Seadrill Ltd (NYSE:SDRL) stock is set to start Tuesday’s session on the front foot after the oil and gas contractor boasted strong quarterly results.
The company, which in 2022 went through its second Chapter 11 bankruptcy process in two years, today told investors it had generated revenue of US$414 million in the second quarter while earnings (adjusted EBITDA) hit US$159mln.
The latest figures represent significant year-on-year improvements from revenue of US$266 million and earnings of US$85 million a year ago.
At US$1.16 per share, diluted earnings per share were up substantially from 83 cents last year, and, were comfortably ahead of expectations of 51 cents per share for the quarter.
The performance was boosted by the fleet of rigs acquired via Seadrill’s takeover of Aquadrill, which was completed in April.
It also comes after a refinancing on improved terms – which saw a new US$500mln loan at 8.375% along with US$225 million in revolving credit and a US$100 million accordion.
"We delivered strong results this quarter, and the full year continues to be in line with previous guidance,” chief executive Simon Johnson said in a statement.
“This quarter, we executed decisively on strategic initiatives that simplify and strengthen our organization."
Operationally, the Aquadrill acquisition added four rigs to Seadrill’s fleet, bringing the total to twelve.
Johnson noted the company’s ongoing commitment to maintaining a conservative capital structure and "a disciplined approach to growth".
As the marine-based contractor narrows its focus on the ‘floater’ market segment – basically ships with rigs on them – it last month sold three ‘tender assist’ vessels for US$85 million and revealed its intention to sell its fleet of jack-up (legged rigs) in Qatar.
On the corporate front, the company’s board has greenlit a stock buyback, of up to US$250 million, which it says “underscores its confidence in its future prospects and its commitment to delivering shareholder value.”
In the floaters business, Seadrill said it has an order backlog representing some US$2.5 billion of contracts and highlighted it believes this segment offers the most growth and value.
In New York, Seadrill stock is trading around US$1.89 or 3.95% higher in premarket changing hands at US$49.76.