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Seadrill Wins New Drillship Contracts, Drives Backlog Growth
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Key Takeaways
Seadrill wins two drillship contracts from LLOG, adding $260M to its backlog.
SDRL's West Vela and West Neptune deals enhance revenue visibility and free cash flow outlook.
Seadrill says both contracts extend its long-standing relationship with LLOG.
Seadrill Limited (SDRL - Free Report) , an offshore drilling contractor, has landed two contract awards from LLOG Exploration Company in the Gulf of America. LLOG Exploration Company, a subsidiary of Harbour Energy, has awarded a 270-day contract to the West Vela drillship for a new drilling assignment, which is expected to begin in August 2026.
The West Neptune drillship has secured a 365-day contract extension in the U.S. Gulf. The operations associated with this contract are slated to begin in September 2026. The company has mentioned that these contracts add $260 million to its backlog, provide revenue visibility for Seadrill and are expected to enhance free cash flow generation. These awards extend and build on the decade-long relationship between the two companies. The company highlighted the availability of the West Vela and West Neptune drillships in 2027, as it expects higher floater utilization in the coming years.
The West Neptune, featuring a Samsung 12000 design, can operate in water depths of up to 12,000 feet and has a maximum drilling depth of 37,500 feet. The West Vela is a seventh-generation ultra-deepwater drillship with a maximum drilling depth of 37,500 feet. Both the ultra-deepwater drillships have an operational history in the U.S. Gulf.
Equinor ASA is one of the leading integrated energy companies globally and a major supplier of natural gas in Europe. The recent conflict between the United States and Iran has resulted in a spike in gas prices and disrupted LNG supply, following damage to critical infrastructure in Qatar, tightening global LNG supply. This is expected to boost demand for Eqinor’s gas exports to Europe, positioning the company to benefit from heightened prices. The company’s expansion in the renewable energy space positions it for long-term growth as more countries transition toward cleaner energy solutions to meet their climate goals.
Subsea7 helps build underwater oil and gas fields. It is a leading player in the global offshore energy industry, providing engineering, construction and related services at offshore oil and gas fields. The long-term outlook for energy demand remains positive, and Subsea7’s focus on cost-efficient deepwater projects strengthens the position of its subsea business.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It is engaged in refining and marketing of oil products and natural gas marketing and sales.
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Seadrill Wins New Drillship Contracts, Drives Backlog Growth
Key Takeaways
Seadrill Limited (SDRL - Free Report) , an offshore drilling contractor, has landed two contract awards from LLOG Exploration Company in the Gulf of America. LLOG Exploration Company, a subsidiary of Harbour Energy, has awarded a 270-day contract to the West Vela drillship for a new drilling assignment, which is expected to begin in August 2026.
The West Neptune drillship has secured a 365-day contract extension in the U.S. Gulf. The operations associated with this contract are slated to begin in September 2026. The company has mentioned that these contracts add $260 million to its backlog, provide revenue visibility for Seadrill and are expected to enhance free cash flow generation. These awards extend and build on the decade-long relationship between the two companies. The company highlighted the availability of the West Vela and West Neptune drillships in 2027, as it expects higher floater utilization in the coming years.
The West Neptune, featuring a Samsung 12000 design, can operate in water depths of up to 12,000 feet and has a maximum drilling depth of 37,500 feet. The West Vela is a seventh-generation ultra-deepwater drillship with a maximum drilling depth of 37,500 feet. Both the ultra-deepwater drillships have an operational history in the U.S. Gulf.
SDRL’s Zacks Rank and Key Picks
SDRL currently has a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks from the energy sector are Equinor ASA (EQNR - Free Report) , Subsea7 S.A. (SUBCY - Free Report) and Galp Energia SGPS SA (GLPEY - Free Report) . While Equinor sports a Zacks Rank #1 (Strong Buy), Subsea7 and Galp Energia carry a Zacks Rank #2 (Buy) each. You can see the complete list of today’s Zacks #1 Rank stocks here.
Equinor ASA is one of the leading integrated energy companies globally and a major supplier of natural gas in Europe. The recent conflict between the United States and Iran has resulted in a spike in gas prices and disrupted LNG supply, following damage to critical infrastructure in Qatar, tightening global LNG supply. This is expected to boost demand for Eqinor’s gas exports to Europe, positioning the company to benefit from heightened prices. The company’s expansion in the renewable energy space positions it for long-term growth as more countries transition toward cleaner energy solutions to meet their climate goals.
Subsea7 helps build underwater oil and gas fields. It is a leading player in the global offshore energy industry, providing engineering, construction and related services at offshore oil and gas fields. The long-term outlook for energy demand remains positive, and Subsea7’s focus on cost-efficient deepwater projects strengthens the position of its subsea business.
Galp Energia is a Portuguese energy company engaged in exploration and production activities. The company’s oil exploration efforts have yielded positive results, particularly with the Mopane discovery in the Orange Basin, offshore Namibia. This discovery allows Galp to diversify its global presence with the potential to become a significant oil producer in the region. It is engaged in refining and marketing of oil products and natural gas marketing and sales.