Cover Page
Cover Page | 7 Months Ended |
Sep. 30, 2022 | |
Document Information [Line Items] | |
Document Type | F-4 |
Entity Registrant Name | SEADRILL LIMITED |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001737706 |
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||||||||
Operating revenues | ||||||||||||||||
Contract revenues | $ 124 | $ 187 | $ 164 | $ 435 | $ 457 | $ 663 | $ 605 | $ 863 | ||||||||
Management contract revenues | 36 | [1] | 63 | [1] | 42 | [1] | 140 | [1] | 130 | [1] | 177 | [2] | 289 | [2] | 338 | [2] |
Total operating revenues | 169 | 269 | 222 | 615 | 632 | 907 | 961 | 1,254 | ||||||||
Operating expenses | ||||||||||||||||
Depreciation | (17) | (28) | (27) | (68) | (95) | (127) | (318) | (397) | ||||||||
Amortization of intangibles | 0 | (10) | 0 | (22) | 0 | 0 | (1) | (105) | ||||||||
Management contract expense | (31) | (49) | (33) | (98) | (148) | (174) | [2] | (390) | [2] | (302) | [2] | |||||
Selling, general and administrative expenses | (6) | (18) | (16) | (42) | (48) | (67) | (74) | (91) | ||||||||
Total operating expenses | (134) | (250) | (237) | (571) | (755) | (1,012) | (1,358) | (1,589) | ||||||||
Other operating items | ||||||||||||||||
Loss on impairment of long-lived assets | 0 | 0 | 0 | 0 | (152) | (152) | (4,087) | 0 | ||||||||
Loss on impairment of intangibles | 0 | 0 | (152) | 0 | (21) | 0 | ||||||||||
Gain on disposals | 2 | 1 | 11 | 1 | 22 | 47 | 15 | 0 | ||||||||
Other operating income | 0 | 0 | 0 | 0 | 3 | 54 | [2] | 9 | [2] | 39 | [2] | |||||
Total other operating items | 2 | 1 | 11 | 1 | (127) | (51) | (4,084) | 39 | ||||||||
Operating profit/(loss) | 37 | 20 | (4) | 45 | (250) | (156) | (4,481) | (296) | ||||||||
Financial and other non-operating items | ||||||||||||||||
Interest income | 0 | 4 | 0 | 7 | 1 | 1 | [2] | 8 | [2] | 33 | [2] | |||||
Interest expense | (7) | (33) | (18) | (73) | (97) | (109) | (398) | (407) | ||||||||
Loss on impairment of investments | 0 | 0 | (6) | |||||||||||||
Share in results from associated companies (net of tax) | (2) | (1) | 2 | (7) | 3 | 3 | 0 | (22) | ||||||||
Fair value measurement on deconsolidation of VIE | 0 | 509 | 0 | |||||||||||||
(Loss)/Gain on derivative financial instruments | 1 | 4 | 0 | 11 | 0 | 0 | (3) | (37) | ||||||||
Foreign exchange (loss)/gain | 8 | (6) | (8) | (9) | 1 | (4) | (23) | (11) | ||||||||
Reorganization items, net | 3,683 | (3) | (24) | (12) | (250) | (296) | 0 | 0 | ||||||||
Other financial and non-operating items | 21 | (1) | 0 | (2) | (12) | (11) | [2] | (43) | [2] | (1) | [2] | |||||
Total financial and other non-operating items, net | 3,704 | (36) | (48) | (85) | (354) | (416) | 50 | (451) | ||||||||
Loss before income taxes | 3,741 | (16) | (52) | (40) | (604) | (572) | (4,431) | (747) | ||||||||
Income tax (expense)/benefit | (2) | (2) | (3) | (10) | (11) | 0 | 1 | 44 | ||||||||
(Loss)/profit from continuing operations | 3,739 | (18) | (55) | (50) | (615) | (572) | (4,430) | (703) | ||||||||
Profit/(loss) after tax from discontinued operations | (33) | 2 | (31) | 2 | (76) | (15) | (233) | (519) | ||||||||
Net (loss)/profit | $ 3,706 | $ (16) | $ (86) | $ (48) | $ (691) | (587) | (4,663) | (1,222) | ||||||||
Net loss attributable to the parent | (587) | (4,659) | (1,219) | |||||||||||||
Net loss attributable to the non-controlling interest | 0 | (3) | (1) | |||||||||||||
Net loss attributable to the redeemable non-controlling interest | $ 0 | $ (1) | $ (2) | |||||||||||||
Basic(loss)/earnings per share from continuing operations (US dollar) | $ 37.25 | $ (0.36) | $ (0.55) | $ (1) | $ (6.13) | $ (5.7) | $ (44.11) | $ (7) | ||||||||
Diluted (loss)/earnings per share from continuing operations (US dollar) | 37.25 | (0.36) | (0.55) | (1) | (6.13) | (5.7) | (44.11) | (7) | ||||||||
Basic earnings/(loss) per share from discontinued operations (US dollar) | (0.33) | 0.04 | (0.31) | 0.04 | (0.75) | |||||||||||
Diluted earnings/(loss) per share from discontinued operations (US dollar) | (0.33) | 0.04 | (0.31) | 0.04 | (0.75) | |||||||||||
Basic (loss)/earnings per share (U.S. dollar) | 36.92 | (0.32) | (0.86) | (0.96) | (6.88) | (5.85) | (46.43) | (12.18) | ||||||||
Diluted (loss)/earnings per share (U.S. dollar) | $ 36.92 | $ (0.32) | $ (0.86) | $ (0.96) | $ (6.88) | $ (5.85) | $ (46.43) | $ (12.18) | ||||||||
Reimbursable revenues | ||||||||||||||||
Operating revenues | ||||||||||||||||
Reimbursable revenues | $ 4 | [1] | $ 9 | [1] | $ 9 | [1] | $ 21 | [1] | $ 26 | [1] | $ 35 | $ 37 | $ 41 | |||
Operating expenses | ||||||||||||||||
Expenses | (4) | (8) | (8) | (18) | (24) | (32) | (34) | (39) | ||||||||
Other revenues | ||||||||||||||||
Operating revenues | ||||||||||||||||
Reimbursable revenues | 5 | [1] | 10 | [1] | 7 | [1] | 19 | [1] | 19 | [1] | 32 | [2] | 30 | [2] | 12 | [2] |
Vessel and rig operating expenses | ||||||||||||||||
Operating expenses | ||||||||||||||||
Expenses | $ (76) | $ (137) | $ (153) | $ (323) | $ (440) | $ (612) | $ (541) | $ (655) | ||||||||
[1] Includes revenue received from related parties of $69 million and $46 million for the 3 months ended September 30, 2022 (Successor) and September 30, 2021 (Predecessor), and of $143 million, $19 million and $142 million for the period from February 23, 2022 through September 30, 2022 (Successor), Period from January 1, 2022 through February 22, 2022 (Predecessor) and for the nine months ended September 30, 2021 (Predecessor), and costs paid to related parties of $0 million and $13 million for the 3 months ended September 30, 2022 (Successor) and September 30, 2021 (Predecessor), and of $0 million, $3 million and $36 million for the period from February 23, 2022 through September 30, 2022 (Successor), Period from January 1, 2022 through February 22, 2022 (Predecessor) and for the nine months ended September 30, 2021 (Predecessor), respectively. Refer to Note 24 – “Related party transactions” for further details. |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue from Related Parties | $ 19 | $ 69 | $ 46 | $ 143 | $ 142 | $ 189 | $ 305 | $ 333 |
Related Party Costs | $ 3 | $ 0 | $ 13 | $ 0 | $ 36 | $ 70 | $ 12 | $ 3 |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||||||
Net (loss)/profit | $ 3,706 | $ (16) | $ (86) | $ (48) | $ (691) | $ (587) | $ (4,663) | $ (1,222) |
Other comprehensive loss, net of tax, relating to continuing operations: | ||||||||
Actuarial loss relating to pensions | 1 | 0 | 0 | 3 | 0 | 0 | (2) | (1) |
Recycling of accumulated other comprehensive loss on sale of Paratus Energy Services | 16 | 0 | 0 | 0 | 0 | |||
Change in fair value of debt component of Archer convertible bond | (1) | 0 | 0 | 0 | 1 | 2 | 4 | 3 |
Share of other comprehensive loss from associated companies | (2) | 0 | 1 | 0 | 5 | 9 | (15) | (8) |
Other comprehensive gain/(loss) | 14 | 0 | 1 | 3 | 6 | 11 | (13) | (6) |
Total comprehensive loss for the period | $ 3,720 | $ (16) | $ (85) | $ (45) | $ (685) | (576) | (4,676) | (1,228) |
Comprehensive loss attributable to the shareholders | (576) | (4,672) | (1,225) | |||||
Comprehensive loss attributable to the non-controlling interest | 0 | (3) | (1) | |||||
Comprehensive loss attributable to the redeemable non-controlling interest | $ 0 | $ (1) | $ (2) |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Current assets | |||
Cash and cash equivalents | $ 224,000,000 | $ 293,000,000 | $ 485,000,000 |
Restricted cash | 55,000,000 | 160,000,000 | 103,000,000 |
Accounts receivable, net | 143,000,000 | 158,000,000 | 110,000,000 |
Amount due from related parties, net | 62,000,000 | 28,000,000 | 85,000,000 |
Assets held for sale - current | 392,000,000 | 1,145,000,000 | 109,000,000 |
Other current assets | 267,000,000 | 197,000,000 | 187,000,000 |
Total current assets | 1,143,000,000 | 1,981,000,000 | 1,079,000,000 |
Non-current assets | |||
Investment in associated companies | 79,000,000 | 27,000,000 | 24,000,000 |
Drilling units | 1,648,000,000 | 1,431,000,000 | 1,755,000,000 |
Restricted cash | 70,000,000 | 63,000,000 | 65,000,000 |
Deferred tax assets | 10,000,000 | 10,000,000 | 9,000,000 |
Equipment | 9,000,000 | 11,000,000 | 19,000,000 |
Amount due from related parties, net | 0 | 0 | 6,000,000 |
Assets held for sale - non-current | 0 | 347,000,000 | 976,000,000 |
Other non-current assets | 23,000,000 | 27,000,000 | 45,000,000 |
Total non-current assets | 1,839,000,000 | 1,916,000,000 | 2,899,000,000 |
Total assets | 2,982,000,000 | 3,897,000,000 | 3,978,000,000 |
Current liabilities | |||
Debt due within one year | 32,000,000 | 0 | 5,545,000,000 |
Trade accounts payable | 75,000,000 | 53,000,000 | 41,000,000 |
Amounts due to related parties - current | 0 | 7,000,000 | |
Liabilities associated with assets held for sale - current | 37,000,000 | 983,000,000 | 692,000,000 |
Other current liabilities | 273,000,000 | 219,000,000 | 277,000,000 |
Total current liabilities | 417,000,000 | 1,255,000,000 | 6,562,000,000 |
Liabilities subject to compromise | 0 | 6,117,000,000 | 0 |
Liabilities subject to compromise associated with assets held for sale | 0 | 118,000,000 | 0 |
Non-current liabilities | |||
Long-term debt | 950,000,000 | 0 | |
Long-term debt due to related parties | 0 | 426,000,000 | |
Deferred tax liabilities | 9,000,000 | 9,000,000 | 10,000,000 |
Liabilities associated with assets held for sale non current | 0 | 2,000,000 | 0 |
Other non-current liabilities | 152,000,000 | 112,000,000 | 120,000,000 |
Total non-current liabilities | 1,111,000,000 | 123,000,000 | 556,000,000 |
Commitments and contingencies (see Note 30) | |||
EQUITY | |||
Common shares of par value US$0.10 per share 138,880,000 shares authorized and 100,384,435 issued at December 31, 2021 and December 31, 2020 | 500,000 | 10,038,444 | 10,038,444 |
Additional paid in capital | 1,499,000,000 | 3,504,000,000 | 3,504,000,000 |
Accumulated other comprehensive loss | 3,000,000 | (15,000,000) | (26,000,000) |
Retained loss | (48,000,000) | (7,215,000,000) | (6,628,000,000) |
Total deficit | 1,454,000,000 | (3,716,000,000) | (3,140,000,000) |
Total liabilities and equity | $ 2,982,000,000 | $ 3,897,000,000 | $ 3,978,000,000 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | |||
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.1 | $ 0.1 |
Common shares, authorized (in shares) | 375,000,000 | 138,880,000 | 138,880,000 |
Common shares, issued (in shares) | 49,999,998 | 100,384,435 | 100,384,435 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||||||
Cash Flows from Operating Activities | ||||||||||||
Net loss | $ 3,706 | $ (48) | $ (691) | $ (587) | $ (4,663) | $ (1,222) | ||||||
Net (loss)/profit from continuing operations | 3,739 | (50) | (615) | (572) | (4,430) | (703) | ||||||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | (33) | 2 | (76) | (15) | (233) | (519) | ||||||
Net operating net loss adjustments related to discontinued operations | 38 | [1] | 1 | [1] | 84 | [1] | 10 | [2] | 211 | [2] | 526 | [2] |
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||||||
Depreciation | 17 | 68 | 95 | 127 | 318 | 397 | ||||||
Amortization of unfavorable and favorable contracts | 0 | 22 | 0 | 0 | 1 | 105 | ||||||
Share of results from associated companies | 2 | 7 | (3) | (3) | 0 | 22 | ||||||
Gain on disposals | (2) | (1) | (22) | (47) | (15) | 0 | ||||||
Unrealized loss related to derivatives | 0 | 3 | 37 | |||||||||
Fair value measurement on deconsolidation of VIE | 0 | (509) | 0 | |||||||||
Loss on impairment of long-lived assets | 0 | 0 | 152 | 152 | 4,087 | 0 | ||||||
Loss on impairment of intangibles | 0 | 0 | 152 | 0 | 21 | 0 | ||||||
Loss on impairment of investments | 0 | 0 | 6 | |||||||||
Deferred tax benefit | (4) | 2 | 1 | (3) | (7) | (60) | ||||||
Unrealized foreign exchange loss | (6) | 3 | 2 | 2 | 19 | (3) | ||||||
Unrealized gain on derivative | (1) | (8) | 0 | |||||||||
Payment in kind interest | 0 | 30 | 0 | |||||||||
Amortization of discount on debt | 7 | (1) | 73 | 84 | 121 | 36 | ||||||
Fresh Start valuation adjustments | (266) | 0 | 0 | |||||||||
Change in allowance for credit losses | (1) | 0 | 47 | 34 | 144 | 0 | ||||||
Non-cash reorganization items | (3,487) | 0 | 168 | 176 | 0 | 0 | ||||||
Other cash movements in operating activities: | ||||||||||||
Payments for long-term maintenance | (2) | (59) | (31) | (55) | (110) | (105) | ||||||
Repayments made under lease arrangements | (11) | 0 | (40) | (46) | 0 | 0 | ||||||
Changes in operating assets and liabilities, net of effect of acquisitions and disposals: | ||||||||||||
Trade accounts receivable | (11) | 26 | (7) | (41) | 49 | 25 | ||||||
Trade accounts payable | 0 | 22 | 13 | 15 | (37) | 3 | ||||||
Prepaid expenses/accrued revenue | 0 | (19) | 5 | (4) | (54) | (1) | ||||||
Deferred revenue | (18) | (1) | 8 | 7 | (5) | 13 | ||||||
Deferred mobilization costs | (4) | (75) | (6) | |||||||||
Related party receivables | (13) | (20) | (19) | (6) | (103) | (8) | ||||||
Related party payables | 0 | 0 | 3 | (7) | (5) | (30) | ||||||
Other assets | (4) | 30 | (19) | (21) | 33 | (16) | ||||||
Other liabilities | 4 | 9 | 72 | 59 | 73 | 14 | ||||||
Other, net | 0 | 8 | 5 | |||||||||
Net cash used in operating activities | (56) | (12) | (115) | (154) | (420) | (256) | ||||||
Cash Flows from Investing Activities | ||||||||||||
Additions to drilling units and equipment | (18) | (108) | (24) | (29) | (27) | (48) | ||||||
Proceeds from disposal of assets | 2 | 1 | 18 | |||||||||
Funds advanced to discontinued operations | (20) | (16) | 0 | |||||||||
Impact to cash resulting from deconsolidation of VIE | 0 | (22) | 0 | |||||||||
Impact on cash from deconsolidation of discontinued operation | (94) | 0 | 0 | |||||||||
Purchase of call option for non-controlling interest shares | 0 | (11) | 0 | |||||||||
Investment in associated companies | 0 | 0 | (25) | |||||||||
Cash flows from investing activities (discontinued operations) | 0 | (30) | (38) | 23 | 36 | 47 | ||||||
Loans granted to related party | 0 | (8) | 0 | |||||||||
Proceeds from disposal of rigs | 43 | 0 | 0 | |||||||||
Net cash provided by/(used in) investing activities | (130) | (153) | (44) | 37 | (32) | (26) | ||||||
Cash Flows from Financing Activities | ||||||||||||
Repayments of secured credit facilities | (160) | 0 | 0 | 0 | (36) | (34) | ||||||
Purchase of redeemable AOD non-controlling interest | 0 | (31) | 0 | |||||||||
Proceeds from debt | 175 | 0 | 0 | |||||||||
Proceeds from convertible bond issuance | 50 | 0 | 0 | |||||||||
Net cash used in financing activities - discontinued operations | 20 | 16 | 0 | 0 | (96) | (333) | ||||||
Net cash used in financing activities | 85 | 16 | 0 | 0 | (163) | (367) | ||||||
Effect of exchange rate changes on cash and cash equivalents | 6 | (3) | (2) | (2) | (19) | 3 | ||||||
Net decrease in cash and cash equivalents, including restricted cash | (95) | (152) | (161) | (119) | (634) | (646) | ||||||
Cash and cash equivalents, including restricted cash, at beginning of the year | 604 | 509 | 723 | 723 | 1,357 | 2,003 | ||||||
Cash and cash equivalents, including restricted cash, at the beginning of year - continuing operations | 516 | [3] | 490 | 653 | [3] | 653 | [3] | 1,205 | [3] | 1,572 | ||
Cash and cash equivalents, including restricted cash, at the beginning of year - discontinued operations | 88 | 19 | 70 | 70 | 152 | 431 | ||||||
Cash and cash equivalents, including restricted cash, at the end of year | 509 | 357 | 562 | 604 | 723 | 1,357 | ||||||
Cash and cash equivalents, including restricted cash, at the end of year - continuing operations | 490 | 349 | 521 | 516 | [3] | 653 | [3] | 1,205 | [3] | |||
Cash and cash equivalents, including restricted cash, at the end of year - discontinued operations | 19 | 8 | 41 | 88 | 70 | 152 | ||||||
Supplementary disclosure of cash flow information | ||||||||||||
Interest paid | 0 | (31) | 0 | 0 | (174) | (378) | ||||||
Taxes paid | (1) | (9) | (5) | (3) | (10) | (29) | ||||||
Reorganization items, net paid | $ (56) | $ (11) | (49) | (100) | 0 | $ 0 | ||||||
Predecessor [Member] | ||||||||||||
Cash Flows from Financing Activities | ||||||||||||
Cash and cash equivalents, including restricted cash, at the beginning of year - continuing operations | 652 | 652 | ||||||||||
Cash and cash equivalents, including restricted cash, at the beginning of year - discontinued operations | $ 71 | $ 71 | ||||||||||
Cash and cash equivalents, including restricted cash, at the end of year - continuing operations | 652 | |||||||||||
Cash and cash equivalents, including restricted cash, at the end of year - discontinued operations | $ 71 | |||||||||||
[1]Relates to adjustments made to the net income/loss from discontinued operations to reconcile to net cash flows from operating activities from discontinued operations. The adjustments reconcile net loss to net cash used in operating activities, other cash movements in operating activities, and changes in operating assets and liabilities, net of the effect of acquisitions and disposals. The net cash used in operating activities for the successor period from February 23, 2022 through September 30, 2022 was $3 million and for the predecessor period from January 1, 2022 through February 22, 2022 was $5 million provided by. (Nine months ended September 30, 2021 (Predecessor): $8 million provided by).[2]Relates to adjustments made to the net loss from discontinued operations to reconcile to net cash flows in operating activities from discontinued operations. The adjustments are made up of adjustments to reconcile net loss to net cash used in operating activities, other cash movements in operating activities, and changes in operating assets and liabilities, net of effect of acquisitions and disposals. The net cash used in operating activities related to Discontinued operations for the year ended December 31, 2021 was $5 million (December 31, 2020: $22 million; December 31, 2019: $7 million generated from operating activities).[3]Comprised of cash and cash equivalents $293 million (2020: $485 million, 2019: $987 million), restricted cash $160 million (2020: $103 million, 2019: $135 million), and restricted cash included in non-current |
CONSOLIDATED STATEMENTS OF CA_2
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 23, 2022 | |
Statement of Cash Flows [Abstract] | |||||||
Net cash (used in)/provided by operating activities | $ 5 | $ 3 | $ 8 | $ 5 | $ 22 | $ 7 | |
Cash and cash equivalents | 224 | 293 | 485 | 987 | $ 355 | ||
Current restricted cash | 55 | 160 | 103 | 135 | 85 | ||
Non-current restricted cash | $ 70 | $ 63 | $ 65 | $ 83 | $ 69 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($) | Total | Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Cumulative Effect, Period Of Adoption, Adjustment | Cumulative Effect, Period of Adoption, Adjusted Balance | Common shares | Common shares Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Common shares Cumulative Effect, Period of Adoption, Adjusted Balance | Additional paid in capital | Additional paid in capital Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Additional paid in capital Cumulative Effect, Period of Adoption, Adjusted Balance | Accumulated other comprehensive income/(loss) | Accumulated other comprehensive income/(loss) Cumulative Effect, Period of Adoption, Adjusted Balance | Retained Earnings | Retained Earnings Cumulative Effect, Period Of Adoption, Adjustment | Retained Earnings Cumulative Effect, Period of Adoption, Adjusted Balance | Total equity before NCI | Total equity before NCI Cumulative Effect, Period Of Adoption, Adjustment | Total equity before NCI Cumulative Effect, Period of Adoption, Adjusted Balance | Non-controlling interest | Non-controlling interest Cumulative Effect, Period of Adoption, Adjusted Balance |
Beginning balance, shares at Dec. 31, 2018 | 10,000,000 | |||||||||||||||||||
Beginning balance at Dec. 31, 2018 | $ 3,035,000,000 | $ (143,000,000) | $ 3,491,000,000 | $ (7,000,000) | $ (611,000,000) | $ (143,000,000) | $ 2,883,000,000 | $ (143,000,000) | $ 152,000,000 | |||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (701,000,000) | (700,000,000) | (700,000,000) | (1,000,000) | ||||||||||||||||
Net loss from discontinuing operations | (519,000,000) | (519,000,000) | (519,000,000) | |||||||||||||||||
Other comprehensive loss from continuing operations | (1,000,000) | (1,000,000) | (1,000,000) | |||||||||||||||||
Other comprehensive loss from discontinued operations | (5,000,000) | (5,000,000) | (5,000,000) | |||||||||||||||||
Fair Value adjustment AOD Redeemable NCI | (21,000,000) | (21,000,000) | (21,000,000) | |||||||||||||||||
Share-based compensation charge | $ 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||||||
Ending balance, shares at Dec. 31, 2019 | 100,234,973 | 10,000,000 | 10,000,000 | |||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 1,793,000,000 | $ 1,650,000,000 | 3,496,000,000 | $ 3,496,000,000 | (13,000,000) | $ (13,000,000) | (1,851,000,000) | $ (1,994,000,000) | 1,642,000,000 | $ 1,499,000,000 | 151,000,000 | $ 151,000,000 | ||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (4,429,000,000) | (4,426,000,000) | (4,426,000,000) | (3,000,000) | ||||||||||||||||
Net loss from discontinuing operations | (233,000,000) | (233,000,000) | (233,000,000) | |||||||||||||||||
Other comprehensive loss from continuing operations | (2,000,000) | (2,000,000) | (2,000,000) | |||||||||||||||||
Other comprehensive loss from discontinued operations | (11,000,000) | (11,000,000) | (11,000,000) | |||||||||||||||||
Fair Value adjustment AOD Redeemable NCI | 25,000,000 | 25,000,000 | 25,000,000 | |||||||||||||||||
Purchase option on non-controlling interest | (11,000,000) | 0 | (11,000,000) | |||||||||||||||||
Deconsolidation of VIE | (137,000,000) | 0 | $ (137,000,000) | |||||||||||||||||
Share-based compensation charge | 9,000,000 | 9,000,000 | 9,000,000 | |||||||||||||||||
Cash settlement for cancellation of share scheme | $ (1,000,000) | (1,000,000) | (1,000,000) | |||||||||||||||||
Ending balance, shares at Dec. 31, 2020 | 100,384,435 | 10,000,000 | ||||||||||||||||||
Ending balance at Dec. 31, 2020 | $ (3,140,000,000) | 3,504,000,000 | (26,000,000) | (6,628,000,000) | (3,140,000,000) | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (301,000,000) | (301,000,000) | ||||||||||||||||||
Net loss from discontinuing operations | (10,000,000) | (10,000,000) | ||||||||||||||||||
Ending balance, shares at Mar. 31, 2021 | 10,000,000 | |||||||||||||||||||
Ending balance at Mar. 31, 2021 | $ (3,451,000,000) | 3,504,000,000 | (26,000,000) | (6,939,000,000) | ||||||||||||||||
Beginning balance, shares at Dec. 31, 2020 | 100,384,435 | 10,000,000 | ||||||||||||||||||
Beginning balance at Dec. 31, 2020 | $ (3,140,000,000) | 3,504,000,000 | (26,000,000) | (6,628,000,000) | (3,140,000,000) | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net loss from discontinuing operations | (76,000,000) | |||||||||||||||||||
Ending balance, shares at Sep. 30, 2021 | 10,000,000 | |||||||||||||||||||
Ending balance at Sep. 30, 2021 | $ (3,825,000,000) | 3,504,000,000 | (20,000,000) | (7,319,000,000) | ||||||||||||||||
Beginning balance, shares at Dec. 31, 2020 | 100,384,435 | 10,000,000 | ||||||||||||||||||
Beginning balance at Dec. 31, 2020 | $ (3,140,000,000) | 3,504,000,000 | (26,000,000) | (6,628,000,000) | (3,140,000,000) | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (572,000,000) | (572,000,000) | (572,000,000) | |||||||||||||||||
Net loss from discontinuing operations | (15,000,000) | (15,000,000) | (15,000,000) | |||||||||||||||||
Other comprehensive loss from discontinued operations | $ 11,000,000 | 11,000,000 | 11,000,000 | |||||||||||||||||
Ending balance, shares at Dec. 31, 2021 | 100,384,435 | 10,000,000 | 10,000,000 | |||||||||||||||||
Ending balance at Dec. 31, 2021 | $ (3,716,000,000) | 3,504,000,000 | $ 3,504,000,000 | (15,000,000) | (7,215,000,000) | (3,716,000,000) | ||||||||||||||
Beginning balance, shares at Mar. 31, 2021 | 10,000,000 | |||||||||||||||||||
Beginning balance at Mar. 31, 2021 | (3,451,000,000) | 3,504,000,000 | (26,000,000) | (6,939,000,000) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (259,000,000) | (259,000,000) | ||||||||||||||||||
Net loss from discontinuing operations | (35,000,000) | (35,000,000) | ||||||||||||||||||
Other comprehensive loss from discontinued operations | 5,000,000 | 5,000,000 | 0 | |||||||||||||||||
Ending balance, shares at Jun. 30, 2021 | 10,000,000 | |||||||||||||||||||
Ending balance at Jun. 30, 2021 | (3,740,000,000) | 3,504,000,000 | (21,000,000) | (7,233,000,000) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (55,000,000) | (55,000,000) | ||||||||||||||||||
Net loss from discontinuing operations | (31,000,000) | (31,000,000) | ||||||||||||||||||
Other comprehensive loss from discontinued operations | 1,000,000 | 1,000,000 | ||||||||||||||||||
Ending balance, shares at Sep. 30, 2021 | 10,000,000 | |||||||||||||||||||
Ending balance at Sep. 30, 2021 | $ (3,825,000,000) | 3,504,000,000 | (20,000,000) | (7,319,000,000) | ||||||||||||||||
Beginning balance, shares at Dec. 31, 2021 | 100,384,435 | 10,000,000 | 10,000,000 | |||||||||||||||||
Beginning balance at Dec. 31, 2021 | $ (3,716,000,000) | 3,504,000,000 | 3,504,000,000 | (15,000,000) | (7,215,000,000) | $ (3,716,000,000) | ||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | 3,739,000,000 | 3,739,000,000 | ||||||||||||||||||
Net loss from discontinuing operations | (33,000,000) | (33,000,000) | ||||||||||||||||||
Other comprehensive loss from continuing operations | 1,000,000 | 1,000,000 | ||||||||||||||||||
Other comprehensive loss from discontinued operations | (3,000,000) | (3,000,000) | ||||||||||||||||||
Recycling of PES AOCI on deconsolidation | 16,000,000 | 16,000,000 | ||||||||||||||||||
Issuance of Successor common stock | 1,495,000,000 | 1,499,000,000 | (4,000,000) | |||||||||||||||||
Cancellation of Predecessor equity | $ 10,038,444 | $ (10,000,000) | (3,504,000,000) | 1,000,000 | 3,513,000,000 | |||||||||||||||
Ending balance, shares at Feb. 22, 2022 | 49,999,998 | |||||||||||||||||||
Ending balance at Feb. 22, 2022 | $ 1,499,000,000 | $ (3,809,000,000) | 1,499,000,000 | (1,000,000) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Issuance of Successor common stock | (4,000,000) | |||||||||||||||||||
Cancellation of Predecessor equity | 3,513,000,000 | |||||||||||||||||||
Ending balance, shares at Feb. 23, 2022 | 0 | 0 | ||||||||||||||||||
Ending balance at Feb. 23, 2022 | $ 1,499,000,000 | 1,499,000,000 | 0 | 0 | 0 | |||||||||||||||
Beginning balance, shares at Feb. 22, 2022 | 49,999,998 | |||||||||||||||||||
Beginning balance at Feb. 22, 2022 | $ 1,499,000,000 | $ (3,809,000,000) | 1,499,000,000 | (1,000,000) | ||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net loss from discontinuing operations | $ 2,000,000 | |||||||||||||||||||
Ending balance, shares at Sep. 30, 2022 | 49,999,998 | 0 | 0 | |||||||||||||||||
Ending balance at Sep. 30, 2022 | $ 1,454,000,000 | 1,499,000,000 | 0 | 3,000,000 | (48,000,000) | |||||||||||||||
Beginning balance, shares at Feb. 23, 2022 | 0 | 0 | ||||||||||||||||||
Beginning balance at Feb. 23, 2022 | 1,499,000,000 | 1,499,000,000 | 0 | 0 | 0 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | $ 4,000,000 | 4,000,000 | ||||||||||||||||||
Ending balance, shares at Mar. 31, 2022 | 49,999,998 | 0 | 0 | |||||||||||||||||
Ending balance at Mar. 31, 2022 | $ 1,503,000,000 | 1,499,000,000 | 0 | 0 | 4,000,000 | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (36,000,000) | (36,000,000) | ||||||||||||||||||
Other comprehensive income | $ 3,000,000 | 3,000,000 | ||||||||||||||||||
Ending balance, shares at Jun. 30, 2022 | 49,999,998 | 0 | 0 | |||||||||||||||||
Ending balance at Jun. 30, 2022 | $ 1,470,000,000 | 1,499,000,000 | 0 | 3,000,000 | (32,000,000) | |||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||||||||||||||
Net profit from continuing operations | (18,000,000) | (18,000,000) | ||||||||||||||||||
Net loss from discontinuing operations | $ 2,000,000 | 2,000,000 | ||||||||||||||||||
Ending balance, shares at Sep. 30, 2022 | 49,999,998 | 0 | 0 | |||||||||||||||||
Ending balance at Sep. 30, 2022 | $ 1,454,000,000 | $ 1,499,000,000 | $ 0 | $ 3,000,000 | $ (48,000,000) |
General information
General information | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
General information | Note 1 – General information Seadrill Limited is incorporated in Bermuda. We provide offshore drilling services to the oil and gas industry. As at September 30, 2022 we owned 21 drilling rigs, leased one rig from SFL Corporation (“SFL”), and managed a further seven rigs that are owned by third parties: five rigs owned by SeaMex and two rigs owned by Sonangol. As described in note 28 – Subsequent Events, we sold seven rigs in October 2022, reducing the number of owned rigs to 14. Our fleet consists of drillships, jackup rigs and semi-submersible rigs for operations in shallow and deepwater areas, as well as benign and harsh environments. As used herein, the term “Predecessor” refers to the financial position and results of operations of Seadrill Limited prior to, and including, February 22, 2022. This is also applicable to terms “we”, “our”, “Group” or “Company” in the context of events on and prior to February 22, 2022. As used herein, the term “Successor” refers to the financial position and results of operations of Seadrill Limited (previously Seadrill 2021 Limited) after February 22, 2022 (“the Effective Date”). This is also applicable to terms “new Successor”, “we”, “our”, “Group” or “Company” in the context of events after February 23, 2022 (Successor). The use herein of such terms as “Group”, “organization”, “we”, “us”, “our” and “its”, or references to specific entities, is not intended to be a precise description of corporate relationships. Emergence from Chapter 11 proceedings On February 22, 2022 (Predecessor), Seadrill Limited and certain of its subsidiaries which filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code in the Bankruptcy Court (“Debtors”), completed its comprehensive restructuring and emerged from Chapter 11 proceedings. Please refer to Note 3 – “Chapter 11” for further details. In our report at June 30, 2021 (Predecessor), we had raised a substantial doubt as to our ability to continue as a going concern as a result of the fact that we were in Chapter 11 proceedings and there was a degree of inherent risk associated with being in bankruptcy and whether the Plan of Reorganization would be confirmed. Having now emerged from Chapter 11 proceedings and with access to exit financing, we believe that cash on hand, contract and other revenues will generate sufficient cash flows to fund our anticipated debt service and working capital requirements for the next twelve months. Therefore, there is no longer a substantial doubt over our ability to continue as a going concern for at least the next twelve months following the date of issue of the financial statements. Basis of presentation The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The amounts are presented in United States dollar (“US dollar”, “$” or “US$”) rounded to the nearest million, unless otherwise stated. The accompanying Consolidated Financial Statements include the financial statements of Seadrill Limited, its consolidated subsidiaries, and any variable interest entity in which we are the primary beneficiary. The accompanying unaudited interim financial statements, in the opinion of management, include all material adjustments that are considered necessary for a fair statement of the Company’s financial statements in accordance with generally accepted accounting principles in the United States of America. The accompanying unaudited interim financial statements do not include all of the disclosures required in complete annual financial statements. These financial statements should be read in conjunction with our annual financial statements filed with the SEC on Form 20-F No. 001-39327). The financial information in this report has been prepared on the basis that we will continue as a going concern, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business as they come due. Basis of consolidation We consolidate entities in which we control directly or indirectly more than 50% of the voting rights. We also consolidate entities in which we hold a variable interest where we are the primary beneficiary of the entity. Subsidiaries, even if fully owned, are excluded from the Consolidated Financial Statements if we are not the primary beneficiary under the variable interest model. All intercompany balances and transactions have been eliminated. Fresh Start accounting Upon emergence from bankruptcy on February 22, 2022 (the “Effective Date”), in accordance with ASC 852, Reorganizations Significant accounting policies The accounting policies adopted in the preparation of the unaudited interim financial statements are consistent with those followed in the preparation of our annual audited Consolidated Financial Statements for the year ended December 31, 2021. Within the comparative periods presented in these financial statements, Seadrill had not incurred significant rig reactivation costs, and therefore we had not disclosed our accounting policy for rig reactivations in the Consolidated Financial Statements for the year ended December 31, 2021. Though not a change in accounting policy, due to the significant increase in rig reactivation activity starting in the first half of 2022, management has therefore disclosed below our current accounting policy for these costs. Rig reactivation project costs Most reactivation costs are capitalized. The incremental cost of equipment depreservation activities and one-time Rig upgrade costs that increase the marketability of the rig beyond the current contract are depreciated over the remaining lives of the rigs. Costs incurred to install equipment or modify to current rig specifications that will not increase the marketability of the rig beyond the current contract, and rig mobilization costs, are deferred and amortized over the initial contract period. The cost of reactivation project related long-term maintenance (LTM) activities such as major classification surveys and other major certifications are capitalized and depreciated over a period of between 2 and 5 years (depending on the period covered by the re-certification). Immaterial revisions to prior period We have revised the Company’s previously issued Unaudited Consolidated Statement of Changes in Equity for the period from January 1, 2022 through February 22, 2022 (Predecessor) due to the improper presentation of fresh start accounting. We evaluated the effects of this error on our previously-issued condensed consolidated financial statements in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections Assessing Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (collectively, “ASC Topic 250”) A summary of the effects of the revisions on the unaudited consolidated statements of changes in equity for the period from January 1, 2022 through February 22, 2022 (Predecessor) are as follows: • improperly including a subtotal labelled Balance as at February 22, 2022 (Predecessor) • presenting separately the net gain from reorganization adjustments of $5,066 million, and net gain from Fresh Start adjustments of $242 million. These separately stated amounts have now been presented within net profit from continuing operations ($3,813 million) and issuance of successor common stock ($1,495 million). • omitting a total of equity as at February 22, 2022 (Predecessor). The total of equity has been added to reflect additional paid-in capital and total equity of $1,499 