Seadrill Limited

If you would like to withdraw your question, again, press the star one. Thank you. I'd now like to turn the call over to Lydia Mabry, Director of Investor Relations. You may begin.

Thank you, Operator. Welcome to FEDRAL's second quarter 2024 earnings call. Today's call will feature prepared remarks from Simon Johnson, our President and Chief Executive Officer, Sameer Ali, Executive Vice President and Chief Commercial Officer, and Grant Creed, Executive Vice President and Chief Financial Officer. Also joining is Marcel Wiegers, Senior Vice President of Operations. Today's call includes forward-looking statements that involve risks and uncertainty. Actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year, and we assume no obligation to update. Our latest forms 20F and 6K filed with the U.S. Securities and Exchange Commission provide a more detailed discussion of our forward-looking statements and the risk factors affecting our business. During the call, we will also refer to non-GAAP measures. Our earnings release filed with the SEC and available on our website includes reconciliations to the nearest corresponding GAAP measures. Our use of the term EBITDA on today's call corresponds with the term adjusted EBITDA as defined in our earnings release. Now, let me turn the call to Simon.

Thank you for joining us on today's call. The second quarter CEDRIL delivered EBITDA of $133 million. on $375 million of total operating revenues for an EBITDA margin of 35.5%. Cedral had a strong first half of the year with a combined $257 million in EBITDA. However, we are lowering our second half expectations based on revised estimates for contract start dates for the two rigs we're moving to Brazil and uncommitted near-term availability on other rigs within our fleet. We entered 2024 knowing it will be a transition year. We've operated fewer rigs while preparing units for long-term contracts and performing necessary calendar-based maintenance on several others. We've acknowledged our willingness to incur idle time early in the cycle as we sought to reprice, relocate and reintegrate rigs. This was exemplified by the West Polaris, which we moved from a third-party managed contract in India, where it operated alone, to a market rate term contract in Brazil, where we operate at scale. Like our peers, we've encountered white space for some of our units with near-term availability, specifically the Savan, Louisiana, West Phoenix, and West Capella. We're seeing indications of limited contracting options and intensifying competition that will impact on these rigs and possibly others into 2025. The emergence of more volatility inherent in the oil field services subsector further enforces the importance of three-cycle resiliency. to achieve durable earnings and cash flow across cycles. One, scale matters. Two, balance sheet strength matters. Three, management discipline matters. And four, most importantly, safe, efficient, responsible drilling operations matter. At Seagrill, we achieve basin scale by concentrating a highly standardized rig fleet in advantage geographies, primarily across the Golden Triangle. We maintain a prudent balance sheet that allows us to invest in maximizing useful life competitiveness and performance of the rigs across our fleet when attractive economics justify doing so we consistently demonstrate discipline by doing what we say we will do acting as strong stewards of capital we maximize the earnings potential of our contracted rig fleet by staying focused on maximizing one of the most important operational metrics uptime when downtime events do occur we learn from them first identifying the root cause then reshaping our efforts and behaviour to deliver intended outcomes. We are seeing results. During the quarter, five of our rigs achieved nearly 100% uptime. Every year, I visit every rig in our fleet. The level of operational performance and commitment to continuous improvement that I've personally seen across our rig sites will drive our success through the cycle. I most recently returned from Angola, where our rigs continue to set examples with superior safety performance across our fleet, across all metrics. Elsewhere in the fleet, the Phoenix recently celebrated nine years without a lost time incident and the West sat in six years without an LTI. Looking at the market, we remain confident in the long-term position of the deep water drilling industry. We still believe burgeoning broad-based demand will bolster what's largely been a supplier-side driven recovery. However, major discoveries in places like Namibia, Cote d'Ivoire and Indonesia have yet to convert into material rig activity. we expect the slower conversion of demand to contract awards will persist into 2025. Importantly, we've seen no indication that day rate development is curtailing demand. Rather, there are more likely paradoxes at play. Firstly, E&P customers are out consolidating contractors. When two becomes one, it can change the timing of tenders as projects that would have occurred consecutively often get deferred. Second, E&Ps continue to prioritize returning capital shareholders rather than spending on the drill bit. Even small independents appear to prioritise buybacks, dividends and debt retirement over new contracts. Third, EMPs appear largely unwilling to commit to long-dated projects. Broader uncertainty related to demand for the underlying commodity and shifting socio-political situations in certain countries appear to be shortening our customers' actionable time horizons. Asymmetry between partner expectations at the JV level can also prevent projects from proceeding. In a less liquid market, characterized by a smaller inventory of available rigs and contracts, it can be difficult to align supply and demand perfectly, contributing to idle time. We believe that this is transitry. Yes, EMPs are showing some discretion on near-term projects, but by definition, they are responsible for producing a consumable resource. What we're seeing is demand delay, not demand destruction. A positive view of the deep water drilling market's longer-term outlook remains unaltered. As frustrating as lack of visibility and short-term congestion may be, we're satisfied with the ongoing development of the market and our relative position within it. However, there will be volatility. As an industry, we seem to be experiencing micro-cycles where the amplitudes may be greater, the periods shorter, and the spread of day rates potentially wider. That means that now, as ever, scale, balance sheets, management teams, and operations matter. As we look to the horizon, I'm convinced CEDRAL will be a competitive player. I'm confident in our team's performance, potential, and progress. Thank you to our employees for your continued commitment to the competitive, collaborative, and cost-conscious behaviors that will carry us forward. With that, I'll pass the call to Samir.