Seadrill Grows Contract Backlog to $3.1 Billion and Tightens 2026 Outlook Amid Efficiency Gains
Backlog Surges as New Contracts Add $860 Million Across Key Regions
Seadrill is signaling more stable footing in deepwater drilling with a freshly reported contract backlog of $3.1 billion as of May 11, 2026—boosted by more than $860 million of new awards since February. These new wins span strategic locations including the U.S. Gulf, Brazil, and Angola, and include significant, multiyear commitments with names like Petrobras and TotalEnergies.
The company’s confidence is reflected in its updated outlook: it now expects full-year 2026 total operating revenues of $1.43–$1.48 billion, up from its previous range, and anticipates adjusted EBITDA between $370–$420 million. This boosted guidance comes on the back of faster-than-expected project completions and rising average dayrates.
Operational Efficiency Bolsters Margins Despite Modest Loss
For the first quarter of 2026, Seadrill reported $358 million in operating revenues and an adjusted EBITDA of $97 million, up from the previous quarter. Though the net loss for the period was $7 million, adjusted EBITDA margins excluding reimbursable revenue climbed to 27.9%, reflecting better utilization and cost management.
Both the West Capella and West Jupiter projects wrapped up ahead of schedule and on budget, providing operational momentum. Economic utilization—how much time rigs actively earned revenue compared to their contracted days—rose to 94.6% in Q1, with average dayrates jumping to $343,000 from $319,000 the previous quarter.
| Key Metric | Q1 2026 | Q4 2025 |
|---|---|---|
| Total Operating Revenues ($M) | 358 | 362 |
| Contract Revenues ($M) | 277 | 273 |
| Net Loss ($M) | -7 | -10 |
| Adjusted EBITDA ($M) | 97 | 88 |
| Adjusted EBITDA Margin excl. Reimbursables (%) | 27.9 | 25.4 |
| Average Contractual Dayrates ($K) | 343 | 319 |
| Economic Utilization (%) | 94.6 | 91.0 |
| Free Cash Flow ($M) | -35 | -63 |
| Contract Backlog ($B) | 3.1 | — |
Contract Extensions Reflect Market Demand for Deepwater Rigs
The quarter’s standout contracts include a three-year, $480 million extension of the West Polaris in Brazil with Petrobras, and lucrative extensions for the West Neptune and West Vela in the Gulf of Mexico, both with LLOG (a Harbour Energy subsidiary). The Sonangol Quenguela will now stay busy in Angola through July 2028 with TotalEnergies.
These contracts highlight a trend: deepwater rig demand is strengthening, with several energy majors securing future capacity as global energy security rises up the agenda. The company’s ability to command premium dayrates and extend contract durations illustrates both its fleet competitiveness and operator urgency.
Guidance Raised Amid Strong Backlog and Utilization Rates
Reflecting the backlog ramp and robust operational execution, Seadrill raised its full-year 2026 guidance for both top-line revenue (now $1.43–$1.48 billion, up from $1.40–$1.45 billion) and adjusted EBITDA (up to $420 million at the top end, from $400 million previously). Capital expenditure and long-term maintenance spending remains steady, signaling management’s focus on capital discipline.
Takeaway: Backlog Strength and Efficiency Drive Upward Potential
Seadrill’s Q1 2026 results underline a tightening supply picture for high-specification offshore rigs, with rising utilization and dayrates beginning to flow through to earnings. While net profitability remains a challenge, the combination of a fortified backlog, growing utilization, and improved guidance set the stage for a potentially more profitable second half of 2026 and beyond.
For investors and industry watchers, the next catalyst could be continued follow-through on operational execution—and whether the higher dayrates forecast across the sector become sticky as energy security remains top of mind for oil majors. Seadrill’s progress offers a real-time case study in what disciplined capital management and operational excellence can achieve as the deepwater market gathers steam.
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