating our legal options, which may include, among other things, seeking injunctive relief, seeking remedies against Petrobras under Seadrill’s prior U.S. Chapter 11 bankruptcy proceedings, and asserting counterclaims for substantial damages against Petrobras in Brazilian courts. This matter is in its early stages, and we are not able to predict its timing or outcome. In addition, the nature, timing, calculation and ultimate amount of the purported penalties are subject to principles of contract interpretation before Brazilian courts. Seadrill intends to vigorously defend its position and pursue available remedies.
Because we do not believe that it is probable that a loss with respect to the claims alleged by Petrobras has been incurred, and we cannot reasonably estimate the amount of any such loss, were it to be incurred, we have not accrued any amounts in respect thereof in our financial statements.
Brazil tax audit
Seadrill Serviços de Petróleo Ltda ("Seadrill Brazil") has a long-standing dispute with Brazil’s tax authority relating to assessment of income tax, penalties, and interest for years 2009 and 2010 and is litigating the matter in Brazil’s courts. The trial court ruled in favor of Seadrill Brazil, but the Federal Regional Court reversed the lower court decision in September 2023 and upheld the tax authority’s assessment. In the first quarter of 2024, Seadrill Brazil filed an appeal in Brazil’s Superior Court of Justice, and we continue to vigorously defend our position. The ultimate timing and outcome of this litigation cannot be determined. As of March 31, 2026, the assessed income tax, penalties, interest accruing on the asserted tax underpayment, and other amounts the courts potentially may award Brazil’s government, together, totaled approximately $83 million.
In connection with its judicial appeal against the tax authority’s assessment for years 2009 and 2010, Seadrill Brazil has entered into an agreement for an insurance bond of BRL435 million ($83 million as of March 31, 2026).
Additionally, Seadrill Brazil has brought administrative appeals against assessments of additional income tax, indirect taxes, penalties, and interest for years 2012, 2016, and 2017. The assessments for these subsequent years raise issues similar to those that are the subject of the disputed assessments for 2009 and 2010, but the 2012 assessment involves other factual and legal issues as well. The timing and outcome of these administrative appeals and of any subsequent judicial review cannot be determined. As of March 31, 2026, the assessed taxes, penalties, and interest for 2012, 2016, and 2017 totaled, in aggregate, approximately $89 million.
Other matters
Other tax audits and disputed assessments of income and other taxes, including applicable penalties and interest, remain outstanding as of March 31, 2026 and continue to be monitored and evaluated by the Company. These tax audit and assessment claims are attributable principally to Ghana, Mexico, Norway, and the United States. We continue to vigorously defend our tax positions and currently consider the ultimate resolution of tax audit and assessment claims will not have a material adverse effect on our financial position, operating results and cash flows.
We operate in various countries in the world. We recognize uncertain tax positions if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit by relevant tax authorities, including resolution of related appeals or litigation processes, if any. While we believe we have the required support for the positions taken on our tax returns, we cannot predict with certainty as to the ultimate outcome of any existing or future assessments.
Other material disputes or litigation
In addition to the foregoing, from time to time we are a named defendant or party in certain other lawsuits, claims or proceedings arising in the ordinary course of business or in connection with our acquisition and disposal activities. Although the outcome of such lawsuits or other proceedings cannot be predicted with certainty, and the amount of any liability that could arise with respect to such lawsuits or other proceedings cannot be predicted accurately, we currently do not expect these other matters to have a material adverse effect on our financial position, operating results and cash flows.
Guarantees
We have issued performance guarantees for potential liabilities that may result from drilling activities under current or previous managed rig arrangements with Sonadrill. As of March 31, 2026, we had not recognized any liabilities for these guarantees as we do not consider it probable that the guarantees will be called. The guarantees provided on behalf of Sonadrill have been capped at $1.1 billion, in the aggregate, across the three rigs operating in the joint venture on two active and two historic contracts.
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
The following discussion should be read in conjunction with the unaudited Condensed Consolidated Financial Statements and related notes included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, as well as the Consolidated Financial Statements and related notes included in our 2025 10-K.
The following discussion and analysis contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those set forth under "Risk Factors" in Part I, Item 1A. of our 2025 10-K and "Forward-Looking Statements" in this Quarterly Report on Form 10-Q.
Our Business
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 drillships and semi-submersible rigs for operations in shallow to ultra-deepwater 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.
As of March 31, 2026, we owned a total of 15 drilling rigs. In addition to our owned assets, as of March 31, 2026, we managed two 7th generation drillships owned by Sonangol EP.
Significant Developments
Oil price volatility
The price of oil has experienced increased volatility and has risen in response to the ongoing conflicts in the Middle East, including the current conflict in Iran, which started on February 28, 2026, and the unprecedented closure of the Strait of Hormuz. The Brent oil price was $71 per barrel on February 27, 2026 and increased to an average price of approximately $103 per barrel for the month of March 2026. We continue to evaluate and monitor the impacts of the recent oil price volatility and the ongoing conflicts in the Middle East on our business and operations; however, it is not possible to predict the long-term impact, if any, of the disruptions to commodity prices, global energy supplies, energy markets and economic conditions, on our business and operations.
U.S. global trade policy changes
Ongoing and recently proposed changes to U.S. global trade policy, along with potential international retaliatory measures, have continued to cause high volatility in global markets and uncertainty around short- and long-term economic impacts in the U.S., including concerns over inflation, recession and slowing growth. We continue to evaluate and monitor the potential impacts of these changes and measures, including the imposition of tariffs and ongoing legal challenges to such tariffs, on our business and operations; however, it is not possible to predict the impact, if any, of any changes or proposed changes to the U.S. global trade policy, or any international retaliatory measures, on our business and operations.
Contract Backlog
Contract backlog includes all firm contracts at the contractual operating dayrate multiplied by the number of days remaining in the firm contract period. For contracts which include a market indexed rate mechanism, we utilize the current applicable dayrate multiplied by the number of days remaining in the firm contract period. Contract backlog includes management contract revenues and leasing revenues from bareboat charter arrangements, denoted as "other" in the tables below. Contract backlog excludes revenues for mobilization, demobilization and contract preparation or other incentive provisions and excludes backlog relating to non-consolidated entities.
The contract backlog for our fleet was as follows as of the dates specified:
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Drilling contracts | 2,142 | 2,095 | ||||||||||||
| Other | 339 | 285 | ||||||||||||
| Total contract backlog | 2,481 | 2,380 | ||||||||||||
Our contract backlog includes only firm commitments represented by signed drilling contracts. The full contractual operating dayrate may differ from the actual dayrate we ultimately receive. For example, an alternative contractual dayrate, such as a waiting‑on‑weather rate, repair rate, standby rate or force majeure rate, may apply under certain circumstances. The contractual operating dayrate may also differ from the actual dayrate we ultimately receive because of several other factors, including rig downtime or suspension of operations. In certain contracts, the dayrate may be reduced to zero if, for example, repairs extend beyond a stated period.
We estimate the March 31, 2026 contract backlog to be realized over the following periods:
| (In $ millions) | Year ending December 31, | |||||||||||||||||||||||||||||||
| Contract backlog | Total | 2026 (1) | 2027 | 2028 | Thereafter | |||||||||||||||||||||||||||
| Drilling contracts | 2,142 | 844 | 862 | 339 | 97 | |||||||||||||||||||||||||||
| Other | 339 | 177 | 102 | 60 | — | |||||||||||||||||||||||||||
| Total | 2,481 | 1,021 | 964 | 399 | 97 | |||||||||||||||||||||||||||
(1) Remainder of 2026.
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The actual amount of revenues earned and the actual periods during which revenues are earned will differ from the amounts and periods shown in the tables above due to various factors, including shipyard and maintenance, surveys, upgrades and regulatory projects, unplanned downtime and other factors that result in a lower applicable dayrate than the full contractual operating dayrate. Additional factors that could affect the amount and timing of actual revenue to be recognized include customer liquidity issues and contract terminations, which are available to our customers under certain circumstances.
Business Environment
The table below shows the average oil price for the three months ended March 31, 2026 and year ended December 31, 2025. The Brent oil price as of May 6, 2026 was $101/bbl.
Source: Bloomberg
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Average Brent oil price ($/bbl) | 78 | 68 | ||||||||||||
In recent years, oil prices have generally remained at levels that support offshore exploration and development activity, where global rig demand has been steady. This level of demand was sustained by the combination of commodity prices, heightened focus on energy security, and relative attractiveness of offshore plays with respect to both cost and carbon emissions. Recently, however, the ongoing conflict in Iran and the unprecedented closure of the Strait of Hormuz have caused significant disruption in the normal flow of oil, refined petroleum products, and related commodities, resulting in higher oil prices.
The price of Brent oil averaged $78 per barrel during the three months ended March 31, 2026 up from $68 per barrel in 2025, driven primarily by ongoing conflicts in the Middle East that disrupted global oil supply during the first quarter of 2026.
Uncertainty persists in the market, particularly in light of concerns over global economic conditions (including the current conflict in Iran), government trade policies and output increases by the Organization of the Petroleum Exporting Countries and other major international producers. This has led to the continued deferral of offshore capital expenditures and could have a negative impact on near-term future demand for offshore drilling services. In addition, inflationary pressures may impact the cost base in our industry, including personnel costs and the prices of goods and services required to reactivate or operate rigs.
As global tendering activity accelerates, we see signs that point towards a market recovery in 2027. In addition, we believe oil majors are calling for renewed focus on large-scale exploration and investment, and there is also growing consensus that U.S. shale production is plateauing. As a result, with projections of growing oil and gas demand and the lagging energy transition, operators are pivoting back towards deepwater exploration in order to replace reserves and sustain production growth.
The table below shows the global number of rigs on contract and marketed utilization for the three months ended March 31, 2026 and year ended December 31, 2025:
| March 31, 2026 | December 31, 2025 | |||||||||||||
| Contracted rigs | ||||||||||||||
| Benign environment floater | 107 | 108 | ||||||||||||
| Harsh environment floater | 22 | 21 | ||||||||||||
| Harsh environment jackup | 26 | 28 | ||||||||||||
| Marketed utilization | ||||||||||||||
| Benign environment floater | 87 | % | 87 | % | ||||||||||
| Harsh environment floater | 92 | % | 90 | % | ||||||||||
| Harsh environment jackup | 97 | % | 97 | % | ||||||||||
Source: RigLogix
Global benign-environment floaters
Marketed utilization and the number of contracted rigs remained relatively consistent in the three months ended March 31, 2026 compared to the year ended December 31, 2025.
Global harsh environment units
Marketed utilization for harsh environment floaters improved in the three months ended March 31, 2026 compared to the year ended December 31, 2025, whereas utilization for harsh environment jackups remained consistent over the same periods, reflecting continued demand for high-specification assets.
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Results of operations
Results for the three months ended March 31, 2026 and March 31, 2025
The tables included below set out financial information for the three months ended March 31, 2026 and March 31, 2025:
| Three months ended March 31, | |||||||||||||||||||||||
| (In $ millions, except percentages) | 2026 | 2025 | Change | Change % | |||||||||||||||||||
| Operating revenues | 358 | 335 | 23 | 7 | % | ||||||||||||||||||
| Operating expenses | (334) | (317) | (17) | 5 | % | ||||||||||||||||||
| Operating profit | 24 | 18 | 6 | 33 | % | ||||||||||||||||||
| Interest expense | (15) | (15) | — | — | % | ||||||||||||||||||
| Financial and non-operating items | 7 | (2) | 9 | (450) | % | ||||||||||||||||||
| Profit before income taxes | 16 | 1 | 15 | 1500 | % | ||||||||||||||||||
| Income tax expense | (23) | (15) | (8) | 53 | % | ||||||||||||||||||
| Net loss | (7) | (14) | 7 | (50) | % | ||||||||||||||||||
1) Operating revenues
Operating revenues consist of contract revenues, reimbursable revenues, management contract revenues, leasing revenues and other revenues.
| Three months ended March 31, | |||||||||||||||||||||||
| (In $ millions, except percentages) | 2026 | 2025 | Change | Change % | |||||||||||||||||||
Contract revenues (a) | 277 | 248 | 29 | 12 | % | ||||||||||||||||||
Reimbursable revenues (b) | 10 | 15 | (5) | (33) | % | ||||||||||||||||||
| Management contract revenues | 63 | 61 | 2 | 3 | % | ||||||||||||||||||
| Leasing revenues | 8 | 8 | — | — | % | ||||||||||||||||||
| Other revenues | — | 3 | (3) | (100) | % | ||||||||||||||||||
| Total operating revenues | 358 | 335 | 23 | 7 | % | ||||||||||||||||||
a) Contract revenues
Contract revenues represent the revenues we earn from contracting our drilling units to customers, primarily on a dayrate basis, and are predominately driven by the average number of rigs under contract during a period, the average dayrates earned and economic utilization achieved by those rigs under contract. We have set out movements in these key indicators of performance in the sections below.
i.Average number of rigs on contract
We calculate the average number of rigs on contract by dividing the aggregate days our rigs (excluding managed rigs) were on contract during the reporting period by the number of days in that reporting period.
The average number of rigs on contract remained consistent at nine in each of the three months ended March 31, 2026 and 2025; however, there was a decrease in the total days on contract resulting in lower contract revenues of $11 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
The decrease was primarily driven by fewer operating days on the West Jupiter, West Capella and Sevan Louisiana, which were undergoing contract preparation activities during the three months ended March 31, 2026 for contracts that started during March 2026 in Brazil, Malaysia and the U.S. Gulf of America, respectively, compared to the three months ended March 31, 2025, during which the rigs were operating for more days. The decrease was partially offset by the West Neptune and West Polaris, operating throughout the three months ended March 31, 2026, compared to being partially contracted during the three months ended March 31, 2025.
ii.Average contractual dayrates
We calculate the average contractual dayrate by dividing the aggregate contractual dayrates during a reporting period by the aggregate number of days for the reporting period.
The average contractual dayrate earned during the three months ended March 31, 2026 was $343 thousand compared to $323 thousand during the three months ended March 31, 2025, resulting in a $5 million increase in contract revenues in the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
The increase was driven by higher dayrates for the West Jupiter, West Auriga, West Polaris, West Tellus and West Carina operating in Brazil, the West Neptune operating in the U.S. Gulf of America, and the West Elara operating in Norway during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. These impacts were partially offset by lower dayrates for the West Vela and Sevan Louisiana operating in the U.S. Gulf of America during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
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iii.Economic utilization for rigs on contract
We define economic utilization as dayrate revenue earned during the period, excluding bonuses, divided by the contractual operating dayrate multiplied by the number of days on contract in the period. If a drilling unit earns its full operating dayrate throughout a reporting period, its economic utilization would be 100%. However, there are many situations that give rise to a dayrate being earned that is less than the contractual operating rate, such as planned downtime for maintenance. In such situations, economic utilization reduces below 100%.
The economic utilization for the three months ended March 31, 2026 was 95%, compared to 84% for the three months ended March 31, 2025, resulting in a $36 million increase in contract revenues in the three months ended March 31, 2026 compared to the three months ended March 31, 2025. The increase was primarily due to improved economic utilization on the West Tellus, West Polaris, West Auriga and Sevan Louisiana during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
iv.Deferred mobilization revenues
We receive fees for the mobilization of our rigs, where the associated revenue is recognized ratably over the expected term of the related drilling contract. As a result, we record a contract liability for mobilization fees received, which is amortized ratably to contract revenues as services are rendered over the initial term of the related drilling contract.
The amortization of deferred mobilization revenues decreased by $1 million during the three months ended March 31, 2026, compared to the three months ended March 31, 2025. The decrease was primarily attributable to mobilization fees received on the West Capella recognized during the first quarter of 2025.
b) Reimbursable revenues
We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel and other services provided at their request in accordance with a drilling contract. We classify such revenues as reimbursable revenues.
For the three months ended March 31, 2026 and the three months ended March 31, 2025, reimbursable revenues primarily related to rigs managed for the Sonadrill joint venture for long-term maintenance projects on the Libongos and Quenguela, along with reimbursable revenues related to services provided across various customers.
The $5 million decrease in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily due to reduced reimbursable services provided to the West Gemini and Quenguela during the first quarter of 2026, compared to the first quarter of 2025.
