Seadrill enters the second half as a high-specification deepwater contractor that is finally rolling legacy contracts onto current market dayrates, and the June quarter is the first clean print under Chief Executive Samir Ali. Ali, elevated from the commercial seat in March after Simon Johnson's exit, used the quarter to raise full-year revenue and earnings guidance for the second time this year. The lift is not a bookkeeping story about one-off items. It is more operating days on West Jupiter and West Capella, a higher fleet average dayrate, and economic utilization that reached 96%. The investment debate is whether this operating recovery converts into free cash in the second half, or whether working-capital drag and residual legal cash outflows keep the equity in a prove-it stance.
Net income flipped to $29 million from a first-quarter loss, and adjusted earnings before interest, tax, depreciation and amortization rose to $144 million. Those figures still sit above cash generation. Operating cash remained an outflow because receivables jumped as West Jupiter and West Capella started new programs, and because the company paid a make-whole on retired notes plus a final Sonadrill legal installment. The income statement is telling a tightening-cycle story. The cash-flow statement is still telling a transition-year story.
Contract backlog stood near $2.9 billion in August after roughly $200 million of Gulf and Malaysia awards since the May fleet update. West Vela's one-year Gulf fixture starting next June is the clearest 2027 visibility add. The open question is simple. Does the second half harvest the higher dayrates already in the backlog, or does idle time on Sevan Louisiana and another working-capital bulge push cash conversion past year-end?