million each as at February 22, 2022 (Predecessor). | Note 1 – General information Seadrill Limited is incorporated in Bermuda. We provide offshore drilling services to the oil and gas industry. As at December 31, 2021 we owned 24 drilling rigs, leased three and managed and operated nine rigs on behalf of Aquadrill (formerly Seadrill Partners), SeaMex, and Sonadrill. Our fleet consists of drillships, jackup rigs (seven of which have been included in discontinued operations held for sale) and semi-submersible rigs for operations in shallow and deepwater areas, as well as benign and harsh environments. As used herein, the term “predecessor” refers to the financial position and results of operations of Seadrill Limited prior to, and including, February 22, 2022. This is also applicable to terms “we”, “our”, “Group” or “Company” in context of events prior to February 22, 2022. As used herein, the term “Successor” refers to the financial position and results of operations of Seadrill Limited (previously “Seadrill 2021 Limited”) after February 22, 2022. This is also applicable to terms “new successor”, “we”, “our”, “Group” or “Company” in context of events after February 22, 2022. The use herein of such terms as “Group”, “organization”, “we”, “us”, “our” and “its”, or references to specific entities, is not intended to be a precise description of corporate relationships. Emergence from Chapter 11 Bankruptcy On February 22, 2022, Seadrill completed its comprehensive restructuring and emerged from Chapter 11 bankruptcy protection. Please refer to Note 4 “Chapter 11 Proceedings” of the accompanying financial statements for further details. In our report at June 30, 2021, we had raised a substantial doubt as to our ability to continue as a going concern as a result of the fact that we were in Chapter 11 and there was a degree of inherent risk associated with being in bankruptcy and whether the Plan of Reorganization would be confirmed. Having now emerged from Chapter 11 and with access to exit financing, we believe that cash on hand, contract and other revenues will generate sufficient cash flow to fund our anticipated debt service and working capital requirements for the next twelve months. Therefore, there is no longer a substantial doubt over our ability to continue as a going concern for at least the next twelve months following the date of issue of the financial statements. Financial information in this report has been prepared on a going concern basis of accounting, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business as they come due. Financial information in this report does not reflect the adjustments to the carrying values of assets, liabilities and the reported expenses and balance sheet classifications that would be necessary if we were unable to realize our assets and settle our liabilities as a going concern in the normal course of operations. Such adjustments could be material. Basis of presentation The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar (“U.S. dollar” or “US$”) rounded to the nearest million, unless otherwise stated. The accompanying Consolidated Financial Statements include the financial statements of Seadrill Limited, its consolidated subsidiaries and any variable interest entity (“VIE”) in which we are the primary beneficiary. The January 2022 disposal of 65% of Seadrill’s equity interest in Paratus Energy Services (“PES”, formerly Seadrill New Finance Limited “NSNCo”) and October 2022 disposal of the KSA business represented strategic shifts in Seadrill’s operations which will have a major effect on its operations and financial results of the current year and going forward and therefore we have reclassified both the PES and the KSA Business as discontinued operations and their results have been reported separately from Seadrill’s continuing operations for both the current and comparative periods. In addition, the assets and liabilities of both PES and the KSA Business were reclassified as held for sale in all periods presented. Reclassifications to comparative period results, assets, and liabilities have been labelled “As adjusted”. Basis of consolidation We consolidate investments in companies in which we control directly or indirectly more than 50% of the voting rights. We also consolidate entities in which we hold a variable interest where we are the primary beneficiary of the entity. A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) equity interest holders as a group lack either (i) the power to direct the activities of the entity that most significantly impact on its economic performance, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. We are the primary beneficiary of a VIE when we have both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. Subsidiaries, even if fully owned, are excluded from the Consolidated Financial Statements if we are not the primary beneficiary under the variable interest model. All intercompany balances and transactions have been eliminated. Fresh Start Reporting Upon emergence from bankruptcy on the Effective Date, in accordance with ASC 852, Seadrill Limited qualified for fresh start reporting and become a new entity for financial reporting purposes. We allocated the reorganization value resulting from fresh start reporting in accordance with the purchase price allocation performed as of the Effective Date. |
Accounting policies
Accounting policies | 12 Months Ended |
Dec. 31, 2021 | |
Accounting Policies [Abstract] | |
Accounting policies | Note 2 – Accounting policies The accounting policies set out below have been applied consistently to all periods in these Consolidated Financial Statements, unless otherwise noted. Revenue from contracts with customers The activities that primarily drive the revenue earned from our drilling contracts include (i) providing a drilling rig and the crew and supplies necessary to operate the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii) performing rig preparation activities and/or modifications required for the contract with a customer. Consideration received for performing these activities may consist of dayrate drilling revenue, mobilization and demobilization revenue, contract preparation revenue and reimbursement revenue. We account for these integrated services as a single performance obligation that is (i) satisfied over time and (ii) comprised of a series of distinct time increments of service. We recognize revenues for activities that correspond to a distinct time increment of service within the contract term in the period when the services are performed. We recognize consideration for activities that are (i) not distinct within the context of our contracts and (ii) do not correspond to a distinct time increment of service, ratably over the estimated contract term. We determine the total transaction price for each individual contract by estimating both fixed and variable consideration expected to be earned over the term of the contract. The amount estimated for variable consideration may be constrained and is only included in the transaction price to the extent that it is probable that a significant reversal of previously recognized revenue will not occur throughout the term of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue as well as the likelihood and magnitude of a potential reversal of revenue. We re-assess Dayrate drilling revenue Mobilization revenue lump-sum Demobilization revenue lump-sum Revenues related to reimbursable expenses Local taxes tax-assessed Deferred contract expenses Management contract revenues Management fees – non-related Other revenues Other revenues consist of related party revenues, leasing income from rigs leased to Gulfdrill, external management fees, and early termination fees. Refer to Note 8 – “Other revenues”. Revenue is recognized as the performance obligation is satisfied, which on our leased rigs is on a straight-line basis. Early termination fees Vessel and Rig Operating Expenses Vessel and rig operating expenses are costs associated with operating a drilling unit that is either in operation or stacked and include the remuneration of offshore crews and related costs, rig supplies, insurance costs, expenses for repairs and maintenance and costs for onshore support personnel. We expense such costs as incurred. Mobilization and demobilization expenses We incur costs to prepare a drilling unit for a new customer contract and to move the rig to a new contract location. We capitalize the mobilization and preparation costs for a rig’s first contract as a part of the rig value and recognize them as depreciation expense over the expected useful life of the rig (i.e. 30 years). For subsequent contracts, we defer these costs over the expected contract term (see deferred contract costs above), unless we do not expect the costs to be recoverable, in which case we expense them as incurred. We incur costs to transfer a drilling unit to a safe harbor or different geographic area at the end of a contract. We expense such demobilization costs as incurred. We also expense any costs incurred to relocate drilling units that are not under contract. Repairs, maintenance and periodic surveys Costs related to periodic overhauls of drilling units are capitalized and amortized over the anticipated period between overhauls, which is generally five years . Related costs are primarily yard costs and the cost of employees directly involved in the work. We include amortization costs for periodic overhauls in depreciation expense. Costs for other repair and maintenance activities are included in vessel and rig operating expenses and are expensed as incurred. Income taxes Seadrill is a Bermuda company that has subsidiaries and affiliates in various jurisdictions. Currently, Seadrill and our Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempted companies. Seadrill and our subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that we will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently, income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. Refer to Note 12 – “Taxation”. The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize liabilities for uncertain tax positions based on a two-step Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. We recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period of sale or transfer occurs. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as at the valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. Foreign currencies The majority of our revenues and expenses are denominated in U.S. dollars and therefore the majority of our subsidiaries use U.S. dollars as their functional currency. Our reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, we use the current method of translation whereby items of income and expense are translated using the average exchange rate for the period and the assets and liabilities are translated using the year-end Transactions in foreign currencies are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency denominated monetary assets and liabilities are remeasured using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations. Loss per share Basic loss per share (“LPS”) is calculated based on the loss for the period available to common shareholders divided by the weighted average number of shares outstanding. Diluted loss per share includes the effect of the assumed conversion of potentially dilutive instruments such as our restricted stock units. The determination of dilutive loss per share may require us to make adjustments to net loss and the weighted average shares outstanding. Refer to Note 13 – “Loss per share”. Fair value measurements We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Hierarchy Levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets. Hierarchy Level 2 inputs are significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets. Hierarchy Level 3 inputs are significant unobservable inputs, including those that require considerable judgment for which there is little or no market data. When a valuation requires multiple input levels, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. Current and non-current classification Generally, assets and liabilities (excluding deferred taxes and liabilities subject to compromise) are classified as current assets and liabilities respectively if their maturity is within one year of the balance sheet date. In addition, we classify any derivative financial instruments as current. Current liabilities will include where amounts from lenders are payable on demand at their discretion due to event of default clauses being met. Generally, assets and liabilities are classified as non-current assets and liabilities respectively if their maturity is beyond one year of the balance sheet date. In addition, we classify loan fees based on the classification of the associated debt principal. Cash and cash equivalents Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with maturities of three months or less. Amounts are presented net of allowances for credit losses. Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts that are expected to be used after one year from balance sheet date are classified as non-current assets. Amounts are presented net of allowances for credit losses, which are assessed based on consideration of whether the balances have short-term maturities and whether the counterparty has an investment grade credit rating, limiting any credit exposure. Refer to Note 14 – “Restricted cash”. Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount net of expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 15 – “Accounts receivable”. Allowance for credit losses In 2020 we adopted the current expected credit loss (“CECL”) model which replaced the “incurred loss” model required under the guidance for FY 2019. The CECL model requires recognition of expected credit losses over the life of a financial asset upon its initial recognition. Periods prior to adoption are presented under the previous guidance with an allowance against a receivable balance recognized only if it was probable that we would not recover the full amount due to us. We determined doubtful accounts on a case-by-case The CECL model contemplates a broader range of information to estimate expected credit losses over the contractual lifetime of an asset. It also requires to consider the risk of loss even if it is remote. We estimate expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts of events which may affect the collectability. We estimate the CECL allowance using a “probability-of-default” 2016-13). re-assessing probability-of-default The CECL model applies to external trade receivables, related party receivables and other financial assets measured at amortized cost as well as to off-balance sheet credit exposures not accounted for as insurance. We have elected to calculate expected credit losses on the combined balance of both the amortized cost and accrued interest from the unpaid principal balance. The allowance for credit losses reflects the net amount expected to be collected on the financial asset. Any change in credit allowance is reflected in the Consolidated Statement of Operations based on the nature of the financial asset receivable. Amounts are written off against the allowance in the period when efforts to collect a balance have been exhausted. Any write-offs in excess of credit allowance by category of financial asset reduces the asset’s carrying amount and is reflected in the Consolidated Statement of Operations. Expected recoveries will not exceed the amounts previously written-off or current credit loss allowance by financial asset category and are recognized in the Consolidated Statement of Operations in the period of receipt. Contract assets and liabilities Accounts receivable are recognized when the right to consideration becomes unconditional based upon contractual billing schedules. If we recognize revenue ahead of this point, we also recognize a contract asset. Contract assets balances relate primarily to demobilization revenues recognized during the period associated with probable future demobilization activities. Contract liabilities include payments received for mobilization, rig preparation and upgrade activities which are allocated to the overall performance obligation and recognized ratably over the initial term of the contract. Related parties Parties are related if one party has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Parties are also related if they are subject to common control or common significant influence. 10% shareholders that do not have significant influence are also considered to be related parties. Amounts receivable from related parties are presented net of allowances for expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 27 –” Related party transactions” for details of balances and material transactions with related parties. Business Combinations We account for business combinations in accordance with ASC 805 – Business Combinations. As described in “Note 32 – Business Combinations”, on November 2, 2021, NSNCo (wholly owned subsidiary of Seadrill Limited) consolidated SeaMex in a business combination. Management determined that the Transaction qualified as a business combination under ASC 805 because (i) SeaMex as the acquiree met the definition of a business and (ii) NSNCo as the acquirer obtained control of SeaMex. As a result, the acquisition method was applied, and the identifiable assets acquired and liabilities assumed were recognized at fair value on the acquisition date. i. Accounts receivable, net SeaMex’s CECL model estimates the allowance using a similar “probability-of-default” ii. Drilling Units The fair value of drilling units are estimated through the DCF approach. The DCF approach derives values of rigs from the cash flows associated with the remaining useful life of the rig. Forecasted revenues used in the DCF model are derived from a “general pool” whereby the rigs receive a global dayrate assumption and a contract probability factor. All future cash flows are discounted using a WACC. Key assumptions used in the DCF include contracted dayrate and utilization forecasts. iii. Contracts Management values the favorable intangible drilling contracts by comparing the signed contract rates against the expected rates achievable for the rig type in the market, both adjusted for economic utilization and taxes. The gain or loss on the signed contract compared to the market rates are then discounted using an adjusted WACC. iv. Convenience date Where a business combination does not occur on a natural period end reporting date, the Company assesses the use of a convenience date based on materiality. Equity investments Investments in common stock are accounted for using the equity method if we have the ability to significantly influence, but not control, the investee. Significant influence is presumed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%. We also consider other factors such as representation on the investee’s board of directors and the nature of commercial arrangements, We classify our equity investees as “Investments in Associated Companies”. We recognize our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies”. Refer to Note 17 – “Investment in associated companies”. We assess our equity method investments for impairment at each reporting period when events or circumstances suggest that the carrying amount of the investments may be impaired. We record an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date. We consider (1) the length of time and extent to which fair value is below carrying value, (2) the financial condition and near-term prospects of the investee, and (3) our intent and ability to hold the investment until any anticipated recovery. If an impairment loss is recognized, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. All other equity investments including investments that do not give us the ability to exercise significant influence and investments in equity instruments other than common stock, are accounted for at fair value, if readily determinable. We classify our other equity investments as “marketable securities” with gains or losses on remeasurement to fair value recognized as “loss on marketable securities”. If we cannot readily ascertain the fair value, we record the investment at cost less impairment. We perform a qualitative impairment analysis for our equity investments recorded at cost at each reporting period to evaluate whether an event or change in circumstances has occurred that indicates that the investment is impaired. We record an impairment loss to the extent that the carrying amount of the investment exceeds its estimated fair value. Drilling units Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of our floaters and, jackup rigs, when new, is 30 years. The direct and incremental costs of significant capital projects, such as rig upgrades and reactivation projects, are capitalized and depreciated over the remaining life of the asset. Drilling units acquired in a business combination are measured at fair value at the date of acquisition. Cost of property and equipment sold or retired, with the related accumulated depreciation and impairment is removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations. We re-assess the remaining useful lives of our drilling units when events occur which may impact our assessment of their remaining useful lives. These include changes in the operating condition or functional capability of our rigs, technological advances, changes in market and economic conditions as well as changes in laws or regulations affecting the drilling industry. Equipment Equipment is recorded at historical cost less accumulated depreciation and impairment and is depreciated over its estimated remaining useful life. The estimated economic useful life of equipment, when new, is between three and five years depending on the type of asset. Refer to Note 19 – “Equipment”. Assets held for sale and discontinued operations Assets are classified as held for sale when all of the following criteria are met: management commits to a plan to sell the asset (disposal group), the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year. The term probable refers to a future sale that is likely to occur, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Assets held for sale are measured at the lower of carrying value or fair value less costs to sell. Management assesses whether an operation should be reported as discontinued operation under the three criteria set out in ASC 205: a) a discontinued operation may include a component of the business or group of components of the business, 2) if the disposal represents a strategic shift that has (or will have) a major effect on an the business’s operations and financial results, and 3) examples of a strategic shift that has (or will have) a major effect on an the business’s operations and financial results could include a disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of the business. When an operation meets these ASC 205 criteria, the results of that operation are reported as “discontinued operations” in the statement of operations and all comparative periods of the consolidated financial statements and associated notes are recast for this classification. Leases Lessee – When we enter into a new contract, or modify an existing contract, we identify whether that contract has a finance or operating lease component. We do not have, nor expect to have any leases classified as finance leases. We determine the lease commencement date by reference to the date the rig (or other leased asset) is available for use and transfer of control has occurred from the lessee. At the lease commencement date, we measure and recognize a lease liability and a right of use (“ROU”) asset in the financial statements. The lease liability is measured at the present value of the lease payments not yet paid, discounted using the estimated incremental borrowing rate at lease commencement. The ROU asset is measured at the initial measurement of the lease liability, plus any lease payments made to the lessor at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred by us. After the commencement date, we adjust the carrying amount of the lease liability by the amount of payments made in the period as well as the unwinding of the discount over the lease term using the effective interest method. After commencement date, we amortize the ROU asset by the amount required to keep total lease expense including interest constant (straight-line over the lease term). Absent an impairment of the ROU asset, the single lease cost is calculated so that the remaining cost of the lease is allocated over the remaining lease term on straight-line basis. Seadrill assesses a ROU asset for impairment and recognizes any impairment loss in accordance with the accounting policy on impairment of long-lived assets. We applied the following significant assumptions and judgments in accounting for our leases. • We apply judgment in determining whether a contract contains a lease or a lease component as defined by Topic 842. • We have elected to combine leases and non-lease components. As a result, we do not allocate our consideration between leases and non-lease components. • The discount rate applied to our operating leases is our incremental borrowing rate. We estimated our incremental borrowing rate based on the rate for our traded debt. • Within the terms and conditions of some of our operating leases we have options to extend or terminate the lease. In instances where we are reasonably certain to exercise available options to extend or terminate, then the option was included in determining the appropriate lease term to apply. Options to renew our lease terms are included in determining the right-of-use asset and lease liability when it is reasonably certain that we will exercise that option. • Where a leasing arrangement is a failed sale and leaseback transaction as no transfer of control has occurred as defined by Topic 606, any monies received will be treated as a financing transaction. Lessor – When we enter into a new contract, or modify an existing contract, we identify whether that contract has a sales-type, direct financing or operating lease. We do not have, nor expect to have any leases classified as sales-type or direct financing. For our operating lease, the underlying asset remains on the balance sheet and we record periodic depreciation expense and lease revenue. Impairment of long-lived assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. We first assess recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows expected to be generated from the asset, including eventual disposal. If the undiscounted future net cash flows are less than the carrying value of the asset, then we compare the carrying value of the asset with the discounted future net cash flows, using a relevant weighted-average cost of capital. The impairment loss to be recognized during the period, is the amount by which the carrying value of the asset exceeds the discounted future net cash flows. Other intangible assets and liabilities Intangible assets and liabilities were recorded at fair value on the date of Seadrill’s previous emergence from Chapter 11 in 2018 less accumulated amortization. The amounts of these assets and liabilities less any estimated residual value are amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. We classify amortization of these intangible assets and liabilities within operating expenses. Our intangible assets include favorable and unfavorable drilling contracts and management services contracts. Refer to Note 16 – “Other assets”. Our intangible liabilities include unfavorable drilling contracts and unfavorable leasehold improvements. Refer to Note 21 – “Other liabilities”. Derivative financial instruments and hedging activities Our derivative financial instruments are measured at fair value and are not designated as a hedging instruments. Changes in fair value are recorded as a gain or loss as a separate line item within “financial items” in the Consolidated Statements of Operations. Refer to Note 28 – “Financial instruments and risk management”. Trade payables Trade payables are liabilities to a supplier for a good or service provided to us. Deferred charges Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, amortized over the term of the related loan. The amortization is included in interest expense. On emergence from Seadrill’s previous Chapter 11 in 2018, our loan costs were reduced to nil. We recognized a discount on our debt to reduce its carrying value to its fair value. The debt discount was due to be unwound over the remaining terms of the debt facilities. Debt We have financed a significant proportion of the cost of acquiring our fleet of drilling units through the issue of debt instruments. At the inception of a term debt arrangement, or whenever we make the initial drawdown on a revolving debt arrangement, we incur a liability for the principal to be repaid. On emergence from the Chapter 11, we issued new debt instruments. Refer to Note 20 – “Debt” for more information on our debt instruments. Pension benefits We have several defined benefit pension plans, defined contribution pension plans and other post-employment benefit obligations which provide retirement, death and early termination benefits. We recognize the service cost, as “Vessel and rig operating expenses” or as “Selling, general and administrative expenses” in our Consolidated Statements of Operations depending on the whether or not the related employee’s role is directly attributable to rig activities. Several defined benefit pension plans cover a number of our Norwegian employees that are all administered by a life insurance company. Our net obligation is calculated by estimating the amount of the future benefit that employees have earned in return for their cumulative service. The aggregated projected future benefit obligation is discounted to present value, from which the aggregated fair value of plan assets is deducted. The discount rate is the market yield at the balance sheet date on government bonds in the relevant currency and based on terms consistent with the post-employment benefit obligations. We record the actuarial gains and losses in the Consolidated Statements of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These actuarial gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income. On retirement, or when an employee leaves the company, the member’s pension liability is transferred to the life insurance company administering the plan, and the pension plan no longer retains an obligation relating to the leaving member. This action is deemed to represent a settlement under U.S. GAAP, as it represents the elimination of significant risks relating to the pension obligation and related assets. Under settlement accounting, the portion of the net unrealized actuarial gains/losses corresponding to the relative value of the obligation reduction is recognized through the Consolidated Statement of Operations. However, settlement accounting is not required if the cost of all settlements in a year is not deemed to be significant in the context of the plan. We deem the settlement not to be significant when the cost of settlements in the year is less than the sum of service cost and interest cost in the year. In this case, the difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company is recognized within “other comprehensive income,” rather than being recognized in the |
Recent Accounting Standards
Recent Accounting Standards | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Changes and Error Corrections [Abstract] | ||
Recent Accounting Standards | Note 2 – Recent accounting pronouncements Recently adopted accounting standards We adopted the following accounting standard update (“ASUs”) since the reporting date of our Form 20-F ASU 2020-06 470-20) Simplifies the guidance in U.S. GAAP on the issuer’s accounting for convertible debt instruments. Under current guidance, applying the separation models in ASC 470-20 2020-06. ASU 2021-05 Requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. Seadrill does not have any sales-type or direct financing leases. ASU 2021-08 Requires contract assets and liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured on the acquisition date in accordance with ASC 606. The Company elected to early adopt and apply this standard as of January 1, 2022 as it is relevant to the emergence from Chapter 11 bankruptcy and application of fresh-start accounting. The Company’s deferred revenues balances were evaluated on the basis of ASC 606 at the measurement date (in accordance with ASU 2021-08). ASU 2022-03 Clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to the contractual sale restriction). In addition, the ASU prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. Seadrill does not apply any discounts related to contractual sale restrictions. ASU 2022-04 The amendments in this ASU address investor and other financial statement user requests for additional information about the use of supplier finance programs by the buyer party to understand the effect of those programs on an entity’s working capital, liquidity, and cash flows. Seadrill does not have any supplier finance programs. Recently issued accounting standards There are currently no recently issued ASUs that are expected to affect our Consolidated Financial Statements and related disclosures in future periods. | Note 3 – Recent Accounting Standards 1) Recently adopted accounting standards We recently adopted the following accounting standard updates (“ASUs”): a) ASU 2019-12 In December 2019, the FASB issued ASU 2019-12. 2019-12 b) ASU 2021-08 We early adopted ASU 2021-08 c) ASU 2016-13 (Also 2018-19, 2019-04 2019-11) In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13 2018-19, 2019-04 2019-11: off-balance Seadrill adopted the requirements of Topic 326 in FY 2020. Reporting periods beginning after January 1, 2020 are presented under Topic 326 while comparative periods continue to be reported in accordance with previously applicable GAAP and have not been restated. The allowance for credit losses is presented as a deduction from the asset’s amortized cost (or liability for off-balance The CECL allowance related primarily to subordinated loan receivables due from related parties (refer to Note 27 – “Related party transactions”). Our external customers are mostly international or national oil companies with high credit standing. We have historically had a very low incidence of credit losses from these customers. Therefore, adoption of the new guidance has not had a material impact on receivables due from our customers. d) Other accounting standard updates We additionally adopted the following accounting standard updates in the year which did not have any material impact on our Consolidated Financial Statements and related disclosures: • ASU 2020-01 • ASU 2020-08 310-20, • ASU 2020-9 – Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 • ASU 2020-10 • ASU 2020-11 2) Recently issued accounting standards Recently issued ASUs by the FASB that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods: a) ASU 2020-04 In March 2020, the FASB issued ASU 2020-04. b) ASU 2021-04 The FASB issued this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. We do not anticipate this will have a material impact on our financial statements. c) ASU 2021-05 The amendments in this Update affect lessors with lease contracts that (1) have variable lease payments that do not depend on a reference index or a rate and (2) would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. We do not anticipate this will have a material impact on our financial statements. d) ASU 2021-10 The FASB issued this Update to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. We do not anticipate this will have a material impact on our financial statements. e) Other accounting standard updates issued by the FASB As of April 29, 2022, the FASB have issued several further updates not included above. We do not currently expect any of these updates to affect our Consolidated Financial Statements and related disclosures either on transition or in future periods. |