2) Operating expenses
Total operating expenses include vessel and rig operating expenses, reimbursable expenses, depreciation of drilling units and equipment, amortization of intangibles, management contract expenses, selling, general and administrative expenses, and merger and integration related expenses.
| Three months ended March 31, | |||||||||||||||||||||||
| (In $ millions, except percentages) | 2026 | 2025 | Change | Change % | |||||||||||||||||||
Vessel and rig operating expenses (a) | (181) | (179) | (2) | 1 | % | ||||||||||||||||||
| Reimbursable expenses | (10) | (15) | 5 | (33) | % | ||||||||||||||||||
Depreciation and amortization (b) | (71) | (55) | (16) | 29 | % | ||||||||||||||||||
| Management contract expenses | (46) | (45) | (1) | 2 | % | ||||||||||||||||||
| Selling, general and administrative expenses (c) | (25) | (23) | (2) | 9 | % | ||||||||||||||||||
| Merger and integration related expenses | (1) | — | (1) | 100 | % | ||||||||||||||||||
| Total operating expenses | (334) | (317) | (17) | 5 | % | ||||||||||||||||||
a) Vessel and rig operating expenses
Vessel and rig operating expenses represent the costs we incur to operate a drilling unit that is either in operation or stacked. This includes the remuneration of offshore crews, rig supplies, expenses for repair and maintenance, onshore support costs, and the amortization of deferred mobilization costs. Vessel and rig operating expenses are mainly driven by rig activity. On average, we incur higher vessel and rig operating expenses when a rig is operating compared to when it is stacked. For stacked rigs, we incur higher vessel and rig expenses for warm stacked rigs compared to cold stacked rigs. We incur one-time costs for activities such as preservation and severance when we cold stack a rig. We also incur significant costs when re-activating a rig from cold stack, a proportion of which is expensed as incurred.
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Vessel and rig operating expenses increased by $2 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025. During the three months ended March 31, 2026, there was an $9 million increase in vessel and rig operating expenses compared to the three months ended March 31, 2025, primarily related to the West Polaris commencing operations in February 2025 in Brazil, along with higher repair and maintenance costs across the fleet. This was partially offset by a $7 million decrease in vessel and rig operating expenses during the three months ended March 31, 2026, attributable to lower deferred mobilization costs related to contracts in Brazil completing during the first quarter of 2026.
b) Depreciation and amortization
The $16 million increase in depreciation and amortization for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 is mainly attributable to long-term maintenance and capital projects across the fleet, and unfavorable contracts being fully amortized during 2025.
Depreciation of drilling units and equipment
Depreciation increased by $11 million in the three months ended March 31, 2026 compared to the three months ended March 31, 2025, mainly attributable to long-term maintenance and capital projects across the fleet, primarily related to West Neptune, West Gemini and Sevan Louisiana during the second half of 2025.
Amortization of intangibles
Amortization increased by $5 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, mainly attributable to unfavorable contracts recorded as liabilities being fully amortized during 2025 related to the West Tellus, West Jupiter and West Carina.
c) Selling, general and administrative expenses
Selling, general and administrative expenses include the cost of our corporate and regional offices, certain legal and professional fees as well as the remuneration and other compensation of our officers, directors and employees engaged in central management and administration activities.
Selling, general and administrative expense increased by $2 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily due to personnel costs and professional fees.
3) Interest expense
| Three months ended March 31, | |||||||||||||||||||||||
| (In $ millions, except percentages) | 2026 | 2025 | Change | Change % | |||||||||||||||||||
Interest on debt facilities (a) | (14) | (14) | — | — | % | ||||||||||||||||||
| Other | (1) | (1) | — | — | % | ||||||||||||||||||
| Total interest expense | (15) | (15) | — | — | % | ||||||||||||||||||
a) Interest on debt facilities
We incur interest on our debt facilities as summarized below:
| Three months ended March 31, | |||||||||||||||||||||||
| (In $ millions, except percentages) | 2026 | 2025 | Change | Change % | |||||||||||||||||||
| $575 million secured bond | (13) | (12) | (1) | 8 | % | ||||||||||||||||||
| Unsecured senior convertible bond | (1) | (2) | 1 | (50) | % | ||||||||||||||||||
| Total interest on debt facilities | (14) | (14) | — | — | % | ||||||||||||||||||
4) Financial and non-operating items
| Three months ended March 31, | |||||||||||||||||||||||
| (In $ millions, except percentages) | 2026 | 2025 | Change | Change % | |||||||||||||||||||
| Interest income | 2 | 4 | (2) | (50) | % | ||||||||||||||||||
Equity in earnings of equity method investment (net of tax) (a) | 4 | 8 | (4) | (50) | % | ||||||||||||||||||
Other financial and non-operating items (b) | 1 | (14) | 15 | (107) | % | ||||||||||||||||||
| Total financial and non-operating items | 7 | (2) | 9 | (450) | % | ||||||||||||||||||
a) Equity in earnings of equity method investment (net of tax)
The earnings during the three months ended March 31, 2026 and the three months ended March 31, 2025 related to Seadrill's proportion of earnings from Sonadrill.
The decrease in earnings of $4 million for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by lower operating dayrates for Libongos and West Gemini, partially offset by an increased dayrate for Quenguela, operating in Angola during the three months ended March 31, 2026, compared to the three months ended March 31, 2025.
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b) Other financial and non-operating items
Other financial and non-operating items improved by $15 million during the three months ended March 31, 2026 compared to the three months ended March 31, 2025, primarily driven by a provision recognized during the three months ended March 31, 2025 related to assets sold, which did not recur during the three months ended March 31, 2026.
5) Income tax expense
Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities related to our ownership and operation of drilling units and may vary significantly depending on jurisdictions and contractual arrangements. In most cases, the calculation of taxes is based on net income or deemed income, the latter generally being a function of gross revenue.
The $8 million increase in tax expense during the three months ended March 31, 2026 compared to the three months ended March 31, 2025 primarily reflects changes in the Company's mix of pre-tax income and loss among tax jurisdictions, as well as lower utilization of tax loss carryforwards in the three months ended March 31, 2026.
Liquidity and Capital Resources
1) Capital allocation framework and Share repurchase program
In July 2023, in connection with the issuance of the Notes, Seadrill announced capital allocation principles designed to prioritize a conservative capital structure and liquidity position, focused capital investment in its fleet, and returns to shareholders. Within this framework, Seadrill intends to maintain a net leverage target of less than 1.0x under current market conditions, with a maximum through-cycle net leverage target of less than 2.0x. Seadrill also intends to maintain a strong liquidity position to provide resilience even in a downturn scenario by establishing a target minimum cash-on-hand of $250 million. Further, Seadrill intends to evaluate the potential for accretive additions in core asset categories.
So long as Seadrill is able to meet its net leverage and liquidity targets on a forward-looking basis, as well as comply with its Revolving Credit Facility covenant requirements, Seadrill would seek to provide a return to our shareholders of at least 50% of Free Cash Flow (defined as cash flows from operating activities minus additions to drilling units and equipment) in the form of Share repurchases or dividends. Seadrill will consider additional returns to shareholders from the proceeds of any asset sales in the absence of identified, accretive opportunities. Dividends and Share repurchases will be authorized and determined by the Board of Directors in its sole discretion and depend upon a number of factors, including those described above, its future prospects, market trend evaluation and such other factors as the Board of Directors may deem relevant. Please see Item 1A. "Risk Factors - Financial and Tax Risks - We may be unable to meet our capital allocation framework goal of returning at least 50% of Free Cash Flow to shareholders through dividends and share repurchases, which could decrease expected returns on an investment in our Shares" in Part I of our 2025 10-K.
During the second quarter of 2024, the Company's Board of Directors authorized a $500 million Share repurchase program that will run for a period of two years from June 25, 2024, the date of completion for the programs initiated in 2023 ("Current Repurchase Program"). Under the Current Repurchase Program, the Board authorized the Company to purchase up to $300 million of the Company's Shares in 2024. Since the Current Repurchase Program commenced, the Company has repurchased an aggregate of 6,714,252 Shares with a weighted average Share price of $43.52, amounting to $292 million. On September 30, 2024 and December 16, 2024, the Company canceled 4,213,349 and 2,500,903 treasury Shares, respectively, repurchased under this program.
During the three months ended March 31, 2026 and March 31, 2025, the Company did not repurchase Shares.
As of March 31, 2026, $208 million of the $500 million authorized amount remained available under the Current Repurchase Program.
While the Current Repurchase Program has a fixed expiration, it may be modified, suspended or discontinued at any time. Shares may be repurchased at any time and from time to time under the program in open market purchases, privately negotiated purchases, block trades, tender offers, accelerated share repurchase transactions or other derivative transactions, through the purchase of call options or the sale of put options, or otherwise, or by any combination of the foregoing. The Company is under no obligation to purchase any Shares in respect of the repurchase program. The manner, timing, pricing and amount of any repurchases may be based upon a number of factors, including market conditions, the Company’s financial position and capital requirements, financial conditions, competing uses for cash, statutory solvency requirements, the restrictions in the Company’s debt agreements and other factors.
The Company may continue Share repurchases pursuant to the Current Repurchase Program at the Board’s discretion. While we intend to announce the initiation of any Board approved repurchase programs in the future, as well as periodic information required under U.S. securities laws and regulations, we do not intend to announce any sub-authorizations for Share repurchases made pursuant to the Current Repurchase Program or any successor program given that we are no longer required to comply with European regulations requiring onerous disclosure in connection with repurchase programs.
2) Liquidity
Our level of liquidity fluctuates depending on a number of factors. These include, among others, our drilling units being on contract, economic utilization achieved, average contract dayrates, timing of accounts receivable collection, capital expenditures for rig upgrades and reactivation projects and timing of payments for operating costs and other obligations.
As of March 31, 2026, Seadrill had available liquidity of $482 million, which consisted of unrestricted cash of $304 million and available borrowings under our Revolving Credit Facility of $178 million. Our cash on hand, available borrowings under the Revolving Credit Facility, and contract and other revenues are expected to generate sufficient cash flow to fund our anticipated debt service and working capital requirements for the next 12 months.
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The table below shows total available liquidity, which consists of unrestricted cash and undrawn Revolving Credit Facility borrowings, as of each date presented.
| (In $ millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Unrestricted cash | 304 | 339 | ||||||||||||
| Undrawn Revolving Credit Facility | 178 | 185 | ||||||||||||
| Total available liquidity | 482 | 524 | ||||||||||||
We have shown our sources and uses of cash by category of cash flows in the table below:
| Three months ended March 31, | |||||||||||||||||||||||
| (In $ millions, except percentages) | 2026 | 2025 | Change | Change % | |||||||||||||||||||
Net cash used in operating activities (a) | (22) | (27) | 5 | (19) | % | ||||||||||||||||||
Net cash used in investing activities (b) | (13) | (49) | 36 | (73) | % | ||||||||||||||||||
| Net cash used in financing activities | (1) | — | (1) | 100 | % | ||||||||||||||||||
| Effect of exchange rate changes in cash | — | 1 | (1) | (100) | % | ||||||||||||||||||
| Change in period | (36) | (75) | 39 | (52) | % | ||||||||||||||||||
a) Net cash used in operating activities
Cash flows from operating activities includes cash receipts from customers, cash paid to employees and suppliers (except for additions to drilling units and equipment), interest and dividends received (except for returns of capital), interest paid, income taxes paid and other operating cash payments and receipts.
Net cash used in operating activities during the three months ended March 31, 2026 was $22 million compared to $27 million for the three months ended March 31, 2025. The $5 million decrease in net cash used in operating activities in the three months ended March 31, 2026 compared to the three months ended March 31, 2025 was primarily driven by improved operating results and reduced disbursements to suppliers, partially offset by the impact of timing of receipts from customers and increased mobilization costs incurred primarily related to the West Tellus, West Jupiter and West Capella.
b) Net cash used in investing activities
The $13 million cash used in investing activities during the three months ended March 31, 2026 was primarily related to capital expenditures on the West Tellus, West Jupiter and West Capella and the acquisition of capital spares.
The $49 million cash used in investing activities during the three months ended March 31, 2025 was primarily related to capital expenditures on the West Neptune, West Elara and West Auriga and the acquisition of capital spares.
3) Borrowing Activities
An overview of our debt as of March 31, 2026, divided into (i) secured bond and (ii) unsecured senior convertible bond, is presented in the table below:
| (In $ millions) | Principal Value | Debt Premium | Debt Issuance Costs | Carrying Value | Maturity Date | |||||||||||||||
| Secured | ||||||||||||||||||||
| $575 million secured bond | 575 | 1 | (12) | 564 | August 2030 | |||||||||||||||
| Unsecured | ||||||||||||||||||||
| Unsecured senior convertible bond | 50 | — | — | 50 | August 2028 | |||||||||||||||
| Total debt | 625 | 1 | (12) | 614 | ||||||||||||||||
Collateral package
Revolving Credit Facility
In July 2023, the Company entered into the $225 million, five-year Credit Agreement in respect of the Revolving Credit Facility. Seadrill Finance is the borrower under the Credit Agreement, and the facility is secured by first priority liens on substantially all of the Company's rigs and related assets, other than non-core assets. The Company, and certain of its subsidiaries that own collateral or are otherwise material, guarantee the obligations under the Credit Agreement. The loans outstanding under the Credit Agreement bear interest at a rate per annum equal to the applicable margin plus, at Seadrill Finance's option, either: (i) the Term SOFR Rate (as defined in the Credit Agreement) plus 0.10%; or (ii) the Daily Simple SOFR (as defined in the Credit Agreement) plus 0.10%. For both the Term SOFR Rate loans and Daily Simple SOFR loans, the applicable margin was 2.75% per annum as of March 31, 2026, and may vary based on Seadrill's Credit Ratings (as defined in the Credit Agreement), from 2.50% to 3.50% per annum. A commitment fee is incurred under the Revolving Credit Facility on undrawn amounts, at a rate of 0.5% per annum to and including July 27, 2026, 0.75% per annum from and including July 28, 2026 to and including July 27, 2027, and 1.00% per annum thereafter. This facility has not been drawn to date.
During the third quarter of 2025, the Company issued a NOK403 million guarantee ($41 million as of March 31, 2026) under the Revolving Credit Facility related to the SFL Hercules Ltd. claim. As of March 31, 2026, outstanding letters of credit and bank guarantees under the Revolving Credit Facility totaled approximately $47 million, which reduced the Company’s available capacity under the Revolving Credit Facility to $178 million.
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For further details, please refer to Note 13 – "Commitments and contingencies" of our unaudited Condensed Consolidated Financial Statements.
On April 3, 2026, the Company amended the Credit Agreement to increase the letter of credit sub-limit from $50 million to $100 million.
$575 million Notes Offerings
In July 2023, Seadrill Finance issued the Notes in a private offering. The Notes mature on August 1, 2030. The Notes are guaranteed by the Company and the same subsidiaries of the Company that guarantee the Credit Agreement. The Notes are secured by a second priority lien on the same assets that secure the Credit Agreement.
Bilateral Facility
Seadrill Rig Holding Company Limited, a subsidiary of Seadrill, has an uncommitted bilateral facility with DNB Bank ASA (the “Bilateral Facility”), which permits the issuance of letters of credit and bank guarantees for our account. Up to $25 million of reimbursement obligations under the Bilateral Facility are secured on a pari passu basis with the collateral that secures the Credit Agreement, and any additional obligations under the Bilateral Facility would need to be secured by cash or other collateral. We pay a fee of 1% on outstanding letters of credit and bank guarantees issued under the Bilateral Facility. As of March 31, 2026, we had approximately $24 million of outstanding letters of credit and bank guarantees issued under the Bilateral Facility.
For further details on these facilities, please refer to Note 9 – "Debt" of our unaudited Condensed Consolidated Financial Statements.
Financial covenants
The Credit Agreement obligates Seadrill and its restricted subsidiaries to comply with the following financial covenants:
•as of the last day of each fiscal quarter, the Interest Coverage Ratio (as defined in the Credit Agreement) is not permitted to be less than 2.50 to 1.00; and
•as of the last day of each fiscal quarter, the Consolidated Total Net Leverage Ratio (as defined in the Credit Agreement) is not permitted to be greater than 3.00 to 1.00.
As of March 31, 2026, Seadrill was in compliance with these financial covenants.
Critical Accounting Estimates
The preparation of our unaudited Condensed Consolidated Financial Statements in accordance with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosures about contingent assets and liabilities. We base these estimates and assumptions on historical experience and on various other information and assumptions that we believe to be reasonable. Critical accounting estimates are important to the portrayal of both our financial position and results of operations and require us to make subjective or complex assumptions or estimates about matters that are uncertain. Actual results may differ from these estimates.
For a discussion of our critical accounting estimates, see Part II, Item 7. "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Estimates" in our 2025 10-K. As of March 31, 2026, there have been no material changes to the judgments, assumptions and estimates upon which our critical accounting policies and estimates are based.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks, including foreign exchange risk and interest rate risk. Our policy is to reduce our exposure to these risks, where possible, within boundaries deemed appropriate by our management team. This may include the use of derivative instruments. There have been no material changes to our market risks as compared to the information previously reported under Part II, Item 7A. "Quantitative and Qualitative Disclosures About Market Risk" in our 2025 10-K.
