Seadrill Limited

Hello and welcome to the CEDRIL third quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, please press star one on your telephone keypad. I would now like to turn the conference over to Lydia Mabry, Director of Investor Relations. You may begin.

Welcome to CEDRIL's third 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. Our comments include forward-looking statements that involve risks and uncertainty. Actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or year, and we assume no obligation to update. Our latest forms 20S 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 that affect our business. During the call, we will also reference non-GAAP measures. Our earnings release filed with the SEC and available on our website includes reconciliations with the nearest corresponding GAAP measures. Our use of the term EBITDA on today's call corresponds with the term adjusted EBITDA as defined in our earnings release. I'll now turn the call to Simon.

Thank you for joining us on our quarterly conference call. I'll begin with a few comments on our quarterly performance before discussing our market outlook and strategy. Samir will then talk about tactics and contracting before Grant reviews our quarterly financial and operational performance and full year outlook. Our third quarter results exceeded expectations. We delivered $93 million in adjusted EBITDA, securing additional work and uncommitted capacity propels us above our previous full-year guidance. Most notably, the Savard, Louisiana continued its existing contract with an independent operator in the US Gulf of Mexico. We're now increasing our EBITDA guidance midpoint by 13% to $385 million. Our continued progress on Brazil projects minimizes the downside risk to guidance. Both the West Auriga and West Polaris are in-country and going through the customer and regulatory acceptance process after clearing customs in record time. Our operations teams focused attention on these critical projects, meaning these rigs are on track to begin their new contracts in December and will then start generating meaningful EBITDA and cash flow. During the quarter, we stacked the West Phoenix to reduce operating capital expense in the absence of an immediate market opportunity. We were unwilling to spend valuable shareholder capital investing in a rig without a bedrock of continuous visible demand. We've released the crews and are actively reducing direct rig OPEX. Following the completion of the West Capella and West Vela's recent contracts, we've now also reintegrated the four Aquadrill drill ships back into the Cedral fleet. In the 18 months since closing the transaction, we've successfully navigated complex, costly rig management agreements and exceeded all cost synergy targets. The Vela and Capella, along with the Auriga and the Polaris, are now managed and crewed to CEDRAL standards and can reliably provide the safe, efficient, responsible operations customers expect from our organisation. Now on to market outlook and strategy. We firmly believe underlying industry fundamentals remain intact, characterised by the interaction between increasingly inelastic supply and inherently variable demand. The prevailing market question is when and where those lines intersect. In our view, the temporary imbalance between drill ship supply and demand is not a true reflection of the fundamentals that support a sustained strong industry cycle, but rather a reminder of the market's volatility. This volatility only deepens my conviction in our strategy, operating a floater-focused fleet that benefits from strong contract coverage, preserving a good balance sheet, and maintaining a relentless and virtuous focus on continued efforts to strengthen and simplify our business. At the heart of our plan to win is operating the right rigs in the right regions. In our experience, most deep water opportunities require dual activity drill ships with 15K BOPs and MPD capabilities. Rigs focused on achieving operational efficiency and endurance rather than exploring technical frontiers. Our fleet meets those requirements. All our drill ships are dual activity and dual BOP capable or equipped. 75% of the drill ships we operate are 7th gen. And in 2025, we expect 80% of our own drill ships will have MPD, as we focus on leading the industry in thought and practice in this important operational activity. We operate premium quality assets in the heart of the market. We cluster almost all our rigs in the Golden Triangle, spanning the Gulf of Mexico, South America and West Africa, which represents the greatest concentration of deep water drilling activity now and into the foreseeable future. We've secured 70% contract utilization for our market and managed fleet in calendar year 2025, a figure that is expected to improve with time as customer conversations convert to contracts. In addition to our contract coverage, we benefit from strong balance sheet and our current cash position feels prescient in today's market. However, we recognize this does not completely insulate us from competitive market realities. We will not rest on our laurels. We will continue to evaluate better, smarter ways of running our business. 2025 will be a year in which we focus increasingly on optimising our operations. We want to be a lean, efficient, right-sized drilling contractor. We plan to reduce bureaucracy across the organisation, empowering our senior leaders offshore to do what they do best, leading, supervising and mentoring their teams to the benefit of our customers who count on us every day to deliver safe, efficient, responsible operations. By doing right for our employees and our customers, we'll do right for our shareholders. We must remain agile. We'll continue to evaluate opportunities to refine and grow our fleet, dynamically adjust our costs as our active rig count fluctuates, and further solidify our formidable financial position. Now, as ever, we're focused on what we can control. how we sign our contracts, how we run our rigs and how we allocate our capital. Our commercial team continues working to secure contracts with terms that maximise each rig's earnings and cash flow. Our operations teams continue to keep drill bits turning to the right, operating costs low, crews safe and customers happy. And our leadership team endeavours to remain disciplined stewards of shareholder capital. We constantly evaluate our approach to capital allocation based on market conditions, outlook, and competitive positioning, and the relative impact these decisions have on strengthening the procedural story. Clear examples of that capital stewardship have been our continued fleet refinement and industry-leading share repurchases. We were the first of our peers to pursue a meaningful buyback program and have reduced our issued share count by 19% since September 23, improving our per share performance across key metrics. At Cedral, we've continuously made decisions to simplify and strengthen our business for the benefit of our shareholders. And as we make our way through 2025, it should become increasingly clear that we build a resilient business that can deliver real returns to shareholders through the cycle, especially once 2026 contract repricing comes more clearly into focus. With that, I'll pass the line to Samir.