Chapter 11
Chapter 11 | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Reorganizations [Abstract] | ||
Chapter 11 | Note 3 – Chapter 11 Seadrill Chapter 11 Process i. Chapter 11 filing The Debtors filed voluntary petitions for reorganization under the Chapter 11 proceedings in the Bankruptcy Court on February 7, 2021 and February 10, 2021 (the “Petition Date”). These filings triggered a stay on enforcement of remedies with respect to our debt obligations. These filings excluded the Seadrill New Finance Limited group (“NSNCo”), as Seadrill and the NSNCo noteholders negotiated a refinancing outside of this bankruptcy. ii. Plan of Reorganization On July 23, 2021, the Company entered into a Plan Support and Lock-Up (as Modified) and the solicitation of the Plan of Reorganization. On October 11, 2021, the Company’s creditor classes voted to accept the plan of reorganization. On October 26, 2021, Seadrill’s Plan of Reorganization (the “Plan”) was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas. iii. Amendment to terms of existing facilities The Plan, among other things, provided that holders of allowed Credit Agreement claims (a) received $683 million (adjusted for the Asia Offshore Drilling Limited (“AOD”) cash out option) of take-back debt (the “New Second Lien Facility”) and (b) were entitled to participate in a $300 million new-money pre-diluted iv. Rights Offering and backstop of new $300 million facility Holders of the subscription rights, which included the backstop parties (the “Backstop Parties” and together, the “Rights Offering Participants”), received the right to lend up to $300 million under the New First Lien Facility. The Rights Offering Participants also received, in consideration for their participation in the Rights Offering, 12.50% of the issued and outstanding pre-diluted As consideration for the backstop commitment of each Backstop Party, the Backstop Parties were (a) issued 4.25% of the issued and outstanding pre-diluted v. Hemen $50 million convertible bond $50 million convertible bonds (the “Convertible Bonds”) were issued to Hemen at par upon emergence. The bonds are convertible into the conversion shares (the “Conversion Shares”) in an amount equal to 5.00% of the fully-diluted New Seadrill Common Shares. The principal amount of the Bonds is convertible (in full not part) into the Conversion Shares at the option of the lender at any time during the conversion period, being the period from the earlier of (i) the date on which the Issuer’s ordinary shares are listed and begin trading on the NYSE and (ii) the date on which the Issuer’s ordinary shares are listed and begin trading on the OSE (the “Conversion Period”). Management considered the accounting treatment for the Conversion using the embedded derivative model, substantial premium model, and the no proceeds allocated model. The Company determined that on the Effective Date that the substantial premium model was applicable, and the recognition of the Convertible Bonds should follow the treatment prescribed under this model. Pursuant to the substantial premium model, the principal was recorded as a liability at par and the excess premium was recorded to additional paid-in-capital. vi. Emergence and New Seadrill equity allocation table Seadrill met the requirements of the Plan and emerged from Chapter 11 proceedings on the Effective Date. Under the Plan and prior to any equity dilution on conversion of the convertible bond, the Company issued % of the Company’s equity to Credit Agreement claimants , to the Rights Offering Participants, 4.25 % to the Backstop Parties through the Equity Commitment Premium, and the remaining % to Class 9 Predecessor shareholders. Recipient of Shares Number of shares % allocation Equity dilution on convertible bond Allocation to predecessor senior secured lenders 41,499,999 83.00 % 78.85 % Allocation to new money lenders – holders of subscription rights 6,250,001 12.50 % 11.87 % Allocation to new money lenders – backstop parties 2,125,000 4.25 % 4.04 % Allocation to predecessor shareholders 124,998 0.25 % 0.24 % Allocation to convertible bondholder — — % 5.00 % Total shares issued on emergence 49,999,998 100.00 % 100.00 % NSNCo Restructuring As part of Seadrill’s wider process, NSNCo, the holding company for investments in SeaMex, Seabras Sapura, and Archer, concluded a separate restructuring process on January 20, 2022. The restructuring was achieved using a pre-packaged 1. Holders of the senior secured notes issued by NSNCo released Seadrill from all guarantees and securities previously provided by Seadrill in respect of the notes; 2. Seadrill sold 65 35 3. Reinstatement of the notes in full on amended terms. Related to the NSNCo restructuring, the noteholders also financed a restructuring of the bank debt of the SeaMex joint venture. This enabled NSNCo to subsequently acquire a 100% equity interest in the SeaMex joint venture by way of a credit bid, which was executed on November 2, 2021. Upon effectiveness of NSNCo’s bankruptcy on January 20, 2022, Seadrill sold 65% of its equity interest in NSNCo, recognizing its 35% retained interest as an equity method investment. The ceding of control occurred 9 days prior on January 11, 2022, the petition date when the Bankruptcy Court first assumed the power to approve all significant actions in the entity. Separately, the determination of held-for-sale 20-F. pre-packaged Renegotiation of leases with SFL Under the sale and leaseback arrangements with certain subsidiaries of SFL Corporation Ltd (“SFL”), the semi-submersible rigs West Taurus West Hercules West Linus On March 9, 2021, the West Taurus West Taurus On August 27, 2021, the Bankruptcy Court of the Southern District of Texas entered an approval order for an amendment to the original SFL Hercules charter. The amended charter was accounted for as an operating lease, resulting in the recognition of a ROU asset and an associated lease liability. The removal of the call options and purchase obligations meant that sale recognition was no longer precluded. On February 19, 2022, Seadrill signed a transition agreement with SFL pursuant to which the West Linus West Linus Other matters i. Liabilities subject to compromise Liabilities subject to compromise distinguish prepetition liabilities which may be affected by the Chapter 11 proceedings from those that will not. The liabilities held as subject to compromise prior to the Company’s emergence from Chapter 11 proceedings are disclosed on a separate line on the consolidated balance sheet. Liabilities subject to compromise prior to emergence from Chapter 11 proceedings, as presented on the consolidated balance sheet at February 22, 2022 immediately prior to emergence, included the following: (In $ millions) February 22, 2022 Senior under-secured external debt 5,662 Accounts payable and other liabilities 35 Accrued interest on external debt 34 Amounts due to SFL Corporation under leases for the West Taurus West Linus 506 Liabilities subject to compromise 6,237 Attributable to: Continuing operations 6,119 Discontinued operations 118 ii. Interest expense The Debtors discontinued recording interest on the under-secured debt facilities from the Petition Date, in line with the guidance of ASC 852-10. iii. Reorganization items, net Incremental costs incurred directly as a result of the bankruptcy filing and any gains or losses on adjustment to the expected allowed claim value under the plan of reorganization are classified as “Reorganization items, net” in the Consolidated Statements of Operations. The following table summarizes the reorganization items recognized in the three months ended September 30, 2022 (Successor), the period from February 23, 2022 through September 30, 2022 (Successor), period from January 1, 2022 through February 22, 2022 (Predecessor), and three and nine months ended September 30, 2021 (Predecessor). Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Gain on settlement of liabilities subject to compromise (a) — — — 3,581 — Fresh Start valuation adjustments (b) — — — 242 — Loss on deconsolidation of Paratus Energy Services (c) — — — (112 ) — Advisory and professional fees (d) (3 ) (36 ) (12 ) (44 ) (88 ) Gain on write-off — 5 — — 13 Expense of predecessor Directors & Officers insurance policy — — — (17 ) — Remeasurement of terminated lease to allowed claim — — — — (186 ) Interest income on surplus cash — 2 — 1 2 Total reorganization items, net (3 ) (29 ) (12 ) 3,651 (259 ) Attributable to: Continuing operations (3 ) (24 ) (12 ) 3,683 (250 ) Discontinued operations — (5 ) — (32 ) (9 ) a. Gain on liabilities subject to compromise On emergence from Chapter 11 proceedings, we settled liabilities subject to compromise in accordance with the Plan. This includes extinguishment of our secured external debt and amounts due under our sale and leaseback agreements with SFL Corporation. Refer to Note 4 – “Fresh Start accounting” for further information. b. Fresh Start valuation adjustments On emergence from Chapter 11 proceedings and under the application of Fresh Start accounting, we allocated the reorganization value to our assets and liabilities based on their estimated fair values. The effects of the application of Fresh Start accounting applied as of February 22, 2022. The new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet at September 30, 2022 (Successor) and the related adjustments were recorded in the Consolidated Statements of Operations in the Predecessor. Refer to Note 4 – “Fresh Start accounting” for further information. c. Loss on deconsolidation of Paratus Energy Services Ltd The loss on deconsolidation reflects the impact of the sale of 65 recorded the 35% retained interest at fair value. The difference between the net assets deconsolidated and retained 35% interest represents a loss on deconsolidation. (In $ millions) January 20, Carrying value of Paratus Energy Services Ltd equity at January 20, 2022 (152 ) Fair value of retained 35% interest in Paratus Energy Services Ltd 56 Reclassification of NSNCo accumulated other comprehensive losses to income on disposal (16 ) Loss on deconsolidation of Paratus Energy Services Ltd (112 ) d. Advisory and professional fees Professional and advisory fees incurred for post-petition Chapter 11 expenses. Professional and advisory expenses have been incurred post-emergence but relate to our Chapter 11 proceedings. Note 4 – Fresh Start accounting Fresh Start accounting Upon emergence from bankruptcy, Seadrill qualified for and adopted Fresh Start accounting in accordance with the provisions set forth in ASC 852, which resulted in a new entity, the Successor, for financial reporting purposes, with no beginning retained earnings or loss as of the Effective Date. The criteria requiring Fresh Start accounting are: (i) the reorganization value of the Seadrill’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims and (ii) the holders of the then-existing voting shares of the Predecessor (or legacy entity prior to the Effective Date) received less than 50% of the voting shares of the Successor outstanding upon emergence from bankruptcy. Fresh Start accounting requires a reporting entity to present its assets, liabilities, and equity at their reorganization value amounts as of the date of emergence from bankruptcy on February 22, 2022. However, the Company will continue to present financial information for any periods before the adoption of Fresh Start accounting for the Predecessor. The Predecessor and Successor Companies lack comparability, as is required in ASC Topic 205, Presentation of Financial Statements Reorganization Value Under Fresh Start accounting, we allocated the reorganization value to Seadrill’s individual assets based on their estimated fair values in conformity with ASC Topic 805, Business Combinations (“ASC 805”) Fair Value Measurement Income Taxes (“ASC 740”) Enterprise value represents the estimated fair value of an entity’s shareholders’ equity plus long-term debt and other interest-bearing liabilities less unrestricted cash and cash equivalents. As set forth in the Disclosure Statement approved by the Bankruptcy Court, the valuation analysis resulted in an enterprise value between $1,795 million and $2,396 million, with a mid-point The following table reconciles the enterprise value to the estimated fair value of the Successor’s common shares as of the Effective Date: (In $ millions, except per share amount) As at (Successor) Enterprise value 2,095 Plus: Cash and cash equivalents at emergence 355 Less: Fair value of long-term debt (951 ) Implied value of Successor equity 1,499 Shares issued upon emergence 49,999,998 Per share value (US$) 29.98 The following table reconciles enterprise value to the reorganization value of the Successor (i.e., value of the total assets of the Successor) as of the Effective Date: (In $ millions) As at (Successor) Enterprise value 2,095 Plus: Cash and cash equivalents at emergence 355 Plus: Non-interest-bearing 350 Plus: Non-interest-bearing non-current 179 Total value of Successor Entity’s assets on Emergence 2,979 The enterprise value and corresponding equity value are derived from expected future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, the estimates, assumptions, valuations or financial projections may not be realized and actual results could vary materially. Valuation Process To apply Fresh Start accounting, we conducted an analysis of the Consolidated Balance Sheet to determine if any of our net assets would require a fair value adjustment as of the Effective Date. The results of our analysis indicated that our drilling units, equipment, drilling and management services contracts, leases, investments in associated companies, certain working capital balances and long-term debt would require a fair value adjustment on the Effective Date. Any deferred tax on the fair value adjustments have been made in accordance with ASC 740. The rest of our net assets were determined to have carrying values that approximated fair value on the Effective Date. Further details regarding the valuation process are described below. i. Drilling units Seadrill’s principal assets comprise its fleet of drilling units. For the working fleet, we determined the fair value of drilling units based primarily on an income approach utilizing a discounted cash flow analysis. For long-term cold stacked units, we have applied a market approach methodology. Assumptions used in our assessment of the discounted free cash flows included, but were not limited to, the contracted and market dayrates, operating costs, overheads, economic utilization, effective tax rates, capital expenditures, working capital requirements, and estimated useful economic lives. The cash flows were discounted at a market participant weighted average cost of capital (“WACC”), which was derived from a blend of market participant after-tax ii. Capital Spares and Equipment The valuation of our capital spares and equipment, including spare parts and capitalized IT software, was determined utilizing the cost approach, in which the estimated replacement cost of the assets was adjusted for physical depreciation and economic obsolescence. iii. Drilling and management services contracts We recognized both favorable and unfavorable contracts based on the income approach utilizing a discounted cash flow analysis, comparing the signed contractual dayrate against the global contract assumptions applied in our drilling unit fair value assessment. The cash flows were discounted at an adjusted market participant WACC. The management services contracts were fair valued based on an excess earnings methodology, adjusted for the incremental cost of services, working capital, tax, and contributory asset charges, with future cash flows discounted at an adjusted market participant WACC. For the management incentive fee payable to Seadrill as part of the management service agreement with Paratus, an option pricing model was used to estimate the fair value of the fee. iv. Leases The fair value of the West Linus West Hercules v. Investments in associated companies The fair value of the equity investments in associated companies was based primarily on the income approach, using projected discounted cash flows of the underlying assets, a risk-adjusted discount rate, and an estimated tax rate. vi. Long-term debt The fair values of the New Term Loan Facility and New Second Lien Facility were determined using relevant market data as of the Effective Date and the terms of each of the respective instruments. Given the interest rates for both facilities were outside of the range of assumed market rates, we selected discount rates based on the data and used a yield to worst case analysis to estimate the fair values of the respective instruments. The fair value of the Convertible Bonds was split in two components: (i) straight debt and (ii) conversion option. The straight debt component was derived through a discounted cash flow analysis. The conversion option component was based on an option pricing model, which forecasts equity volatility and compares the potential conversion redemption against equity movements in industry peers. Consolidated Balance Sheet The adjustments included in the following Consolidated Balance Sheet reflect the consummation of the transactions contemplated by the Plan and carried out by the Company (“Reorganization Adjustments”) and the fair value adjustments as a result of the application of Fresh Start accounting (“Fresh Start Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair value and significant assumptions or inputs. February 22, 2022 February 23, (In $ millions) Predecessor Reorganization Fresh Start Successor ASSETS Current assets Cash and cash equivalents 281 74 (a ) — 355 Restricted cash 135 (50 ) (b ) — 85 Accounts receivable, net 201 — — 201 Amount due from related parties, net 42 — — 42 Other current assets (u) 206 (17 ) (c ) 31 (k ) 220 Total current assets 865 7 31 903 Non-current Investment in associated companies 81 — (17 ) (l ) 64 Drilling units (u) 1,778 (175 ) (d ) 279 (m ) 1,882 Restricted cash 69 — — 69 Deferred tax assets 9 — 1 (n ) 10 Equipment 11 — (2 ) (o ) 9 Other non-current 13 — 29 (p ) 42 Total non-current 1,961 (175 ) 290 2,076 Total assets 2,826 (168 ) 321 2,979 LIABILITIES AND EQUITY Current liabilities Trade accounts payable 59 — — 59 Other current liabilities 222 52 (e ) 17 (q ) 291 Total current liabilities 281 52 17 350 Liabilities subject to compromise (u) 6,237 (6,237 ) (f ) — — Non-current Long-term debt — 951 (g ) — 951 Deferred tax liabilities 7 — (1 ) (r ) 6 Other non-current 110 — 63 (s ) 173 Total non-current 117 951 62 1,130 EQUITY Predecessor common shares of par value 10 (10 ) (h ) — — Predecessor additional paid-in 3,504 (3,504 ) (h ) — — Accumulated other comprehensive loss (1 ) 1 (h ) — — Retained (deficit)/earnings (7,322 ) 7,080 (i ) 242 (t ) — Successor common shares of par value — — — — Successor additional paid-in — 1,499 (j ) — 1,499 Total shareholders’ (deficit)/equity (3,809 ) 5,066 242 1,499 Total liabilities and equity 2,826 (168 ) 321 2,979 Reorganization Adjustments (a) Reflects the net cash receipts that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Receipt of cash from the issuance of the Term Loan Facility 175 Receipt of cash from the issuance of the Convertible Bonds 50 Proceeds from the issuance of the New Second Lien Facility 683 Settlement of the Prepetition Credit Agreement (683 ) Payment of the AOD cash out option (116 ) Payment of success-based advisor fees (28 ) Payment of the arrangement & financing fee for the Term Loan Facility (5 ) Transfer of cash to restricted cash for the professional fee escrow account funding (2 ) Change in cash and cash equivalents 74 (b) Reflects the net restricted cash payments that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Payment of net scrap rig proceeds to holders of Prepetition Credit agreement claims (45 ) Return of cash collateral to SFL for the amended West Linus lease agreement (7 ) Cash transferred from unrestricted cash for the professional fee escrow account funding 2 Change in restricted cash (50 ) (c) Reflects the change in other current assets for the following activities: (In $ millions) February 22, 2022 (Predecessor) Expense of Predecessor Directors & Officers insurance policy (17 ) Expense of the Commitment Premium and other capitalized debt issuance costs (24 ) Recognition of the right-of-use 24 Change in other current assets (17 ) (d) Reflects the change in drilling units for the derecognition of the West Linus (e) Reflects the change in other current liabilities: (In $ millions) February 22, 2022 (Predecessor) Accrued liability due to holders of Prepetition Credit agreement claims for sold rig proceeds 27 Recognition of lease liability and other accrued liability associated with the amended West Linus lease 25 Change in other current liabilities 52 (f) Liabilities subject to compromise were settled as follows in accordance with the Plan: (In $ millions) February 22, 2022 (Predecessor) Senior under-secured external debt 5,662 Accounts payable and other liabilities 35 Accrued interest on external debt 34 Amounts due to SFL Corporation under leases for the West Taurus West Linus 506 Total liabilities subject to compromise 6,237 Attributable to: Continuing operations 6,119 Discontinued operations 118 Payment of the AOD cash out option (116 ) Issuance of the New Second Lien Facility (717 ) Premium associated with the Term Loan Facility (9 ) Debt issuance costs (30 ) Payment of the rig sale proceeds (45 ) Amounts due to Prepetition Credit agreement claims for sold rig proceeds not yet paid (27 ) Issuance of New Seadrill Common Shares to holders of Prepetition Credit Agreement claims (1,244 ) Issuance of New Seadrill Common Shares to the Rights Offering Participants (187 ) Issuance of New Seadrill Common Shares associated with the Equity Commitment Premium (64 ) Derecognition of West Linus (182 ) Reversal of the release of certain general unsecured operating accruals (35 ) Pre-tax 3,581 (g) Reflects the changes in long-term debt for the following activities: (In $ millions) February 22, 2022 (Predecessor) Issuance of the Term Loan Facility 175 Issuance of the New Second Lien Facility 683 Issuance of the Convertible Bonds 50 Record the premium on the Term Loan Facility and New Second Lien Facility 43 Change in long-term debt 951 (h) Reflects the cancellation of the Predecessor’s common shares, additional paid in capital, and accumulated other comprehensive income. (i) Reflects the cumulative net impact on retained loss as follows: (In $ millions) February 22, 2022 (Predecessor) Pre-tax 3,581 Release of general unsecured operating accruals 35 Payment of success fees recognized on the Effective Date (28 ) Expense of Predecessor Directors & Officers insurance policy (17 ) Impact to net income 3,571 Cancellation of Predecessor common shares and additional paid in capital 3,513 Issuance of New Seadrill Common Shares to Predecessor equity holders (4 ) Net impact to retained loss 7,080 (j) Reflects the reorganization adjustments made to the Successor additional paid-in (In $ millions) February 22, 2022 (Predecessor) Fair value of New Seadrill Common Shares issued to holders of Prepetition Credit Agreement claims 1,456 Fair value of New Seadrill Common Shares issued to Predecessor equity holders 4 Fair value of the conversion option on the Convertible Bond 39 Successor additional paid-in 1,499 Fresh Start Adjustments (k) Reflects the fair value adjustment to other current assets for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 68 Write-off (15 ) Off-market right-of-use West Hercules West Linus (22 ) Change in other current assets 31 Attributable to: Continuing operations 20 Discontinued operations 11 (l) Reflects the fair value adjustment to the investments in Paratus of $14 million and in Sonadrill of $3 million. (m) Reflects the fair value adjustment to drilling units and the elimination of accumulated depreciation. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 279 Attributable to: Continuing operations 316 Discontinued operations (37 ) (n) Reflects the fair value adjustment to deferred tax assets of $1 million for favorable management contracts. (o) Reflects the fair value adjustment to equipment and the elimination of accumulated depreciation. (p) Reflects fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 42 Write-off non-current (9 ) Write-off non-current (4 ) Change in other non-current 29 Attributable to: Continuing operations 26 Discontinued operations 3 (q) Reflects the fair value adjustment to other current liabilities for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 18 Write-off (1 ) Change in other current liabilities 17 (r) Reflects the fair value adjustment to deferred tax liabilities of $1 million to write-off (s) Reflects the fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 67 Write-off non-current (4 ) Change in other non-current 63 (t) Reflects the cumulative impact of the Fresh Start accounting adjustments discussed above. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 242 Attributable to: Continuing operations 266 Discontinued operations (24 ) (u) These line items include current and non-current The below table discloses the impact of Reorganization and Fresh Start adjustments related to the discontinued operations’ Balance Sheet items: February 22, 2022 February 23, (In $ millions) Predecessor Reorganization Fresh Start Successor ASSETS Current assets Cash and cash equivalents 19 — — 19 Accounts receivable, net 32 — — 32 Other current assets 12 — 11 (k ) 23 Total current assets 63 — 11 74 Non-current Drilling units 344 — (37 ) (m ) 307 Deferred tax assets 1 — — 1 Other non-current — — 3 (p ) 3 Total non-current 345 — (34 ) 311 Total assets 408 — (23 ) 385 LIABILITIES AND EQUITY Current liabilities Trade accounts payable 6 — — 6 Other current liabilities 58 — — 58 Total current liabilities 64 — — 64 Liabilities subject to compromise 118 (118 ) (f ) — — Non-current Other non-current 2 — — 2 Total non-current 2 — — 2 EQUITY Total equity 224 118 (i ) (23 ) 319 Total liabilities and equity 408 — (23 ) 385 | Note 4 – Chapter 11 Summary On February 22, 2022, Seadrill concluded its comprehensive restructuring process and emerged from Chapter 11 bankruptcy protection. The following major changes to Seadrill’s capital structure were achieved through the restructuring: 1. Additional $350 million of liquidity raised; 2. Obligations under external credit facilities decreased from $5,662 million to $683 million of reinstated debt with maturity in 2027; 3. Future obligations under finance lease arrangements in respect of the West Taurus West Hercules West Linus 4. Elimination of guarantees previously provided to holders of the senior notes previously issued by the NSNCo group. Seadrill emerged from bankruptcy with cash of $509 million, of which $355 million was unrestricted and $154 million was restricted. Seadrill also had $125 million undrawn on its new revolving credit facility which together with the unrestricted cash provided $480 million of liquidity to the Successor company. Following emergence, Seadrill had total debt obligations of $908 million. This comprised $683 million outstanding on reinstated credit facilities; $175 million drawn on its new term loan; and a $50 million convertible bond. This left the Successor company with net debt of $399 million after adding back its post-emergence cash. In order to substantially eliminate future commitments under capital lease arrangements with SFL Corporation Ltd (“ SFL West Taurus West Hercules West Linus West Hercules West Linus As part of Seadrill’s wider process, NSNCo, the holding company for investments in SeaMex, Seabras Sapura, and Archer, concluded a separate restructuring process on January 20, 2022. The restructuring was achieved using a pre-packaged 1. Holders of the senior secured notes issued by NSNCo (“ notes “noteholders 2. Noteholders received a 65% equity interest in NSNCo with Seadrill’s equity interest thereby decreasing to 35% and 3. Reinstatement in full of the notes on amended terms. 4. Related to the NSNCo restructuring, the noteholders also financed a restructuring of the bank debt of the SeaMex joint venture. This enabled NSNCo to subsequently acquire a 100% equity interest in the SeaMex joint venture by way of a credit bid, which was executed on November 2, 2021. In the sections below, we have provided a detailed account of the comprehensive restructuring process. Background and Objectives i. Macro-economic background and impact of COVID-19 Since the mid-2010s, COVID-19 COVID-19, After the global impact of this pandemic, the global offshore rig market has experienced a recovery, at least in utilization, in many regions. The price of Brent crude has risen and stabilized at more than $90 over the past several months before increasing to over $100. Additionally, oil companies and rig owners have mostly managed to navigate through many of the logistical hurdles posed by the COVID-19 pre-pandemic ii. Default on senior debt obligations and other commitments in 2020 Since the end of 2019, we had been working with senior creditors to provide a solution to Seadrill’s high cash outflow for debt service and potential future breaches of liquidity covenants by converting certain interest payments under our credit facilities to payment-in-kind PIK In September 2020, we did not pay interest on our secured credit facilities, which constituted an event of default. This triggered cross-default covenants for the senior secured notes, guarantee facility agreement and leasing agreements in respect of the West Hercules West Linus West Taurus (“ SFL rigs ”) In In December 2020, after triggering an additional event of default through not paying interest on our secured credit facilities, we entered into a further forbearance agreement with certain creditors. On January 15, 2021, we did not make the semi-annual cash interest payment due on our senior secured notes. The forbearance agreements ended on January 29, 2021. The events of default in September 2020 and December 2020 due to non-payment payment-in-kind iii. Three objectives of the comprehensive restructuring Seadrill’s largest debt obligation at the petition date was the $ billion owed to lenders under its senior credit facilities. The primary objective of the restructuring was to enter an agreement with stakeholders to provide new liquidity and to substantially decrease liabilities under these facilities through the issuance of new equity. In addition, as of the petition date, Seadrill was committed to $ billion in aggregate lease obligations under the arrangements for SFL rigs. As these lease arrangements were not considered sustainable under a new capital structure, the rejection or restructuring of these lease obligations was considered an integral part of obtaining the requisite level of creditor approval in support of the Plan. Following Seadrill’s previous restructuring on July 2, 2018, NSNCo had issued % senior secured notes due July 2025, of which $ billion remained outstanding as of the petition date. Seadrill held % of the equity interest in NSNCo and had provided guarantees over its debt obligations. One of the key terms of the restructuring was to negotiate the release by the Noteholders of all existing guarantees and security and claims with respect to Seadrill Limited and its subsidiaries. This was likely to involve the disposal of part of Seadrill’s equity interest in the NSNCo group. Seadrill Chapter 11 Process i. Introduction and Chapter 11 filing Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. In addition to permitting debtor rehabilitation, chapter 11 promotes equality of treatment for creditors and similarly situated equity interest holders, subject to the priority of distributions prescribed by the Bankruptcy Code. The commencement of a chapter 11 case creates an estate that comprises all of the legal and equitable interests of the debtor as of the date the chapter 11 case is commenced. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.” Following the defaults in 2020, and expiry of forbearance agreements described above, the Debtors filed voluntary petitions for reorganization under the Chapter 11 Proceedings in the Bankruptcy Court on February 7, 2021 and February 10, 2021. These filings triggered a stay on enforcement of remedies with respect to our debt obligations. These filings excluded the NSNCo group, with Seadrill and NSNCo noteholders continuing to negotiate a refinancing outside of bankruptcy. ii. Plan of Reorganization Consummating a chapter 11 plan is the principal objective of a chapter 11 case. A bankruptcy court’s confirmation of a plan binds the debtor, any person acquiring property under the plan, any creditor or equity interest holder of the debtor, and any other entity as may be ordered by the bankruptcy court. Subject to certain limited exceptions, the order issued by a bankruptcy court confirming a plan provides for the treatment of the debtor’s liabilities in accordance with the terms of the confirmed plan. On July 23, 2021, the Company entered into a Plan Support and Lock-Up Agreement (the “ Plan Support Agreement ”) with the Company, the Company Parties, certain Holders of Claims under the Company’s Credit Agreements, and Hemen. On July 24, 2021, the Company filed the first versions of the Joint Chapter 11 Plan of Reorganization and Disclosure Statement. On August 31, 2021, the Company filed the First Amended Plan of Reorganization and the First Amended Disclosure Statement (the “ Disclosure Statement ”) and on September 2, 2021, the Court approved the First Amended Disclosure Statement (as Modified) and the solicitation of the Plan of Reorganization. On October 11, 2021, the Company’s creditor classes voted to accept the plan of reorganization. On October 26, 2021, Seadrill’s Plan of Reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas. iii. Amendment to terms of existing facilities As of the Petition Date, the Debtors were liable for approximately $ billion in aggregate funded debt obligations. These obligations included $ billion due under 12 Prepetition Credit Facilities (silos) and $ billion due under the NSNCo Secured Notes. Seadrill Limited was a guarantor under all 12 Prepetition Credit Facilities and the Notes. The facilities were secured by, among other things, (a) a first priority, perfected mortgage in one or more of the Debtors’ drilling rigs, (b) guarantees from the applicable rig-owning entities and intra-group charterers. No financial institution possessed a blanket lien over the Debtors’ entire fleet. Instead, the Prepetition Credit Facilities were secured by non-overlapping subsets of the Debtors’ rigs. The Plan, among other things, provided that holders of Allowed Credit Agreement Claims would (a) receive $ million (adjusted for AOD cash out option) of take-back debt (amortizing beginning in March 2023, with a maturity date of December 2026 and margin of LIBOR + % cash-pay + % PIYC) whereby Seadrill either pays the PIYC interest in cash or the equivalent amount is capitalized as principal outstanding (dependent on certain conditions set out in the facility agreement) and (b) be entitled to participate in a $ million new-money raise under the New First Lien Facility, and (c) receive percent of equity in Reorganized Seadrill, subject to dilution by the Management Incentive Plan and the Convertible Bond Equity, on account of their Allowed Credit Agreement Claims, and percent of equity in Reorganized Seadrill if such holders elected to participate in the Rights Offering (including the Backstop Parties). iv. Rights offering and backstop of new $300m facility In bankruptcy, a rights offering allows a debtor to offer creditors or equity security holders the right to purchase equity in the post-emergence company. In a rights offering, debtors grant subscription rights to a class (or classes) of creditors (or equity holders) in conjunction with the chapter 11 plan of reorganization. Rights offerings function as a source of exit financing, allowing debtors to raise capital to fund emergence costs and plan distributions, or to ensure that the company has sufficient liquidity post-emergence in a de-leveraged capital structure. Nearly all rights offerings are fully backstopped pursuant to agreements between the backstop party (or parties) and the debtors. Under a backstop agreement, backstop parties commit to purchase a certain amount of securities offered under the plan and to purchase additional securities if the issuance is under-subscribed, receiving additional securities in exchange for their agreement to backstop a rights offering. Holders of the Subscription Rights, which include the Backstop Parties, received the right to lend up to $ million under the New First Lien Facility in accordance with and pursuant to the Plan, the Rights Offering Procedures, the Backstop Commitment Letter, and the New Credit Facility Term Sheet. Rights Offering Participants also received, in consideration for their participation in the Rights Offering, % (the “Rights Offering Percentage ”) of the issued and outstanding New Seadrill Common Shares as of the Effective Date (subject to dilution by the Management Incentive Plan and the Convertible Bond Equity). The New First Lien facility is structured as (i) $ million term loan and (ii) $ million revolving credit facility (RCF). The term loan facility bears interest at a margin of % per annum plus a compounded risk-free rate (and any applicable credit adjustment spread). The RCF bears interest at a margin of % per annum plus a compounded risk-free rate (and any applicable credit adjustment spread), and a commitment fee of % per annum is payable in respect to any undrawn portion of the RCF commitment. As consideration for the Backstop Commitment of each Backstop Party, the Backstop Parties were issued the number of New Seadrill Common Shares equal to the sum of: (i) % minus the Rights Offering Percentage (if under-subscribed) plus (ii) % multiplied by the total number of New Seadrill Common Shares issued and outstanding on the Effective Date (subject to dilution by the MIP and the Convertible Bond Equity) (the “ Equity Commitment Premium ”, and together with the foregoing clause, the “ Backstop Participation Equity ”); and (b) the Debtors paid in cash to the Backstop Parties a premium (the “ Commitment Premium ”) equal to % of the $ million in total commitments under the New First Lien Facility. As at the Effective Date, the outstanding external debt is repayable as set out in the table below: (In $ millions) 2022 2023 2024 2025 2026 and Total Total Debt Repayments (a) 0 40 40 40 788 908 (a) The repayment schedule is net of fees and assumes that all interest is paid in cash as opposed to any capitalized pay-if-you-can v. Hemen $50m convertible bond $50 million convertible bonds with margin of LIBOR + 6% cash-pay vi. Emergence and new Seadrill equity allocation table Seadrill met the requirements of the plan of reorganization and emerged from Chapter 11 on February 22, 2022. Companies emerging from chapter 11 qualify for fresh-start reporting if two conditions are met: (1) the reorganization value of the entity’s assets is less than the total of all claims and post-petition liabilities; and (2) the holders of pre-confirmation percent of the voting shares upon emergence. Upon emergence from the Chapter 11 Proceedings, we expect to meet the requirements and will apply fresh start accounting to our financial statements in accordance with the provision set forth in ASC 852. Entities that adopt fresh-start reporting must assign the reorganization value to the entity’s assets and liabilities in accordance with procedures specified in ASC 805. The guidance defines reorganization value as the value attributed to the reconstituted entity, as well as the expected net realizable value of those assets that will be disposed of before reconstitution occurs. Therefore, this value is viewed as the value of the entity before considering liabilities and it approximates the amount a willing buyer would pay for the assets of the entity immediately after the restructuring. Under the Plan and prior to any equity dilution on conversion of the convertible bond, the Company issued 83.00% of the Company’s equity to Class 4 Credit Agreement Claimants, 12.50% to the Rights Offering Participants, 4.25% to the Backstop Parties through the Equity Commitment Premium, and the remaining 0.25% to Class 9 predecessor shareholders. The breakout shown below shows the equity allocation before and after the conversion of the convertible bond. Recipient of Shares Number of % allocation Equity dilution on Allocation to predecessor senior secured lenders 41,499,999 83.00 % 78.85 % Allocation to new money lenders – holders of subscription rights 6,250,001 12.50 % 11.87 % Allocation to new money lenders – backstop parties 2,125,000 4.25 % 4.04 % Allocation to predecessor shareholders 124,998 0.25 % 0.24 % Allocation to convertible bondholder — — % 5.00 % Total shares issued on emergence 49,999,998 100.00 % 100.00 % NSNCo Restructuring i Introduction As part of Seadrill’s wider process, NSNCo, the holding company for investments in SeaMex, Seabras Sapura, and Archer, concluded a separate restructuring process on January 20, 2022. The restructuring was achieved using a pre-packaged 1. Holders of the senior secured notes issued by NSNCo released Seadrill from all guarantees and securities previously provided by Seadrill in respect of the notes; 2. Seadrill sells 65% of its equity interest in NSNCo to the holders of NSNCo senior secured notes. Seadrill’s equity interest thereby decreasing to 35%; and 3. Reinstatement in full of the notes on amended terms. Related to the NSNCo restructuring, the noteholders also financed a restructuring of the bank debt of the SeaMex joint venture. This enabled NSNCo to subsequently acquire a 100% equity interest in the SeaMex joint venture by way of a credit bid, which was executed on November 2, 2021. As Seadrill lost its controlling interest in NSNCo through the sale of 65% of its equity interest on January 20, 2022 (the date the bankruptcy court heard the filing for NSNCo’s prepackaged Chapter 11), we have presented the results of NSNCo, including the consolidated results of SeaMex from November 2021 onwards, as discontinued operations in Seadrill’s financial statements for the period ended December 31, 2021. NSNCo’s assets and liabilities have similarly been classified as held-for-sale ii. Purchase of SeaMex by NSNCo through credit bid Credit bidding is a mechanism, whereby a secured creditor can ‘bid’ the amount of its secured debt, as consideration for the purchase of the assets over which it holds security. In effect, it allows the secured creditor to offset the secured debt as payment for the assets and to take ownership of those assets without having to pay any cash for the purchase. On June 18, 2021, John C. McKenna of Finance & Risk Services Ltd and Simon Appell of AlixPartners UK LLP were appointed as joint provisional liquidators (the “ JPLs On July 2, 2021, a restructuring support agreement (“ RSA” SeaMex out of provisional liquidation to a newly incorporated wholly owned subsidiary of NSNCo under a share purchase agreement. On November 2, 2022, the sale of assets of SeaMex to a subsidiary of NSNCo was completed. Management determined that the Transaction qualified as a business combination under ASC 805 because (i) SeaMex as the acquiree met the definition of a business and (ii) NSNCo as the acquirer obtained control of SeaMex. As a result, the acquisition method was applied, and the identifiable assets acquired and liabilities assumed were recognized at fair value on the acquisition date. The consideration of the business combination was determined to be $0.4 billion, which is based on the value of various forms of debt instruments that were forgiven and were owed to NSNCo. The fair value of the net assets acquired equaled the amount of the purchase consideration and no amount was ascribed to goodwill nor bargain purchase. A gain was recognized in discontinued operations in connection with the step acquisition of SeaMex by NSNCo and relates primarily to the reversal of previously established expected credit loss allowances against loans previously advanced by the NSNCo Group to the SeaMex joint venture. The book value of the equity method investment was nil prior to the acquisition date. We assessed whether SeaMex qualified as held-for-sale iii. NSNCo Sale NSNCo filed a pre-packaged On a Seadrill consolidated group basis, the assets, liabilities, and equity of NSNCo will be derecognized as at the date of sale, when control is lost, on January 20, 2022 (the date the court heard the filing for the pre-packaged Management determined that it meets the criteria for being held-for-sale Renegotiation of leases with SFL SFL is a company that owns and charters shipping vessels in the tanker, bulker, container and offshore segments. Since 2013, Seadrill had entered into sale and leaseback arrangements with certain subsidiaries of SFL (SFL Hercules Ltd., SFL Deepwater Ltd. and SFL Linus Ltd. Under those arrangements, the semi-submersible rigs West Taurus West Hercules West Linus Prepetition SFL Charters The original charters had been accounted for as failed sale leasebacks due to contractual call options and purchase obligations, resulting in the rigs being kept on balance sheet. As they were treated as financing transactions, this resulted in the recognition of financial liabilities to SFL held at fair value on initial recognition (upon deconsolidation of the ship finance VIEs in 2020). The Chapter 11 Proceedings afforded Seadrill the option to reject or amend the leases. Shortly after the Petition Date, the Debtors sought court authority to reject the Prepetition Taurus Charter and abandon certain related personal property. On March 9, 2021, the West Taurus West Taurus On August 27, 2021, the Bankruptcy Court of the Southern District of Texas entered an approval order for an amendment to the original SFL Hercules Charter, whereby Seadrill would pay a lower charter hire and whereby the expiry of the SFL Charter would mirror the completion of work under the Equinor (Canada) Contract in October 2022 (subject to extension, if Equinor exercises certain options rights). The amended charter is accounted for as an operating lease, resulting in the recognition of a ROU asset and an associated lease liability. The removal of the call options and purchase obligations meant that sale recognition was no longer precluded. The rig asset and finance liability to SFL were derecognized in 2021, resulting in a $10 million non-cash On February 18, 2022, Seadrill signed a transition agreement with SFL pursuant to which the West Linus West Linus Detailed timeline We have provided a detailed timeline covering the core events of the restructuring process below. September 2020 – West Hercules West Linus West Taurus December 2020 – January 2021 – February 7, 2021 and February 10, 2021 – Seadrill Limited and the majority of its subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the Southern District of Texas. March 2021 – West Taurus April 2021 – West Taurus June 2021 – July 2, 2021 July 9, 202 – July – Lock-Up July – August – August – Disclosure Statement September 2, 2021 October – October – November 2, 2021 Subsequent Events January 11, 2022 pre-packaged January 20, 2022 pre-packaged C February – West Linus February – Other matters i. Liabilities subject to compromise Liabilities subject to compromise distinguish pre-petition Liabilities subject to compromise, as presented on the Consolidated Balance Sheet as at December 31, 2021, include the following: (In $ millions) December 31, Senior under-secured external debt 5,662 Accounts payable and other liabilities 36 Accrued interest on external debt 34 Amount due to related party 503 Liabilities subject to compromise 6,235 Attributable to: Continuing operations 6,117 Discontinued operations 118 ii. Interest expense The Debtors have discontinued recording interest on the under-secured debt facilities from the Petition Date, in line with the guidance of ASC 852-10, iii. Reorganization items, net Incremental costs incurred directly as a result of the bankruptcy filing and any gains or losses on adjustment to the expected allowed claim value under the plan of reorganization are classified as “Reorganization items, net” in the Consolidated Statement of Operations. The following table summarizes the reorganization items recognized in the year ended December 31, 2021: (In $ millions) Year ended Advisory and professional fees after filing (127 ) Remeasurement of terminated lease to allowed claim (186 ) Interest income on surplus cash 3 Total reorganization items, net (310 ) Attributable to: Continuing operations (296 ) Discontinued operations (14 ) iv. Condensed Combined Debtors Financial Statements When one or more entities in the consolidated group are in bankruptcy and one or more entities in the consolidated group are not in bankruptcy, the reporting entity is required to disclose the condensed combined financial statements of only the entities in bankruptcy (“ debtor in possession DIP The reclassification of the NSNCo group to discontinued operations has resulted in the continuing operations elements of Seadrill’s financial statements being aligned to the combined financial statements of only the entities in bankruptcy, aside from the exceptions noted below. Separately presented DIP results would include: • a $24 million reduction in current restricted cash, to $136 million, and an $8 million reduction in unrestricted cash, to $304 million, due to cash held by entities not in bankruptcy; • the recognition of current and non-current • additional intra-group liabilities subject to compromise of $8 million owed by DIP to entities not in bankruptcy; and • an additional $4 million net cash outflows from changes in the above assets. As such, we have not separately presented Condensed Combined Financial Statements of the entities that filed for bankruptcy. |
Fresh Start accounting
Fresh Start accounting | 9 Months Ended |
Sep. 30, 2022 | |
Reorganizations [Abstract] | |
Fresh Start accounting | Note 3 – Chapter 11 Seadrill Chapter 11 Process i. Chapter 11 filing The Debtors filed voluntary petitions for reorganization under the Chapter 11 proceedings in the Bankruptcy Court on February 7, 2021 and February 10, 2021 (the “Petition Date”). These filings triggered a stay on enforcement of remedies with respect to our debt obligations. These filings excluded the Seadrill New Finance Limited group (“NSNCo”), as Seadrill and the NSNCo noteholders negotiated a refinancing outside of this bankruptcy. ii. Plan of Reorganization On July 23, 2021, the Company entered into a Plan Support and Lock-Up (as Modified) and the solicitation of the Plan of Reorganization. On October 11, 2021, the Company’s creditor classes voted to accept the plan of reorganization. On October 26, 2021, Seadrill’s Plan of Reorganization (the “Plan”) was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas. iii. Amendment to terms of existing facilities The Plan, among other things, provided that holders of allowed Credit Agreement claims (a) received $683 million (adjusted for the Asia Offshore Drilling Limited (“AOD”) cash out option) of take-back debt (the “New Second Lien Facility”) and (b) were entitled to participate in a $300 million new-money pre-diluted iv. Rights Offering and backstop of new $300 million facility Holders of the subscription rights, which included the backstop parties (the “Backstop Parties” and together, the “Rights Offering Participants”), received the right to lend up to $300 million under the New First Lien Facility. The Rights Offering Participants also received, in consideration for their participation in the Rights Offering, 12.50% of the issued and outstanding pre-diluted As consideration for the backstop commitment of each Backstop Party, the Backstop Parties were (a) issued 4.25% of the issued and outstanding pre-diluted v. Hemen $50 million convertible bond $50 million convertible bonds (the “Convertible Bonds”) were issued to Hemen at par upon emergence. The bonds are convertible into the conversion shares (the “Conversion Shares”) in an amount equal to 5.00% of the fully-diluted New Seadrill Common Shares. The principal amount of the Bonds is convertible (in full not part) into the Conversion Shares at the option of the lender at any time during the conversion period, being the period from the earlier of (i) the date on which the Issuer’s ordinary shares are listed and begin trading on the NYSE and (ii) the date on which the Issuer’s ordinary shares are listed and begin trading on the OSE (the “Conversion Period”). Management considered the accounting treatment for the Conversion using the embedded derivative model, substantial premium model, and the no proceeds allocated model. The Company determined that on the Effective Date that the substantial premium model was applicable, and the recognition of the Convertible Bonds should follow the treatment prescribed under this model. Pursuant to the substantial premium model, the principal was recorded as a liability at par and the excess premium was recorded to additional paid-in-capital. vi. Emergence and New Seadrill equity allocation table Seadrill met the requirements of the Plan and emerged from Chapter 11 proceedings on the Effective Date. Under the Plan and prior to any equity dilution on conversion of the convertible bond, the Company issued % of the Company’s equity to Credit Agreement claimants , to the Rights Offering Participants, 4.25 % to the Backstop Parties through the Equity Commitment Premium, and the remaining % to Class 9 Predecessor shareholders. Recipient of Shares Number of shares % allocation Equity dilution on convertible bond Allocation to predecessor senior secured lenders 41,499,999 83.00 % 78.85 % Allocation to new money lenders – holders of subscription rights 6,250,001 12.50 % 11.87 % Allocation to new money lenders – backstop parties 2,125,000 4.25 % 4.04 % Allocation to predecessor shareholders 124,998 0.25 % 0.24 % Allocation to convertible bondholder — — % 5.00 % Total shares issued on emergence 49,999,998 100.00 % 100.00 % NSNCo Restructuring As part of Seadrill’s wider process, NSNCo, the holding company for investments in SeaMex, Seabras Sapura, and Archer, concluded a separate restructuring process on January 20, 2022. The restructuring was achieved using a pre-packaged 1. Holders of the senior secured notes issued by NSNCo released Seadrill from all guarantees and securities previously provided by Seadrill in respect of the notes; 2. Seadrill sold 65 35 3. Reinstatement of the notes in full on amended terms. Related to the NSNCo restructuring, the noteholders also financed a restructuring of the bank debt of the SeaMex joint venture. This enabled NSNCo to subsequently acquire a 100% equity interest in the SeaMex joint venture by way of a credit bid, which was executed on November 2, 2021. Upon effectiveness of NSNCo’s bankruptcy on January 20, 2022, Seadrill sold 65% of its equity interest in NSNCo, recognizing its 35% retained interest as an equity method investment. The ceding of control occurred 9 days prior on January 11, 2022, the petition date when the Bankruptcy Court first assumed the power to approve all significant actions in the entity. Separately, the determination of held-for-sale 20-F. pre-packaged Renegotiation of leases with SFL Under the sale and leaseback arrangements with certain subsidiaries of SFL Corporation Ltd (“SFL”), the semi-submersible rigs West Taurus West Hercules West Linus On March 9, 2021, the West Taurus West Taurus On August 27, 2021, the Bankruptcy Court of the Southern District of Texas entered an approval order for an amendment to the original SFL Hercules charter. The amended charter was accounted for as an operating lease, resulting in the recognition of a ROU asset and an associated lease liability. The removal of the call options and purchase obligations meant that sale recognition was no longer precluded. On February 19, 2022, Seadrill signed a transition agreement with SFL pursuant to which the West Linus West Linus Other matters i. Liabilities subject to compromise Liabilities subject to compromise distinguish prepetition liabilities which may be affected by the Chapter 11 proceedings from those that will not. The liabilities held as subject to compromise prior to the Company’s emergence from Chapter 11 proceedings are disclosed on a separate line on the consolidated balance sheet. Liabilities subject to compromise prior to emergence from Chapter 11 proceedings, as presented on the consolidated balance sheet at February 22, 2022 immediately prior to emergence, included the following: (In $ millions) February 22, 2022 Senior under-secured external debt 5,662 Accounts payable and other liabilities 35 Accrued interest on external debt 34 Amounts due to SFL Corporation under leases for the West Taurus West Linus 506 Liabilities subject to compromise 6,237 Attributable to: Continuing operations 6,119 Discontinued operations 118 ii. Interest expense The Debtors discontinued recording interest on the under-secured debt facilities from the Petition Date, in line with the guidance of ASC 852-10. iii. Reorganization items, net Incremental costs incurred directly as a result of the bankruptcy filing and any gains or losses on adjustment to the expected allowed claim value under the plan of reorganization are classified as “Reorganization items, net” in the Consolidated Statements of Operations. The following table summarizes the reorganization items recognized in the three months ended September 30, 2022 (Successor), the period from February 23, 2022 through September 30, 2022 (Successor), period from January 1, 2022 through February 22, 2022 (Predecessor), and three and nine months ended September 30, 2021 (Predecessor). Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Gain on settlement of liabilities subject to compromise (a) — — — 3,581 — Fresh Start valuation adjustments (b) — — — 242 — Loss on deconsolidation of Paratus Energy Services (c) — — — (112 ) — Advisory and professional fees (d) (3 ) (36 ) (12 ) (44 ) (88 ) Gain on write-off — 5 — — 13 Expense of predecessor Directors & Officers insurance policy — — — (17 ) — Remeasurement of terminated lease to allowed claim — — — — (186 ) Interest income on surplus cash — 2 — 1 2 Total reorganization items, net (3 ) (29 ) (12 ) 3,651 (259 ) Attributable to: Continuing operations (3 ) (24 ) (12 ) 3,683 (250 ) Discontinued operations — (5 ) — (32 ) (9 ) a. Gain on liabilities subject to compromise On emergence from Chapter 11 proceedings, we settled liabilities subject to compromise in accordance with the Plan. This includes extinguishment of our secured external debt and amounts due under our sale and leaseback agreements with SFL Corporation. Refer to Note 4 – “Fresh Start accounting” for further information. b. Fresh Start valuation adjustments On emergence from Chapter 11 proceedings and under the application of Fresh Start accounting, we allocated the reorganization value to our assets and liabilities based on their estimated fair values. The effects of the application of Fresh Start accounting applied as of February 22, 2022. The new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet at September 30, 2022 (Successor) and the related adjustments were recorded in the Consolidated Statements of Operations in the Predecessor. Refer to Note 4 – “Fresh Start accounting” for further information. c. Loss on deconsolidation of Paratus Energy Services Ltd The loss on deconsolidation reflects the impact of the sale of 65 recorded the 35% retained interest at fair value. The difference between the net assets deconsolidated and retained 35% interest represents a loss on deconsolidation. (In $ millions) January 20, Carrying value of Paratus Energy Services Ltd equity at January 20, 2022 (152 ) Fair value of retained 35% interest in Paratus Energy Services Ltd 56 Reclassification of NSNCo accumulated other comprehensive losses to income on disposal (16 ) Loss on deconsolidation of Paratus Energy Services Ltd (112 ) d. Advisory and professional fees Professional and advisory fees incurred for post-petition Chapter 11 expenses. Professional and advisory expenses have been incurred post-emergence but relate to our Chapter 11 proceedings. Note 4 – Fresh Start accounting Fresh Start accounting Upon emergence from bankruptcy, Seadrill qualified for and adopted Fresh Start accounting in accordance with the provisions set forth in ASC 852, which resulted in a new entity, the Successor, for financial reporting purposes, with no beginning retained earnings or loss as of the Effective Date. The criteria requiring Fresh Start accounting are: (i) the reorganization value of the Seadrill’s assets immediately prior to confirmation of the Plan was less than the total of all post-petition liabilities and allowed claims and (ii) the holders of the then-existing voting shares of the Predecessor (or legacy entity prior to the Effective Date) received less than 50% of the voting shares of the Successor outstanding upon emergence from bankruptcy. Fresh Start accounting requires a reporting entity to present its assets, liabilities, and equity at their reorganization value amounts as of the date of emergence from bankruptcy on February 22, 2022. However, the Company will continue to present financial information for any periods before the adoption of Fresh Start accounting for the Predecessor. The Predecessor and Successor Companies lack comparability, as is required in ASC Topic 205, Presentation of Financial Statements Reorganization Value Under Fresh Start accounting, we allocated the reorganization value to Seadrill’s individual assets based on their estimated fair values in conformity with ASC Topic 805, Business Combinations (“ASC 805”) Fair Value Measurement Income Taxes (“ASC 740”) Enterprise value represents the estimated fair value of an entity’s shareholders’ equity plus long-term debt and other interest-bearing liabilities less unrestricted cash and cash equivalents. As set forth in the Disclosure Statement approved by the Bankruptcy Court, the valuation analysis resulted in an enterprise value between $1,795 million and $2,396 million, with a mid-point The following table reconciles the enterprise value to the estimated fair value of the Successor’s common shares as of the Effective Date: (In $ millions, except per share amount) As at (Successor) Enterprise value 2,095 Plus: Cash and cash equivalents at emergence 355 Less: Fair value of long-term debt (951 ) Implied value of Successor equity 1,499 Shares issued upon emergence 49,999,998 Per share value (US$) 29.98 The following table reconciles enterprise value to the reorganization value of the Successor (i.e., value of the total assets of the Successor) as of the Effective Date: (In $ millions) As at (Successor) Enterprise value 2,095 Plus: Cash and cash equivalents at emergence 355 Plus: Non-interest-bearing 350 Plus: Non-interest-bearing non-current 179 Total value of Successor Entity’s assets on Emergence 2,979 The enterprise value and corresponding equity value are derived from expected future financial results set forth in our valuations, as well as the realization of certain other assumptions. All estimates, assumptions, valuations and financial projections, including the fair value adjustments, the enterprise value and equity value projections, are inherently subject to significant uncertainties and the resolution of contingencies beyond our control. Accordingly, the estimates, assumptions, valuations or financial projections may not be realized and actual results could vary materially. Valuation Process To apply Fresh Start accounting, we conducted an analysis of the Consolidated Balance Sheet to determine if any of our net assets would require a fair value adjustment as of the Effective Date. The results of our analysis indicated that our drilling units, equipment, drilling and management services contracts, leases, investments in associated companies, certain working capital balances and long-term debt would require a fair value adjustment on the Effective Date. Any deferred tax on the fair value adjustments have been made in accordance with ASC 740. The rest of our net assets were determined to have carrying values that approximated fair value on the Effective Date. Further details regarding the valuation process are described below. i. Drilling units Seadrill’s principal assets comprise its fleet of drilling units. For the working fleet, we determined the fair value of drilling units based primarily on an income approach utilizing a discounted cash flow analysis. For long-term cold stacked units, we have applied a market approach methodology. Assumptions used in our assessment of the discounted free cash flows included, but were not limited to, the contracted and market dayrates, operating costs, overheads, economic utilization, effective tax rates, capital expenditures, working capital requirements, and estimated useful economic lives. The cash flows were discounted at a market participant weighted average cost of capital (“WACC”), which was derived from a blend of market participant after-tax ii. Capital Spares and Equipment The valuation of our capital spares and equipment, including spare parts and capitalized IT software, was determined utilizing the cost approach, in which the estimated replacement cost of the assets was adjusted for physical depreciation and economic obsolescence. iii. Drilling and management services contracts We recognized both favorable and unfavorable contracts based on the income approach utilizing a discounted cash flow analysis, comparing the signed contractual dayrate against the global contract assumptions applied in our drilling unit fair value assessment. The cash flows were discounted at an adjusted market participant WACC. The management services contracts were fair valued based on an excess earnings methodology, adjusted for the incremental cost of services, working capital, tax, and contributory asset charges, with future cash flows discounted at an adjusted market participant WACC. For the management incentive fee payable to Seadrill as part of the management service agreement with Paratus, an option pricing model was used to estimate the fair value of the fee. iv. Leases The fair value of the West Linus West Hercules v. Investments in associated companies The fair value of the equity investments in associated companies was based primarily on the income approach, using projected discounted cash flows of the underlying assets, a risk-adjusted discount rate, and an estimated tax rate. vi. Long-term debt The fair values of the New Term Loan Facility and New Second Lien Facility were determined using relevant market data as of the Effective Date and the terms of each of the respective instruments. Given the interest rates for both facilities were outside of the range of assumed market rates, we selected discount rates based on the data and used a yield to worst case analysis to estimate the fair values of the respective instruments. The fair value of the Convertible Bonds was split in two components: (i) straight debt and (ii) conversion option. The straight debt component was derived through a discounted cash flow analysis. The conversion option component was based on an option pricing model, which forecasts equity volatility and compares the potential conversion redemption against equity movements in industry peers. Consolidated Balance Sheet The adjustments included in the following Consolidated Balance Sheet reflect the consummation of the transactions contemplated by the Plan and carried out by the Company (“Reorganization Adjustments”) and the fair value adjustments as a result of the application of Fresh Start accounting (“Fresh Start Adjustments”). The explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair value and significant assumptions or inputs. February 22, 2022 February 23, (In $ millions) Predecessor Reorganization Fresh Start Successor ASSETS Current assets Cash and cash equivalents 281 74 (a ) — 355 Restricted cash 135 (50 ) (b ) — 85 Accounts receivable, net 201 — — 201 Amount due from related parties, net 42 — — 42 Other current assets (u) 206 (17 ) (c ) 31 (k ) 220 Total current assets 865 7 31 903 Non-current Investment in associated companies 81 — (17 ) (l ) 64 Drilling units (u) 1,778 (175 ) (d ) 279 (m ) 1,882 Restricted cash 69 — — 69 Deferred tax assets 9 — 1 (n ) 10 Equipment 11 — (2 ) (o ) 9 Other non-current 13 — 29 (p ) 42 Total non-current 1,961 (175 ) 290 2,076 Total assets 2,826 (168 ) 321 2,979 LIABILITIES AND EQUITY Current liabilities Trade accounts payable 59 — — 59 Other current liabilities 222 52 (e ) 17 (q ) 291 Total current liabilities 281 52 17 350 Liabilities subject to compromise (u) 6,237 (6,237 ) (f ) — — Non-current Long-term debt — 951 (g ) — 951 Deferred tax liabilities 7 — (1 ) (r ) 6 Other non-current 110 — 63 (s ) 173 Total non-current 117 951 62 1,130 EQUITY Predecessor common shares of par value 10 (10 ) (h ) — — Predecessor additional paid-in 3,504 (3,504 ) (h ) — — Accumulated other comprehensive loss (1 ) 1 (h ) — — Retained (deficit)/earnings (7,322 ) 7,080 (i ) 242 (t ) — Successor common shares of par value — — — — Successor additional paid-in — 1,499 (j ) — 1,499 Total shareholders’ (deficit)/equity (3,809 ) 5,066 242 1,499 Total liabilities and equity 2,826 (168 ) 321 2,979 Reorganization Adjustments (a) Reflects the net cash receipts that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Receipt of cash from the issuance of the Term Loan Facility 175 Receipt of cash from the issuance of the Convertible Bonds 50 Proceeds from the issuance of the New Second Lien Facility 683 Settlement of the Prepetition Credit Agreement (683 ) Payment of the AOD cash out option (116 ) Payment of success-based advisor fees (28 ) Payment of the arrangement & financing fee for the Term Loan Facility (5 ) Transfer of cash to restricted cash for the professional fee escrow account funding (2 ) Change in cash and cash equivalents 74 (b) Reflects the net restricted cash payments that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Payment of net scrap rig proceeds to holders of Prepetition Credit agreement claims (45 ) Return of cash collateral to SFL for the amended West Linus lease agreement (7 ) Cash transferred from unrestricted cash for the professional fee escrow account funding 2 Change in restricted cash (50 ) (c) Reflects the change in other current assets for the following activities: (In $ millions) February 22, 2022 (Predecessor) Expense of Predecessor Directors & Officers insurance policy (17 ) Expense of the Commitment Premium and other capitalized debt issuance costs (24 ) Recognition of the right-of-use 24 Change in other current assets (17 ) (d) Reflects the change in drilling units for the derecognition of the West Linus (e) Reflects the change in other current liabilities: (In $ millions) February 22, 2022 (Predecessor) Accrued liability due to holders of Prepetition Credit agreement claims for sold rig proceeds 27 Recognition of lease liability and other accrued liability associated with the amended West Linus lease 25 Change in other current liabilities 52 (f) Liabilities subject to compromise were settled as follows in accordance with the Plan: (In $ millions) February 22, 2022 (Predecessor) Senior under-secured external debt 5,662 Accounts payable and other liabilities 35 Accrued interest on external debt 34 Amounts due to SFL Corporation under leases for the West Taurus West Linus 506 Total liabilities subject to compromise 6,237 Attributable to: Continuing operations 6,119 Discontinued operations 118 Payment of the AOD cash out option (116 ) Issuance of the New Second Lien Facility (717 ) Premium associated with the Term Loan Facility (9 ) Debt issuance costs (30 ) Payment of the rig sale proceeds (45 ) Amounts due to Prepetition Credit agreement claims for sold rig proceeds not yet paid (27 ) Issuance of New Seadrill Common Shares to holders of Prepetition Credit Agreement claims (1,244 ) Issuance of New Seadrill Common Shares to the Rights Offering Participants (187 ) Issuance of New Seadrill Common Shares associated with the Equity Commitment Premium (64 ) Derecognition of West Linus (182 ) Reversal of the release of certain general unsecured operating accruals (35 ) Pre-tax 3,581 (g) Reflects the changes in long-term debt for the following activities: (In $ millions) February 22, 2022 (Predecessor) Issuance of the Term Loan Facility 175 Issuance of the New Second Lien Facility 683 Issuance of the Convertible Bonds 50 Record the premium on the Term Loan Facility and New Second Lien Facility 43 Change in long-term debt 951 (h) Reflects the cancellation of the Predecessor’s common shares, additional paid in capital, and accumulated other comprehensive income. (i) Reflects the cumulative net impact on retained loss as follows: (In $ millions) February 22, 2022 (Predecessor) Pre-tax 3,581 Release of general unsecured operating accruals 35 Payment of success fees recognized on the Effective Date (28 ) Expense of Predecessor Directors & Officers insurance policy (17 ) Impact to net income 3,571 Cancellation of Predecessor common shares and additional paid in capital 3,513 Issuance of New Seadrill Common Shares to Predecessor equity holders (4 ) Net impact to retained loss 7,080 (j) Reflects the reorganization adjustments made to the Successor additional paid-in (In $ millions) February 22, 2022 (Predecessor) Fair value of New Seadrill Common Shares issued to holders of Prepetition Credit Agreement claims 1,456 Fair value of New Seadrill Common Shares issued to Predecessor equity holders 4 Fair value of the conversion option on the Convertible Bond 39 Successor additional paid-in 1,499 Fresh Start Adjustments (k) Reflects the fair value adjustment to other current assets for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 68 Write-off (15 ) Off-market right-of-use West Hercules West Linus (22 ) Change in other current assets 31 Attributable to: Continuing operations 20 Discontinued operations 11 (l) Reflects the fair value adjustment to the investments in Paratus of $14 million and in Sonadrill of $3 million. (m) Reflects the fair value adjustment to drilling units and the elimination of accumulated depreciation. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 279 Attributable to: Continuing operations 316 Discontinued operations (37 ) (n) Reflects the fair value adjustment to deferred tax assets of $1 million for favorable management contracts. (o) Reflects the fair value adjustment to equipment and the elimination of accumulated depreciation. (p) Reflects fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 42 Write-off non-current (9 ) Write-off non-current (4 ) Change in other non-current 29 Attributable to: Continuing operations 26 Discontinued operations 3 (q) Reflects the fair value adjustment to other current liabilities for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 18 Write-off (1 ) Change in other current liabilities 17 (r) Reflects the fair value adjustment to deferred tax liabilities of $1 million to write-off (s) Reflects the fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 67 Write-off non-current (4 ) Change in other non-current 63 (t) Reflects the cumulative impact of the Fresh Start accounting adjustments discussed above. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 242 Attributable to: Continuing operations 266 Discontinued operations (24 ) (u) These line items include current and non-current The below table discloses the impact of Reorganization and Fresh Start adjustments related to the discontinued operations’ Balance Sheet items: February 22, 2022 February 23, (In $ millions) Predecessor Reorganization Fresh Start Successor ASSETS Current assets Cash and cash equivalents 19 — — 19 Accounts receivable, net 32 — — 32 Other current assets 12 — 11 (k ) 23 Total current assets 63 — 11 74 Non-current Drilling units 344 — (37 ) (m ) 307 Deferred tax assets 1 — — 1 Other non-current — — 3 (p ) 3 Total non-current 345 — (34 ) 311 Total assets 408 — (23 ) 385 LIABILITIES AND EQUITY Current liabilities Trade accounts payable 6 — — 6 Other current liabilities 58 — — 58 Total current liabilities 64 — — 64 Liabilities subject to compromise 118 (118 ) (f ) — — Non-current Other non-current 2 — — 2 Total non-current 2 — — 2 EQUITY Total equity 224 118 (i ) (23 ) 319 Total liabilities and equity 408 — (23 ) 385 |
Current expected credit losses
Current expected credit losses | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Current expected credit losses | Note 5 – Current expected credit losses The CECL model applies to our external trade receivables and related party receivables. Our external customers are international oil companies, national oil companies, and large independent oil companies. There was no change in allowances for external or related party trade receivables. The expected credit loss allowance on related p arty b 2 (Su | Note 5 – Current expected credit losses The CECL model applies to our external trade receivables and related party receivables. Our external customers are international oil companies, national oil companies and large independent oil companies. The following table summarizes the movement in the allowance for credit losses for the year ended December 31, 2021. (In $ millions) Allowance Allowance Allowance Total January 1, 2020 — 9 — 9 Credit loss expense 3 139 2 144 December 31, 2020 3 148 2 153 Credit loss expense — 36 (2 ) 34 Write-off (1)/(2) (3 ) (183 ) — (186 ) December 31, 2021 — 1 — 1 (1) In April 2021 we signed a settlement agreement with Aquadrill (formerly Seadrill Partners) which waived all claims on pre-petition write-off (2) Following the cancellation of the Wintershall contract, a settlement agreement was reached with Northern Ocean to extinguish all outstanding claims. The agreement became effective in December 2021 resulting in the write-off The below table shows the classification of the credit loss expense within the Consolidated Statements of Operations. (In $ millions) Year ended Year ended Management contract expenses 36 142 Other financial items (2 ) 2 Total 34 144 Changes in expected credit loss allowance for external and related party trade receivables are included in operating expenses, while changes in the allowances for related party loan receivables are included in other financial items. The decrease in the allowance for the year ended December 31, 2021 was due to the write-off |
Segment information
Segment information | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | ||
Segment information | Note 6 – Segment information Operating segments We use the management approach to identify our operating segments. We identified the Board of Directors as the Group’s Chief Operating Decision Maker (“CODM”) which regularly reviews internal reports when making decisions about allocation of resources to segments and in assessing their performance. We have the following three reportable segments: 1. Harsh environment 2. Floaters 3. Jackups Segment results are evaluated on the basis of operating income and the information presented below is based on information used for internal management reporting. The remaining incidental revenues and expenses not included in the reportable segments are included in the “other” reportable segment. Total operating revenue Operating revenues consist of contract revenues, reimbursable revenues, management contract revenues and other revenues. The segmental analysis of operating revenues is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 125 125 261 78 357 Floaters 133 85 327 85 239 Jackups 11 10 27 6 28 Other — 2 — — 8 Total operating revenues 269 222 615 169 632 Depreciation We record depreciation expense to reduce the carrying value of drilling unit and equipment balances to their residual value over their expected remaining useful economic lives. The segmental analysis of depreciation is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 7 13 18 7 56 Floaters 18 11 42 6 30 Jackups 3 3 8 4 9 Total 28 27 68 17 95 Amortization of intangibles We record amortization of favorable and unfavorable contracts over the remaining lives of the contracts. The segmental analysis of amortization is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 5 — 12 — — Floaters 5 — 10 — — Total 10 — 22 — — Operating profit/(loss) – Net profit/(loss) The segmental analysis is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 24 6 22 16 (171 ) Floaters (7 ) (13 ) 23 9 (40 ) Jackups 1 8 — 9 13 Other 2 (5 ) — 3 (52 ) Operating profit / (loss) 20 (4 ) 45 37 (250 ) Unallocated items: Total financial and other items (36 ) (48 ) (85 ) 3,704 (354 ) Income taxes (2 ) (3 ) (10 ) (2 ) (11 ) Net (loss)/profit from continuing operations (18 ) (55 ) (50 ) 3,739 (615 ) Drilling units – Total assets The segmental analysis of drilling assets and total assets is shown in the table below. Successor Predecessor (In $ millions) As at As at Harsh Environment 308 709 Floaters 1,179 524 Jackups 161 198 Total drilling units 1,648 1,431 Unallocated items: Investments in associated companies 79 27 Assets held for sale 392 1,492 Cash and restricted cash 349 516 Other assets 514 431 Total assets 2,982 3,897 Drilling units – Capital expenditures The segmental analysis of capital expenditures is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 2 9 3 2 26 Floaters 87 11 162 18 23 Jackups — — — — 3 Other — — — — 1 Total 89 20 165 20 53 Geographic segment data Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following information presents our revenues and fixed assets by geographic area: Revenues Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents our revenues and fixed assets by geographic area: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Norway 74 112 180 78 346 Angola 63 32 160 43 85 United States 44 20 100 20 66 Canada 51 — 80 — — Brazil 26 32 67 19 86 Others (1) 11 26 28 9 49 Total 269 222 615 169 632 (1) Other countries represent countries in which we operate that individually had revenues representing less than 10% of total revenues earned for any of the periods presented. Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area based on location as at end of the period are as follows: Successor Predecessor (In $ millions) As at As at Brazil 348 169 Norway 308 710 United States 274 92 Spain 346 47 Qatar 147 156 Other 225 257 Drilling units 1,648 1,431 (1) Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. (2) “Other” represents countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented. Major Customers We had the following customers with total revenues greater than 10% in any of the periods presented: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Sonadrill 22 % 14 % 22 % 9 % 12 % Equinor 19 % 15 % 13 % 10 % 15 % ConocoPhillips 14 % 18 % 15 % 13 % 20 % Var Energi 13 % 7 % 13 % 11 % 2 % Lundin — % 13 % 1 % 12 % 14 % Other 32 % 33 % 36 % 45 % 37 % | Note 6 – Segment information We use the management approach to identify our operating segments. We identified the Board of Directors as the Group’s Chief Operating Decision Maker (“ CODM We have the following three reportable segments: 1. Harsh environment 2. Floaters 3. Jackups Segment results are evaluated on the basis of operating income and the information presented below is based on information used for internal management reporting. The remaining incidental revenues and expenses not included in the reportable segments are included in the “other” reportable segment. The below section splits out total operating revenue, depreciation, amortization of intangibles, operating net loss, drilling units and capital expenditures by segment: Total operating revenue Operating revenues consist of contract revenues, reimbursable revenues, management contract revenues and other revenues. The segmental analysis of operating revenues is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment 495 526 510 Floaters 363 358 625 Jackup rigs 38 59 95 Other 11 18 24 Total 907 961 1,254 Depreciation We record depreciation expense to reduce the carrying value of drilling unit and equipment balances to their residual value over their expected remaining useful economic lives. The segmental analysis of depreciation is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment 73 93 125 Floaters 37 176 224 Jackup rigs 16 20 19 Other 1 29 29 Total 127 318 397 Amortization of intangibles We record amortization of favorable and unfavorable contracts over the remaining lives of the contracts. The segmental analysis of amortization is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) Harsh environment — 1 — Floaters — — 105 Total — 1 105 Impairment of drilling units and intangible assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. The segmental analysis of impairment is shown in the table below. (In $ millions) Year ended Year ended Year ended Harsh environment 152 419 — Floaters — 3,555 — Jackups — 86 — Other — 48 — Total 152 4,108 — Operating net loss The segmental analysis of operating net losses is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment (138 ) (396 ) (69 ) Floaters (21 ) (3,781 ) (201 ) Jackups 17 (86 ) (3 ) Other (14 ) (218 ) (23 ) Operating loss (156 ) (4,481 ) (296 ) Unallocated items: Total financial items and other (416 ) 50 (451 ) Loss before income taxes (572 ) (4,431 ) (747 ) Drilling assets – Total assets The segmental analysis of drilling assets and total assets is shown in the table below. (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Harsh environment rigs 709 1,032 Floaters 524 528 Jackup rigs 198 195 Total Drilling Units 1,431 1,755 Unallocated items: Investments in associated companies 27 24 Assets held for sale 1,492 1,085 Cash and restricted cash 516 653 Other assets 431 461 Total assets 3,897 3,978 Drilling units – Capital expenditures (1) The segmental analysis of capital expenditures is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment 30 26 34 Floaters 35 110 111 Jackups 19 1 8 Total 84 137 153 (1) Capital expenditure includes long term maintenance projects. Geographic segment data Revenues Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents our revenues and fixed assets by geographic area: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Norway 486 480 469 Angola 125 89 215 Brazil 121 51 137 United States 105 107 74 Nigeria — — 198 Others (1) 70 234 161 Total Revenue 907 961 1,254 (1) Other countries represent countries in which we operate that individually had revenues representing less than 10% of total revenues earned for any of the periods presented. Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area based on location as at end of the year are as follows: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Norway 710 1,044 Brazil 169 79 Qatar 156 151 Malaysia 40 94 USA 92 87 Spain 47 49 Others (2) 217 251 Total 1,431 1,755 (1) Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. (2) Other countries represent countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented. Major customers In the years ended December 31, 2021, 2020 and 2019, we had the following customers with total revenues greater than 10% in any of the years presented: Segment Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) ConocoPhillips Harsh Environment 18 % 18 % 12 % Equinor Harsh Environment 15 % 13 % 18 % Lundin Floaters 13 % 2 % — % Northern Ocean Harsh Environment 4 % 13 % 13 % TotalEnergies Floaters — % 5 % 20 % Other 50 % 49 % 37 % Total 100 % 100 % 100 % |
Revenue from contracts with cus
Revenue from contracts with customers | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Revenue from contracts with customers | Note 7 – Revenue from contracts with customers The following table provides information about receivables and contract liabilities from our contracts with customers: Successor Predecessor (In $ millions) As at As at Accounts receivable, net 143 158 Current contract liabilities (classified within other current liabilities) (9 ) (25 ) Non-current non-current (7 ) (10 ) Significant changes in the contract liabilities balances during the period, from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through September 30, 2022 (Successor) are as follows: (In $ millions) Contract Net contract liability at January 1, 2022 (Predecessor) (35 ) Amortization of revenue that was included in the beginning contract liability balance 16 Net contract liability at February 22, 2022 (Predecessor) (19 ) Net contract liability at February 23, 2022 (Successor) (19 ) Cash received, excluding amounts recognized as revenue (3 ) Net contract liability at March 31, 2022 (Successor) (22 ) Amortization of revenue that was included in the beginning contract liability balance 14 Cash received, excluding amounts recognized as revenue (22 ) Net contract liability at June 30, 2022 (Successor) (30 ) Amortization of revenue that was included in the beginning contract liability balance 14 Net contract liability at September 30, 2022 (Successor) (16 ) The Company does not have any material contract assets. Significant changes in the contract liabilities balances during the nine months ended September 30, 2021 (Predecessor) are as follows: (In $ millions) Contract Net contract liability at January 1, 2021 (Predecessor) (31 ) Amortization of revenue that was included in the beginning contract liability balance 5 Cash received, excluding amounts recognized as revenue (2 ) Net contract liability at March 31, 2021 (Predecessor) (28 ) Amortization of revenue that was included in the beginning contract liability balance 5 Cash received, excluding amounts recognized as revenue (8 ) Net contract liability at June 30, 2021 (Predecessor) (31 ) Amortization of revenue that was included in the beginning contract liability balance 17 Cash received, excluding amounts recognized as revenue (22 ) Net contract liability at September 30, 2021 (Predecessor) (36 ) | Note 7 – Revenue from contracts with customers The following table provides information about receivables, contract assets and contract liabilities from our contracts with customers: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Accounts receivable, net 158 110 Current contract liabilities (deferred revenues) (1) (25 ) (18 ) Non-current (1) (10 ) (13 ) (1) Current contract liabilities balances are included in “Other current liabilities,” in our Consolidated Balance Sheets as at December 31, 2021. Significant (In $ millions) Contract Contract Net Contract Balances Net contract liability at January 1, 2020 — (29 ) (29 ) Amortization of revenue that was included in the beginning contract liability balance — 23 23 Cash received, excluding amounts recognized as revenue — (25 ) (25 ) Net contract liability at December 31, 2020 — (31 ) (31 ) Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2021 are as follows: (In $ millions) Contract Contract Net Contract Balances Net contract liability at January 1, 2021 — (31 ) (31 ) Amortization of revenue that was included in the beginning contract liability balance — 24 24 Cash received, excluding amounts recognized as revenue — (28 ) (28 ) Net contract liability at December 31, 2021 — (35 ) (35 ) The deferred revenue balance of $25 million reported in “Other current liabilities” at December 31, 2021 is expected to be realized within the next twelve months and the $10 million reported in “Other non-current |
Other revenues
Other revenues | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Revenues [Abstract] | ||
Other revenues | Note 8 – Other revenue Other revenues consist of the following: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Leasing revenues (a) 7 7 16 4 19 Other (b) 3 — 3 1 — Total other revenues 10 7 19 5 19 (a) Leasing revenue represents revenue earned on the charter of the West Castor, West Telesto West Tucana – (b) On July 1, 2022, Seadrill novated their drilling contract for the West Gemini West Gemini follow-on West Gemini | Note 8 – Other revenues Other revenues consist of the following: (In $ millions) Year ended Year ended Year ended Leasing revenues (i) 26 19 1 Early termination fees (ii) 6 11 11 Total other revenues 32 30 12 i. Leasing revenues Revenue earned on the charter of the West Castor, West Telesto West Tucana ii. Early termination fees Early termination fees were received in 2021 for the West Bollsta, West Gemini West Jupiter West Castor |
Other operating items
Other operating items | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Other Operating Income (Loss) [Abstract] | ||
Other operating items | Note 9 – Other op erati Other operating items consist of the following: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Impairment of long lived assets — — — — (152 ) Gain on disposals 1 11 1 2 22 Other — — — — 3 Total other operating items 1 11 1 2 (127 ) The impairment of long-lived assets in 2021 relates to the impairment of the West Hercules | Note 9 – Other operating items Other operating items consist of the following: (In $ millions) Year ended Year ended Year ended Impairment of long lived assets (i) (152 ) (4,087 ) — Impairment of intangibles (ii) — (21 ) — Gain on disposals (iii) 47 15 — Other operating income (iv) 54 9 39 Total other operating items (51 ) (4,084 ) 39 i. Impairment of long lived assets In June 2021, the West Hercules In 2020, we determined the global impact of the COVID-19 ii. Impairment of intangibles On December 1, 2020, Seadrill Partners announced it had filed a voluntary petition under Chapter 11. Under Chapter 11 we were required to continue to provide the management services only at market rate. We concluded that we no longer had a favorable contract and the intangible asset relating to Seadrill Partners was fully impaired. iii. Gain on disposals Following the impairments recognized in 2020, Seadrill disposed of seven rigs in 2021, and one rig in 2020, all of which had previously been impaired in full. The full consideration, less costs to sell, was recognized as a gain. iv. Other operating income Other operating income consist of the following: (In $ millions) Year ended Year ended Year ended Pre-petition write-off (a) 27 — — War risk insurance rebate (b) 22 — — Loss of hire insurance settlement (c) 2 9 10 Receipt of overdue receivable (d) — — 26 Other 3 — 3 Total other operating income 54 9 39 a) Prepetition liabilities write-off Write-off West Bollsta pre-petition b) War risk insurance rebate Receipt of $ 22 DNK ”), representing a rebate of past premium paid. c) Loss of hire insurance settlement Settlement of a claim on our loss of hire insurance policy following an incident on the Sevan Louisiana. d) Receipt of overdue receivables Receipt of overdue receivables in 2019 which had not been recognized as an asset as part of fresh start accounting. |
Interest expense
Interest expense | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Interest Expense [Abstract] | ||
Interest expense | Note 10 – Interest expenses Interest expense consists of the following: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Cash and payment-in-kind (32 ) — (73 ) — (24 ) Interest on SFL leases — (18 ) — (7 ) (73 ) Unwinding of debt premium — — 1 — — Guarantee and commission fees (1 ) — (1 ) — — Interest expense (33 ) (18 ) (73 ) (7 ) (97 ) Cash and payment We incur cash and payment-in-kind Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Pre-filing — — — — (24 ) Post-emergence first-lien senior secured (4 ) — (9 ) — — Post-emergence second lien senior secured (27 ) — (62 ) — — Post-emergence unsecured convertible bond (1 ) — (2 ) — — Cash and payment-in-kind (32 ) — (73 ) — (24 ) Interest on SFL Leases Interest on SFL leases reflects the cost incurred on capital lease agreements between Seadrill and SFL for the West Taurus West Linus West Hercules. West Taurus West Linus West Hercules | Note 10 – Interest expense Interest expense consists of the following: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Cash interest on debt facilities (a) (25 ) (256 ) (360 ) Interest on SFL leases (b) (84 ) (12 ) — Unwind of discount debt — (44 ) (47 ) Write off of discount on debt (c) — (86 ) — Interest expense (109 ) (398 ) (407 ) (a) Cash interest on debt facilities We incur cash and payment-in-kind below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Senior credit facilities and unsecured bonds (25 ) (229 ) (313 ) Debt of consolidated variable interest entities — (27 ) (47 ) Cash interest (25 ) (256 ) (360 ) Our senior credit facilities incurred interest at LIBOR plus a margin. For periods after July 2, 2018, this margin increased by one percentage point following the emergence from the Previous Chapter 11 Proceedings. On February 7, 2021, after filing for Chapter 11, we recorded contractual interest payments against debt held as subject to compromise (“adequate protections payments”) as a reduction to debt in the Consolidation Balance sheet and not as an expense to Consolidated Statement of Operations. For further information on our bankruptcy proceedings refer to Note 4 – Chapter 11 Proceedings of our Consolidated Financial Statements included herein. (b) Interest on SFL Leases In the fourth quarter of 2020 we deconsolidated the Ship Finance SPVs as we were no longer the primary beneficiary of the variable interest entities. Following the deconsolidation, we recognized the liability, and related interest expense, between Seadrill and the SPVs that was previously eliminated on consolidation. (c) Write off of discount on debt In September 2020 and December 2020, there were non-payments |
Loss on impairment of long-live
Loss on impairment of long-lived assets | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |
Loss on impairment of long-lived assets | Note 11 – Loss on impairment of long-lived assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. In 2020, the significant decrease in the price of oil due to the actions of OPEC and its partners combined with the global impact of the COVID-19 While there have been no further macro-economic indicators of impairment in 2021, with the oil price increasing by 50% from December 2020, changes to our forecast assumptions regarding the future of the West Hercules West Linus During West Hercules West Linus West Hercules West Linus The impairment of $152 million for the year ended December 31, 2021 has been classified within “Impairment of long-lived assets” on our Consolidated Statement of Operations. We derived the fair value of the rigs using an income approach based on updated projections of future dayrates, contract probabilities, economic utilization, capital and operating expenditures, applicable tax rates and asset lives. The cash flows were estimated over the remaining useful economic lives of the assets and discounted using an estimated market participant weighted average cost of capital “WACC” of 11.8%. To estimate these fair values, we were required to use various unobservable inputs including assumptions related to the future performance of our rigs as explained above. We based all estimates on information available at the time of performing the impairment test. |
Taxation
Taxation | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | ||
Taxation | Note 11 – Taxation Income tax expense for the period from January 1, 2022 through February 22, 2022 (Predecessor) was $2 million, and for the period from February 23, 2022 through September 30, 2022 (Successor) was $10 million (nine months ended September 30, 2021: $11 million). The income tax expense of $2 million for the period from January 1, 2022 through February 22, 2022 (Predecessor), and $10 million for the period from February 23, 2022 through September 30, 2022 (Successor) was primarily due to ordinary tax charges in the UK, US and Angola and movements in our Uncertain Tax Positions, as partially offset by tax credits due to additional deferred tax asset recognized in Switzerland. The effective tax rate has moved from positive 0.1% for the period from January 1, 2022 through February 22, 2022 (Predecessor) to negative 22% for the period from February 23, 2022 through September 30, 2022 (Successor) due to the non-taxable Seadrill Limited is incorporated in Bermuda, where a tax exemption has been granted until 2035. Other jurisdictions in which Seadrill’s subsidiaries operate are taxable based on rig operations. A loss in one jurisdiction may not be offset against taxable income in other jurisdictions. Thus, we may pay tax within some jurisdictions even though we might have losses in others. Tax authorities in certain jurisdictions examine our tax returns and some have issued assessments. We are defending our tax positions in those jurisdictions. The Brazilian tax authorities have issued a series of assessments with respect to our returns for certain years up to 2017 for an aggregate amount equivalent to $124 million including interest and penalties. As a positive development in relation to the earlier years’ assessments, the first-tier judicial court has ruled in favor of Seadrill. However, an appeal has since been filed by the tax authorities to the second tier judicial court. The relevant group companies are robustly contesting these assessments including filing the relevant appeals to the tax authorities and counter-appeal to the higher court. The Norwegian tax authorities have issued an assessment with respect to our 2016 tax return for an aggregate amount equivalent to $17 million including interest and penalties. The relevant group company is robustly contesting the assessment including filing relevant appeal. The Nigerian tax authorities have issued a series of claims and assessments both directly and lodged through the previous Chapter 11 proceedings, with respect to returns for subsidiaries for certain years up to 2016 for an aggregate amount equivalent to $171 million. The relevant group companies are robustly contesting these assessments including filing relevant appeals in Nigeria. The Kuwaiti tax authorities have issued a series of assessments with respect to our returns for years up to 2015 for an aggregate amount equivalent to $12 million including interest and penalties. The relevant group company is robustly contesting these assessments including filing relevant appeals. The Mexican tax authorities have issued a series of assessments with respect to our returns for certain years up to 2014 for an aggregate amount equivalent to $82 million, including interest and penalties. The relevant group companies are robustly contesting these assessments including filing relevant appeals. An adverse outcome on these proposed assessments, although considered unlikely, could result in a material adverse impact on our Consolidated Balance Sheets, Statements of Operations or Cash Flows. | Note 12 – Taxation Income taxes consist of the following: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Current tax expense/(benefit): Bermuda — — — Foreign 2 6 17 Deferred tax expense/(benefit): Bermuda — — — Foreign (2 ) (7 ) (61 ) Total tax expense/(benefit) — (1 ) (44 ) Effective tax rate — % — % (5.9 )% The effective tax rate for the year ended December 31, 2021, the year ended December 31, 2020 and the year ended December 31, 2019 was 0.0%, 0.0% and (5.9)% respectively. We are incorporated in Bermuda, where a tax exemption has been granted until 2035. Other jurisdictions in which we and our subsidiaries operate are taxable based on rig operations. A loss in one jurisdiction may not be offset against taxable income in another jurisdiction. Thus, we may pay tax within some jurisdictions even though we might have losses in others. Due to the CARES Act in the US, we recognized a tax benefit in 2021 of $2 million (2020: $5 million) which included the release of valuation allowances previously recorded and carrying back net operating losses to previous years. The income taxes for the year ended December 31, 2021, the year ended December 31, 2020 and the year ended December 31, 2019 differed from the amount computed by applying the Bermuda statutory income tax rate of 0% as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Effect of change on unrecognized tax benefits 2 (8 ) (11 ) Effect of unremitted earnings of subsidiaries — (2 ) (17 ) Effect of taxable income in various countries (2 ) 9 (16 ) Total tax expense/(benefit) — (1 ) (44 ) Deferred income taxes Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The net deferred tax assets/(liabilities) consist of the following: Deferred tax assets: (In $ millions) December 31, December 31, (As adjusted) Pensions and stock options 3 1 Provisions 30 31 Property, plant and equipment 51 — Net operating losses carried forward 320 240 Intangibles — 4 Other 9 3 Gross deferred tax assets 413 279 Valuation allowance (403 ) (208 ) Deferred tax assets, net of valuation allowance 10 71 Deferred tax liabilities: (In $ millions) December 31, December 31, (As adjusted) Property, plant and equipment — 30 Unremitted Earnings of Subsidiaries 8 8 Deferred gain — 34 Intangibles 1 — Gross deferred tax liabilities 9 72 Net deferred tax asset/(liability) 1 (1 ) As at December 31, 2021, deferred tax assets related to net operating loss (“NOL”) carry As at December 31, 2021, deferred tax liability related to intangibles from the application of fresh start accounting was $1 million (December 31, 2020: nil). We establish a valuation allowance for deferred tax assets when it is more likely than not that the benefit from the deferred tax asset will not be realized. The amount of deferred tax assets considered realizable could increase or decrease in the near-term if our estimates of future taxable income change. Our valuation allowance consists of $320 million on NOL carry forwards as at December 31, 2021 (December 31, 2020: $240 million). Uncertain tax positions As at December 31, 2021, we had a total amount of unrecognized tax benefits of $83 million excluding interest and penalties. The changes to our balance related to unrecognized tax benefits were as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) Balance at the beginning of the period 82 89 132 Increases as a result of positions taken in prior periods 2 1 8 Increases as a result of positions taken during the current period 2 — 29 Decreases as a result of positions taken in prior periods (1 ) (4 ) (34 ) Decreases due to settlements (1 ) (1 ) (46 ) Decreases as a result of a lapse of the applicable statute of limitations (1 ) (3 ) — Balance at the end of the period 83 82 89 Accrued interest and penalties totaled $19 million at both December 31, 2021 and December 31, 2020 and were included in “Other liabilities” on our Consolidated Balance Sheets. We recognized expenses/(benefits) of $1 million, ($1 million), and ($7 million) during the year ended December 31, 2021, the year ended December 31, 2020 and the year ended December 31, 2019, respectively, related to interest and penalties for unrecognized tax benefits on the income tax expense line in the accompanying Consolidated Statement of Operations. As of December 31, 2021, $85 million of our unrecognized tax benefits, including penalties and interest, would have a favorable impact to the Company’s effective tax rate if recognized. Tax returns and open years We are subject to taxation in various jurisdictions. Tax authorities in certain jurisdictions examine our tax returns and some have issued assessments. We are defending our tax positions in those jurisdictions. The Brazilian tax authorities have issued a series of assessments with respect to our returns for certain years up to 2017 for an aggregate amount equivalent to $124 million including interest and penalties. As a positive development in relation to the earlier years’ assessments, the first tier judicial court has ruled in favor of Seadrill. However, an appeal has since been filed by the tax authorities to the second tier judicial court. The relevant group companies are robustly contesting these assessments including filing the relevant appeals to the tax authorities and counter-appeal to the higher court. The Nigerian tax authorities have issued a series of claims and assessments both directly and lodged through the Previous Chapter 11 Proceedings, with respect to returns for subsidiaries for certain years up to 2016 for an aggregate amount equivalent to $171 million. The relevant group companies are robustly contesting these assessments including filing relevant appeals in Nigeria. An adverse outcome on these proposed assessments could result in a material adverse impact on our Consolidated Balance Sheets, Statements of Operations or Cash Flows. The Kuwaiti tax authorities have issued a series of assessments with respect to our returns for years up to 2015 for an aggregate amount equivalent to $12 million including interest and penalties. The relevant group company is robustly contesting these assessments including filing relevant appeals. The Mexican tax authorities have issued a series of assessments with respect to our returns for certain years up to 2014 for an aggregate amount equivalent to $95 million including interest and penalties (across our continuing and discontinued operations of $49 million and $46 million respectively). The relevant group companies are robustly contesting these assessments including filing relevant appeals. An adverse outcome on these proposed assessments could result in a material adverse impact on our Consolidated Balance Sheets, Statements of Operations or Cash Flows. The following table summarizes the earliest tax years that remain subject to examination by other major taxable jurisdictions in which we operate. Jurisdiction Earliest Kuwait 2012 Nigeria 2014 United States 2018 Mexico 2011 Norway 2015 Brazil 2008 |