Item 4. Controls and Procedures
Disclosure Controls and Procedures
Our management, with participation from the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the Company's disclosure controls and procedures as of March 31, 2026. Based on that evaluation and as of the date of that evaluation, the Chief Executive Officer and Chief Financial Officer concluded the Company's disclosure controls and procedures were effective, providing effective means to ensure the information the Company is required to disclose under applicable laws and regulations is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms and accumulated and communicated to the Company's management to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting during the quarter ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
On January 1, 2026, we implemented a new enterprise resource planning ("ERP") system on a company-wide basis, which resulted in certain changes to our processes and procedures. We utilize the new ERP to assist us in executing our internal control over financial reporting; however, the ERP implementation has not materially affected, nor is it reasonably likely to materially affect, our internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Except as set forth in Note 13 – "Commitments and contingencies" to our unaudited Condensed Consolidated Financial Statements included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q, we were involved in a number of lawsuits, regulatory matters, disputes, and claims, asserted and unasserted, all of which have arisen in the ordinary course of our business and for which we do not expect the liability, if any, to have a material adverse effect on our consolidated financial position, results of operations, or cash flows. We cannot predict with certainty the outcome or effect of any of the matters referred to above or of any such other pending or threatened litigation or legal proceedings. We can provide no assurance that our beliefs or expectations as to the outcome or effect of any lawsuit or claim or dispute will prove correct and the eventual outcome of these matters could materially differ from management’s current estimates.
Additional information regarding legal proceedings is presented in Note 13 – "Commitments and contingencies" to our unaudited Condensed Consolidated Financial Statements, included in Part I, Item 1. "Financial Statements" of this Quarterly Report on Form 10-Q.
Item 1A. Risk Factors
There have been no material changes from the risk factors previously disclosed in Part I, Item 1A. "Risk Factors" in our 2025 10-K.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
During the first quarter of 2026, the Company did not repurchase Shares, and therefore, as of March 31, 2026, $208 million of the $500 million authorized amount remained available under the Current Repurchase Program.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Rule 10b5-1 Trading Arrangements
During the three months ended March 31, 2026, no director or officer (as defined in Rule 16a-1(f) of the Exchange Act) of the Company adopted terminated
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Item 6. Exhibits
| Exhibit Number | Description | ||||
| 3.1 | |||||
| 3.2 | |||||
| 3.3 | |||||
| 3.4 | |||||
| 3.5 | |||||
| 10.1*+^ | |||||
| 10.2*+ | |||||
| 10.3*+ | |||||
| 10.4*† | |||||
| 31.1* | |||||
| 31.2* | |||||
| 32.1** | |||||
| 32.2** | |||||
| 101.INS | Inline XBRL Instance Document | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Schema Calculation Linkbase Document | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 104* | Cover Page Interactive Data File (embedded within the Inline XBRL document and contained in Exhibit 101) | ||||
* | Filed herewith. | ||||
** | Furnished herewith. | ||||
| † | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K and will be provided to the SEC upon request. | ||||
| + | Management contract or compensatory plan or arrangement. | ||||
| ^ | Certain personally identifiable information contained in this Exhibit has been redacted pursuant to Item 601(a)(6) of Regulation S-K. | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| SEADRILL LIMITED | ||||||||
| Date: May 11, 2026 | ||||||||
| By: | /s/ Grant Creed Grant Creed Executive Vice President and Chief Financial Officer (duly authorized officer, principal financial officer, principal accounting officer) | |||||||
Exhibit 10.1
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this “Agreement”) is entered into effective as of March 12, 2026 (the “Effective Date”), between Seadrill Americas, Inc., a company incorporated in the State of Texas (the “Company”), whose parent company is Seadrill Limited, a company incorporated in Bermuda (“Seadrill”), and Samir H. Ali (“Executive”).
WHEREAS, Executive and the Company are party to that certain Employment Agreement, dated as of November 21, 2023, as amended as of October 2, 2024 (the “Prior Agreement”), pursuant to which Executive served as the Chief Commercial Officer of the Group Companies;
WHEREAS, the Company and Executive desire to amend and restate the Prior Agreement in the form hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Certain Definitions. Certain words or phrases used herein with initial capital letters shall have the meanings set forth in paragraph 8 hereof.
2.Employment. The Company shall continue to employ Executive, and Executive desires to remain in the continued employ of the Company as of the Effective Date, upon the terms and conditions set forth in this Agreement for the period beginning on the Effective Date and ending as provided in paragraph 5 hereof (the “Employment Period”). Notwithstanding anything in this Agreement to the contrary, Executive will be an at-will employee of the Company and Executive or the Company may terminate Executive’s employment with the Company for any reason or no reason at any time.
3.Position and Duties.
(a)During the Employment Period, Executive shall serve as the President and Chief Executive Officer of Seadrill and shall have the normal duties, responsibilities and authority of an executive serving in such position, subject to the power of the Board to expand or limit such duties, responsibilities and authority, either generally or in specific instances.
(b)During the Employment Period, Executive shall report to the Board of Seadrill.
(c)During the Employment Period, Executive shall:
(i)devote Executive’s best efforts and Executive’s full business time and attention (except for permitted vacation periods and reasonable periods of illness or other incapacity) to the business and affairs of the Company, Seadrill, and all of Seadrill’s subsidiary companies from time to time (each of the
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Company, Seadrill and such subsidiaries, a “Group Company” and collectively, the “Group Companies”);
(ii)perform Executive’s duties and responsibilities to the best of Executive’s abilities in a faithful, diligent, trustworthy, businesslike and efficient manner;
(iii)keep the Board fully informed of Executive’s conduct of the business of any Group Company for which Executive is responsible in a prompt and timely manner;
(iv)obey all reasonable, lawful and proper directions and requests of the Board;
(v)act in such a way as to promote and protect the interests and reputation of every Group Company;
(vi)comply with all Group Company policies and procedures, including anti-corruption and bribery policies; and
(vii)bring to the attention of the Board any relevant material business opportunities for any Group Company of which Executive becomes aware.
(d)During the Employment Period, Executive will not, whether during or outside regular business hours:
(i)directly or indirectly be engaged or concerned in the conduct of any business activity whether as shareholder, employee, director or other officer (except as a representative of the Company or with the prior written consent of the Board, which shall not be unreasonably withheld); or
(ii)accept any appointment as director of any company which is not a Group Company without the prior written consent of the Board, which shall not be unreasonably withheld.
(e)Notwithstanding the foregoing, the Board approves Executive’s current ownership and limited management oversight activities of the retail businesses located in California that are set forth on Exhibit A (“Retail Businesses”) that do not compete with the Group Companies.
(f)Executive shall perform Executive’s duties and responsibilities principally at the office of the Company in the Houston, Texas area. Executive may be required to travel and work outside of the Houston, Texas area from time to time including at other Group Company locations or client locations but, unless otherwise agreed with the Board, Executive will not be required to live outside of the Houston, Texas area.
4.Compensation and Benefits.
(a)Salary. The Company agrees to pay Executive a salary during the Employment Period in installments based on the Company’s practices as may be in effect from time to time. Executive’s initial salary shall be at the rate of $750,000 per year (the “Base Salary”). The Board shall review and may upwardly adjust the Base Salary from
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time to time. The Base Salary may not be reduced without Executive’s written agreement.
(b)Annual Bonus. During the Employment Period, Executive will be eligible for an annual bonus in a target amount equal to 110% of Executive’s Base Salary, based on the achievement of specified performance goals (as determined by the Board). For the avoidance of doubt, the annual bonus that may be earned for the calendar year ending December 31, 2026 may be earned based on the target percentage set forth in the prior sentence of this subparagraph 4(b) and will not be prorated based on the portion of such calendar year beginning on the Effective Date. Except as provided in Section 6(b)(i) and Section 6(b)(ii), Executive must be employed by the Company on the last day of the applicable performance year to be eligible to receive an annual bonus for such year.
(c)Standard Benefits Package. Executive shall be entitled during the Employment Period to participate, on the same basis as other employees of the Company, in the Company’s Standard Benefits Package. The Company’s “Standard Benefits Package” means those benefits (including insurance and other benefits, but excluding, except as hereinafter provided in subparagraph 6(b), any severance pay program or policy of the Company) for which substantially all of the employees of the Company are from time to time generally eligible, as determined from time to time by the Board.
(d)Vacation. During the Employment Period, Executive shall be entitled to twenty-five (25) days of paid vacation during each calendar year.
(e)Indemnification. With respect to Executive’s acts or failures to act during the Employment Period in Executive’s capacity as a director, officer, employee or agent of the Company, Executive shall be entitled to liability insurance coverage on the same basis as other directors and officers of Seadrill.
5.Employment Period.
(a)Except as hereinafter provided, the Employment Period shall continue until, and shall end upon, the first anniversary of the Effective Date.
(b)On the first anniversary of the Effective Date and on each anniversary thereafter, unless the Employment Period shall have ended pursuant to subparagraph 5(c) below or the Company shall have given Executive thirty (30) days written notice that the Employment Period will not be extended, the Employment Period shall be extended for an additional year. If the Company gives Executive thirty (30) days written notice that the Employment Period will not be extended, this will be considered a Termination Without Cause.
(c)Notwithstanding (a) or (b) above, the Employment Period shall end upon the first to occur of any of the following events:
(i)Executive’s death;
(ii)the Company’s termination of Executive’s employment due to Permanent Disability;
(iii)a Termination For Cause;
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(iv)a Termination Without Cause;
(v)a Termination For Good Reason; or
(vi)a Voluntary Termination.
6.Post-Employment Payments.
(a)Accrued Payments. At the end of Executive’s employment for any reason, Executive shall cease to have any rights to salary, equity awards, expense reimbursements or other benefits, except that Executive shall be entitled to (i) any Base Salary which has accrued but is unpaid, any reimbursable expenses which have been incurred but are unpaid, and any unexpired vacation days which have accrued under the Company’s vacation policy but are unused, as of the end of the Employment Period, (ii) any equity compensation rights or plan benefits which by their terms extend beyond termination of Executive’s employment (but only to the extent provided in any equity compensation theretofore granted to Executive or any other benefit plan in which Executive has participated as an employee of the Company and excluding, except as hereinafter provided in subparagraph 6(b), any severance pay program or policy of the Company) and (iii) any benefits to which Executive is entitled under Part 6 of Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as amended (“COBRA”). In addition, Executive shall be entitled to the additional amounts described in subparagraph 6(b), in the circumstances described in such subparagraph.
(b)Termination Without Cause or Termination For Good Reason.
(i)If the Employment Period ends early pursuant to paragraph 5 on account of a Termination Without Cause or a Termination For Good Reason, the Company shall continue to pay Executive Executive’s Base Salary at the time of such termination and, if Executive timely and properly elects continuation of health care coverage under COBRA, the Company shall reimburse Executive for the portion of the monthly COBRA premium paid by Executive that is typically covered by the employer for active employees (the “COBRA Continuation”), in each case, for a period of twenty-four (24) months following such termination in accordance with the Company’s normal payroll practices. Notwithstanding the foregoing, such COBRA Continuation shall terminate on the earliest of: (i) the end of the twenty-four (24) -month period; (ii) the date Executive is no longer eligible to receive COBRA coverage; and (iii) the date on which Executive becomes eligible for group medical coverage from another employer or the employer of a spouse. Additionally, if the Employment Period ends early pursuant to paragraph 5 on account of a Termination Without Cause or Termination For Good Reason, Executive shall be entitled to receive a pro rata amount of the bonus (if any) Executive would have otherwise received pursuant to paragraph 4(b) for the year in which the Employment Period ends (based on the number of days during such bonus year Executive was employed up to and including the last day of the Employment Period), which such bonus amount (if any) shall be based on the extent to which the performance measures are met but assuming satisfaction of any personal objectives, and shall be payable at the same time as bonuses are paid to employees generally. To be clear, the fact that Executive is not employed on the last day of the performance year will not preclude his receipt of a pro rata bonus for such year on the terms set forth in the immediately preceding sentence.
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(ii)Notwithstanding the foregoing, if the Employment Period ends early pursuant to paragraph 5 on account of a Termination Without Cause or a Termination For Good Reason, in each case, within the twenty-four (24)-month period immediately following a Change in Control (a “CIC Termination”), the Company shall pay Executive an amount equal to three times (3x) the sum of (A) Executive’s Base Salary at the time of such termination, plus (B) Executive’s annual bonus in effect for the year in which the Employment Period ends, based on the target level of performance, plus (C) the annualized amount (for the avoidance of doubt, twelve (12) months) of COBRA Continuation. Additionally, in the event of a CIC Termination, Executive shall be entitled to receive a pro rata amount of the bonus (if any) Executive would have otherwise received pursuant to paragraph 4(b) for the year in which the Employment Period ends (based on the number of days during such bonus year Executive was employed up to and including the last day of the Employment Period), which such bonus amount (if any) shall be based on the extent to which the performance measures are met but assuming satisfaction of any personal objectives, and shall be payable at the same time as bonuses are paid to employees generally. To be clear, the fact that Executive is not employed on the last day of the performance year will not preclude his receipt of a pro rata bonus for such year on the terms set forth in the immediately preceding sentence.
(c)Compliance with Restrictive Covenants. It is expressly understood that the Company’s payment obligations under subparagraph 6(b) shall cease in the event that a court finds Executive breaches any of the agreements in paragraph 7 hereof (and the Company’s payment obligations under subparagraph 6(b) shall be tolled pending the court’s determination) and in such event, to the extent any payment was previously made to Executive under subparagraph 6(b), Executive will immediately return any such payment to the Company if so ordered by a court of competent jurisdiction.
(d)No Mitigation. Executive shall not be required to mitigate the amount of any payment provided for in this Agreement by seeking other employment.
(e)Release. Notwithstanding anything herein to the contrary, the Company shall not be obligated to make any payment under subparagraph 6(b) hereof unless (i) prior to the 60th day following the Termination Without Cause or Termination For Good Reason, Executive executes a separation agreement and release of claims substantially in the form attached hereto as Exhibit B and (ii) any applicable revocation period has expired during such 60-day period without Executive revoking such release.
(f)Payment Timing. The amounts payable to Executive pursuant to subparagraph 6(b)(i) shall commence or become payable on the first regularly scheduled payroll date following the 60th day after the Termination Without Cause or Termination For Good Reason, subject to subparagraph 6(e), with the aggregate of any payments that would otherwise have been paid prior to such payroll date paid to Executive in a lump sum on such payroll date. The amounts payable to Executive pursuant to subparagraph 6(b)(ii) shall paid as soon as practicable following Executive’s timely execution and nonrevocation of the release described in subparagraph 6(e); provided, however, that if the 60-day period described therein spans two calendar years, the amounts payable to Executive pursuant to subparagraph 6(b)(ii) shall be made in the second calendar year.
7.Restrictive Covenants
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(a)Acknowledgements and Agreements. Executive hereby acknowledges and agrees that in the performance of Executive’s duties to the Company during the Employment Period, Executive will be brought into frequent contact with existing and potential customers of the Group Companies throughout the world. Executive also agrees that trade secrets and confidential information of the Group Companies, more fully described in subparagraph 7(f), gained by Executive during Executive’s association with the Group Companies, have been developed by each Group Company through substantial expenditures of time, effort and money and constitute valuable and unique property of the Group Companies. Executive further understands and agrees that the foregoing makes it necessary for the protection of the Businesses that Executive not compete with the Businesses during Executive’s employment with the Company and not compete with the Businesses for a reasonable period thereafter, as further provided in the following subparagraphs.
(b)Covenants During Employment Period. While employed by the Company, Executive will not compete with the Businesses anywhere in the world. In accordance with this restriction, but without limiting its terms, while employed by the Company, Executive will not:
(i)enter into or engage in any business which competes with the Businesses;
(ii)solicit customers, business, patronage or orders for, or sell, any products or services in competition with, or for any business that competes with, the Businesses;
(iii)divert, entice or otherwise take away any customers, business, patronage or orders of the Group Companies or attempt to do so; or
(iv)promote or assist, financially or otherwise, any person, firm, association, partnership, corporation or other entity engaged in any business which competes with the Businesses.
(c)Non-Competition. For a period of twelve (12) months following the termination of Executive’s employment, Executive shall not be employed in, or carry on for Executive’s own account or for any other person, or provide advisory services to (whether directly or indirectly), or be a director of any company, business or venture, which:
(i)is, or is about to be in competition with the Businesses (or any part thereof); or
(ii)is likely to result in the intentional or unintentional disclosure or use of Confidential Information by Executive in order for Executive to properly discharge Executive’s duties or further Executive’s interest in that company business or venture.
(d)Non-Solicitation. For a period of twelve (12) months following the termination of Executive’s employment, Executive shall not (either on Executive’s own behalf or for or with any other person), whether directly or indirectly:
(i)in respect of any Goods and/or Services:
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(A)solicit, facilitate the solicitation of, or canvass the custom or business of any Customer, or
(B)solicit, facilitate the solicitation of, or canvas the custom or business of any Prospective Customer; or
(ii)in respect of any Employee:
(A)solicit or entice or endeavor to solicit or entice any Employee to leave such Employee’s employment with or cease such Employee’s directorship or consultancy with any Group Company, whether or not that person would breach any obligations owed to the Company or any relevant Group Company by so doing, or
(B)offer employment or any contract for services to or employ or engage any Employee.
