Seadrill Limited

Thank you for standing by. My name is Ian, and I will be your conference operator today. At this time, I'd like to welcome everyone to the CEDRAL Q1 2025 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 during this time, simply press star, followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I would like to turn the call over to Kevin Smith, Vice President, Corporate Finance and Investor Relations. Please go ahead.

Welcome to CEDRIL's first quarter 2025 earnings call. I'm Kevin Smith, Vice President of Corporate Finance and Investor Relations, and I'm joined today by Simon Johnson, President and Chief Executive Officer, Samira Lee, Executive Vice President and Chief Commercial Officer, and Grant Creed, Executive Vice President and Chief Financial Officer. Our call will 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 them. Our filings 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 reference non-GAAP measures. Our earnings release, furnished to 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 over to Simon.

Hello, and thank you for joining us on that call. Today I'll touch on our quarterly performance before moving to market overview. Samir will then discuss our commercial outlook and Grant will review our quarterly financial results. I'd like to begin today's call by recognising two rigs in our fleet that recently received special endorsements from our customers for outstanding service delivery. The Sonigold Queen Gala was awarded 2024 Rig of the Year by Total Energies and the West Alara was the recipient of a 2024 Supplier Recognition Award from ConocoPhillips. This acknowledgement is a testament to our crews and their commitment to providing safe and efficient operations for our clients. In the first quarter, Cedril delivered EBITDA of $73 million. Economic utilization for the quarter of 84% was principally impacted by three of our rigs in Brazil. As previously disclosed, the West Talos incurred downtime in the quarter, responding to regulatory matters, and the West Auriga and the West Polaris both incurred teething issues as they commenced long-term contracts. Whilst it is not uncommon to experience lower uptime following major projects, returning utilization to the procedural standard is a priority moving forward. We've already seen a material improvement in the month of April. Turning to the market, current global macro uncertainty in OPEC's decision to accelerate supply increases way heavily on the underlying commodity price at present. Clients are showing caution investing in such a volatile environment, and this is disrupting the demand side of our business. We don't know how long this climate will persist, but it's having an understandable impact on near-term customer confidence. Although uncertainty has increased, we are encouraged by our active dialogue with clients for opportunities commencing in the second half of 2025 and 2026, and anticipate multiple contract awards in the coming months. We're confident in the future demand for deep water drilling. Fundamentals remain in place, and we continue to believe that investment is required to offset depletion. Deepwater will play a substantial role in reserve replenishment. Historically, U.S. shale plays have been an important source of production growth. Tier 1 acreage has largely been drilled, productivity gains and efficiency improvements are slowing down, and average well economics are increasingly seen as less attractive relative to deepwater prospects. In contrast, deepwater investments continue to be compelling due to expansive reserves and superior production rates. Offshore sanctioning activity in both 2026 and 2027 is forecast by Ristead Energy to be double that of 2025, with roughly 75% of these projects economic above $50 per barrel and more than 80% economic above $60 per barrel. We believe we are well positioned in the current environment. We operate a flow-to-focus fleet in geographies that are oil price resilient. A strong balance sheet and capital structure should provide protection against the market volatility that we are currently experiencing, especially if it proves to be more prolonged than currently anticipated. We closed the first quarter with cash of $430 million, and we have durable contract cover with backlog of $2.8 billion that extends meaningfully through 2028 and into 2029. As we navigate the current landscape, we will remain disciplined in managing our fleet. The industry has brought back supply prematurely in the absence of sustainable demand. It is our continued belief that prioritising margins and cash flow over utilisation will yield more long-term value creation for our shareholders. Finally, I want to provide an update regarding the delay penalty notices CEDRAL received from Petrobras related to the Seche matter. Petrobras and CEDRAL have agreed to participate in voluntary mediation and Petrobras was committed to not exercise any set-off rights pending the outcome of the mediation. At this stage, we cannot estimate when the mediation will commence or be completed. However, dialogue between the parties is ongoing and has been constructive to date. With that, I'll turn the call over to Samir.