Earnings_(Loss) per share
Earnings/(Loss) per share | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Earnings/(Loss) per share | Note 12 – Earnings/(Loss) per share The computation of basic earnings/(loss) per share (“EPS/LPS”) is based on the weighted average number of shares outstanding during the period. Diluted EPS/LPS includes the effect of the assumed conversion of potentially dilutive instruments. There were no dilutive instruments in the Predecessor period, but the issuance of the convertible note in the Successor period could have been dilutive, had the Company not been in a loss-making position. Refer to Note 18 – “Debt” for further details’ on the instrument. The components of the numerator for the calculation of basic and diluted EPS/LPS were as follows: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months (Loss)/profit from continuing operations (18 ) (55 ) (50 ) 3,739 (615 ) Profit/(loss) from discontinued operations 2 (31 ) 2 (33 ) (76 ) (Loss)/profit available to stockholders (16 ) (86 ) (48 ) 3,706 (691 ) Effect of dilution — — — — — Diluted (loss)/profit available to stockholders (16 ) (86 ) (48 ) 3,706 (691 ) The components of the denominator for the calculation of basic and diluted EPS/LPS were as follows: Successor Predecessor Successor Predecessor (In millions) Three months Three months Period from Period from Nine months Basic (loss)/earnings per share: Weighted average number of common shares outstanding 50 100 50 100 100 Diluted(loss)/earnings per share: Effect of dilution — — — — — Weighted average number of common shares outstanding adjusted for the effects of dilution 50 100 50 100 100 The basic and diluted (loss)/earnings per share were as follows: Successor Predecessor Successor Predecessor (In $) Three months Three months Period from Period from Nine months Basic/diluted (loss)/earnings per share from continuing operations (0.36 ) (0.55 ) (1.00 ) 37.25 (6.13 ) Basic/diluted earnings/(loss) per share from discontinued operations 0.04 (0.31 ) 0.04 (0.33 ) (0.75 ) Basic/diluted (loss)/earnings per share (0.32 ) (0.86 ) (0.96 ) 36.92 (6.88 ) | Note 13 – Loss per share The computation of basic LPS is based on the weighted average number of shares outstanding during the period. Diluted LPS includes the effect of the assumed conversion of potentially dilutive instruments. The components of the numerator for the calculation of basic and diluted LPS are as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Net loss from continuing operations (572 ) (4,430 ) (703 ) Profit /(loss) from discontinued operations (15 ) (233 ) (519 ) Net loss attributable to the parent (587 ) (4,663 ) (1,222 ) Less: Allocation to participating securities — — — Net loss available to stockholders (587 ) (4,663 ) (1,222 ) Effect of dilution — — — Diluted net loss available to stockholders (587 ) (4,663 ) (1,222 ) The components of the denominator for the calculation of basic and diluted LPS are as follows: (In millions) Year ended Year ended Year ended Basic loss per share: Weighted average number of common shares outstanding 100 100 100 Diluted loss per share: Effect of dilution — — — Weighted average number of common shares outstanding adjusted for the effects of dilution 100 100 100 The basic and diluted loss per share are as follows: (In $) Year ended Year ended Year ended Basic Loss per share from continuing operations (5.70 ) (44.11 ) (7.00 ) Diluted Loss per share from continuing operations (5.70 ) (44.11 ) (7.00 ) Basic loss per share (5.85 ) (46.43 ) (12.18 ) Diluted loss per share (5.85 ) (46.43 ) (12.18 ) ASC 260 ‘Earnings per Share’ requires the presentation of diluted earnings per share where a company could be called upon to issue shares that would decrease net earnings per share. As the Company reported net losses for the year ended December 31, 2021, the effect of including potentially dilutive instruments in the calculation would result in a reduction in loss per share, which is anti-dilutive. Under these circumstances, these instruments are not included in the calculation due to their anti-dilutive effect and as a result the basic and diluted loss per share are equal. |
Restricted cash
Restricted cash | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Restricted Cash and Investments [Abstract] | ||
Restricted cash | Note 13 – Restricted cash Restricted cash as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) was as follows: Successor Predecessor (In $ millions) As at As at Demand deposit pledged as collateral for tax related guarantee 70 63 Cash held in escrow in Saudi Arabia 23 23 Accounts pledged as collateral for performance bonds and similar guarantees 11 28 Accounts pledged as collateral for SFL leases 8 37 Accounts pledged as collateral for guarantees related to rig recycling 6 14 Proceeds from rig sales 2 47 Other 5 11 Total restricted cash 125 223 Restricted cash is presented in our Consolidated Balance Sheets as follows: Successor Predecessor (In $ millions) As at As at Current restricted cash 55 160 Non-current 70 63 Total restricted cash 125 223 | Note 14 – Restricted cash Restricted cash consists of the following: (In $ millions) December 31, December 31, (As adjusted) Accounts pledged as collateral for performance bonds and similar guarantees (i) 42 48 Proceeds from rig sales (ii) 47 — Demand deposit pledged as collateral for tax related guarantee (iii) 63 65 Accounts pledged as collateral for SFL leases (iv) 37 22 Other 34 33 Total restricted cash 223 168 (i) Cash collateral in respect to bank guarantee facilities with Danske Bank and DNB. (ii) (iii) We placed a total of 330 million Brazilian Reais of collateral with BTG Pactual under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current (iv) Accounts pledged to SFL for lease arrangements for the West Linus West Hercules. Restricted cash is presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, December 31, (As adjusted) Current restricted cash 160 103 Non-current 63 65 Total restricted cash 223 168 |
Accounts receivable
Accounts receivable | 12 Months Ended |
Dec. 31, 2021 | |
Receivables [Abstract] | |
Accounts receivable | Note 15 – Accounts receivable Accounts receivable are held at their nominal amount less an allowance for expected credit losses. Refer to Note 5 – “Current expected credit losses” for further information. |
Other assets
Other assets | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Other Assets [Abstract] | ||
Other assets | Note 14 – Other assets As at September 30, 2022 (Successor) and December 31, 2021 (Predecessor), other assets included the following: Successor Predecessor (In $ millions) As at As at Deferred contract costs 75 15 Favorable drilling and management services contracts 62 9 Prepaid expenses 52 51 Taxes receivable 45 48 Right of use asset 10 24 Derivative asset – interest rate cap 8 — Reimbursable amounts due from customers 7 13 Restructuring backstop commitment fee — 20 Other 31 44 Total other assets 290 224 Other assets were presented in our Consolidated Balance Sheet as follows: Successor Predecessor (In $ millions) As at As at Other current assets 267 197 Other non-current 23 27 Total other assets 290 224 Favorable drilling contracts and management services contracts The gross carrying amounts and accumulated amortization included in ‘Other current assets’ and ‘Other non-current The following table summarizes the movement for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Gross carrying Accumulated Net carrying As at January 1, 2021 (Predecessor) 266 (256 ) 10 Amortization — — — As at March 31, 2021 (Predecessor) 266 (256 ) 10 Amortization — — — As at June 30, 2021 (Predecessor) 266 (256 ) 10 Amortization — — — As at September 30, 2021 (Predecessor) 266 (256 ) 10 The following table summarizes the movement for the period from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Gross Carrying Accumulated Net carrying As at January 1, 2022 (Predecessor) 266 (257 ) 9 Amortization — — — As at February 22, 2022 (Predecessor) 266 (257 ) 9 Fresh Start accounting (170 ) 257 87 As at February 23, 2022 (Successor) 96 — 96 Amortization — (5 ) (5 ) As at March 31, 2022 (Successor) 96 (5 ) 91 Amortization — (16 ) (16 ) As at June 30, 2022 (Successor) 96 (21 ) 75 Amortization — (13 ) (13 ) As at September 30, 2022 (Successor) 96 (34 ) 62 On emergence from Chapter 11 proceedings and on application of Fresh Start accounting, new favorable drilling contract and management service contract intangible assets were recognized. For further information refer to Note 4 – “Fresh Start accounting”. The amortization is recognized in the Consolidated Statements of Operations as “Amortization of intangibles”. The weighted average remaining amortization period for the favorable contracts is 8 months. The table below shows the amounts relating to favorable contracts that is expected to be amortized over the following periods: Period ended December 31 (In $ millions) 2022 2023 2024 2025 and Total Amortization of favorable contracts 31 29 1 1 62 | Note 16 – Other assets As at December 31, 2021 and 2020, other assets included the following: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Prepaid expenses 51 65 Taxes receivable 48 32 Right of use asset 24 57 Deferred contract costs 15 14 Reimbursable amounts due from customers 13 11 Favorable drilling and management services contracts 9 10 Restructuring backstop commitment fee 20 — Other 44 43 Total other assets 224 232 Other assets are presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Other current assets 197 187 Other non-current 27 45 Total other assets 224 232 |
Investment in associated compan
Investment in associated companies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Investment in associated companies | Note 15 – Investment in associated companies As at September 30, 2022 (Successor) and December 31, 2021 (Predecessor), the carrying values of our investments in associated companies were as follows. Successor Predecessor (In $ millions) As at As at Paratus Energy Services 31 — Sonadrill 46 27 Gulfdrill 2 — Total investment in associated companies 79 27 Part-disposal of Paratus Energy Services As set out in Note 3 – “Chapter 11”, as part of the Group’ s On emergence from Chapter 11 proceedings and application of Fresh Start accounting a fair value adjustment was made for the investment, reducing the book value of the investment in PES to $39 million. For further information, refer to Note 4 – “Fresh Start accounting”. Seadrill’s share of post-emergence PES losses amounted to $8 million, further reducing the carrying value to $31 million as at September 30, 2022. On September 30, 2022, Seadrill entered into share purchase agreements with certain other existing shareholders of PES to dispose of the remaining 35% shareholding. The deal is subject to closing conditions, including relevant antitrust approvals, and is expected to complete in the fourth quarter of 2022 or early 2023. Sonadrill Seadrill’s investment in the Sonadrill joint venture included $25 million of initial equity capital plus certain other contingent commitments. One of these commitments was to charter up to two drillships to the joint venture at a nominal charter rate. This commitment was contingent on Sonadrill obtaining drilling contracts for the units. On July 1, 2022, Seadrill novated two drilling contracts for the West Gemini West Gemini This lease is considered to form part of Seadrill’s investment in the joint venture. Accordingly, we recorded a $21 million liability equal to the fair value of the lease at the commencement of the West G | Note 17 – Investment in associated companies We have the following investments in associated companies: Ownership percentage Joint venture partner December 31, December 31, Gulfdrill (i) Gulf Drilling International 50.0 % 50.0 % Sonadrill (ii) Sonangol E.P. 50.0 % 50.0 % We own 50% equity interests in the above entities. The remaining 50% equity interest is owned by the above joint venture partners. We account for our 50% investments in the joint ventures under the equity method. For transactions with related parties refer to Note 27 – “Related party transactions”. i. Gulfdrill Gulfdrill is a joint venture that manages and operates five premium jackups in Qatar with Qatargas. We have a 50% ownership stake in Gulfdrill. The remaining 50% interest is owned by Gulf Drilling International (“GDI”) ii. Sonadrill Sonadrill is a joint venture that will operate four drillships focusing on opportunities in Angolan waters. We have a 50% ownership stake in Sonadrill. The remaining 50% interest is owned by Sonangol EP (“Sonangol”) Libongos Libongos, Quenguela Share in results from associated companies Our share in results of our associated companies (net of tax) were as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) Seadrill Partners — — (21 ) Sonadrill 5 (2 ) (1 ) Gulfdrill (2 ) 2 — Total share in results from associated companies (net of tax) 3 — (22 ) Summary of Consolidated Statements of Operations for our equity method investees The results of the Sonadrill companies and our share in those results (net of tax) were as follows: Sonadrill (In $ millions) Year ended Year ended Year ended Operating revenues 94 56 22 Net operating income/(loss) 18 (2 ) (1 ) Net income/(loss) 11 (5 ) (2 ) Seadrill ownership percentage 50 % 50 % 50 % Share of results from Sonadrill (net of tax) 5 (2 ) (1 ) The results of the Gulfdrill companies and our share in those results (net of tax) were as follows: Gulfdrill (In $ millions) Year ended Year ended Year ended Operating revenues 142 44 — Net operating income/(loss) (4 ) 6 — Net income/(loss) (4 ) 4 — Seadrill ownership percentage 50 % 50 % 50 % Share of results from Gulfdrill (net of tax) (2 ) 2 — Book value of our investments in associated companies At the year end, the book values of our investments in our associated companies were as follows: (In $ millions) December 31, December 31, Sonadrill 27 22 Gulfdrill — 2 Total 27 24 Quoted market prices for all of our investments are not available. Summarized Consolidated Balance sheets for our equity method investees The summarized balance sheets of the Sonadrill companies and our share of recorded equity in those companies was as follows: Sonadrill (In $ millions) December 31, December 31, Current assets 72 54 Current liabilities (18 ) (11 ) Net Assets 54 43 Seadrill ownership percentage 50 % 50 % Book value of Seadrill investment 27 22 The summarized balance sheets of the Gulfdrill companies and our share of recorded equity in those companies was as follows: Gulfdrill (In $ millions) December 31, December 31, Current assets 120 67 Non-current 173 102 Current liabilities (182 ) (135 ) Non-current (113 ) (31 ) Net (liabilities)/assets (2 ) 3 Seadrill ownership percentage 50 % 50 % Book value of Seadrill investment — 2 |
Drilling units
Drilling units | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Drilling units | Note 16 – Drilling units The following table summarizes the movement for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Cost Accumulated Net book As at January 1, 2021 (Predecessor) 2,669 (914 ) 1,755 Additions 8 — 8 Depreciation — (34 ) (34 ) As at March 31, 2021 (Predecessor) 2,677 (948 ) 1,729 Additions 25 — 25 Depreciation — (32 ) (32 ) Impairment (152 ) — (152 ) As at June 30, 2021 (Predecessor) 2,550 (980 ) 1,570 Additions 20 — 20 West Hercules (364 ) 227 (137 ) Depreciation — (25 ) (25 ) As at September 30, 2021 (Predecessor) 2,206 (778 ) 1,428 The following table summarizes the movement for the period from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Cost Accumulated Net book As at January 1, 2022 (Predecessor) 2,217 (786 ) 1,431 Additions 20 — 20 Disposal of West Venture (23 ) 23 — Depreciation — (17 ) (17 ) As at February 22, 2022 (Predecessor) 2,214 (780 ) 1,434 Derecognition of West Linus (211 ) 36 (175 ) Fresh Start accounting (428 ) 744 316 As at February 23, 2022 (Successor) 1,575 — 1,575 Additions 16 — 16 Depreciation — (12 ) (12 ) As at March 31, 2022 (Successor) 1,591 (12 ) 1,579 Additions 60 — 60 Disposal of Sevan Brasil Sevan Driller (24 ) — (24 ) Depreciation — (28 ) (28 ) As at June 30, 2022 (Successor) 1,627 (40 ) 1,587 Additions 89 — 89 Depreciation — (28 ) (28 ) As at September 30, 2022 (Successor) 1,716 (68 ) 1,648 | Note 18 – Drilling units Changes in drilling units for the periods presented in this report were as follows: (In $ millions) Cost Accumulated Net book (As adjusted) (As adjusted) (As adjusted) January 1, 2020 6,624 (605 ) 6,019 Additions 136 — 136 Depreciation — (313 ) (313 ) Impairment (4,087 ) — (4,087 ) December 31, 2020 2,673 (918 ) 1,755 Additions 84 — 84 Depreciation — (119 ) (119 ) Impairment (1) (152 ) — (152 ) Disposal (2) (364 ) 227 (137 ) December 31, 2021 (1)(2) 2,241 (810 ) 1,431 (1) In June 2021 we recorded an impairment of $152 million (December 31, 2020: $4.1 billion) which was reported within “Loss on impairment of long-lived assets” on our Consolidated Statement of Operations. Please refer to Note 11 – “Loss on impairment of long-lived assets” for further details. (2) In August, 2021, the lease agreement with SFL for the West Hercules |
Equipment
Equipment | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Equipment | Note 17 – Equipment Equipment consists of office equipment, software, furniture and fittings. The following table summarizes the movement for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Cost Accumulated Net book value As at January 1, 2021 (Predecessor) 39 (20 ) 19 Depreciation — (1 ) (1 ) As at March 31, 2021 (Predecessor) 39 (21 ) 18 Depreciation — (2 ) (2 ) As at June 30, 2021 (Predecessor) 39 (23 ) 16 Additions 2 — 2 Depreciation — (2 ) (2 ) As at September 30, 2021 (Predecessor) 41 (25 ) 16 The following table summarizes the movement for the period from January 1, 2022 through February 22, 2022 (Predecessor) and the period from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Cost Accumulated Net book value As at January 1, 2022 (Predecessor) 39 (28 ) 11 As at February 22, 2022 (Predecessor) 39 (28 ) 11 Fresh Start adjustments (30 ) 28 (2 ) As at February 23, 2022 (Successor) 9 — 9 As at March 31, 2022 (Successor) 9 — 9 Additions 1 — 1 Depreciation — (1 ) (1 ) As at June 30, 2022 (Successor) 10 (1 ) 9 Additions 1 — 1 Depreciation — (1 ) (1 ) As at September 30, 2022 (Successor) 11 (2 ) 9 On emergence from Chapter 11 proceedings, the carrying value of our equipment was adjusted to fair value a result of the application of Fresh Start accounting. The fair values were determined through a combination of income-based and market based approaches, with accumulated depreciation being reset to nil. The total net fair value adjustment to our equipment was $2 million, resulting in a loss recognized in “Reorganization items, net” in the Consolidated Statements of Operations. | Note 19 – Equipment Equipment consists of office equipment, software, furniture and fittings. Changes in equipment balances for the periods presented in this report were as follows: (In $ millions) Cost Accumulated Net book January 1, 2020 38 (15 ) 23 Additions 1 — 1 Depreciation — (5 ) (5 ) December 31, 2020 39 (20 ) 19 Depreciation — (8 ) (8 ) December 31, 2021 39 (28 ) 11 |
Debt
Debt | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Debt | Note 18 – Debt The table below sets our external debt agreements as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor): Successor Predecessor (In $ millions) As at As at Secured debt: Term Loan Facility 175 — Second Lien Facility 713 — Total Secured debt 888 — Unsecured notes Unsecured convertible notes 50 — Total Unsecured notes 50 — Total principal debt 938 — Exit fee Term Loan Facility 5 — Second Lien Facility 35 — Debt premium Term Loan Facility 4 — Total debt 982 — Debt was presented in our Consolidated Balance Sheets as: Successor Predecessor (In $ millions) As at As at Debt due within one year 32 — Long-term debt 950 — Total debt 982 — Key changes to borrowing facilities Term Loan and Revolving Credit Facility On emergence, we entered into a $300 million super senior secured credit facility with a syndicate of lenders secured on a first lien basis. The facility has a maturity of December 15, 2026 and consists of a $175 million term loan facility and a $125 million revolving credit facility (“RCF”). The term loan facility and RCF bear interest at a margin of 7% per annum plus the secured overnight financial rate facility (“SOFR”) (and any applicable credit adjustment spread). A commitment fee of 2.8% per annum is payable in respect of any undrawn portion of the RCF commitment. The facility includes an undrawn, uncommitted basket in amount of $50 million for incremental facilities pari passu with the facility for specified purposes. There is a 3% exit fee payable on principal repayments under the super senior credit facility; in addition, there is a make-whole premium payable if the facility is repaid within the first 3 years. We have recognized exit fees of $5 million and a debt premium of $4 million in respect to the facility. New Second Lien Facility On emergence, we entered into a senior secured credit facility with a syndicate of lenders to partially reinstate the existing facilities in an aggregate amount of $683 million, secured on a second lien basis. The facility bears interest at a total margin of 12.5% per annum plus SOFR (and any applicable credit adjustment spread), and has a maturity of June, 15 2027. The above-mentioned margin is comprised of 5% cash interest; and 7.5% pay-if-you-can payment-in-kind Unsecured convertible notes On emergence, we issued a $50 million unsecured convertible note to Hemen, with a final maturity in August 2028 (the “Convertible Note”). The note bears interest of 6% per annum plus three-month US LIBOR, which is payable quarterly in cash. The Convertible Note is convertible, at the option of the holder, into shares in an amount equal to 5% of the fully-diluted ordinary shares. Debt maturities The outstanding debt as at September 30, 2022 (Successor) was repayable as follows, for the years ended December 31: (In $ millions) Term Loan Second (1) Convertible Total 2023 — 42 — 42 2024 — 42 — 42 2025 — 42 — 42 2026 180 42 — 222 2027 — 580 — 580 2028 and thereafter — — 50 50 Total debt principal and exit fee payments 180 748 50 978 (1) A mandatory payment of debt principal ($192 million), exit fee ($10 million), and accrued interest ($2 million) was made against the second lien facility in October 2022. A further voluntary payment of debt principal ($250 million), exit fee ($13 million), and accrued interest ($6 million) was made against the second lien facility in November 2022. See “Note 28 – Subsequent events” for further details. | Note 20 – Debt As at December 31, 2021 and 2020, we had the following liabilities for third party debt agreements: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Secured credit facilities 5,545 5,545 Total debt principal 5,545 5,545 Less: Debt balance held as subject to compromise (5,545 ) — Carrying value — 5,545 Certain subsidiaries filed for Chapter 11 bankruptcy protection on February 7, 2021 and February 10, 2021. As a result, the outstanding balance of the senior credit facilities were classified within liabilities subject to compromise (“LSTC”) in our Consolidated Balance Sheet at December 31, 2021. For further information on our bankruptcy proceedings refer to Note 4 – |
Other liabilities
Other liabilities | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
Other liabilities | Note 19 – Other liabilities As at September 30, 2022 (Successor) and December 31, 2021 (Predecessor), other liabilities included the following: Successor Predecessor (In $ millions) As at As at Accrued expenses 114 78 Uncertain tax positions 86 83 Unfavorable contracts to be amortized 74 6 Employee withheld taxes, social security and vacation payments 45 43 Taxes payable 23 23 Liability for below-market lease 19 — Contract liabilities 16 35 Lease liabilities 14 35 Accrued interest expense 6 — Other liabilities 28 28 Total other liabilities 425 331 Other liabilities are presented in our Consolidated Balance Sheet as follows: Successor Predecessor (In $ millions) As at As at Other current liabilities 273 219 Other non-current 152 112 Total other liabilities 425 331 Unfavorable drilling contracts and management services contracts The gross carrying amounts and accumulated amortization included in ‘Other current liabilities’ and ‘Other non-current The following table summarizes the movement in unfavorable drilling contracts and management services contracts for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Gross Carrying Accumulated Net carrying As at January 1, 2021 (Predecessor) 66 (59 ) 7 Amortization — — — As at March 31, 2021 (Predecessor) 66 (59 ) 7 Amortization — — — As at June 30, 2021 (Predecessor) 66 (59 ) 7 Amortization — — — As at September 30, 2021 (Predecessor) 66 (59 ) 7 The following table summarizes the movement in unfavorable drilling contracts and management services contracts for the period from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Gross Carrying Accumulated Net carrying As at January 1, 2022 (Predecessor) 66 (60 ) 6 Amortization — — — As at February 22, 2022 (Predecessor) 66 (60 ) 6 Fresh Start accounting 19 60 79 As at February 23, 2022 (Successor) 85 — 85 Amortization — (3 ) (3 ) As at March 31, 2022 (Successor) 85 (3 ) 82 Amortization — (5 ) (5 ) As at June 30, 2022 (Successor) 85 (8 ) 77 Amortization — (3 ) (3 ) As at September 30, 2022 (Successor) 85 (11 ) 74 On emergence from Chapter 11 proceedings and on application of Fresh Start accounting, new unfavorable drilling contract intangible liabilities were recognized. For further information refer to Note 4 – “Fresh Start accounting”. The amortization is recognized in the Consolidated Statements of Operations as “Amortization of intangibles”. The weighted average remaining amortization period for the unfavorable contracts is 31 months. The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods: Period ended December 31 (In $ millions) Remainder 2023 2024 2025 and Total Amortization of unfavorable contracts 4 24 24 22 74 | Note 21 – Other liabilities As at December 31, 2021 and December 31, 2020, other liabilities included the following: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Uncertain tax positions 83 79 Accrued expenses 78 107 Employee withheld taxes, social security and vacation payments 43 44 Lease liabilities 35 68 Contract liabilities 35 31 Taxes payable 23 25 Accrued interest expense — 10 Other liabilities 34 33 Total Other Liabilities 331 397 Other liabilities are presented in our Consolidated Balance Sheet as follows: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Other current liabilities 219 277 Other non-current 112 120 Total Other Liabilities 331 397 |
Leases
Leases | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Leases | Note 20 – Leases Current leasing arrangements On the bankruptcy Effective date, the Company assumed all outstanding leases and reinstated all associated lease liabilities and right-of-use As of September 30, 2022, we held an operating lease for the West Hercules right-of-use We continue to lease three of our benign environment jackup rigs, West Castor, West Telesto West Tucana, On July 1, 2022 we commenced a lease for our benign environment floater, West Gemini, Sale and leaseback arrangements with SFL Corporation Seadrill had previously entered into sale and leaseback arrangements for the West Hercules West Linus West Taurus The West Taurus West Taurus On August 27, 2021, the Bankruptcy Court approved an amendment to the original West Hercules buy-back West Hercules West Hercules West Hercules On February 22, 2022, Seadrill entered an interim transition charter with SFL, which provided that Seadrill would continue to operate the West Linus West Linus buy-back West Linus West Linus Lease fair value and Chapter 11 In accordance with the bankruptcy guidance, liabilities and assets associated with assumed leases should be recognized as of the date of emergence in accordance with the provisions of ASC 805. Leases are one of the limited exceptions to the fair value recognition and measurement principles under ASC 805 and follow specific guidance for acquired leases under “ASC 842” and ASC 805. In accordance with such guidance, at emergence, assumed leases are remeasured by utilizing 1) the remaining lease term (including consideration for any lessee options that are reasonably certain of exercise); 2) the remaining lease payments; 3) the updated discount rate for the successor entity which is reflective of the new lease term. Further, in a business combination, ASC 842 requires that the acquirer retain the acquiree’s previous lease classification, unless the lease is modified. Lease liabilities (Short-term & Long-term) In accordance with ASC 805, acquired operating lease liabilities should be measured as if they were new leases following the guidance under ASC 842 (e.g., reassessment of the lease term, incremental borrowing rate (“IBR”), lease payments, purchase options). Therefore, all assumed lease liabilities were measured at the present value of remaining lease payments discounted at the IBR of the successor on the date of remeasurement (i.e., the Effective Date). Right-of-use In accordance with ASC 805, acquired operating lease ROU assets are measured at the amount of the corresponding lease liabilities adjusted by any favorable or unfavorable terms of the lease as compared to market terms. When determining whether there were any favorable or unfavorable terms of a lease that required recognition, management considered all of the terms of the lease (e.g., contractual rent payments, renewal or termination options, purchase options, lease incentives). Pursuant to the above guidance, as part of its fresh-start valuation, the Company adjusted the ROU asset downwards for the West Hercules West Linus off-market Lease liabilities For operating leases where we are the lessee, our future undiscounted cash flows as at September 30, 2022 (Successor) are as follows: (In $ millions) Year ended Remainder of 2022 8 2023 2 2024 2 2025 2 2026 and thereafter 2 Total 16 The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheets as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor): Successor Predecessor (In $ millions) As at As at Total undiscounted cash flows 16 37 Less discount (2 ) (2 ) Operating lease liability 14 35 Of which: Curren 7 30 Non-curr 7 5 Supplementary lease information The following table gives supplementary information regarding our lease accounting for the three months ended September 30, 2022 (Successor) and September 30, 2021 (Predecessor), the period from January 1, 2022 through February 22, 2022 (Predecessor), the period February 23, 2022 through September 30, 2022 (Successor) and the nine months ended September 30, 2021 (Predecessor): Successor Predecessor Successor Predecessor (In $ million) Three months Three months Period from Period from Nine months Operating lease cost: Operating lease cost 11 27 31 4 32 Short-term lease cost 1 — 3 1 — Total lease cost 12 27 34 5 32 Other information: Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows 12 27 34 5 32 Right-of-use Non-cash — — 4 24 — Weighted-average remaining lease term in months 37 25 37 22 25 Weighted-average discount rate 10 % 16 % 10 % 9 % 16 % Lessor arrangements On November 25, 2019, March 15, 2020 and November 15, 2020 respectively, we leased the West Castor, West Telesto West Tucana he estimated future undiscounted cash flows on these leases are as follows: (In $ millions) Year ended 2022 7 2023 28 2024 21 2025 and thereafter 20 Total 76 On July 1, 2022, Seadrill leased the West Gemini Refer to Note 8 – Other revenue for comparative information on income from operating leases. | Note 22 – Leases As West Bollsta West Hercules West Linus right-of-use leases. We continue to lease three of our benign environment jackup rigs, West Castor, West Telesto West Tucana, In March, 2020, Seadrill was awarded a contract to provide drilling services for 10 firm wells and 4 optional wells. To fulfill this contract Seadrill entered a charter agreement to lease the West Bollsta right-of-use Seadrill entered into sale and leaseback arrangements for the West Hercules West Linus Jack-up West Taurus The West Taurus West Taurus On August 27, 2021, the Bankruptcy Court approved an amendment to the original SFL charter based on the current Equinor contract in Norway and in direct continuation (after a period of mobilization) of the subsequent Equinor contract in Canada. The buy-back West Hercules West Hercules Seadrill leases West Linus year-end, West Linus West Linus. For operating leases where we are the lessee, our future undiscounted cash flows are as follows: (In $ millions) Year ended 2022 32 2023 3 2024 1 2025 and thereafter 1 Total 37 The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheet as at December 31, 2021: (In $ millions) Year ended Year ended Total undiscounted cash flows 37 79 Less short term leases — — Less discount (2 ) (11 ) Operating lease liability 35 68 Of which: Current 30 51 Non-current 5 17 Total 35 68 The following table gives supplementary information regarding our lease accounting at December 31, 2021: (In $ million) Year ended Year ended Year ended Operating Lease Cost: Operating lease cost 42 19 12 Short-term lease cost 1 2 1 Total lease cost 43 21 13 Other information: Cash paid for amounts included in the measurement of lease liabilities – 42 21 13 Right-of-use 24 53 19 Weighted-average remaining lease term in months 19 14 18 Weighted-average discount rate 10 % 24 % 13 % On November 25, 2019, March, 15 2020 and November 15, 2020 we leased the West Castor, West Telesto West Tucana (In $ millions) Year ended 2022 28 2023 28 2024 21 2025 18 2026 and thereafter 2 Total 97 Refer to Note 8 – “Other revenues” for comparative information on income from operating leases. |