(e)Non-Interference. For a period of twelve (12) months following the termination of Executive’s employment, Executive shall not (either on Executive’s own behalf or for or with any other person), whether directly or indirectly:
(i)in regards to any Customer or Prospective Customer:
(A)deal with or supply any Customer, or
(B)deal with or supply any Prospective Customer; or
(ii)in regards to any Supplier:
(A)deal with or accept the supply of any goods or services from any Supplier where such supply is likely to be to the detriment of any Group Company whether by causing the Supplier to reduce or alter the terms or quantity of supply to the Group Company or, where the value of the Group Company’s arrangement with the Supplier is diminished; or
(B)solicit, facilitate the solicitation of, or canvass the supply of any goods or services from any Supplier where such supply is likely to be to the detriment of any Group Company whether by causing the Supplier to reduce or alter the terms or quantity of supply to the Group Company, or where the value of the Group Company’s arrangement with the Supplier is diminished.
(f)Confidential Information. Executive shall not (except in the proper performance of Executive’s duties) use or disclose to any person, company or other organization (and shall use every reasonable endeavor to prevent the publication or disclosure of) any of the trade secrets or confidential information of any Group Company. This restriction shall continue to apply after the termination of Executive’s employment but will not apply to information or knowledge which may come into the public domain other than through unauthorized disclosure, or any use or disclosure authorized by the Board or required by law.
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(i)For purposes of this subparagraph 7(f), trade secrets and confidential information include but will not be limited to:
(A)information relating to the business methods, corporate plans, management systems, finances, new business opportunities, research and development projects, marketing or sales of any past, present or future product or service of any Group Company;
(B)secret formulae, processes, inventions, designed, know-how discoveries, technical specifications and other technical information relating to the creation, production or supply of any past, present or future product or services of any Group Company;
(C)lists or details or customers, potential customers or suppliers of the arrangements made with any customer or supplier of any Group Company;
(D)any information in respect of which any Group Company owes an obligation of confidentiality to any third party (provided that with respect to such third party Executive knows or reasonably should have known that the third party provided it to any Group Company on a confidential basis);
(E)information and details of and concerning the engagement, employment and termination of employment of Executive and any other personnel;
(F)information concerning any litigation proposed, in progress or settled; and,
(G)any other information in whatever form (written, oral, visual and electronic) concerning the confidential affairs of any Group Company.
(ii)During Executive’s employment, Executive shall not make (other than for the benefit of any Group Company) any record or copy (whether on paper, computer memory, disc or otherwise) relating to any matter within the scope of the business of any Group Company or their customers and supplies or concerning its or their dealings or affairs or (either during Executive’s employment or afterwards) use such records (or allow them to be used) other than for the benefit of the Company or the other relevant Group Company. All such records (and any copies of them) shall belong to the Company or the other relevant Group Company and shall be handed over to the Company by Executive on the termination of the Employment or at any time during the Employment at the request of the Company.
(g)Intellectual Property. Executive shall give the Company full written details of all Inventions and of all works embodying Intellectual Property Rights made wholly or partially by Executive at any time during the course of Executive’s employment. Executive acknowledges that all Intellectual Property Rights subsisting (or which may in the future subsist) in all such Inventions and works shall automatically, on creation, vest in the Company absolutely. To the extent that they do not vest
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automatically, Executive holds them on trust for the Company. Executive agrees promptly to execute all documents and do all acts as may, in the opinion of the Company, be necessary to give effect to this subparagraph 7(g).
(i)Executive hereby irrevocably waives Executive’s entire right, title, and interest in and to all Inventions and Intellectual Property Rights therein, including the right to sue, counterclaim, and recover for all past, present and future infringement, misappropriation, or dilution thereof, and all rights corresponding thereto throughout the world, including, without limitation, all moral rights under the Copyright, Designs and Patents Act 1988 of the United Kingdom (and all similar rights in other jurisdictions) which Executive has or will have in any existing or future works referred to in this subparagraph 7(g).
(ii)Rights and obligations under this subparagraph 7(g) will continue after the termination of this Agreement in respect of all Inventions, works and information made or obtained during the Employment Period and will be binding on the personal representatives of Executive.
(iii)By entering into this Agreement, Executive irrevocably appoints the Company to act on Executive’s behalf to execute any document and do anything in Executive’s name for the purpose of giving the Company (or its nominee) the full benefit of the provisions of this subparagraph 7(g) or the Company's entitlement under statute. If there is any doubt as to whether such a document (or other thing) has been carried out within the authority conferred by this subparagraph 7(g)(iii), a certificate in writing (signed by any director of the Company) will be sufficient to prove that the act or thing falls within that authority.
(h)Non-Disparagement. During the Employment Period and at all times thereafter, regardless of the reason for the termination of the Employment Period, each of the Company and the Executive agrees that it shall not (and the Company shall ensure that each other Group Company shall not) make negative comments to third parties or otherwise disparage the Executive, the Company or any other Group Company to any third parties. The provisions of this subparagraph 7(h) will not be breached in respect of any truthful statements made by the Executive or any Group Company in response to any legal proceedings or regulatory investigations.
(i)Certain Definitions for this Paragraph 7. For purposes of this paragraph 7:
(i)“Businesses” shall mean offshore drilling and any other trade or commercial activity which is carried on by any Group Company or which any Group Company shall have determined to carry on with a view to profit in the immediate or foreseeable future.
(ii)“Confidential Information” shall have the meaning given to trade secrets and confidential information in subparagraph 7(f).
(iii)“Customer” shall mean any person who at any time during the 12 months immediately preceding the termination of Executive’s employment was a customer of any Group Company with whom Executive had material dealings or in relation to whom Executive acquired confidential information.
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(iv)“Employee” shall mean any individual who is employed or engaged by any Group Company, or any person who, during the 12 months immediately preceding the termination of Executive’s employment, is or was employed or engaged by any Group Company.
(v)“Intellectual Property Rights” shall mean patents, utility models, rights to Inventions, copyright and neighboring and related rights, moral rights, trademarks and service marks, business names and domain names, rights in get-up and trade dress, goodwill and the right to sue for passing off or unfair competition, rights in designs, rights in computer software, database rights, rights to use, and protect the confidentiality of, confidential information (including know-how and trade secrets) and all other intellectual property rights, in each case whether registered of unregistered and including all applications and rights to apply for and be granted, renewals or extensions of, and rights to claim priority from, such rights and all similar or equivalent rights or forms of protection which subsist or will subsist now or in the future in any part of the world.
(vi)“Invention” shall mean any invention, idea, discovery, development, improvement or innovation, whether or not patentable or capable of registration, and whether or not recorded in any medium.
(vii)“Goods and/or Services” shall mean any goods and/or services competitive with those supplied by any Group Company at any time during the 12 months immediately preceding the termination of Executive’s employment and in relation to which Executive was materially involved or concerned or for which Executive was directly responsible during that time.
(viii)“Prospective Customer” shall mean any person who was at any time during the 12 months immediately preceding the termination of Executive’s employment engaged in negotiations, with which Executive was personally involved, with any Group Company with a view to obtaining Goods and/or Services from any Group Company or in relation to whom Executive has acquired Confidential Information.
(ix)“Supplier” shall mean any person with whom Executive had material dealings at any time during the 12 months immediately preceding the termination of Executive’s employment and who during that period supplied goods or services to any Group Company on terms other than those available to another purchaser in the market during that period, whether by reason of exclusivity (either de facto or contractually obliged), price or otherwise.
(j)Return of Company Property. Executive agrees that upon termination of Executive’s employment with the Company, for any reason, Executive shall
(i)return to the Company or any relevant Group Company, in good condition, all property of the Company, including without limitation, the originals and all copies of any files, sketches, plans, drawings, equipment, tools, instruments, computers, devices, telephones, credit cards, letters, calendars, reports, memoranda, notes, correspondence, databases, discs, records, books, papers, letters, CD ROMs, keys, computer access codes, forms, contracts, software programs, information and records, training guides and manuals, and other documents or materials that Executive made, compiled, copied or acquired
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during Executive’s employment that relate to the business, finances or affairs of the Company or any Group Company or which contain, reflect, summarize, describe, analyze or refer or relate to any items of information listed in subparagraph 7(f) of this Agreement, and that are in Executive’s possession, custody or control;
(ii)irretrievably delete and erase any information relating to the business of any Group Company stored on any computer, technological or memory device maintained or used by Executive for work purposes during Executive’s employment and which is in Executive’s possession, custody, care or control outside the premises of the Company and, if required by the Company, deliver any such equipment (electronic or otherwise) that is not company property and was used for the storage of the matters in subparagraph 7(j)(i) above so that the Company may review and delete and erase the same;
(iii)transfer (without payment) to the Company (or as it may direct) any qualifying nominee shareholdings which Executive holds in connection with Executive’s employment with the Company and Executive hereby irrevocably appoints the Company to be Executive’s attorney to execute such transfers on Executive’s behalf; and
(iv)return all other property belonging or relating to any of the Group Companies.
(k)Notwithstanding any other provisions of this Agreement, pursuant to 18 U.S.C. § 1833(b), an individual will not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that is made: (I) solely for the purpose of reporting or investigating a suspected violation of law and in confidence to a federal, state or local government official (either directly or indirectly) or to an attorney; or (II) in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. An individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual files any document containing the trade secret under seal; and does not disclose the trade secret, except pursuant to court order.
(l)Communication of Contents of Agreement. While employed by the Company and for one (1) year thereafter, Executive will communicate the contents of paragraph 7 of this Agreement to any person, firm, association, partnership, corporation or other entity that Executive intends to be employed by, associated with, or represent.
(m)Relief. Executive acknowledges and agrees that the remedy at law available to the Company for breach of any of Executive’s obligations under this Agreement would be inadequate. Executive therefore agrees that, in addition to any other rights or remedies that the Company may have at law or in equity, temporary and permanent injunctive relief may be granted in any proceeding which may be brought to enforce any provision contained in subparagraphs 7(b), 7(c), 7(d), 7(e), 7(f), 7(g), 7(h) and 7(i) inclusive, of this Agreement, without the necessity of proof of actual damage.
(n)Reasonableness. Executive acknowledges that Executive’s obligations under this paragraph 7 are reasonable in the context of the nature of the Businesses and the competitive injuries likely to be sustained by the Company and the other Group
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Companies if Executive were to violate such obligations. Executive further acknowledges that this Agreement is made in consideration of, and is adequately supported by the agreement of the Company to perform its obligations under this Agreement and by other consideration, which Executive acknowledges constitutes good, valuable and sufficient consideration.
8.Definitions.
(a)“Board” means the Board of Directors of Seadrill from time to time or any person or committee nominated by the Board as its representative for the purpose of this Agreement.
(b)“Change in Control” shall have the meaning ascribed thereto in the Seadrill Management Limited 2022 Management Incentive Plan, as amended from time to time.
(c)“Permanent Disability” means that Executive, because of accident, disability, or physical or mental illness, is incapable of performing Executive’s duties to the Company or any Group Company, as determined by the Board. Notwithstanding the foregoing, Executive will be deemed to have become incapable of performing Executive’s duties to the Company or any Group Company, if Executive is incapable of so doing for (i) a continuous period of 90 days and remains so incapable at the end of such 90 day period or (ii) periods amounting in the aggregate to 180 days within any one period of 365 days and remains so incapable at the end of such aggregate period of 180 days.
(d)“Termination For Cause” means the termination by the Company or any Group Company of Executive’s employment with the Company as a result of (i) Executive’s serious or repeated breach of this Agreement, (ii) Executive’s failure to comply with any reasonable and lawful order or direction given to him by the Board, (iii) Executive’s commission of any gross misconduct or conduct (whether in connection with Executive’s employment with the Company or not) which in the reasonable opinion of the Board is or could reasonably be expected to be materially harmful to the Company or any Group Company, (iv) Executive’s conviction of any criminal offense (other than a traffic offense for which Executive is not sentenced to any term of imprisonment, whether immediate or suspended), (v) Executive’s commission of any act of fraud or dishonesty or corrupt practice relating to the Company or any Group Company, any of its or their employees, customers or otherwise or a breach of the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations thereunder, as such laws, rules and regulations may be amended from time to time, (vi) Executive’s breach of any legislation or regulation in force which may materially affect or relate to the business or securities of the Company or any Group Company. Notwithstanding the foregoing, no termination of employment by the Company or any Group Company shall constitute a “Termination For Cause” as a result of an event described in clause (i), (ii), (iii), (v) or (vi) above unless (A) the Company gives Executive notice of the existence of an event described in such clause, within sixty (60) days following the occurrence thereof, (B) if such event is remediable, Executive is provided a period of ten (10) days following such notice to remedy such event, and (C) if such event is remediable, Executive fails to remedy such event within such period of ten (10) days.
(e)“Termination For Good Reason” means Executive’s termination of Executive’s employment as a result of (i) a material adverse change in Executive’s title,
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authority, duties or responsibilities other than (a) temporarily in the event of physical or mental incapacitation, (b) as required by applicable law or regulatory requirements, or (c) due to any such change made in the ordinary course of business that is due to an internal restructuring of employees and their corresponding titles, authorities, duties, and/or responsibilities (which exception (c) shall apply prior to a Change in Control only); (ii) a material reduction in Executive’s Base Salary or target annual bonus except to the extent that the base salaries or target annual bonuses of all other similarly situated executives of the Company are similarly reduced; (iii) a relocation of Executive’s principal office to a location that is in excess of fifty (50) miles from its location as of the Effective Date; or (iv) any material breach of this Agreement by the Company. Notwithstanding the foregoing, no termination of employment by Executive shall constitute a “Termination For Good Reason” unless (A) Executive gives the Company notice of the existence of an event described in clause (i), (ii), (iii) or (iv) above, within sixty (60) days following the occurrence thereof, (B) the Company does not remedy such event described in clause (i), (ii), (iii) or (iv) above, as applicable, within thirty (30) days of receiving the notice described in the preceding clause (A), and (C) Executive terminates employment within five (5) days of the end of the cure period specified in clause (B), above.
(f)“Termination Without Cause” means the termination by the Company or any Group Company of Executive’s employment with the Company prior to the end of the Employment Period for any reason other than a termination for Permanent Disability or Executive’s death, or a Termination For Cause and, for the avoidance of doubt, shall include the Company’s giving notice pursuant to subparagraph 5(b) that the Employment Period will not be extended.
(g)“Voluntary Termination” means Executive’s termination of Executive’s employment with the Company for any reason, other than a Termination For Good Reason.
9.Executive Representations. Executive represents and warrants to the Company that (a) Executive is entering into this Agreement voluntarily and that the performance of Executive's obligations hereunder will not violate any agreement between Executive and any other person, firm, organization or other entity, (b) Executive is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by Executive’s entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement, and (c) Executive is not subject to any pending or, to Executive’s knowledge, threatened claim, action, judgment, or investigation that could adversely affect his ability to perform his obligations under this Agreement or the business reputation of the Company or any Group Company.
10.Survival. Subject to any limits on applicability contained therein, paragraph 7 hereof shall survive and continue in full force in accordance with its terms notwithstanding any termination of the Employment Period.
11.Taxes. The Company may withhold from any amounts payable under this Agreement all federal, state, city or other taxes as the Company is required to withhold pursuant to any applicable law, regulation or ruling. Notwithstanding any other provision of this Agreement, the Company shall not be obligated to guarantee any particular tax result for Executive with respect to any payment provided to Executive hereunder, and Executive shall be responsible for any taxes imposed on Executive with respect to any such payment.
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12.Notices. Any notice provided for in this Agreement shall be in writing and shall be either personally delivered, sent by reputable overnight carrier or mailed by first class mail, return receipt requested, to the recipient at the address below indicated:
Notices to Executive:
[***]
Notices to the Company:
Seadrill Americas, Inc.
Attn: EVP, HR
11025 Equity Drive
Suite 150
Houston, Texas 77041
or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party. Any notice under this Agreement will be deemed to have been given when so delivered.
13.Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid or unenforceable in any respect under any applicable law, such invalidity or unenforceability shall not affect any other provision, but this Agreement shall be reformed, construed and enforced as if such invalid or unenforceable provision had never been contained herein.
14.Right to Offset. The Company may deduct from any money due to Executive any amount which Executive owes to any Group Company and Executive hereby consents to such deduction.
15.Prevailing Party’s Litigation Expenses. In the event of litigation between the Company and Executive related to this Agreement, the non-prevailing party shall reimburse the prevailing party for any costs and expenses (including, without limitation, attorneys’ fees) reasonably incurred by the prevailing party in connection therewith.
16.Internal Revenue Code Section 280G.
(a)Notwithstanding any other provision of this Agreement or any other plan, arrangement or agreement to the contrary, if any of the payments or benefits provided or to be provided by the Company or its affiliates to Executive or for Executive’s benefit pursuant to the terms of this Agreement or otherwise (such payments or benefits, “Covered Payments”) constitute parachute payments within the meaning of Code Section 280G (“Parachute Payments”) and would, but for this paragraph 16, be subject to the excise tax imposed under Code Section 4999 (or any successor provision thereto) or any similar tax imposed by state or local law or any interest or penalties with respect to such taxes (collectively, the “Excise Tax”), then the Covered Payments shall be either (a) delivered in full or (b) delivered to such lesser extent which would result in no portion of such payments or benefits being subject to the Excise Tax, whichever of the foregoing
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amounts, taking into account the applicable federal, state and local income taxes and the Excise Tax, results in the receipt by Executive on an after-tax basis, of the greatest amount of Covered Payments, notwithstanding that all or some portion of such payments or benefits may be taxable under Code Section 4999. Any determination required under this paragraph 16 shall be made in writing in good faith by an independent accounting firm selected by the Company that is reasonably acceptable to Executive (the “Accountants”), which shall take into account all possible mitigating factors and shall provide detailed supporting calculations to the Company and Executive as requested by the Company or Executive. For purposes of making the calculations required by this paragraph 16, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Section 280G and Code Section 4999. The Company and Executive shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this paragraph 16. The Company shall be responsible for all fees and expenses incurred by the Accountants in connection with the calculations required by this paragraph 16.
