Seadrill Ltd (NYSE:SDRL) shares traded higher in Tuesday’s premarket deals, up 4.53% changing hands at $44.50 after the offshore oil and gas contractor confirmed a robust third quarter performance.
The driller reported $151 million of earnings (Adjusted EBITDA) or $1.10 per share, on $414 million of revenue – exceeding Wall Street forecasts for 83 cents and $396.25 million respectively.
A key feature of the quarter was the successful refinancing which saw $575 million of 8.375% senior secured notes issued, along with a new $225 million revolving credit facility.
At the same time, the driller committed to a meaningful shareholder returns program, comprising $250 million of stock buybacks ($213 million of which has been completed so far), and, now the board has greenlit a further $250 million of buybacks.
Seadrill updated its full year 2023 guidance, projecting earnings (adjusted EBITDA) between $485 million and $505 million.
Operationally, the driller said it saw in the quarter an average of 12 rigs in use, representing an economic utilization of 93%, to generate some $324 million of contract revenue, and, it meanwhile landed notable new contacts in the US Gulf of Mexico.
"We delivered another strong quarter for our stakeholders, and today we announce an increase in our full year 2023 Adjusted EBITDA guidance,” chief executive Simon Johnson said in a statement.
“We have secured an extension for the West Neptune with LLOG and been awarded a short-term campaign by QuarterNorth Energy for the West Vela.
“This will mark the return to Seadrill of the second of four drillships that we acquired earlier this year.
Johnson added: “We remain on track with synergy capture arising from the Aquadrill transaction.”