Common shares
Common shares | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Common shares | Note 21 – Common shares Share capital as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) was as follows: Issued and fully paid share capital Shares Par value each $ As at January 1, 2022 and February 22, 2022 (Predecessor) 100,384,435 $ 0.10 10,038,444 Cancellation of Predecessor equity (100,384,435 ) $ 0.10 (10,038,444 ) Issuance of Successor common stock 49,999,998 $ 0.01 500,000 As at February 23, 2022, March 31, 2022, June 30, 2022 and September 30, 2022 (Successor) 49,999,998 0.01 500,000 Please refer to Note 3 – “Chapter 11” for further details on the changes share | Note 23 – Common shares The common shares presented in our Consolidated Balance Sheet is that of the Predecessor Company, prior to our emergence from Chapter 11. The information included in this note presents the common share transactions of the predecessor. For information on the common shares held on emergence from Chapter 11, refer to Note 4 – “Chapter 11”. Changes in predecessor common shares for the periods presented in this report were as follows: Issued and fully paid share Shares $ millions December 31, 2019 100,234,973 10 2020 RSU share issuance 149,462 — December 31, 2020 and December 31, 2021 100,384,435 10 Predecessor common share transactions for periods presented On February 10, 2020 and June 17, 2020, a total of 149,462 common shares were issued to employees following a vesting of restricted stock units awarded under our Employee Incentive Plan. Key terms of shares issued and outstanding All our issued and outstanding common shares are and will be fully paid. Subject to the Bye-Laws, non-Bermudians non-residents Holders of common shares have no pre-emptive, Bye-Laws, Bye-Laws, In the event of liquidation, dissolution or winding up of the Company, the holders of common shares are entitled to share equally and ratably in the Company’s assets, if any, remaining after the payment of all its debts and liabilities, subject to any liquidation preference on any issued and outstanding preference shares. |
Accumulated other comprehensive
Accumulated other comprehensive (loss)/income | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Accumulated other comprehensive (loss)/income | Note 22 – Accumulated other comprehensive (loss)/income Accumulated other comprehensive loss for the three month period ended September 30, 2021 (Predecessor) were as follows: (In $ millions) Actuarial gain Share in Change in debt Total As at January 1, 2021 (Predecessor) (2 ) (28 ) 4 (26 ) Other comprehensive income — (1 ) 1 — March 31, 2021 (Predecessor) (2 ) (29 ) 5 (26 ) Other comprehensive income — 5 — 5 As at June 30, 2021 (Predecessor) (2 ) (24 ) 5 (21 ) Other comprehensive income — 1 — 1 As at September 30, 2021 (Predecessor) (2 ) (23 ) 5 (20 ) Accumulated other comprehensive income/(loss) for the periods from January 1, 2022 through February 22, 2022 (Predecessor) and February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor) were as follows: (In $ millions) Actuarial Share in Change in debt Total As at January 1, 2022 (Predecessor) (2 ) (19 ) 6 (15 ) Other comprehensive income from continuing operations 1 — — 1 Other comprehensive loss from discontinued operations — (2 ) (1 ) (3 ) Recycling of accumulated other comprehensive loss on sale of Paratus Energy Services — 21 (5 ) 16 As at February 22, 2022 (Predecessor) (1 ) — — (1 ) Reset accumulated other comprehensive loss 1 — — 1 As at February 23, 2022 (Successor) — — — — Other comprehensive income — — — — As at March 31, 2022 (Successor) — — — — Other comprehensive income 3 — — 3 As at June 30, 2022 (Successor) 3 — — 3 Other comprehensive income — — — — As at September 30, 2022 (Successor) 3 — — 3 | Note 24 – Accumulated other comprehensive income/(loss) Changes in accumulated other comprehensive income/(loss) for the periods presented in this report were as follows: (In $ millions) Actuarial Share in Change in Total January 1, 2020 — (13 ) — (13 ) Other comprehensive loss from continuing operations (2 ) — — (2 ) Other comprehensive (loss)/income from discontinued operations — (15 ) 4 (11 ) December 31, 2020 (2 ) (28 ) 4 (26 ) Other comprehensive income from continuing operations — — — — Other comprehensive income from discontinued operations — 9 2 11 December 31, 2021 (2 ) (19 ) 6 (15 ) |
Share based compensation
Share based compensation | 12 Months Ended |
Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |
Share based compensation | Note 25 – Share based compensation The share-based compensation expense for our share options and Restricted Stock Unit (“ RSU (In $ millions) Year ended Year ended Year ended Share-based compensation expense — 8 5 Total share-based compensation expense — 8 5 On August 16, 2018, following emergence from the previous Chapter 11, we established an employee incentive plan with a limit of 11.1 million of our common shares. On September 4, 2018 we made a grant of 0.5 million RSUs to certain employees and directors under the employee incentive plan. The awards were subject to a service condition and vest 33% per year over the three-year period to September 4, 2021. On September 4, 2019, the first tranche of RSUs vested and 0.2 million of our common shares were issued to employees and directors. On April 26, 2019, we made a grant of 1.7 million performance shares to certain employees under our employee incentive plan. The awards are subject to service and performance conditions and the vesting period ends on March 31, 2022. On August 23, 2019, we made a grant of 0.3 million restricted stock units to directors. The awards were subject to a service condition and vest 33% per year over the three-year period to August 23, 2022. On July 29, 2020, we made a one-off expensed to the consolidated statement of operations. Company Directors and Senior Management held 510,234 performance share units and 188,369 restricted stock units, which resulted in a cash payment of $ 0.2 million. No further grants have been made since all schemes were cancelled and there are no unvested awards. |
Pension benefits
Pension benefits | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Pension benefits | Note 26 – Pension benefits Defined benefit plans For onshore employees in Norway, who are participants in the defined benefit plans, the primary benefits are a retirement pension of approximately 66 percent of salary at retirement age of 67 years, together with a long-term disability pension. The retirement pension per employee is capped at an annual payment of 66 percent of the total of 12 times the Norwegian Social Security Base. Most employees in this group may choose to start a pre-retirement Consolidated Balance Sheet position Net defined benefit pension asset/(obligation) is as follows: (In $ millions) December 31, December 31, Defined benefit obligation – Non-current liabilitie s (5 ) — Deferred tax asset 1 1 Net defined benefit pension (obligation)/asset (4 ) 1 Annual pension cost We record pension costs in the period during which the services are rendered by the employees. (In $ millions) Year ended Year ended Year ended Service cost — 1 3 Interest cost on prior years’ benefit obligation — — 1 Gross pension cost for the year — 1 4 Expected return on plan assets — — (1 ) Net pension cost for the year — 1 3 Impact of settlement/curtailment of defined benefit plans 2 1 — Total net pension cost 2 2 3 The funded status of the defined benefit plan Funded defined benefit pension obligation is as follows: (In $ millions) December 31, December 31, Projected defined benefit obligations (16 ) (16 ) Plan assets at market value 11 16 Funded defined benefit pension obligation (5 ) — Change in projected benefit obligations Change in projected benefit obligation is as follows: (In $ millions) Year ended Year ended Year ended Projected benefit obligations at beginning of period 16 40 37 Interest cost — — 1 Service cost — 1 3 Benefits paid (1 ) (1 ) (2 ) Change in unrecognized actuarial gain 1 2 — Settlement (1) — (25 ) — Foreign currency translations — (1 ) 1 Projected benefit obligations at end of period 16 16 40 (1) Two Norwegian defined benefit plans were settled and paid out in the year ending 31 December, 2020. Change in pension plan assets Change in pension plan assets is as follows: (In $ millions) December 31, December 31, December 31, Fair value of plan assets at beginning of year 16 39 33 Estimated return — — 1 Contribution by employer 1 6 6 Benefits paid (1 ) (1 ) (2 ) Actuarial gain — — — Settlement (2) (1 ) (27 ) — Foreign currency translations — (1 ) 1 Other (1) (4 ) — — Fair value of plan assets at end of year 11 16 39 (1) In 2021, we received the contribution back for two Norwegian defined benefit plans that were terminated in 2020. (2) Two Norwegian defined benefit plans were settled and paid out in 2020. The accumulated benefit obligation for all defined benefit pension plans was $15 million and $15 million at December 31, 2021 and December 31, 2020, respectively. Pension obligations are actuarially determined and are critically affected by the assumptions used, including the expected return on plan assets, discount rates, compensation increases and employee turnover rates. We periodically review the assumptions used and adjust them and the recorded liabilities as necessary. The expected rate of return on plan assets and the discount rate applied to projected benefits are particularly important factors in calculating our pension expense and liabilities. We evaluate assumptions regarding the estimated rate of return on plan assets based on historical experience and future expectations on investment returns, utilizing the asset allocation classes held by the plan’s portfolios. The discount rate is based on the covered bond rate in Norway. Changes in these and other assumptions used in the actuarial computations could impact the projected benefit obligations, pension liabilities, pension expense and other comprehensive income. Assumptions used in calculation of pension obligations Year ended Year ended Year ended Rate of compensation increase at the end of year 2.25 % 2.25 % 2.25 % Discount rate at the end of year 1.50 % 1.70 % 2.30 % Prescribed pension index factor 1.20 % 1.20 % 2.00 % Expected return on plan assets for the year 2.90 % 2.60 % 2.60 % Employee turnover 4.00 % 4.00 % 4.00 % Expected increases in Social Security Base 2.25 % 2.00 % 2.50 % The weighted-average asset allocation of funds related to our defined benefit plan at December 31, was as follows: Pension benefit plan assets December 31, December 31, Equity securities 9.7 % 7.2 % Debt securities 65.3 % 68.2 % Real estate 13.6 % 13.6 % Money market 10.6 % 10.6 % Other 0.8 % 0.4 % Total 100.0 % 100.0 % The investment policies and strategies for the pension benefit plan funds do not use target allocations for the individual asset categories. The investment objectives are to maximize returns subject to specific risk management policies. The life insurance company diversify the allocation of plan assets by investing in both domestic and international fixed income securities and domestic and international equity securities. These investments are readily marketable and can be sold to fund benefit payment obligations as they become payable. Effective January , the company terminated of the defined benefit plans and replaced it with a defined contribution plan. The termination/settlement cost relating to the defined benefit plans has been recognized within ‘Selling, general and administrative expenses’ within the Consolidated Statement of Operations. Cash flows – Contributions expected to be paid The table below shows our expected annual pension plans contributions under defined benefit plans for the years ending December 31, 2021-2030. The expected payments are based on the assumptions used to measure our obligations at December 31, 2021 and include estimated future employee services. (In $ millions) December 31, 2022 1 2023 1 2024 1 2025 1 2025-2030 3 Total payments expected during the next 10 years 7 Defined contribution and other plans We made contributions to personal defined contribution pension and other plans totaling $18 million for the year ended December 31, 2021, $18 million for the year ended December 31, 2020, and $16 million for the year ended December 31, 2019. These were charged as operational expenses as they became payable. |
Related party transactions
Related party transactions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transactions [Abstract] | ||
Related party transactions | Note 24 – Related party transactions Prior to emerging from Chapter 11 proceedings on February 22, 2022, our main related parties included (i) affiliated companies over which we held significant influence, and (ii) companies who were either controlled by or whose operating policies were significantly influenced by Hemen, who was a major shareholder of the Predecessor Company. On emergence, Hemen’s equity interest in Seadrill substantially decreased and, as a result, companies who were either controlled by or whose policies were significantly influenced by Hemen are no longer related parties. These include Archer, Frontline, Seatankers, Northern Drilling and Northern Ocean. Companies over which we hold significant influence include Sonadrill, Gulfdrill, and Paratus Energy Services Limited (formerly Seadrill New Finance Limited or “NSNCo”) (“PES”), following the disposal of 65% of our equity interest in PES in January 2022. PES owns 100% of SeaMex and holds a 50% equity interest in Seabras Sapura. Prior to November 2, 2021, SeaMex was an affiliated company of which we held a 50% interest. On November 2, 2021, NSNCo purchased the residual equity in SeaMex, which led to it becoming a wholly owned subsidiary, until the disposal of 65% of our interest in PES in January 2022. Aquadrill (formerly Seadrill Partners) was an affiliated company until it emerged from Chapter 11 proceedings in May 2021. The information presented within the Predecessor period of this note includes all services performed prior to May 2021. In the following sections we provide an analysis of transactions with related parties and balances outstanding with related parties. Related party revenue The below table provides an analysis of related party revenues for periods presented in this report. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Management fees revenues (a) 58 22 118 12 77 Reimbursable revenue (b) 4 17 9 3 46 Lease revenue (c) 7 7 16 4 19 Total related party operating revenues 69 46 143 19 142 (a) We provide management and administrative services to SeaMex, PES, Sonadrill and, in the Predecessor period, Aquadrill. We provide operational and technical support services to SeaMex, Sonadrill and, in the Predecessor period, Aquadrill and Northern Ocean. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis. (b) We recognized reimbursable revenues from Sonadrill for project work on the Quenguela (c) Lease revenue earned on the charter of the West Castor, West Telesto West Tucana Related party operating expenses The below table provides an analysis of related party operating expenses for periods presented in this report. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months West Bollsta lease (d) — (10 ) — — (31 ) West Hercules lease (e) — (2 ) — (3 ) (2 ) Other related party operating expenses (f) — (1 ) — — (3 ) Total related party operating expenses — (13 ) — (3 ) (36 ) (d) Seadrill entered a charter agreement to lease the West Bollsta – (e) Seadrill incurred operating lease expense related to its lease of the West Hercules – (f) We received services from certain other related parties. These included management and administrative services from Frontline, warehouse rental from Seabras Sapura and other services from Archer and Seatankers. Following emergence from Chapter 11 proceedings, these companies are no longer related parties. Related party receivable balances The below table provides an analysis of related party receivable balances for periods presented in this report. Successor Predecessor (In $ millions) As at As at Related party loans and interest (g) — 9 Trading and other balances (h) 63 20 Allowance for expected credit losses (i) (1 ) (1 ) Total related party receivables 62 28 Of which: Amounts due from related parties – current 62 28 Amounts due from related parties – non-current — — (g) In 2021, the Sponsor Minimum Liquidity Shortfall loan receivable from SeaMex, which earned interest at 6.5% plus 3-month (h) Trading and other balances are primarily comprised of receivables from Gulfdrill for lease income, as well as from SeaMex, PES and Sonadrill for related party management and crewing fees. Per our contractual terms, these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. (i) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 – The below table provides an analysis of the receivable balance by counterparty: Successor Predecessor (In $ millions) As at As at Sonadrill 53 4 Gulfdrill 7 13 PES / SeaMex (j) 3 12 Gross amount receivable 63 29 Less: CECL allowance (1 ) (1 ) Receivable net of CECL allowance 62 28 (j) Receivables from PES / SeaMex as at December 31, 2021, represent balances between the continuing operations of Seadrill and the discontinued operations held for sale. Related party payable balances The below table provides an analysis of related party payable balances as of September 30, 2022 (Successor) and December 31, 2021 (Predecessor) presented in this report. Successor Predecessor (In $ millions) As at As at Liabilities from Seadrill to SFL (k) — 503 Total related party liabilities — 503 Of which: Amounts due to related parties – current — — Liabilities subject to compromise — 503 (k) On filing for Chapter 11, our prepetition related party payables were reclassified to Liabilities subject to compromise (“LSTC”) in our Consolidated Balance Sheets at December 31, 2021 (Predecessor). Upon emergence from Chapter 11 proceedings in February 2022, all LSTC balances were extinguished with a gain on settlement recognized in “Reorganization items, net”. For further information refer to Note 4 – “Fresh Start accounting”. Following emergence from Chapter 11 proceedings, SFL is no longer a related party. The following table provides a summary of the related party lease liabilities to SFL as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor). Successor Predecessor (In $ millions) As at As at West Taurus — 345 West Linus — 158 Total lease liabilities to SFL — 503 Other related party transactions We have made guarantees over performance to end customers on behalf of Sonadrill. We have not recognized a liability for any of these guarantees as we do not consider it to be probable that the guarantees would be called. | Note 27 – Related party transactions Prior to emerging from Chapter Companies over which we hold significant influence include Seabras Sapura, Sonadrill and Gulfdrill. In addition, prior to November 2, 2021, SeaMex was an affiliated company with which we held a 50% interest. On November 2, 2021, we purchased the residual equity in SeaMex, which led to it becoming a wholly owned subsidiary. Our investments in both SeaMex and Seabras Sapura are included within assets held for sale and liabilities associated with assets held for sale in our Consolidated Balance Sheet. Aquadrill (formerly Seadrill Partners) was an affiliated company until it emerged from Chapter 11 in May 2021. The information presented within this note includes all services performed prior to May 2021. Companies that are controlled by, or whose operating policies may be significantly influenced by, Hemen include SFL, Archer, Frontline, Seatankers, Northern Drilling and Northern Ocean. In the following sections we provide an analysis of transactions with related parties and balances outstanding with related parties. Related party revenue The below table provides an analysis of related party revenues for periods presented in this report. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) Management fee revenues (a) 98 135 113 Reimbursable revenues (b) 65 148 218 Leasing revenues (c) 26 19 1 Other — 3 1 Total related party operating revenues 189 305 333 (a) We provide management and administrative services to SeaMex, Sonadrill and, until May 2021, Aquadrill, as well as operational and technical support services to SeaMex, Sonadrill, Northern Ocean and, until May 2021, Aquadrill. We charge our affiliates for support services provided either on a cost-plus mark-up (b) We recognized reimbursable revenues from Northern Ocean for work performed to mobilize the Northern Ocean rigs West Mira West Bollsta Quenguela In December 2021, the off against the receivable. The remaining receivable of $18 million was net was settled for no cash against the lease liability owed to Northern Ocean for the West Bollsta (c) Lease revenue earned on the charter of the West Castor, West Telesto West Tucana Related party operating expenses The below table provides an analysis of related party operating expenses for periods presented in this report. (In $ millions) Year ended Year ended Year ended West Bollsta (d) 57 10 — West Hercules (e) 10 — — Other related party operating expenses (f) 3 2 3 Total related party operating expenses 70 12 3 (d) Seadrill entered a charter agreement to lease the West Bollsta (e) Lease expense following the change to operating lease in August 2021. Refer to Note 22 – “Leases” for details. (f) We received services from certain other related parties. These included management and administrative services from Frontline and other services from Seatankers. Related party financial items In 2021, $1 million (2020; nil) interest income was recognized on an $8 million “Minimum Liquidity Shortfall” loan issued to SeaMex during 2020. Related party receivable balances The below table provides an analysis of related party receivable balances for periods presented in this report. (In $ millions) December 31, December 31, (As adjusted) Related party loans and interest (g) 9 8 Trading balances (h) 20 236 Allowance for expected credit loss (i) (1 ) (153 ) Total related party receivables 28 91 Of which: Amounts due from related parties – 28 85 Amounts due from related parties – non-curren t — 6 Total amounts due from related parties 28 91 (g) Sponsor Minimum Liquidity Shortfall loan receivable from SeaMex which earns interest at 6.5% plus 3-month (h) Trading balances are primarily comprised of receivables from Gulfdrill for lease income, as well as from SeaMex and Sonadrill for related party management and crewing fees. Per our contractual terms these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. After its emergence from Chapter 11 in May 2021, Aquadrill is no longer considered a related party and any amounts due from them have been reclassified to “Accounts receivable, net” in our Consolidated Balance Sheets. The below table provides an analysis of the receivable balance: (In $ millions) Year ended Year ended Northern Ocean — 140 Aquadrill — 61 Gulfdrill 13 17 Sonadrill 4 10 NSNCo/SeaMex (Discontinued operations) 3 8 Gross amount receivable 20 236 Less: CECL allowance (1 ) (153 ) Receivable net of CECL allowance 19 83 (i) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 – Related party payable balances The below table provides an analysis of related party payable balances for periods presented in this report. (In $ millions) December 31, December 31, Liabilities from Seadrill to SFL (k) 503 426 Trading balances (l) — 7 Total related party liabilities 503 433 Of which: Amounts due to — 7 Long-term debt due to related parties — 426 Liabilities subject to compromise 503 — On filing for Chapter 11, our prepetition related party payables were reclassified to “liabilities subject to compromise” in our Consolidated Balance Sheets at December 31, 2021. For further information on our bankruptcy proceedings refer to Note 4 – Chapter 11 of our Consolidated Financial Statements included herein. (k) The liabilities to SFL represented $1.1 billion of lease liabilities between Seadrill and certain special purpose vehicles (“SPVs”), that are legal subsidiaries, of SFL. Seadrill consolidated these SPVs under the variable interest model until December 2020, when their deconsolidation was triggered by default on the leases. Refer to Note 4 – Chapter 11 for further details. On deconsolidation, Seadrill recognized the lease liabilities at a significant discount, reflecting its credit position at the time. The following table provides a summary of the lease liabilities to SFL as at December 31, 2021 and December 31, 2020. (In $ millions) December 31, December 31, West Taurus 345 147 West Linus 158 142 West Hercules — 137 Total lease liabilities to SFL 503 426 The lease on the West Taurus The West Hercules West Linus West Linus (l) Trading balances in 2020 primarily included related party payables due to Aquadrill and SeaMex. As part of the settlement agreement with Aquadrill all claims on pre-petition Other related party transactions We have made certain guarantees over the performance of Northern Ocean and Sonadrill on behalf of customers. We have not recognized a liability for any of the above guarantees as we did not consider it to be probable that the guarantees would be called. |
Financial instruments and risk
Financial instruments and risk management | 12 Months Ended |
Dec. 31, 2021 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial instruments and risk management | Note 28 – Financial instruments and risk management We are exposed to several market risks, including credit risk, foreign currency risk and interest rate risk. Our policy is to reduce our exposure to these risks, where possible, within boundaries deemed appropriate by our management team. This may include the use of derivative instruments. Credit risk We have financial assets, including cash and cash equivalents, related party receivables, other receivables and certain amounts receivable on derivative instruments. These assets expose us to credit risk arising from possible default by the counterparty. Most of the counterparties are creditworthy financial institutions or large oil and gas companies. We do not expect any significant loss to result from non-performance We do not demand collateral in the normal course of business. The credit exposure of derivative financial instruments is represented by the fair value of contracts with a positive fair value at the end of each period. The credit exposure of interest rate swap agreements, currency option contracts and foreign currency contracts is represented by the fair value of contracts with a positive fair value at the end of each period, reduced by the effects of master netting agreements and adjusted for counterparty non-performance Credit risk is also considered as part of our expected credit loss provision. For details on how we estimate expected credit losses refer to Note 5 – “Current expected credit losses”. Concentration of risk There is also a concentration of credit risk with respect to cash and cash equivalents to the extent that most of the amounts are carried with Citibank, Nordea Bank AB, Danske Bank A/S, BNP Paribas and BTG Pactual. We consider these risks to be remote, but, from time to time, we may utilize instruments such as money market deposits to manage concentration of risk with respect to cash and cash equivalents. We also have a concentration of risk with respect to customers, including affiliated companies. For details on the customers with greater than 10% of contract revenues, refer to Note 6 – “Segment information”. For details on amounts due from affiliated companies, refer to Note 27 – “Related party transactions”. Foreign exchange risk It is customary in the oil and gas industry that a majority of our revenues and expenses are denominated in U.S. dollars, which is the functional currency of most of our subsidiaries and equity method investees. However, a portion of the revenues and expenses of certain of our subsidiaries and equity method investees are denominated in other currencies. We are therefore exposed to foreign exchange gains and losses that may arise on the revaluation or settlement of monetary balances denominated in foreign currencies. Our foreign exchange exposures primarily relate to cash and working capital balances denominated in foreign currencies. We do not expect these exposures to cause a significant amount of fluctuation in net income and do not currently hedge them. The effect of fluctuations in currency exchange rates arising from our international operations has not had a material impact on our overall operating results. Interest rate risk Our exposure to interest rate risk relates mainly to our floating rate debt and balances of surplus funds placed with financial institutions. We manage this risk through the use of derivative arrangements. On May 11, 2018, we purchased an interest rate cap for $68 million to mitigate exposure to future increases of LIBOR. The $4.5 billion of debt principal covered by the cap is significantly in excess of Seadrill’s debt outstanding following the restructuring and the interest rate cap is not designated as a hedge and therefore we do not apply hedge accounting. The capped rate against the 3-month 3-month As part of reference rate reform, the use of LIBOR will be replaced by other interest rate indexes as part of a negotiation with our lenders. As at December 31, 2021 our debt facilities and derivatives continue to be linked to the LIBOR interest rate index. The $683 million reinstated facility and $300 million new money facility will be referenced to the SOFR, whilst the Convertible Note will be referenced to the 3-month |
Fair values of financial instru
Fair values of financial instruments | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | ||
Fair values of financial instruments | Note 26 – Fair value of financial instruments Fair value of financial instruments measured at amortized cost The carrying value and estimated fair value of our financial instruments that are measured at amortized cost as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) are as follows: Successor Predecessor As at September 30, As at December 31, (In $ millions) Fair Carrying Fair Carrying Assets Related party loans receivable (Level 2) — — 9 9 Liabilities Liability subject to compromise – Secured credit facilities ( Level 3) — — 1,966 5,544 Liability subject to compromise – Related Party Loans Payable (Level 3) — — 176 503 First Lien Senior Secured (Level 3) 188 184 — — Second Lien Senior Secured (Level 3) 748 748 — — Unsecured Convertible note – debt component (Level 3) * 42 50 — — * The conversion option, together with the issue discount, was recorded in the Predecessor equity which was subsequently cancelled on emergence from Chapter 11 proceedings. Financial instruments categorized as level 2 The fair value of related party loan receivable balances were assumed to be equal to their carrying value, after adjusting for expected credit losses. The loans were categorized as level 2 on the fair value hierarchy and were repaid in 2022. Other trading balances with related parties are not shown in the table above and are discussed in Note 24 – “Related party transactions”. Financial instruments categorized as level 3 Upon emergence from Chapter 11 proceedings, our secured credit facilities were settled and replaced with the first and second lien senior notes and an unsecured convertible note. The fair values attributed to the first and second lien debt were derived by discounting the future cash flows associated with each facility, using a weighted average cost of capital range of 8.5% to 9.5%. The fair value attributed to the unsecured convertible bond is bifurcated into two elements: the straight debt component is derived through a discounted cash flow approach, similarly to the one applied for the first and second lien debt, and the conversion option, which is derived through an option pricing model which forecasts equity volatility and compares the potential conversion redemption against historical and implied equity movements in comparable companies in our industry. The fair values of the secured credit facilities as at December 31, 2021 were determined by reference to the secured credit facilities holder allocation of the Seadrill fair value post emergence. The fair value was derived using a discounted cash flow model of future free cash flows from each rig, using a weighted average cost of capital range of 17.0%. Upon emergence from Chapter 11 proceedings, our related party loans payable were extinguished and a gain recognized in “Reorganization items, net”. The fair value of the related party loans payable as at December 31, 2021, for the West Taurus West Linus Our cash and cash equivalents, restricted cash, accounts receivable, and accounts payable are by their nature short-term. As a result, the carrying values included in our Consolidated Balance Sheets approximate fair value. Financial instruments measured at fair value on a recurring basis The carrying value and estimated fair value of our financial instruments that are measured at fair value on a recurring basis at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) are as follows: Successor Predecessor As at September 30, As at December 31, (In $ millions) Fair Carrying Fair Carrying Assets Cash and cash equivalents ( Level 1) 224 224 293 293 Restricted cash (Level 1) 125 125 223 223 Interest rate cap (Level 2) 8 8 — — Level 1 fair value measurements The carrying value of cash and cash equivalents and restricted cash, which are highly liquid, is a reasonable estimate of fair value and are categorized at level 1 of the fair value hierarchy. Level 2 fair value measurements The fair value of the interest rate cap as at September 30, 2022 is calculated using well-established independent valuation techniques and counterparty non-performance | Note 29 – Fair values of financial instruments Fair value of financial instruments measured at amortized cost The carrying value and estimated fair value of o ur fina December 31, 2021 December 31, 2020 (As adjusted) (As adjusted) (In $ millions) Fair value Carrying value Fair value Carrying value Assets Related party loans receivable (Level 2) 9 9 6 6 Liabilities Liability subject to compromise – Level 3) 1,966 5,544 922 5,545 Liability subject to compromise – (Level 3) 176 503 424 426 Level 2 The fair value of related party receivable balances are assumed to be equal to their carrying value, after adjusting for expected credit losses. The loans are categorized as level 2 on the fair value hierarchy. Other trading balances with related parties are not shown in the table above and are covered in Note 27 – “Related party transactions”. Level 3 The fair values of the secured credit facilities as at December 31, 2021 are determined by reference to the secured credit facilities holder allocation of the Seadrill fair value post emergence, as this is the expected amount of equity they would be entitled to, as well as the value of the issuance of second lien debt facility. The fair value is derived using a discounted cash flow model of future free cash flows from each rig, using a weighted average cost of capital range of 10% to 17.0%. We have categorized this at level 3 of the fair value hierarchy. The fair value of the secured credit facilities as at December 31, 2020, was determined by reference to the fair value of the collateral of each facility, the rigs, as this is the expected amount recoverable on enforcement of an event of default. As noted in “ Note 1 – General information ”, all amounts related to PES and the KSA business have been presented separately; accordingly, rigs classified as held for sale have been excluded from the fair value of the secured credit facilities as at December 31, 2020. Refer to Note 20 – “Debt” for further information. The fair value of the related party loans payable as at December 31, 2021, for the West Taurus West Linus Note 27 – “Related party transactions” for further information. Our cash and cash equivalents, and restricted cash, accounts receivable, and accounts payable are by their nature short-term. As a result, the carrying values included in our Consolidated Balance Sheets approximate fair value. |