(b)If a reduction in payments or benefits is required by subparagraph 16(a), such reduction shall be made in a manner that maximized Executive’s economic position. In applying this principle, the reduction shall be made in a manner consistent with the requirements of Code Section 409A, and where two economically equivalent amounts are subject to reduction but payable at different times, such amounts shall be reduced on a pro rata basis but not below zero.
17.Complete Agreement. This Agreement embodies the complete agreement and understanding between the parties with respect to the subject matter hereof and effective as of its date supersedes and preempts any prior understandings, agreements or representations by or between the parties or any Group Company, written or oral, which may have related to the subject matter hereof in any way, including the Prior Agreement, as described herein.
18.Counterparts. This Agreement may be executed in separate counterparts, each of which shall be deemed to be an original and both of which taken together shall constitute one and the same agreement.
19.Successors and Assigns. This Agreement shall bind and inure to the benefit of and be enforceable by Executive, the Company and their respective heirs, executors, personal representatives, successors and assigns, except that neither party may assign any rights or delegate any obligations hereunder without the prior written consent of the other party. Executive hereby consents to the assignment by the Company of all of its rights and obligations hereunder to any successor to the Company by merger, consolidation or purchase of all or substantially all of the Company’s assets, or other corporate transaction, or to any company succeeding the Company upon a liquidation in order to reconstruct or amalgamate the Company or by reason of reorganization of the Company, provided such transferee or successor assumes the liabilities of the Company hereunder.
20.Choice of Law. This Agreement shall be governed by, and construed in accordance with, the internal, substantive laws of the State of Texas. Executive agrees that the state and federal courts located in the State of Texas shall have jurisdiction in any action, suit or proceeding against Executive based on or arising out of this Agreement and Executive hereby: (a) submits to the personal jurisdiction of such courts; (b) consents to service of process in connection with any action, suit or proceeding against Executive; and (c) waives any other requirement (whether imposed by statute, rule of court or otherwise) with respect to personal
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jurisdiction, venue or service of process. The Company’s powers under this Agreement will not be affected if the Company delays in enforcing any provision of this Agreement or Executive grants time to the Company.
21.Amendment and Waiver. The provisions of this Agreement may be amended or waived only with the prior written consent of the Company and Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall affect the validity, binding effect or enforceability of this Agreement.
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.
Seadrill Americas, Inc.
By: /s/ Ragnhild Anker Bohlin
Name: Ragnhild Anker Bohlin
Title: Vice President Human Resources
EXECUTIVE
/s/ Samir H. Ali
Samir H. Ali
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Exhibit A
Retail Businesses
[Omitted.]
A-1
Exhibit B
Separation Agreement and Release of Claims
[Date]
Samir Ali
Via Email
Dear Mr. Ali,
This letter agreement (this “Agreement”) sets forth the terms and conditions pursuant to which certain payments and benefits will be provided to you in connection with the termination of your employment from Seadrill Americas, Inc., a company incorporated in the State of Texas (the “Company”), effective as of [date] (the “Termination Date”).
Reference is made herein to the Employment Agreement, dated as of March 12, 2026 (the “Employment Agreement”), by and between the Company and you. Capitalized terms used but not defined herein have the meanings assigned to them in the Employment Agreement.
1.Termination of Employment and Resignation from All Positions. You acknowledge and agree that (a) your employment with the Company terminated effective as of the Termination Date and (b) by executing this Agreement, you hereby resign, effective as of the Termination Date, from your positions of President and Chief Executive Officer of Seadrill Limited, an exempted company incorporated and existing under the laws of Bermuda (“Seadrill”), and from any and all offices and directorships that you hold in the Group Companies or any affiliated companies of the Group Companies. You agree to execute all instruments and take all actions (including the transfer of any director qualifying shares or similar interests), at the Company’s expense, to evidence and/or effectuate such resignations.
2.Accrued Payments. Regardless of whether you sign this Agreement, you will be entitled to the following payments and benefits described in the first sentence of Section 6(a) of the Employment Agreement (collectively, the “Accrued Payments”).
3.Termination Benefits. In exchange for your promises made in this Agreement, including your release of claims in Section 4 and your continued compliance with the terms of this Agreement, including the Covenants (as defined in Section 12), you will receive the payments and benefits set forth in [Section 6(b)(i)] [Section 6(b)(ii)] of the Employment Agreement (collectively, the “Termination Benefits”). You acknowledge and agree that the Company is providing you with the Termination Benefits only in exchange for the promises you made in this Agreement, and the Termination Benefits are not otherwise due to you. You acknowledge that, if you do not sign this Agreement, or if you sign this Agreement but subsequently revoke this Agreement pursuant to Section 8, you will not receive the Termination Benefits.
4.Release. In consideration for the Termination Benefits set forth in Section 3, to which you would not otherwise be entitled, you, for your own self and on behalf of your heirs, executors, administrators, and assigns, agree to and do hereby RELEASE, ACQUIT, WAIVE and FOREVER DISCHARGE (a) the Group Companies; (b) any past or present director, officer, employee or agent of the Group Companies, in their individual and official capacities; (c) the
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Group Companies’ representatives, predecessors, successors-in-interest, and affiliated companies; and (d) the present and former shareholders, agents, attorneys, fiduciaries, insurers, heirs, administrators, executors, successors and assigns of any of the foregoing entities and persons named in clauses (a)-(c) and any other person, firm or corporation for which any of the foregoing entities and persons named in clauses (a)-(c) may be legally responsible or which may be legally responsible for any of them (all collectively, the “Released Parties”), in each case, from any and all claims, liabilities, demands, and causes of action of whatsoever nature, accrued or unaccrued, known or unknown, fixed or contingent, which you may have or claim to have against any of the Released Parties occurring during, arising out of, or related to your employment and/or termination of employment with the Company and/or as a result of any other matter arising through the date of your signature on this Agreement. This release, acquittal, waiver and discharge includes, but is not limited to, claims arising under federal, state or local laws, whether equitable or legal, causes of action for breach of express or implied written or oral contract, promissory estoppel, tortious interference with contract, claims for personal injury or harm, negligence, intentional infliction of emotional injury, fraud, negligent misrepresentation, negligent supervision, libel, slander, age discrimination, sexual orientation or preference discrimination, race or color discrimination, invasion of privacy, religious discrimination, sex or gender discrimination, national origin discrimination, harassment, wrongful termination, violations of Chapters 21, 61 and 451 of the Texas Labor Code, violations of the Worker Adjustment and Retraining Notification (WARN) Act, violations of Title VII of the Civil Rights Act 1964, violations of the Civil Rights Act of 1866 (42 U.S.C. § 1981), violations of the Age Discrimination in Employment Act, violations of the Older Workers’ Benefit Protection Act, violations of the Genetic Information Nondiscrimination Act, violations of the Occupational Safety and Health Act, violations of the National Labor Relations Act, violations of the Americans with Disabilities Act, violations of the Family Medical Leave Act, violations of Fair Labor Standards Act or Equal Pay Act violations, violations of the Fair Credit Reporting Act , violations of the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA) or the Employee Retirement Income Security Act of 1974, and any similar federal, state, and local laws, worker’s compensation violations, retaliation for exercise of protected rights, employee health or disability benefit compensation violations, disability or handicap discrimination, loss of consortium, mental anguish, pain and suffering, lost past or future wages, lost past or future bonuses or commissions, vacation or sick pay, pension benefits, costs, punitive or exemplary damages, attorney’s fees, and pre- or post-judgment interest (collectively, the “Enumerated Causes of Action”).
5.Settlement. You agree to and hereby accept the Termination Benefits in full compromise and settlement of all claims, demands, causes of action of whatsoever nature accrued or unaccrued, federal, state or other jurisdiction, equitable or legal occurring during, arising out of or related to your employment and/or termination of employment with the Company, including but not limited to the Enumerated Causes of Action.
6.Advised to Seek Consultation. You understand that Section 4 above includes a release of claims under the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act. You understand that this Agreement does not waive rights or claims that arise after the date that you sign this Agreement. Further, you are advised to consult with legal counsel regarding this Agreement.
7.Consideration Period. You acknowledge that you have had adequate time to review and consider this Agreement, and, as a result, enter into this Agreement willingly and voluntarily. You acknowledge that you have until [date], which is [21] [45] days after the date that you received this Agreement, to review and consider this Agreement.
8.Revocation Period. You understand that you have a period of seven days after the date that you sign this Agreement during which you may notify the Company that you revoke
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this Agreement. If you decide to revoke this Agreement, notice of revocation must be made in writing and sent by email to me at [email address], and received prior to the expiration of the seven-day revocation period. This Agreement will not become effective until the revocation period expires. If you revoke this Agreement, you will not receive any compensation other than the Accrued Payments. If you timely sign and do not revoke this Agreement, then this Agreement, including your entitlement to the Termination Benefits, will become effective on the eighth day after you sign this Agreement (such eighth day, the “Release Effective Date”).
9.Agreement Not to Sue. You agree not to sue in any local, state or federal court regarding or relating in any way to your employment with, or termination of employment from, the Company, unless suit is necessary to enforce the terms of this Agreement.
10.Exclusions. Excluded from this Agreement are (a) any claims or rights which cannot be waived by law, (b) any claims for vested benefits earned during your employment under Company Group qualified retirement plans, as determined under the terms of such plans, (c) your right to file for workers’ compensation or unemployment compensation, (d) your right to file a charge with an administrative agency or participate in any agency investigation, and (e) any claims or rights to indemnification or advancement of expenses under any of the Company’s, Group Company’s or Seadrill’s articles of incorporation, bye-laws (or similar governing documents), or under directors’ and officers’ (D&O) insurance policies currently maintained by any of the Company, Group Companies or Seadrill.
11.Acknowledgments. You hereby warrant and represent that you have not (a) filed or caused to be filed any claim against the Released Parties, whether past or present, with any administrative agency, court of law or other tribunal, (b) assigned, sold, delivered, transferred or conveyed any rights you have asserted or may have against any of the aforementioned parties to any person or entity, in each case, with respect to any claims being released hereby, (c) assisted or advised any directors, officers, shareholders, employees or agents of any of the aforementioned parties with respect to the pursuit or evaluation of any claim against any of the aforementioned parties, or (d) engaged in the course of your employment with or services to the Group Companies in (i) any fraudulent, tortious or illegal activity or (ii) any violation of a material policy of the Group Companies that would cause the Group Companies demonstrable material injury.
12.Affirmation of Covenants; Forfeiture and Clawback. You acknowledge and agree that (a) you are bound by, and will abide by, the covenants (collectively, the “Covenants”) set forth in subparagraphs 8(c) (Non-Competition), 8(d) (Non-Solicitation), 8(e) (Non-Interference), 8(f) (Confidential Information), 8(g) (Intellectual Property), 8(h) (Non-Disparagement), 8(j) (Return of Company Property) and 8(l) (Communication of Contents of Agreement) of the Employment Agreement, which will remain in full force and effect following the Termination Date in accordance with their terms, and (b) if you breach any of the Covenants, the Company’s obligation to pay you any Termination Benefits that have not yet been paid will cease, and you will immediately return to the Company any Termination Benefits that you previously received if so ordered by a court of competent jurisdiction.
13.Cooperation. At the Company’s reasonable request, you will use good faith efforts to cooperate with the Group Companies and their attorneys or other legal representatives (collectively, the “Attorneys”) in connection with any claim, litigation, audit or other or judicial, arbitral or government proceeding which is material to the Group Companies and is now pending or may hereinafter be brought against any of the Released Parties by any third party. Your duty of cooperation will include, but not be limited to, (a) meeting with Attorneys by telephone or in person at mutually convenient times and places in order to state truthfully your knowledge of matters at issue and recollection of events, (b) appearing at the Group Companies’ and/or the Attorneys’ request (and, to the extent possible, at a time convenient to you that does not conflict
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with the needs or requirements of your then-current employer) as a witness at depositions or trials, without necessity of a subpoena, in order to state truthfully your knowledge of matters at issue, and (c) signing at the Group Companies’ and/or the Attorneys’ request, declarations or affidavits that truthfully state matters of which you have knowledge. The Company will reimburse you for the reasonable expenses that you incur in the course of your cooperation hereunder.
14.Confidentiality of Agreement. You agree that you will keep all terms of this Agreement confidential, including but not limited to the fact and amounts of the Termination Benefits, except that you may make necessary disclosures to your spouse, attorney or tax advisor; however, you agree to assume responsibility for your spouse’s, representatives’ and tax advisor’s conduct and confidentiality obligations.
15.Withholding Taxes. The Group Companies may withhold from the Termination Benefits and the Accrued Payments all federal, state, local, domestic and foreign taxes as shall be required pursuant to any law or governmental ruling or regulation as reasonably determined by the Company.
16.Non-Admissions. The fact and terms of this Agreement, and the furnishing of consideration for this Agreement, are not an admission by the Group Companies of liability or other wrongdoing under any law, but rather such liability is expressly denied. You acknowledge that the parties contemplate an unequivocal, complete and final dissolution of the employment relationship.
17.Severability. If any provision of this Agreement is declared illegal or unenforceable by any court of competent jurisdiction and cannot be modified to be enforceable, such provision shall immediately become null and void, leaving the remainder of this Agreement in full force and effect.
18.Entire Agreement. This Agreement sets forth the entire agreement between the parties hereto and fully supersedes any prior agreements or understandings between the parties as to its subject matter. You acknowledge that you have not relied on any representations, promises or agreements of any kind made to you in connection with your decision to accept this Agreement except for those set forth in this Agreement.
19.Binding Agreement. This Agreement shall be binding upon and inure to the benefit of (a) your heirs, successors, personal representatives and legal representatives and (b) any successor of the Company.
20.Choice of Law. This Agreement shall be governed by, and construed in accordance with, the internal, substantive laws of the State of Texas. You agree that the state and federal courts located in the State of Texas shall have jurisdiction in any action, suit or proceeding against you based on or arising out of this Agreement and you hereby: (a) submit to the personal jurisdiction of such courts; (b) consent to service of process in connection with any action, suit or proceeding against you; and (c) waives any other requirement (whether imposed by statute, rule of court or otherwise) with respect to personal jurisdiction, venue or service of process. The Company’s powers under this Agreement will not be affected if the Company delays in enforcing any provision of this Agreement or you grant time to the Company.
[Signature page follows]
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If you accept and agree to the terms herein, within the time frame described in this Agreement, please sign on the appropriate line below and return by email to me at [email address].
Sincerely,
SEADRILL AMERICAS, INC.
By:_________________________
[Name]
[Title]
[Title]
BY SIGNING THIS AGREEMENT, I ACKNOWLEDGE THAT I HAVE HAD THE OPPORTUNITY TO CONSULT WITH A LEGAL ADVISOR OF MY CHOICE, THAT I HAVE CAREFULLY REVIEWED AND CONSIDERED THIS AGREEMENT, THAT I UNDERSTAND THE TERMS OF THIS AGREEMENT, AND THAT I VOLUNTARILY AGREE TO THE TERMS OF THIS AGREEMENT.
____________________________
Samir Ali
____________________________
Date
[Signature Page to Separation Agreement]
Exhibit 10.2
AMENDED AND RESTATED
SEADRILL LIMITED
2022 MANAGEMENT INCENTIVE PLAN
PERFORMANCE-BASED RESTRICTED STOCK UNIT AWARD AGREEMENT
THIS AWARD AGREEMENT (this “Agreement”), made effective as of the day of , 20 (the “Grant Date”) by Seadrill Limited, an exempted company incorporated and existing under the laws of Bermuda (the “Company”) evidences the performance-based Restricted Stock Units (as defined in the Plan) awarded hereunder to (“Participant”), subject to Participant signing and returning the signature page hereto to the Company, and sets forth the restrictions, terms and conditions that apply thereto. Capitalized terms used in this Agreement and not otherwise defined in this Agreement shall have the meanings set forth in the Plan.
W I T N E S S E T H
WHEREAS, the Committee acting under the Amended and Restated Seadrill Limited 2022 Management Incentive Plan, as may be amended (the “Plan”), has determined that it is desirable to award performance-based Restricted Stock Units to Participant pursuant to the Plan; and
WHEREAS, pursuant to the Plan, the Committee has determined that the performance-based Restricted Stock Units so awarded shall be subject to the restrictions, terms and conditions set forth in this Agreement;
NOW, THEREFORE, subject to the terms of this Agreement, the award of performance-based Restricted Stock Units is hereby granted to Participant as follows:
1.Performance-Based Restricted Stock Unit Award.
(a)Number of Shares. On the terms and conditions and subject to the restrictions, including forfeiture to or acquisition for no further consideration by the Company, hereinafter set forth, the Company hereby awards Restricted Stock Units (the “Awarded Restricted Stock Units”) to Participant pursuant to the Plan. The Awarded Restricted Stock Units set forth in this Section 1 represents the number of Shares that may be earned and vest pursuant to this Agreement if the Performance Goals set forth on Schedule I, attached hereto, are achieved at 100% payout; however, the actual number of Shares that may be earned and vest pursuant to this Agreement will vary based upon the extent to which the Committee determines the Performance Goals are achieved during the Performance Period (as defined below) in accordance with Schedule I and subject to the provisions of this Agreement.
(b)Performance Goals. The Awarded Restricted Stock Units may be earned, if at all, based on the Company’s Total Shareholder Return (“TSR”) over the period beginning on , 20 and ending , 20 (the “Performance Period”) and Cumulative Free Cash Flow over the Performance Period (each of the Company’s TSR
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and Cumulative Free Cash Flow a “Performance Goal” and collectively the “Performance Goals” and , 20 , the “end of the Performance Period”), as described in Schedule I. Sixty percent (60%) of the Awarded Restricted Stock Units may be earned, if at all, based on the Company’s TSR over the Performance Period (the “TSR Awarded Restricted Stock Units”) and forty percent (40%) of the Awarded Restricted Stock Units may be earned, if at all, based on the Company’s Cumulative Free Cash Flow over the Performance Period (the “Cumulative Free Cash Flow Awarded Restricted Stock Units”). The Cumulative Free Cash Flow Awarded Restricted Stock Units may be earned in three “Tranches,” as described in Schedule I. The Awarded Restricted Stock Units are being awarded to Participant without the payment of any cash consideration by Participant, except that payment of the aggregate par value in respect of any Shares delivered hereunder may be required by the Committee or pursuant to procedures of the Committee in respect of the allotment and issuance, transfer or delivery of such Shares.
2.Vesting and Forfeiture. The number of Awarded Restricted Stock Units, if any, that are earned shall be determined by the Committee based on the level of achievement of the Performance Goals set forth on Schedule I, which determination shall be made by the Committee as soon as practicable and, in any event, with respect to the Cumulative Free Cash Flow Awarded Restricted Stock Units, within 60 days following the end of each Annual Measurement Period (as defined in Schedule I), and with respect to the TSR Awarded Restricted Stock Units, within 60 days following the end of the Performance Period. Unless otherwise determined by the Committee and except as otherwise provided in Section 3 or Section 4 of this Agreement, such number of Awarded Restricted Stock Units so earned, if any, shall vest subject to the Participant remaining continuously employed by the Company or a Subsidiary of the Company from the Grant Date through the last day of the Performance Period. Unless otherwise determined by the Committee and except as otherwise provided in Section 3 or Section 4 of this Agreement, any Awarded Restricted Stock Units that have not already vested in accordance with this Section 2 shall be forfeited by Participant upon the termination of Participant’s employment with the Company or a Subsidiary of the Company. For purposes of this Agreement, transfers of employment without interruption of service between or among the Company and a Subsidiary of the Company shall not be considered a termination of employment.
3.Acceleration of Vesting.
(a)Notwithstanding Section 2 of this Agreement, and except as provided in Section 4, if Participant’s employment with the Company or a Subsidiary of the Company terminates after the first anniversary of the Grant Date and prior to the end of the Performance Period pursuant to a Qualifying Termination Event (as defined below), the Awarded Restricted Stock Units will be treated as set forth in Section 3(b) and Section 3(c), as applicable. “Qualifying Termination Events” means a termination of Participant’s employment with the Company or a Subsidiary of the Company:
i) by reason of Participant’s death,
ii) by reason of Participant’s Disability,
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iii)by reason of the Company’s termination of Participant’s employment other than for Cause, or
iv)by reason of Participant’s resignation of Participant’s employment for Good Reason.
(b)TSR Awarded Restricted Stock Units. If Participant’s employment with the Company or a Subsidiary of the Company terminates after the first anniversary of the Grant Date and prior to the end of the Performance Period pursuant to a Qualifying Termination Event, a Pro-Rata Portion (as defined in this Section 3(b)) of the TSR Awarded Restricted Stock Units will remain outstanding until the end of the Performance Period and thereafter such Pro Rata Portion shall become vested in accordance with Section 2 as if the Participant had remained employed through the last day of the Performance Period. For purposes of this Section 3(b), the “Pro Rata Portion” shall be equal to the product of “A” multiplied by “B,” where “A” equals the number of TSR Awarded Restricted Stock Units determined by the Committee to have been earned based on the level of achievement of the TSR Performance Goals set forth on Schedule I, and “B” is a fraction, the numerator of which is the number of full months the Participant worked during the Performance Period through the date of Participant’s termination of employment, and the denominator of which is 36.
(c)Cumulative Free Cash Flow Awarded Restricted Stock Units. If Participant’s employment with the Company or a Subsidiary of the Company terminates after the first anniversary of the Grant Date and prior to the end of the Performance Period pursuant to a Qualifying Termination Event:
i)Any Tranche of Cumulative Free Cash Flow Awarded Restricted Stock Units for which the Annual Measurement Period has ended prior to the Qualifying Termination Event will become vested in connection with the Participant’s Qualifying Termination Event, subject to Section 3(d).
ii)A Pro Rata Portion (as defined in this Section 3(c)(ii)) of the Tranche of Awarded Restricted Stock Units for the Annual Measurement Period in which the Qualifying Termination Event occurs will remain outstanding until the end of such Annual Measurement Period and thereafter such Pro Rata Portion of such Tranche shall become vested in connection with the Committee’s determination of the achievement of the Annual Free Cash Flow Performance Goal for such Annual Measurement Period, subject to Section 3(d). For purposes of this Section 3(c)(ii), the “Pro Rata Portion” shall be equal to the product of “A” multiplied by “B,” where “A” equals the number of Cumulative Free Cash Flow Awarded Restricted Stock Units determined by the Committee to have been earned with respect to such Tranche based on the level of achievement of the Cumulative Free Cash Flow Performance Goals for such Annual Measurement Period set forth on Schedule I, and “B” is a fraction, the numerator of which is the number of full months the Participant worked during the Annual Measurement Period in which the Qualifying Termination Event occurred through the date of Participant’s termination of employment, and the denominator of which is 12.
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iii)Any Tranche for which the Annual Measurement Period has not commenced at the time of the Qualifying Termination Event shall be forfeited.
(d)Awarded Restricted Stock Units shall be eligible to become earned and vested pursuant to this Section 3 only upon Participant’s (or Participant’s legal representative’s, heir’s, legatee’s or distributee’s, as applicable) timely execution of a general release of claims no later than 45 days following such Qualifying Termination Event in a form satisfactory to the Company and, if applicable, Participant’s (or Participant’s legal representative’s, heir’s, legatee’s or distributee’s, as applicable) failure to revoke such execution or signature in accordance with the terms of such release (any such period to execute and revoke such release of claims, the “Consideration Period”).
(e)For purposes of this Agreement, “Good Reason” shall have the meaning assigned such term or analogous term in the employment, severance or similar agreement, if any, between the Participant and the Company or a Subsidiary of the Company, and if Participant is not a party to an employment, severance or similar agreement with the Company or a Subsidiary of the Company in which such term is defined, “Good Reason” means Participant’s termination of Participant’s employment as a result of (i) a material adverse change in Participant’s title, authority, duties or responsibilities other than (1) temporarily in the event of physical or mental incapacitation, (2) as required by applicable law or regulatory requirements, or (3) due to any such change made in the ordinary course of business that is due to an internal restructuring of employees and their corresponding titles, authorities, duties, and/or responsibilities (which exception (3) shall apply prior to a Change in Control only); (ii) a material reduction in Participant’s base salary or target annual bonus, if applicable, except to the extent that the base salaries or target annual bonuses of all other similarly situated employees of the Company are similarly reduced; (iii) a relocation of Participant’s principal office to a location that is in excess of fifty (50) miles from its location as of the Grant Date; or (iv) any material breach of this Agreement by the Company. Notwithstanding the foregoing, no termination of employment by Participant shall constitute a termination for “Good Reason” unless (A) Participant gives the Company notice of the existence of an event described in clause (i), (ii), (iii) or (iv) above, within sixty (60) days following the occurrence thereof, (B) the Company does not remedy such event described in clause (i), (ii), (iii) or (iv) above, as applicable, within thirty (30) days of receiving the notice described in the preceding clause (A), and (C) Participant terminates employment within five (5) days of the end of the cure period specified in clause (B), above.
(f)For the avoidance of doubt, all Awarded Restricted Stock Units that do not vest in accordance with this Section 3 or Section 4 shall be forfeited by Participant upon the termination of Participant’s employment with the Company or a Subsidiary of the Company during the Performance Period or the expiration of the Consideration Period, if applicable. All Awarded Restricted Stock Units shall be forfeited by Participant upon the termination of Participant’s employment by the Company for Cause and any Shares issued to the Participant pursuant to such Award would be acquired by the Company for no consideration.
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4.Change in Control.
(a)Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control, the Performance Goals of any Awarded Restricted Stock Units for which the level of achievement has not previously been determined as of immediately prior to the Change in Control shall be deemed met at the greater of (i) 100% payout/target level or (ii) actual performance, as determined by the Committee (in effect immediately prior to the consummation of the Change in Control).
(b)Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control in which the Awarded Restricted Stock Units as so scored in accordance with Section 4(a) above are not continued or assumed, substituted or replaced with an award with respect to cash or shares of the acquiror or surviving entity in such Change in Control, in each case, with substantially equivalent terms and value as the Awarded Restricted Stock Units as so scored (“Assumed”), such Awarded Restricted Stock Units as so scored shall vest immediately prior to the Change in Control.
(c)In the event of a Change in Control in which the Awarded Restricted Stock Units as so scored in accordance with Section 4(a) above are Assumed, such Awarded Restricted Stock Units as so scored shall not vest immediately prior to the Change in Control and shall remain subject to the terms and conditions of this Agreement, provided, that, notwithstanding Section 3, if Participant’s employment with the Company or a Subsidiary of the Company terminates pursuant to a Qualifying Termination Event within the 12-month period beginning on the Change in Control and ending at the end of the first anniversary of the Change in Control, any such Awarded Restricted Stock Units as so scored shall become vested subject to Participant’s (or Participant’s legal representative’s, heir’s, legatee’s or distributee’s, as applicable) timely execution of a general release of claims no later than 45 days following such Qualifying Termination Event in a form satisfactory to the Company and, if applicable, Participant’s (or Participant’s legal representative’s, heir’s, legatee’s or distributee’s, as applicable) failure to revoke such execution or signature in accordance with the terms of such release during the Consideration Period. If the Consideration Period spans two calendar years, then, subject to such execution and non-revocation of the release, any such Awarded Restricted Stock Units as so scored shall become vested and be settled in the second calendar year.
5.Allotment and Issuance of Shares. As soon as practicable following the end of the Performance Period (or, the applicable vesting date described in Section 3 or Section 4 of this Agreement, if applicable), but in any event no later than 70 days following such date, the Company shall either (a) settle in cash the Awarded Restricted Stock Units that are earned and in which Participant vests or (b) allot and issue or transfer to Participant one Share in settlement of any such Awarded Restricted Stock Units and, in each case, in full satisfaction of such Awarded Restricted Stock Units. The determination of whether the Awarded Restricted Stock Units that are earned and become vested shall be settled in cash or in Shares shall be made at the sole discretion of the Committee.
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6.No Rights as Shareholder. Except as provided in Section 7, Participant shall have no rights as a shareholder of the Company, including, without limitation, voting rights or the right to receive dividends and distributions as a shareholder, with respect to the Shares subject to the Awarded Restricted Stock Units, unless and until and to the extent such Shares are allotted and issued or transferred to Participant as provided herein.
7.Dividend Equivalents. In connection with the Awarded Restricted Stock Units the Company hereby awards to Participant Dividend Equivalents with respect to any cash dividends payable with respect to the Shares. Such cash Dividend Equivalents shall be payable at the same time, and shall be subject to the same conditions (including the Performance Goals), that are applicable to the Awarded Restricted Stock Units, and shall be payable in cash at the same time of settlement of the underlying Awarded Restricted Stock Unit that ultimately vest. Accordingly, the right to receive such cash Dividend Equivalent payments shall be forfeited to the extent that the Awarded Restricted Stock Units do not vest, are forfeited, are acquired by the Company or are otherwise cancelled pursuant to this Agreement.
8.Arrangements and Procedures Regarding Withholding Taxes.
(a)Participant shall make arrangements satisfactory to the Committee for the payment of taxes and social security obligations of any kind that are required by law to be withheld with respect to the Awarded Restricted Stock Units or the Dividend Equivalents awarded under this Agreement, including, without limitation, taxes applicable to (i) the awarding of the Awarded Restricted Stock Units or the payment of cash or allotment and issuance or transfer of Shares in settlement thereof, or (ii) the awarding of the Dividend Equivalents or the payments made with respect thereto.
(b)Unless and until the Committee shall determine otherwise and provide notice to Participant in accordance with Section 8(c), any obligation of Participant under Section 8(a) that arises with respect to the payment of cash or allotment and issuance, transfer or delivery of Shares in settlement of Awarded Restricted Stock Units that have become vested may be satisfied, in accordance with procedures adopted by the Committee, by (i) Participant’s forfeiture or surrender of the right to require the Company to allot and issue, transfer or deliver Shares subject to such Awarded Restricted Stock Units, (ii) causing such Awarded Restricted Stock Units to be settled partly in cash or (iii) otherwise reducing the number of Shares to be issued and/or reacquiring a portion of such Shares. In the case of Shares as to which the right to require allotment and issuance, transfer or delivery is forfeited or surrendered pursuant to clause (i) and Shares not issued or reacquired pursuant to clause (iii) such Shares or rights shall be valued at the Fair Market Value (of such Shares or the Shares to which such rights relate, as the case may be) as of the date on which the taxable event that gives rise to the withholding requirement occurs.
(c)The Committee may determine, after the Grant Date and on notice to Participant, to authorize one or more arrangements (in addition to or in lieu of the arrangement described in Section 8(b)) satisfactory to the Committee for Participant to satisfy the obligation of Participant under Section 8(a).
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(d)If Participant does not, for whatever reason, satisfy the obligation of Participant under Section 8(a), then the Company and its Subsidiaries shall, to the extent permitted by law, have the right to deduct from any payments of any kind otherwise due to Participant the amount required to satisfy the obligation of Participant under such Section 8(a).
9.Restrictive Covenants. Without limiting any other non-competition, non-solicitation, non-disparagement or non-disclosure or other similar agreement to which Participant may be a party, Participant shall be subject to the confidentiality and restrictive covenants set forth in this Section 9.
(a)Non-Competition. Participant shall not, for the duration of Participant’s employment and for the six-month period following the termination of Participant’s employment, be employed in, or carry on for Participant’s own account or for any other person, or provide advisory services to (whether directly or indirectly), or be a director of any company, business or venture, which is, or is about to be in competition with the Company, or is likely to result in the intentional or unintentional disclosure or use of Confidential Information by Participant in order for Participant to properly discharge Participant’s duties.
(b)Non-Solicitation. Participant shall not, for the duration of Participant’s employment and for the six-month period following the termination of Participant’s employment (either on Participant’s own behalf or for or with any other person), whether directly or indirectly, (i) solicit or entice or endeavor to solicit or entice any Employee to leave such Employee’s employment with or cease such Employee’s directorship or consultancy with the Company or a Subsidiary of the Company, whether or not that person would breach any obligations owed to the Company or any Subsidiary of the Company by so doing or offer employment or any contract for services to or employ or engage any Employee, or (ii) in respect of any Goods or Services, solicit, facilitate the solicitation of, or canvass the custom or business of any Customer solicit, facilitate the solicitation of, or canvas the custom or business of any Prospective Customer.
(c)Non-Interference. Participant shall not, for the duration of Participant’s employment and for the six-month period following the termination of Participant’s employment, (either on Participant’s own behalf or for or with any other person), whether directly or indirectly, (i) in regards to any Customer or Prospective Customer, (A) deal with or supply any Customer, or (B) deal with or supply any Prospective Customer; or (ii) in regards to any Supplier, (A) deal with or accept the supply of any goods or services from any Supplier where such supply is likely to be to the detriment of any Company whether by causing the Supplier to reduce or alter the terms or quantity of supply to the Company or, where the value of the Company’s arrangement with the Supplier is diminished; or (B) solicit, facilitate the solicitation of, or canvass the supply of any goods or services from any Supplier where such supply is likely to be to the detriment of any Company whether by causing the Supplier to reduce or alter the terms or quantity of supply to the Company, or where the value of the Company’s arrangement with the Supplier is diminished.
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(d)Confidential Information. Participant shall not (except in the proper performance of Participant’s duties) use or disclose to any person, company or other organization (and shall use every reasonable endeavor to prevent the publication or disclosure of) any of the trade secrets or confidential information of the Company or any Subsidiary of the Company. This restriction shall continue to apply after the termination of Participant’s employment but will not apply to information or knowledge which may come into the public domain other than through unauthorized disclosure, or any use or disclosure authorized by the Board or required by law. For purposes of this Section 9(c), “trade secrets” and “confidential information” will include but not be limited to: (i) information relating to the business methods, corporate plans, management systems, finances, new business opportunities, research and development projects, marketing or sales of any past, present or future product or serve of the Company; (ii) secret formulae, processes, inventions, designed, know-how discoveries, technical specifications and other technical information relating to the creation, production or supply of any past, present or future product or services of the Company; (iii) lists or details or customers, potential customers or suppliers of the arrangements made with any customer or supplier of the Company; (iv) any information in respect of which the Company owes an obligation of confidentiality to any third party (provided that with respect to such third party Participant knows or reasonably should have known that the third party provided it to the Company on a confidential basis); (v) information and details of and concerning the engagement, employment and termination of employment of Participant and any other personnel; (vi) information concerning any litigation proposed, in progress or settled; and, (vii) any other information in whatever form (written, oral, visual and electronic) concerning the confidential affairs of the Company.
(e)Non-Disparagement. During the term of Participant’s employment with the Company or a Subsidiary of the Company and thereafter in perpetuity, Participant shall not, directly or indirectly, knowingly disparage, criticize, or otherwise make derogatory statements regarding the Company or any Subsidiary of the Company, successors, directors or officers. The foregoing shall not be violated by Participant’s truthful responses to legal process or inquiry by a governmental authority.
(f)Definitions. For purposes of this Section 9:
i)“Company” shall mean, for purposes of this Section 9 only, the Company and any and all direct and indirect subsidiary, parent, affiliated, or related companies of the Company for which Participant worked or had responsibility at the time of termination of Participant’s employment and at any time during the twelve (12) month period prior to such termination.
ii)“Confidential Information” shall have the meaning given to trade secrets and confidential information in Section 9(d).
iii)“Customer” shall mean any person who at any time during the 12 months immediately preceding the termination of Participant’s employment was a customer
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of the Company with whom Participant had material dealings or in relation to whom he acquired confidential information.
iv)“Employee” shall mean any individual who is employed or engaged by the Company, or any person who, during the 12 months immediately preceding the termination of Participant’s employment, is or was employed or engaged by the Company.
v)“Goods and/or Services” shall mean any goods and/or services competitive with those supplied by the Company at any time during the 12 months immediately preceding the termination of Participant’s employment and in relation to which Participant was materially involved or concerned or for which Participant was directly responsible during that time.
vi)“Prospective Customer” shall mean any person who was at any time during the 12 months immediately preceding the termination of Participant’s employment engaged in negotiations, with which Participant was personally involved, with the Company with a view to obtaining Goods and/or Services from the Company or in relation to whom Participant has acquired Confidential Information.
vii)“Supplier” shall mean any person with whom Participant had material dealings at any time during the 12 months immediately preceding the termination of Participant’s employment and who during that period supplied goods or services to the Company on terms other than those available to another purchaser in the market during that period, whether by reason of exclusivity (either de facto or contractually obliged), price or otherwise.
10.Forfeiture Events. Participant expressly acknowledges and agrees that his or her rights, and those of any permitted transferee of the Awarded Restricted Stock Units, under the Awarded Restricted Stock Units, including the right to any cash or Shares acquired upon the vesting of the Awarded Restricted Stock Units or proceeds from the disposition thereof are subject to any clawback or recoupment policy of the Company. In addition, if Participant (i) is terminated for Cause (or, within one year following Participant’s termination other than for Cause, the Committee determines that the Company had grounds to terminate the Participant for Cause) or (ii) violates any restrictive covenants to which Participant is subject, whether set forth in this Agreement or elsewhere, the Committee, in its sole discretion, may require Participant to surrender and return to the Company all or any cash or sell or transfer to the Company (for no further consideration) Shares received in connection with the vesting of the Awarded Restricted Stock Units, or to disgorge all or any profits or any other economic value (however defined by the Committee) made or realized by Participant on the sale of such Shares.
11.Non-Assignability. This Agreement is not assignable or transferable by Participant. No right or interest of Participant under this Agreement or the Plan may be assigned, transferred or alienated, in whole or in part, either directly or by operation of law (except pursuant to a qualified domestic relations order within the meaning of Section 414(p) of the Code or a similar domestic relations order under applicable foreign law, either in such form as is
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acceptable to the committee), and no such right or interest shall be liable for or subject to any debt, obligation or liability of Participant.
12.Plan Provisions. The Awarded Restricted Stock Units and the Dividend Equivalents subject to this Agreement shall be governed by and subject to all applicable provisions of the Plan. This Agreement is subject to the Plan, and the Plan shall govern where there is any inconsistency between the Plan and this Agreement.
13.Governing Law. This Agreement shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without regard to the principles of conflicts of laws thereof, except to the extent the laws of the State of Delaware are preempted by federal law of the United States or by the laws of England.
14.Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, personal representatives, successors and permitted assigns.
15.Prior Communications; Amendment. This Agreement, together with any Schedules and Exhibits and any other writings referred to herein or delivered pursuant hereto, evidences the Award granted hereunder, which shall be subject to the restrictions, terms and conditions hereof, and supersedes all prior agreements and understandings, whether written or oral, between the parties with respect to the subject matter hereof. To the fullest extent provided by applicable law, this Agreement may only be amended, modified and supplemented in accordance with the applicable terms and conditions set forth in the Plan.
16.Notices. All notices and other communications hereunder shall be in writing and shall be deemed given if directed in the manner specified below, to the parties at the following addresses and numbers:
(a)If to the Company, when delivered by hand or mail (registered or certified mail with postage prepaid) to:
Seadrill Management Limited,
11025 Equity Drive
Suite 150
Houston, Texas 77041
Attention: General Counsel
(b)If to Participant, when delivered by hand or mail (registered or certified mail with postage prepaid) to:
The last known address and number for Participant as maintained in the personnel records of the Company.
For purposes of this Section 16, the Company shall provide Participant with written notice of any change of the Company’s address, and Participant shall be responsible for
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providing the Company with proper notice of any change of Participant’s address pursuant to the Company’s personnel policies, and from and after the giving of such notice the address or addresses therein specified will be deemed to be the address of such party for the purposes of giving notice hereunder.
17.Severability. If any provision of this Agreement is held to be unenforceable, this Agreement shall be considered divisible and such provision shall be deemed inoperative to the extent it is deemed unenforceable, and in all other respects the restrictions, terms and conditions set forth in this Agreement shall remain in full force and effect; provided, however, that if any such provision may be made enforceable by limitation thereof, then such provision shall be deemed to be so limited and shall be enforceable to the maximum extent permitted by applicable law.
18.Description Headings. The descriptive headings herein are inserted for convenience of reference only, do not constitute a part of this Agreement, and shall not affect in any manner the meaning or interpretation of this Agreement.
19.Gender. Pronouns in masculine, feminine and neuter genders shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa, unless the context otherwise requires.
20.References. The words “this Agreement,” “herein,” “hereof,” “hereby,” “hereunder” and words of similar import refer to this Agreement as a whole and not to any particular subdivision unless expressly so limited. Whenever the words “include,” “includes” and “including” are used in this Agreement, such words shall be deemed to be followed by the words “without limitation.”
21.Unfunded Awards. The awards made under this Agreement are unfunded and unsecured obligations and rights to provide or receive compensation in accordance with the provisions hereof, and to the extent that Participant acquires a right to receive compensation from the Company or a Subsidiary of the Company pursuant to this Agreement, such right shall be no greater than the right of any unsecured general creditor of the Company or such affiliate.
22.Compliance with Code Section 409A. The compensation payable to or with respect to Participant pursuant to the Awarded Restricted Stock Units is intended to be compensation that is exempt from Code Section 409A or, to the extent subject to Code Section 409A, compliant with Code Section 409A or not subject to the tax imposed by Code Section 409A, and this Agreement shall be administered and construed to the fullest extent possible to reflect and implement such intent.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Company has signed and delivered this Agreement as of the date first above written.
Seadrill Limited
By:
[Name]
[Title]
Acknowledged, Agreed and Accepted:
[Participant]
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SCHEDULE I
AMENDED AND RESTATED
SEADRILL LIMITED
2022 MANAGEMENT INCENTIVE PLAN
PERFORMANCE GOALS AND PERFORMANCE PERIOD
FOR AWARD OF PERFORMANCE-BASED RESTRICTED STOCK UNITS
TSR Performance Goals
The number of TSR Awarded Restricted Stock Units that may be earned will be based on the Company’s relative TSR (“Relative TSR”), as modified by the Company’s absolute TSR (“Absolute TSR”), in each case, over the Performance Period, as set forth below.
The target number of TSR Awarded Restricted Stock Units that may be earned based on Relative TSR, as modified by Absolute TSR, is referred to herein as the “Target TSR Payout”.
Initially Earned TSR Restricted Stock Units Based on Relative TSR
The number of TSR Awarded Restricted Stock Units that initially may be earned (the “Initially Earned TSR Restricted Stock Units”) will be based on Relative TSR over the Performance Period, as follows:
| Relative TSR Percentile Ranking | Initially Earned TSR Restricted Stock Units (as % of Target TSR Payout) | ||||
<25th Percentile | 0% | ||||
25th Percentile | 50% | ||||
50th Percentile | 100% | ||||
≥75th Percentile | 200% | ||||
In each case, if Relative TSR is earned at a percentile ranking that is between two adjacent percentile rankings, the Initially Earned TSR Restricted Stock Units shall be determined by straight line interpolation between such percentile rankings.
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Modification Based on Absolute TSR
The final number of TSR Award Restricted Stock Units that may be earned (the “TSR Payout”) will be determined by multiplying the Initially Earned TSR Restricted Stock Units by the applicable multiplier set forth below based on Absolute TSR over the Performance Period:
| Absolute TSR | Multiplier | ||||
| ≥15% | 1.25x | ||||
| 0% | 1.00x | ||||
| <0% | 0.75x | ||||
If Absolute TSR is earned at a percentage that is between 0% and 15%, the multiplier shall be determined by straight line interpolation between such percentages. For clarity, if Absolute TSR is earned at a percentage that (a) is less than 0%, the multiplier shall be 0.75x, regardless of the extent to which such earned percentage is less than 0%, or (b) exceeds 15%, the multiplier shall be 1.25x, regardless of the extent to which such earned percentage exceeds 15%.
Notwithstanding the foregoing:
•If Absolute TSR over the Performance Period is earned at a percentage that is less than 0%, the TSR Payout shall be capped at the Target TSR Payout.
•In no event shall the TSR Payout exceed 200% of the Target TSR Payout.
For clarity, if Relative TSR over the Performance Period is earned at less than the 25th percentile, the TSR Payout shall be zero, regardless of the Absolute TSR that is earned over the Performance Period.
All determinations as to the achievement of Relative TSR, Absolute TSR, the Initially Earned TSR Restricted Stock Units and the TSR Payout shall be made by the Committee in its sole discretion and such determinations shall be final and binding.
Absolute TSR
Absolute TSR shall be determined based on the following formula and shall be expressed as a percentage:
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Where:
“Beginning Average Share Price” means the volume weighted average price of a Share for the first 20 trading days of the Performance Period (including the first day of the Performance Period);
“Dividends” means all dividends paid to a shareholder of record with respect to one Share during the Performance Period; and
“Ending Average Share Price” means the volume weighted average price of a Share for the last 20 trading days of the Performance Period (including the last day of the Performance Period).
Relative TSR
The results of the Absolute TSR for each of the companies in the Peer Group (for the avoidance of doubt, excluding the Company) will be ranked from highest to lowest Absolute TSR (rounded, if necessary, to one-tenth of a percentage point by application of regular rounding) and Absolute TSR will be compared to such ranking to determine Relative TSR.
The Peer Group shall include the following companies:
[Peer Group]
Where the effect of changes to the Peer Group shall be as follows:
•If a company in the Peer Group is acquired and ceases to have its primary common equity security listed or traded prior to the end of the Performance Period, such company will be omitted from Peer Group.
•If a company in the Peer Group is forced to delist from the securities exchange upon which it was traded due to low stock price or other reasons or files for bankruptcy, such company shall be included in the Peer Group but will be ranked last.
Cumulative Free Cash Flow Performance Goals
The number of Cumulative Free Cash Flow Awarded Restricted Stock Units that may be earned will be based on the Company’s Cumulative Free Cash Flow over the Performance Period, as set forth below.
The Company’s Cumulative Free Cash Flow will be measured over three individual Annual Measurement Periods, with one-third (1/3) of the Cumulative Free Cash Flow Awarded Restricted Stock Units being eligible to be earned based on the extent to which the Company’s
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Annual Free Cash Flow for such Annual Measurement Period is achieved for such Annual Measurement Period (each, a “Tranche”), where:
“Annual Free Cash Flow” means, for the applicable Annual Measurement Period, adjusted EBITDA; less capital expenditures and payments on vendor-financed capital expenditures; less cash taxes; less net cash interest; less, asset retirement obligations; plus proceeds from sale of property, plant, and equipment; plus or minus gains (or losses and tax payments) associated with any disposition or disposal of assets whether by sale, trade or exchange; plus or minus gains (or losses and tax payments) associated with any acquisition, divestiture, recapitalization or other corporate transaction; plus or minus the positive (or negative) effects of exchange rate changes on cash and cash equivalents; plus or minus the net increase (or decrease) in working capital; plus or minus a positive (or negative) adjustment to reflect mobilization costs and mobilization revenue on a cash basis; plus dividends received from investments in associated companies; and also reflecting such other adjustments as the Committee deems appropriate; and
“Annual Measurement Period” means each of:
•The 20 Annual Measurement Period: The period beginning on , 20 and ending on , 20 ;
•The 20 Annual Measurement Period: The period beginning on , 20 and ending on , 20 ;
•The 20 Annual Measurement Period: The period beginning on , 20 and ending on , 20 ;
The number of Cumulative Free Cash Flow Awarded Restricted Stock Units that may become vested will be equal to the sum of (1) the Cumulative Free Cash Flow Awarded Restricted Stock Units earned with respect to the 20 Annual Measurement Period Tranche, plus the Cumulative Free Cash Flow Awarded Restricted Stock Units earned with respect to the 20 Annual Measurement Period Tranche, plus (3) the Cumulative Free Cash Flow Awarded Restricted Stock Units earned with respect to the 20 Annual Measurement Period Tranche.
The Company’s Annual Free Cash Flow for each Annual Measurement Period shall be compared to the Company’s annual budget for Annual Free Cash Flow for the applicable Annual Measurement Period and the number of Free Cash Flow Awarded Restricted Stock Units earned with respect to the applicable Tranche shall be based on the below.
| Performance Achievement % | Payout % | |||||||
| Threshold | 85% | 50% | ||||||
| Target | 100% | 100% | ||||||
| Maximum | 125% | 200% | ||||||
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In each case, if an Annual Free Cash Flow Performance Goal is earned at an amount that is at a point between two adjacent performance levels, the level at which the Annual Free Cash Flow Performance Goal shall be earned and the number of Cumulative Free Cash flow Awarded Restricted Stock Units that are earned with respect to the applicable Tranche shall be determined by straight line interpolation between such points. All determinations as to the achievement of the Annual Free Cash Flow Performance Goal and the number of Cumulative Free Cash Flow Award Restricted Stock Units that are earned with respect to the applicable Tranche shall be made by the Committee in its sole discretion and such determinations shall be final and binding.
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Exhibit 10.3
SEADRILL LIMITED
2026 SHORT TERM INCENTIVE PLAN (STIP)
The Joint Nomination and Remuneration Committee of the Board of Directors of Seadrill Limited (together with its subsidiaries, the “Company”) approved a 2026 Short Term Incentive Plan (the “STIP”) for employees selected by the Joint Nomination and Remuneration Committee, that establishes certain goals for the Company or specific rigs and employees in 2026 (the “Performance Goals”).
Under the STIP, cash bonuses payable to participants are determined by the Joint Nomination and Remuneration Committee based on the level of achievement of the Performance Goals approved by the Joint Nomination and Remuneration Committee and, where applicable, individual goals, weighted as follows:
1.For Executive Committee participants:
a.40% - “Company [Adjusted]1 EBITDA”, which is defined as the Company’s Adjusted EBITDA, where “Adjusted EBITDA” is defined as net income before depreciation and amortization, taxes, total financial items, and other income, as well as similar non-cash charges;
b.20% - “Unlevered Free Cash Flow”, which is defined as Company Adjusted EBITDA minus capital expenditures, payments on vendor-financed capital expenditures; cash taxes; plus, or minus the net increase (or decrease) in working capital and positive (or negative) adjustments to reflect mobilization costs and mobilization revenue on a cash basis; plus, dividends received from investments in associated companies;
c.20% - “Company TRIR: Industry Comparison”, which is a safety measure defined as the Company’s recordable events per 200,000 hours worked (“TRIR”), benchmarked against industry figures reported by the International Association of Drilling Contractors (“IADC”); and
d.20% - “Company Technical Utilization”, which is defined as the ratio between the number of hours the Company’s drilling units have executed the contract (uptime), and the total amount of hours the Company’s drilling units have been on contract in the selected period.
Cash bonuses for Executive Committee participants will be subject to individual performance modifiers, whereby the final amount earned for such participants under the STIP may be adjusted upwards or downwards by up to 20%.
2.For other onshore non-rig participants:
a.35% - Company Adjusted EBITDA;
b.15% - Unlevered Free Cash Flow;
c.15% - Company TRIR: Industry Comparison;
1 Note to SDRL: Please confirm this metric remains as Company Adjusted EBITDA and not Company EBITDA.
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d.15% - Company Technical Utilization; and
e.20% - individual performance.
3.For onshore rig participants:
a.5% - Company Adjusted EBITDA;
b.5% - Unlevered Free Cash Flow;
c.35% - “Rig-Specific Adjusted EBITDA”, which is defined as Adjusted EBITDA for the specified rig;
d.10% - Company TRIR: Industry Comparison;
e.10% - “Rig-Specific TRIR: Industry Comparison”, which is defined as the specified rig’s TRIR, benchmarked against industry figures reported by IADC;
f.15% - “Rig-Specific Technical Utilization”, which is defined as the ratio between the number of hours the specified rig’s drilling unit has executed the contract (uptime), and the total amount of hours the specified rig’s drilling unit been on contract in the selected period; and
g.20% - individual performance.
4.For offshore rig participants:
a.20% - Rig-Specific Adjusted EBITDA;
b.40% - Rig-Specific TRIR: Industry Comparison; and
c.40% - Rig-Specific Technical Utilization;
For each participant under the STIP, the cash bonus is achievable in an amount based on a percentage of base salary as approved by the Joint Nomination and Remuneration Committee. Each of the Performance Goals may be achieved at between 0% and 200% of its target, except for the offshore rig participants’ Rig-Specific Adjusted EBITDA and Rig-Specific Technical Utilization, each of which may be achieved at between 0% and [262.5]%2 of its target; provided, however, that the Joint Nomination and Remuneration Committee has absolute discretion to approve payment of amounts other than those determined based on the level of achievement of the Performance Goals. The achievement of performance goals may be adjusted, and cash bonus payments are subject to other terms and conditions (including continued employment) in the Joint Nomination and Remuneration Committee’s discretion. Notwithstanding anything to the contrary, the Company Adjusted EBITDA must be met at least at its threshold level in order for any cash bonus under the STIP to be earned.
2 Note to SDRL: We note that the offshore rig participants’ certificate states that “The final payout may range from 0% to a maximum of 237.5% of your target, depending on rig and company performance,” but also note that the specific Adjusted EBITDA and TU metrics refer to 262.5%. Please confirm which is the correct number for this sentence. Additionally, please kindly confirm when the maximum of 237.5% target would come into effect.
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Exhibit 10.4
Execution Version
AMENDMENT NO. 1
TO SENIOR SECURED REVOLVING CREDIT AGREEMENT
TO SENIOR SECURED REVOLVING CREDIT AGREEMENT
This AMENDMENT NO. 1 TO SENIOR SECURED REVOLVING CREDIT AGREEMENT (this “Amendment”) is dated as of April 3, 2026, and is by and among Seadrill Finance Limited, an exempted company incorporated under the laws of Bermuda (the “Borrower”), Seadrill Limited, an exempted company incorporated under the laws of Bermuda (the “Company”), each Issuing Bank party hereto, and the Lenders party hereto constituting Required Lenders.
RECITALS
A. The Borrower, the Company, J.P. Morgan SE, as administrative agent (in such capacity, the “Administrative Agent”), GLAS Trust Company LLC, as common security agent (in such capacity, the “Common Security Agent”), and the financial institutions party thereto from time to time as lenders (collectively, the “Lenders”) and issuing banks, are parties to that certain Senior Secured Revolving Credit Agreement dated as of July 11, 2023 (the “Existing Credit Agreement” and the Existing Credit Agreement, as amended by this Amendment, the “Credit Agreement”). Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Existing Credit Agreement.
B. Subject to the terms and conditions set forth herein, the parties hereto wish to amend the Existing Credit Agreement as set forth below.
NOW THEREFORE, in consideration of the mutual agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
Section 1.Amendments to Credit Agreement. Effective as of the Amendment No. 1 Effective Date (as defined below), the Existing Credit Agreement is amended as follows:
(a)Clause (b)(i)(B) of the definition of “Consolidated Secured Indebtedness” in the Existing Credit Agreement is hereby amended by replacing the text “$50,000,000” with the text “$100,000,000”.
(b)Clause (b)(i)(B) of the definition of “Consolidated Total Indebtedness” in the Existing Credit Agreement is hereby amended by replacing the text “$50,000,000” with the text “$100,000,000”.
(c)Clause (a) of Section 2.12 of the Existing Credit Agreement is hereby amended by replacing the text “$50,000,000” with the text “$100,000,000”.
(d)Schedule 2.12(a) of the Existing Credit Agreement is hereby amended to delete the existing Schedule 2.12(a) in its entirety and replace it with Schedule 2.12(a) attached as Exhibit A to this Amendment.
Section 2.Representations and Warranties. Each of the Company and the Borrower (on behalf of each Credit Party) hereby represents and warrants, as of the date hereof and immediately after giving effect to this Amendment, that:
(a)(x) the execution, delivery and performance of this Amendment have been duly authorized by the Company and the Borrower, as applicable, (y) this Amendment constitutes the legal, valid and binding obligation of the Company and the Borrower, as applicable, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity), and (z) this Amendment has been duly executed and delivered by the Company and the Borrower.
(b)the representations and warranties set forth in Article 5 of the Existing Credit Agreement are true and correct in all material respects (except for those representations and warranties qualified by
“materiality,” “Material Adverse Effect” or similar language, which are correct in all respects), and in each case unless expressly stated to relate to a specific earlier date, in which case such representations and warranties are true and correct in all material respects (unless qualified by “materiality,” “Material Adverse Effect” or similar language, which are correct in all respects) as of such earlier date; and
(c)no Default or Event of Default has occurred and is continuing.
Section 3.Conditions. This Amendment shall be effective (the “Amendment No. 1 Effective Date”) upon receipt by the Administrative Agent of the duly executed counterparts of:
(a)this Amendment signed by the Borrower, the Company, each Issuing Bank and the Required Lenders;
(b)the Reaffirmation attached hereto signed by each Guarantor;
(c)(x) certificates of a Responsible Officer of each Credit Party containing specimen signatures of the Persons authorized to execute this Amendment to which such entity is a party on such entity’s behalf or any other documents provided for herein or therein, together with (A) copies of resolutions of the board of directors or other appropriate body of the Borrower and the Company, authorizing the execution and delivery of this Amendment to which such entity is a party (or if such document has been previously delivered, certifying as to no change to the same since such prior delivery) and (B) copies of such entity’s memorandum of association, articles of association or other publicly filed (if applicable) organizational, incorporation or constitutional documents in its jurisdiction of incorporation, as applicable (or if such document has been previously delivered, certifying as to no change to the same since such prior delivery), and such entity’s bye-laws/bylaws or limited liability company agreement (or other comparable governing documents, if any), as applicable (or if such document has been previously delivered, certifying as to no change to the same since such prior delivery); and
(d)a certificate of a Responsible Officer of the Company and the Borrower certifying to the satisfaction of all conditions set forth in Sections 2(b) and (c) hereof.
Section 4.Fees and Expenses. The Borrower agrees to pay all reasonable and documented out-of-pocket costs and expenses of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including reasonable and documented attorney’s fees of the Administrative Agent’s legal counsel.
Section 5.Acknowledgment.
(a)Except as expressly set forth herein, this Amendment shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Administrative Agent, the Common Security Agent or the Lenders under the Existing Credit Agreement (other than as amended by this Amendment) and the other Credit Documents, and shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Existing Credit Agreement (other than as amended by this Amendment) or any of the other Credit Documents, all of which are ratified and reaffirmed in all respects and shall continue in full force and effect.
(b)From and after the date hereof, all references in the Credit Agreement and the other Credit Documents to the Existing Credit Agreement shall mean the Existing Credit Agreement, as amended by this Amendment. On and after the date hereof, this Amendment shall constitute a Credit Document for purposes of the Credit Agreement. On and after the date hereof, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby, and each reference in any other Credit Document to the Credit Agreement shall be deemed to be a reference to the Credit Agreement as amended hereby.
Section 6.Counterparts. This Amendment may be executed in any number of counterparts, and by different parties hereto on different counterpart signature pages, each of which when
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executed shall be deemed an original, but all such counterparts taken together shall constitute one and the same agreement. Delivery of an executed counterpart of a signature page of this Amendment, that is an Electronic Signature transmitted by telecopy, emailed “.pdf” or “.tif” file or any other electronic means that reproduces an image of an actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to this Amendment shall be deemed to include electronic signatures, deliveries or the keeping of records in any electronic form (including deliveries by telecopy, emailed “.pdf” or “.tif” file or any other electronic means that reproduces an image of an actual executed signature page), each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act.
Section 7.Successors and Assigns. This Amendment shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns permitted pursuant to the Credit Agreement.
Section 8.Governing Law. THIS AMENDMENT AND THE RIGHTS AND DUTIES OF THE PARTIES HERETO, SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. Section 11.15(d) of the Existing Credit Agreement is hereby incorporated by reference into this Amendment and shall apply to this Amendment, mutatis mutandis.
Section 9.Entire Agreement. THIS AMENDMENT TOGETHER WITH THE OTHER CREDIT DOCUMENTS REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
Section 10.Severability. Section 11.18 of the Existing Credit Agreement is hereby incorporated by reference into this Amendment and shall apply to this Amendment, mutatis mutandis.
[Remainder of page intentionally left blank]
3
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
SEADRILL FINANCE LIMITED, an exempted company incorporated under the laws of Bermuda, as the Borrower
By: /s/ Grant Creed
Name: Grant Creed
Title: Executive Vice President and Chief Financial Officer
SEADRILL LIMITED, an exempted company incorporated under the laws of Bermuda, as the Company
By: /s/ Grant Creed
Name: Grant Creed
Title: Executive Vice President and Chief Financial Officer
[Signature Page to Amendment No. 1]
JPMORGAN CHASE BANK, N.A., London Branch, as a Lender
By: /s/ Cameron Strock
Name: Cameron Strock
Title: Authorized Officer
[Signature Page to Amendment No. 1]
CITIBANK N.A., as a Lender
By: /s/ Todd Mogil
Name: Todd Mogil
Title: Vice President
[Signature Page to Amendment No. 1]
DEUTSCHE BANK AG NEW YORK BRANCH, as a Lender
By: /s/ Philip Tancorra
Name: Philip Tancorra
Title: Director
By: /s/ Suzan Onal
Name: Suzan Onal
Title: Director
[Signature Page to Amendment No. 1]
DNB Bank ASA, as a Lender and as an Issuing Bank
By: /s/ Thomas Lie
Name: Thomas Lie
Title: Director
DNB Bank ASA, as a Lender and as an Issuing Bank
By: /s/ Andreas Jøtne
Name: Andreas Jøtne
Title: Director
[Signature Page to Amendment No. 1]
BARCLAYS BANK PLC, as a Lender
By: /s/ Natalia Holgate
Name: Natalia Holgate
Title: Asset Management
[Signature Page to Amendment No. 1]
EXHIBIT A
SCHEDULE 2.12(a)
MAXIMUM L/C ISSUANCE AMOUNTS
[Omitted.]
REAFFIRMATION
APRIL 3, 2026
Reference is made to the Amendment No. 1 to Senior Secured Revolving Credit Agreement, dated as of the date hereof (the “First Amendment”), by and among Seadrill Finance Limited, an exempted company incorporated under the laws of Bermuda (the “Borrower”), Seadrill Limited, an exempted company incorporated under the laws of Bermuda (the “Company”), each Issuing Bank party thereto and the Lenders party thereto constituting Required Lenders, which First Amendment amends the Senior Secured Revolving Credit Agreement, dated as of July 11, 2023 (the “Existing Credit Agreement”, and the Existing Credit Agreement, as amended by the First Amendment, the “Credit Agreement”), by and among the Borrower, the Company, the Lenders from time to time party thereto, the Issuing Banks from time to time party thereto, the Administrative Agent and GLAS Trust Company LLC, as common security agent. Capitalized terms used herein but not otherwise defined herein shall have the meanings assigned to such terms in the Credit Agreement.
Each of the undersigned hereby consents to the First Amendment and the transactions contemplated thereby. Each of the undersigned further (a) reaffirms and confirms its respective guarantees, pledges, grants of security interests or Liens and other obligations under the Credit Agreement and each of the other Credit Documents to which it is a party, in respect of, and to secure, the Obligations, (b) agrees that, notwithstanding the execution or effectiveness of the First Amendment and the transactions contemplated thereby, the Credit Documents to which it is a party or otherwise bound, and such guarantees, pledges, grants of security interests or Liens and other obligations thereunder, shall continue to be in full force and effect in accordance with the terms thereof and (c) represents and warrants that the execution and delivery of this Reaffirmation has been duly authorized by such Guarantor, as applicable, and this Reaffirmation constitutes the legal, valid and binding obligation of such Guarantor, as applicable, enforceable in accordance with its terms, except as such enforceability may be subject to (i) bankruptcy, insolvency, reorganization, fraudulent conveyance or transfer, moratorium or similar laws affecting creditors’ rights generally and (ii) general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or in equity).
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have caused this Reaffirmation to be executed by their respective officers thereunto duly authorized as of the day and year first above written.
SEADRILL FINANCE LIMITED
By: /s/ Grant Creed
Name: Grant Creed
Title: Executive Vice President and Chief Financial Officer
Name: Grant Creed
Title: Executive Vice President and Chief Financial Officer
SEADRILL LIMITED
By: /s/ Grant Creed
Name: Grant Creed
Title: Executive Vice President and Chief Financial Officer
Name: Grant Creed
Title: Executive Vice President and Chief Financial Officer
SEADRILL RIG HOLDING COMPANY LIMITED
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL TREASURY UK LIMITED
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL GEMINI LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL ECLIPSE LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL CARINA LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
[Signature Page to Reaffirmation]
SEADRILL TELLUS LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL SATURN LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL JUPITER LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL POLARIS LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL UK LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL GLOBAL SERVICES LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL MANAGEMENT LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
NORTH ATLANTIC PHOENIX LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
NORTH ATLANTIC ELARA LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL NORWAY OPERATIONS LTD.
[Signature Page to Reaffirmation]
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL SEVAN HOLDINGS LIMITED
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL NORTH ATLANTIC HOLDINGS LIMITED
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
AQUADRILL LLC
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL AMERICAS, INC.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
AQUADRILL CAPRICORN HOLDINGS LLC
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL GULF OPERATIONS NEPTUNE LLC
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEVAN DRILLING NORTH AMERICA LLC
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL OFFSHORE AS
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL DEEPWATER DRILLSHIP LTD.
[Signature Page to Reaffirmation]
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL NEPTUNE HUNGARY KFT.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEVAN LOUISIANA HUNGARY KFT.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL AURIGA HUNGARY KFT.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL VELA HUNGARY KFT.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL CHINA OPERATIONS LTD.
S.A.R.L.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL SERVIÇOS DE PETRÓLEO LTDA.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL SWITZERLAND GMBH
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL RIG HOLDCO KFT.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL HUNGARY KFT.
[Signature Page to Reaffirmation]
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
SEADRILL AQUARIUS LTD.
By: /s/ James Ferrow
Name: James Ferrow
Title: Authorized signatory
Name: James Ferrow
Title: Authorized signatory
[Signature Page to Reaffirmation]
Exhibit 31.1
CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER
I, Samir Ali, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Seadrill Limited;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 11, 2026
/s/ Samir Ali
Samir Ali
Chief Executive Officer
Exhibit 31.2
CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER
I, Grant Creed, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Seadrill Limited;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: May 11, 2026
/s/ Grant Creed
Grant Creed
Chief Financial Officer
Exhibit 32.1
PRINCIPAL EXECUTIVE OFFICER CERTIFICATION
In connection with the quarterly report on Form 10-Q of Seadrill Limited (the “Company”) for the period ended March 31, 2026 as filed with the Securities and Exchange Commission (the “SEC”) on the date hereof (the “Report”), I, Samir Ali, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 11, 2026
/s/ Samir Ali
Samir Ali
Chief Executive Officer
Exhibit 32.2
PRINCIPAL FINANCIAL OFFICER CERTIFICATION
In connection with the quarterly report on Form 10-Q of Seadrill Limited (the “Company”) for the period ended March 31, 2026 as filed with the Securities and Exchange Commission (the “SEC”) on the date hereof (the “Report”), I, Grant Creed, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:
(1)The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2)The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 11, 2026
/s/ Grant Creed
Grant Creed
Chief Financial Officer