Commitments and contingencies
Commitments and contingencies | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Commitments and contingencies | Note 25 – Commitments and contingencies Legal Proceedings From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions for demurrage, damages, off-hire Oro Negro The CEO of Perforadora Oro Negro, S. DE R.L. DE C.V (“Oro Negro”), a Mexican drilling rig contractor, filed a complaint personally and in his capacity as foreign representative of Oro Negro on June 6, 2019 in the United States Bankruptcy Court, Southern District of New York, within Oro Negro’s Chapter 15 proceedings ancillary to its Mexican insolvency process. The complaint names Seadrill and its joint venture partner as co-defendants Nigerian Cabotage Act litigation Seadrill Mobile Units Nigeria Ltd (“SMUNL”) commenced proceedings in May 2016 against the Honourable Minister for Transportation, the Attorney General of the Federation and the Nigerian Maritime Administration and Safety Agency (“NMASA”) with respect to interpretation of the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Cabotage Act”). SMUNL is an Aquadrill entity which is the litigating party on behalf of both Aquadrill and Seadrill as the litigation relates to the West Capella West Saturn West Jupiter Although we intend to strongly pursue this appeal, we cannot predict the outcome of this case. We do not believe that it is probable that the ultimate liability, if any, resulting from this litigation will have a material effect on our financial position and results of operations and cash flows. Lava Jato The Brazilian markets have experienced heightened volatility in recent years due to the uncertainties derived from the ongoing investigations being conducted by the Office of the Brazilian Federal Prosecutor, the Brazilian Federal Police, the Brazilian Securities Commission (Comissão de Valores Mobiliários), the Securities and Exchange Commission, the U.S. Department of Justice, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) and other Brazilian and foreign public authorities, including the largest such investigation known as Lava Jato, and the impact that such investigations have on the Brazilian economy and political environment. Numerous elected officials, public servants and executives and other personnel of large and state-owned companies have been subject to investigation, arrest, criminal charges and other proceedings in connection with allegations of political corruption, including the acceptance of bribes by means of kickbacks on contracts granted by the government to several infrastructure, oil and gas and construction companies, among others. The profits of these kickbacks allegedly financed the political campaigns of political parties that were unaccounted for or not publicly disclosed and served to personally enrich the recipients of the bribery scheme. On September 23, 2020, Seadrill’s subsidiary Seadrill Serviços de Petroleo, Ltda was served with a search and seizure warrant from the Federal Police in Rio de Janeiro, Brazil as part of the phase of Operation Lava Jato relating to individuals formally associated with Seadrill Serviços. At this time, Seadrill understands that this investigation has been closed. Individuals who have had commercial arrangements with Seadrill have been identified in the Lava Jato investigations and the investigations by the Brazilian authorities are ongoing. The outcome of certain of these investigations is uncertain, but they have already had an adverse impact on the business, image and reputation of the implicated companies, and on the general market perception of the Brazilian economy. We cannot predict whether such allegations will lead to further political and economic instability or whether new allegations against government officials or executives will arise in the future. We also cannot predict the outcome of any such allegations on the Brazilian economy, and the Lava Jato investigation including its recent phases, could adversely affect our business and operations. Any other material disputes or litigation During the course of the preceding 12 months, the Company has not been involved in any other material litigation or legal proceedings. Guarantees We have issued performance guarantees for potential liabilities that may result from drilling activities under current or previous managed rig arrangements with Sonadrill and Northern Ocean. As of September 30, 2022, we had not recognized any liabilities for these guarantees as we do not consider it probable that the guarantees will be called. The guarantees provided on behalf of Sonadrill have been capped at $1.1 billion (December 31, 2021 (Predecessor): $400 million), in the aggregate, across the three rigs operating in the joint venture on three active and one future contract. The guarantees provided on behalf of Northern Ocean have been capped at $100 million (December 31, 2021 (Predecessor): $150 million). | Note 30 – Commitments and contingencies Legal Proceedings From time to time we are a party, as plaintiff or defendant, to lawsuits in various jurisdictions for demurrage, damages, off-hire Oro Negro The CEO of Perforadora Oro Negro, S. DE R.L. DE C.V (“Oro Negro”), a Mexican drilling rig contractor, filed a complaint personally and in his capacity as foreign representative of Oro Negro on June 6, 2019 in the United States Bankruptcy Court, Southern District of New York, within Oro Negro’s Chapter 15 proceedings ancillary to its Mexican insolvency process. The complaint names Seadrill and its joint venture partner as co-defendants The stay in the bankruptcy proceeding will continue whilst a purchase is agreed. Nigerian Cabotage Act litigation Seadrill Mobile Units Nigeria Ltd (“SMUNL”) commenced proceedings in May 2016 against the Honourable Minister for Transportation, the Attorney General of the Federation and the Nigerian Maritime Administration and Safety Agency with respect to interpretation of the Coastal and Inland Shipping (Cabotage) Act 2003 (the “Cabotage Act”). SMUNL is an Aquadrill entity which is the litigating party on behalf of both Aquadrill and Seadrill as the litigation relates to the West Capella West Saturn West Jupiter 3-5 Although we intend to strongly pursue this appeal, it cannot predict the outcome of this case. We do not believe that it is probable that the ultimate liability, if any, resulting from this litigation will have a material effect on our financial position. Lava Jato On September 23, 2020, Seadrill’s subsidiary Seadrill Serviços de Petroleo, Ltda was served with a search and seizure warrant from the Federal Police in Rio de Janeiro, Brazil as part of the phase of Operation Lava Jato relating to individuals formally associated with Seadrill Serviços. Seadrill is cooperating with the investigation. The Brazilian markets have experienced heightened volatility in recent years due to the uncertainties derived from the ongoing investigations being conducted by the Office of the Brazilian Federal Prosecutor, the Brazilian Federal Police, the Brazilian Securities Commission (Comissão de Valores Mobiliários), the Securities and Exchange Commission, the U.S. Department of Justice, the Norwegian National Authority for Investigation and Prosecution of Economic and Environmental Crime (Økokrim) and other Brazilian and foreign public authorities, including the largest such investigation known as Lava Jato, and the impact that such investigations have on the Brazilian economy and political environment. Numerous elected officials, public servants and executives and other personnel of large and state-owned companies have been subject to investigation, arrest, criminal charges and other proceedings in connection with allegations of political corruption, including the acceptance of bribes by means of kickbacks on contracts granted by the government to several infrastructure, oil and gas and construction companies, among others. The profits of these kickbacks allegedly financed the political campaigns of political parties that were unaccounted for or not publicly disclosed and served to personally enrich the recipients of the bribery scheme. Individuals who have had commercial arrangements with Seadrill have been identified in the Lava Jato investigations and the investigations by the Brazilian authorities are ongoing. The outcome of certain of these investigations is uncertain, but they have already had an adverse impact on the business, image and reputation of the implicated companies, and on the general market perception of the Brazilian economy. We cannot predict whether such allegations will lead to further political and economic instability or whether new allegations against government officials or executives will arise in the future. We also cannot predict the outcome of any such allegations on the Brazilian economy, and the Lava Jato investigation including its recent phases, could adversely affect our business and operations. Any other material disputes or litigation During the course of the preceding twelve months, the Company has not been involved in any other material litigation or legal proceedings. Guarantees We have issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee: (In $ millions) December 31, December 31, (As adjusted) Guarantees in favor of customers Guarantees to Northern Ocean (1) 150 100 Guarantees to Sonadrill (2) 400 50 Total 550 150 (1) Guarantees in favor of customers are performance guarantees provided on behalf of Northern Ocean of $150 million (December 31, 2020: $100 million) for a contract that matures in 2022. (2) Guarantees in favor of customers are performance guarantees provided on behalf of Sonadrill of $400 million (December 31, 2020: $50 million). Contract maturity in November 2022 ($50 million) and March 2023 ($350 million). As of December 31, 2021 we have not recognized any liabilities for the above guarantees, as we do not consider it is probable for the guarantees to be called. Other contingencies Sevan Louisiana loss incident On January 2019, there was a loss incident on the Sevan Louisiana related to a malfunction of its subsea equipment. As at December 31, 2021 this claim had been closed out and we have recovered $23 million insurance income from our Hull & Machinery policy for the claim. The loss incident also resulted in a period of downtime for the Sevan Louisiana. As a result, we recovered $20 million insurance income from the loss of hire policy for the Sevan Louisiana. The Loss of Hire claim is now closed. |
Supplementary cash flow informa
Supplementary cash flow information | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplementary cash flow information | Note 31 — Supplementary cash flow information The table below summarizes the non-cash (In $ millions) Year ended Year ended Year ended Non-cash Proceeds from sale of West Epsilon (1) — 12 — Non-cash Repayment of debt following sale of West Epsilon (1) — (12 ) — (1) During September 2020, the West Epsilon |
Business combination
Business combination | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Business combination | Note 32 – Business combination On August 31, 2021, Seadrill Limited entered into a restructuring implementation deed (RID) with NSNCo and the JPLs and refinanced SeaMex senior secured bank debt by the issuance of new senior secured notes (the “New SeaMex Notes”). On September 2, 2021, the parties entered into a share purchase agreement (“ SPA We have used a convenience date for this transaction and concluded that SeaMex is consolidated into the Seadrill Group effective November 1, 2021. Prior to this date it was accounted for as a joint venture on the Seadrill consolidated Balance Sheet. The following is a summary of SeaMex’s identifiable assets acquired and liabilities assumed as at acquisition date: (In $ millions) As Carrying amounts of major classes of assets Cash and cash equivalents 41 Restricted cash 21 Accounts receivable, net 316 Intangible drilling contracts 172 Drilling units 216 Other assets 17 Total assets 783 Carrying amounts of major classes of liabilities Amounts due to related parties 133 Long-term debt 234 Other liabilities 88 Total liabilities 455 Net asset acquired 328 Prior to November 2021, 50% of the net income or loss from SeaMex was recognized as a share in results from associated companies in Seadrill’s Consolidated Statement of Operations, and subsequently reclassified to results from discontinued operations. From November 2021 onwards, 100% of SeaMex’s results from operations form part of Seadrill’s consolidated results and have been reported as income from discontinued operations. The following is a summary of SeaMex’s operation results since the acquisition date included in the discontinued operations for the reporting period: (In $ millions) Period November 2, Results from business combination Operating revenues Contract revenues 36 Total operating revenues 36 Operating expenses Vessel and rig operating expenses (25 ) Selling, general and administrative expenses (2 ) Total operating expenses (27 ) Operating profit 9 Financial and non-operating Interest expense (4 ) Others (1 ) Total financial items (5 ) Income before tax 4 Income tax benefit 2 Income after tax 6 |
Assets and Liabilities Held for
Assets and Liabilities Held for Sale/Discontinued Operations | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Discontinued Operations and Disposal Groups [Abstract] | ||
Assets and Liabilities Held for Sale/Discontinued Operations | Note 27 – Assets and liabilities held for sale/Discontinued operation Sale of jackup units in the Kingdom of Saudi Arabia On September 1, 2022, Seadrill entered into the Jackup SPA with subsidiaries of ADES for non-current On October 18, 2022, the Jackup Sale closed and the rigs AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida West Leda West Ariel West Cressida West Leda Disposal of 65% interest in Seadrill New Finance Limited As set out in Note 3 – “Chapter 11”, the Company concluded a comprehensive restructuring of its balance sheet on February 22, 2022. As part of this wider restructuring process, the Company sold 65% of its equity interest in Seadrill New Finance Limited (formerly “NSNCo”, now Paratus Energy Services Limited “PES”) on January 20, 2022. Prior to year end, on November 2, 2021, NSNCo completed the acquisition of the residual 50% equity interest in SeaMex Ltd, a company that it had previously held as a joint venture with Fintech. The agreed sale of 65% of NSNCo meant that the assets and liabilities were to be classified as held for sale as at December 31, 2021 and any financial information generated would be reported as “discontinued operations”. On September 30, 2022, Seadrill entered into share purchase agreements with certain other existing shareholders of PES to dispose of the remaining 35% shareholding. The deal is subject to closing conditions, including relevant antitrust approvals, and is expected to complete in the fourth quarter of 2022 or early 2023. The table below shows the assets and liabilities classified as held for sale as at September 30, 2022, and December 31, 2021: Successor Predecessor As at September 30, 2022 As at December 31, 2021 (In $ millions) Jackup Total NSNCo Jackup Total Assets held for sale Current 392 392 1,103 42 1,145 Non-current — — — 347 347 Total assets held for sale 392 392 1,103 389 1,492 Liabilities associated with assets held for sale Current 37 37 948 35 983 Liabilities subject to compromise — — — 118 118 Non-current — — — 2 2 Total liabilities associated with assets held for sale 37 37 948 155 1,103 The table below shows the income/(loss) from discontinued operations: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months NSNCo — (28 ) — (4 ) (59 ) Jackup Sale 2 (3 ) 2 (29 ) (17 ) Total profit/(loss) from discontinued operations 2 (31 ) 2 (33 ) (76 ) Further details over held for sale assets connected to the Jackup Sale The table below shows the carrying amounts of major classes of assets and liabilities classified as held for sale as of September 30, 2022 and December 31, 2021: Successor Predecessor (In $ millions) As at As at Carrying amounts of major classes of assets included as part of discontinued operations Cash and cash equivalents 8 19 Accounts receivable 21 12 Intangible drilling contracts 7 — Drilling units 339 346 Other assets 17 12 Total assets of discontinued operations classified as held for sale 392 389 Carrying amounts of major classes of liabilities included as part of discontinued operations Trade accounts payable 6 6 Other liabilities 31 31 Total liabilities of discontinued operations classified as held for sale 37 37 Carrying amounts of liabilities subject to compromise included as part of discontinued operations Liabilities subject to compromise — 118 Major classes of line items constituting profit/(loss) of discontinued operations: Successor Predecessor Successor Predecessor (In $ millions, except per share data) Three months Three months Period from Period from Nine months Operating revenues Contract revenues 35 29 79 18 71 Total operating revenues 35 29 79 18 71 Operating expenses Vessel and rig operating expenses (18 ) (17 ) (42 ) (10 ) (46 ) Selling, general and administrative expenses (3 ) (2 ) (7 ) (1 ) (7 ) Depreciation and amortization (4 ) (7 ) (14 ) (4 ) (21 ) Amortization of intangibles (2 ) — (7 ) — — Costs associated with disposal (5 ) — (5 ) — — Total operating expenses (32 ) (26 ) (75 ) (15 ) (74 ) Operating profit 3 3 4 3 (3 ) Financial and other non-operating Interest expense — — — — (1 ) Reorganization items — (5 ) — (32 ) (9 ) Other financial items (1 ) — (1 ) — — Net profit/(loss) before tax from discontinued operations 2 (2 ) 3 (29 ) (13 ) Income tax expense — (1 ) (1 ) — (4 ) Net profit/(loss) after tax from discontinued operations 2 (3 ) 2 (29 ) (17 ) Basic Earning/(loss) per share from discontinued operations 0.04 (0.03 ) 0.04 (0.29 ) (0.17 ) Diluted Earning/(loss) per share from discontinued operations 0.04 (0.03 ) 0.04 (0.29 ) (0.17 ) | Note 33 – Assets and Liabilities Held for Sale/ Discontinued Operations The Company has evaluated subsequent events through April 29, 2022, the date the financial statements were available to be issued. Sale of jackup units in the Kingdom of Saudi Arabia On September 1, 2022, Seadrill entered into the Jackup SPA with subsidiaries of ADES for “Jackup Sale KSA Business non-current On October 18, 2022, the Jackup Sale closed and the rigs AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida West Leda West Ariel West Cressida West Leda Disposal of 65% interest in Seadrill New Finance Limited As set out in “ Note 4 – Chapter 11 ” proceedings, the Company concluded a comprehensive restru ctur of equity interest in NSNCo on January 20, 2022. Prior to year end, on November 2, 2021, NSNCo completed the acquisition of the residual 50% equity interest in SeaMex Ltd, a company that it had previously held as a joint venture with Fintech. The consideration of the business combination was $0.4 billion, based on the value of the various forms of debt instruments forgiven and owed to NSNCo. The agreed sale of 65% of NSNCo meant that the assets and liabilities were to be classified as held for sale as at December 31, 2021 and any financial information generated would be reported as “discontinued operations”. The table below shows the assets and liabilities classified as held for sale as at December 31, 2021, and December 31, 2020: As at December 31, 2021 As at December 31, 2020 (In $ millions) NSNCo Jackup Total NSNCo Jackup Total Assets held for sale Current 1,103 42 1,145 74 35 109 Non-current — 347 347 611 365 976 Total assets held for sale 1,103 389 1,492 685 400 1,085 Liabilities associated with assets held for sale Current 948 35 983 546 146 692 Liabilities subject to compromise — 118 118 — — — Non-current — 2 2 — — — Total liabilities associated with assets held for sale 948 155 1,103 546 146 692 The table below shows the income/(loss) from discontinued operations: (In $ millions) Year ended Year ended Year ended NSNCo 5 (215 ) (502 ) Jackup Sale (20 ) (18 ) (17 ) Total loss from discontinued operations, net of tax (15 ) (233 ) (519 ) Basic/diluted loss per share from discontinued operations (0.15 ) (2.32 ) (5.18 ) The table below shows the cash flows from discontinued operations: (In $ millions) Year ended Year ended Year ended Net cash (used in)/provided by operating activities (5 ) (22 ) 7 NSNCo (18 ) (24 ) (33 ) Jackup Sale 13 2 40 Net cash provided by investing activities 23 36 47 NSNCo 23 36 47 Jackup Sale — — — Net cash used in used in financing activities — (96 ) (333 ) NSNCo — — (333 ) Jackup Sale — (96 ) — Further details over held for sale assets connected to the Jackup Sale The table below shows the carrying amounts of major classes of assets and liabilities classified as held-for- sales: (In $ millions) As at As at Carrying amounts of major classes of assets included as part of discontinued Cash and cash equivalents 19 6 Accounts receivable 12 15 Drilling units 346 365 Other assets 12 14 Total assets of discontinued operations classified as held for sale 389 400 Carrying amounts of major classes of liabilities included as part of discontinued Trade accounts payable 6 4 Long-term debt (including current portion) — 117 Uncertain tax positions 2 — Other liabilities 29 25 Total liabilities of discontinued operations classified as held for sale 37 146 Carrying amounts of liabilities subject to compromise included as part of discontinued operations Liabilities subject to compromise 118 — Major classes of line items constituting loss of discontinued operations: (In $ millions, except per share data) Year ended Year ended Year ended Operating revenues Contract revenues 101 98 134 Total operating revenues 101 98 134 Operating expenses Operating expenses (102 ) (99 ) (133 ) Total operating expenses (102 ) (99 ) (133 ) Operating (loss)/profit (1 ) (1 ) 1 Financial and other non-operating Interest income — 1 2 Interest expense — (11 ) (14 ) Reorganization items, net (14 ) — — Other financial items — (2 ) (2 ) Total financial items (14 ) (12 ) (14 ) Net loss before tax from discontinued operations (15 ) (13 ) (13 ) Income tax expense (5 ) (5 ) (4 ) Net loss after tax from discontinued operations (20 ) (18 ) (17 ) Basic loss per share from discontinued operations (0.20 ) (0.18 ) (0.16 ) Diluted loss per share from discontinued operations (0.20 ) (0.18 ) (0.16 ) Further details over held for sale assets connected to the disposal of 65% interest in Seadrill New Finance Limited The table below shows the carrying amounts of major classes of assets and liabilities classified as held-for- sales: (In $ millions) As at As at Carrying amounts of major classes of assets included as part of discontinued Cash and cash equivalents 48 35 Restricted cash 21 29 Accounts receivable 318 — Intangible drilling contracts 165 — Drilling units 215 — Investment in associated companies 239 224 Amount due from related parties 69 387 Deferred tax assets 6 — Other assets 22 10 Total assets of discontinued operations classified as held for sale 1,103 685 Carrying amounts of major classes of liabilities included as part of discontinued Trade accounts payable 7 — Amounts due to related parties 12 — Long-term debt 814 515 Uncertain tax positions 25 — Other liabilities 90 31 Total liabilities of discontinued operations classified as held for sale 948 546 Major classes of line items constituting profit/(loss) of discontinued operations: (In $ millions, except per share data) Year ended Year ended Year ended Operating revenues Contract revenues 36 — — Total operating revenues 36 — — Operating expenses Operating expenses (27 ) — — Total operating expenses (27 ) — — Operating profit 9 — — Financial and other non-operating Interest income 18 26 34 Interest expense (77 ) (60 ) (66 ) Share in results from associated companies (net of tax) 14 (77 ) (93 ) Loss on impairment of investments — (47 ) (296 ) Loss impairment of convertible bond from related party — (29 ) (11 ) Net loss on debt extinguishments — — (22 ) Gain/(loss) on marketable securities 2 (3 ) (46 ) Other financial items 37 (24 ) (1 ) Total financial items (6 ) (214 ) (501 ) Net profit/(Loss) before tax from discontinued operations 3 (214 ) (501 ) Income tax benefit/(expense) 2 (1 ) (1 ) Net profit/(Loss) after tax from discontinued operations 5 (215 ) (502 ) Basic Earning/(Loss) per share from discontinued operations 0.05 (2.14 ) (5.02 ) Diluted Earning/(Loss) per share from discontinued operations 0.05 (2.14 ) (5.02 ) Related party transactions Seabras Sapura guarantees – |
Risk management and financial i
Risk management and financial instruments | 7 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Risk management and financial instruments | Note 23 – Risk management and financial instruments We are exposed to several market risks, including credit risk, foreign currency risk and interest rate risk. Our policy is to reduce our exposure to these risks, where possible, within boundaries deemed appropriate by the Board and Audit & Risk Committee. This may include the use of derivative instruments. Credit risk We have financial assets, including cash and cash equivalents, related party receivables, other receivables and certain amounts receivable on derivative instruments. These assets expose us to credit risk arising from possible default by the counterparty. Most of the counterparties are creditworthy financial institutions or large oil and gas companies and, as such, we do not expect any significant loss to result from non-performance We do not demand collateral in the normal course of business. As of September 30, 2022, the credit exposure of derivative financial instruments is limited to our interest rate cap. Credit risk is also considered as part of our expected credit loss provision. For details on how we estimate expected credit losses refer to Note 5 – “Current expected credit losses”. Concentration of risk There is also a concentration of credit risk with respect to cash and cash equivalents to the extent that most of the amounts are carried with Citibank, Danske Bank A/S, DNB, SABB, and BTG Pactual. We consider these risks to be remote, but, from time to time, we may utilize instruments such as money market deposits to manage concentration of risk with respect to cash and cash equivalents. We also have a concentration of risk with respect to customers, including affiliated companies. For details on the customers with greater than 10% of contract revenues, refer to Note 6 – “Segment information”. For details on amounts due from affiliated companies, refer to Note 24 – “Related party transactions”. Foreign exchange risk It is customary in the oil and gas industry that a majority of our revenues and expenses are denominated in U.S. dollars, which is the functional currency of most of our subsidiaries and equity method investees. However, a portion of the revenues and expenses of certain of our subsidiaries and equity method investees are denominated in other currencies. We are therefore exposed to foreign exchange gains and losses that may arise on the revaluation or settlement of monetary balances denominated in foreign currencies. Our foreign exchange exposures primarily relate to cash and working capital balances denominated in foreign currencies. We do not expect these exposures to cause a significant amount of fluctuation in net income and do not currently hedge them. The effect of fluctuations in currency exchange rates arising from our international operations has not had a material impact on our overall operating results. Interest rate risk Our exposure to interest rate risk relates mainly to our floating rate debt and balances of surplus funds placed with financial institutions. We manage this risk through the use of derivative arrangements. On May 11, 2018, we purchased an interest rate cap for $68 million to mitigate exposure to future increases of LIBOR. Following the termination of 81% of these derivatives in the quarter ended June 30, 2022, the notional amount covered by the cap is $834 million and results in 89% of our debt being hedged. The interest rate cap is not designated as a hedge and therefore we do not apply hedge accounting. The capped rate against the 3-month 3-month The new term loan and second lien debt facilities entered on emergence from Chapter 11 proceedings are referenced to the SOFR, while the Convertible Note is referenced to 3-month |
Subsequent Events
Subsequent Events | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Subsequent Events [Abstract] | ||
Subsequent Events | Note 28 – Subsequent events Completion of the sale of Seadrill’s Saudi Arabian Jackup business On September 1, 2022, Seadrill entered into a share purchase agreement (the “Jackup SPA”) with subsidiaries of ADES Arabia Holding Ltd. (together, “ADES” ) AOD I AOD II AOD III West Callisto West Ariel West Cressida West Leda West Ariel West Cressida West Leda and other items. We have entered into a Transitional Services Agreement (TSA) with ADES whereby Seadrill will continue to provide operational and project support for the operating and reactivating rigs for a period of up to ninety days. Debt facility payments On October 18, 2022, in connection with the Jackup Sale, Seadrill made a mandatory payment of $204 million under its secured second lien debt facility. The payment was comprised of $192 million in debt principal, $10 million in exit fee, and $2 million in accrued interest. Furthermore, on November 14, 2022, Seadrill made a voluntary payment of $269 million under its second lien debt facility. This payment was comprised of $250 million in debt principal, $13 million in exit fee, and $6 million in accrued interest. As such, in total, post period Seadrill made payments under its second lien debt facility of $473 million, including $442 million in debt principal. | Note 34 – Subsequent events The Company has evaluated subsequent events through April 29, 2022, the date the financial statements were available to be issued. Emergence from Chapter 11 On February 22, 2022, Seadrill concluded its comprehensive restructuring process and emerged from Chapter 11 bankruptcy protection. The restructuring reduced debt obligations under external credit facilities from “Note 4 – Chapter 11” NSNCo Emergence On July 2, 2021, a RSA was reached with the NSNCo Noteholders with regards to a comprehensive restructuring of the debt facility. A key step in the RSA was the sale of the assets of SeaMex out of provisional liquidation to a newly incorporated wholly owned subsidiary of NSNCo under a share purchase agreement. On November 2, 2021, the sale of the assets of SeaMex to a subsidiary of NSNCo was completed. NSNCo filed a pre-packaged held-for-sale de-recognized In exchange for Seadrill being released from all guarantees and securities provided to the NSNCo lenders in respect of the notes, we disposed of 65% of our equity interest in NSNCo to the noteholders . Whilst these guarantees have substantial value to all parties, they are not reflected as a discrete liability on Seadrill’s balance sheet under applicable accounting rules. Accordingly, there will be no accounting gain when they are extinguished which is expected to result in the overall accounting loss of disposal referenced. In addition, Seadrill received improved payment priority on certain balances owed by SeaMex to Seadrill and reinstatement of management agreements for SeaMex. The notes were also reinstated on amended terms. West Linus lease arrangement On February 19, 2022, Seadrill signed a transition agreement with SFL pursuant to which the West Linus West Linus The interim transition bareboat agreement with SFL will see Seadrill continuing to operate the West Linus de-recognition Rig disposals The West Venture The Sevan Driller Sevan Brasil Events Subsequent to Original Issuance of Financial Statements (Unaudited) In connection with the reissuance of the financial statements, the Company has evaluated subsequent events through February 2 7 Rig reactivations Seadrill has commenced reactivation of five previously cold-stacked drilling units. Reactivation of the drillships West Carina West Jupiter West Ariel, West Leda, West Cressida Reactivation projects for the West Carina and West Jupiter are complete, with both rigs mobilizing for operations in Brazil. The West Carina commenced operations in November 2022 and the West Jupiter is expected to commence operations in December 2022. Reactivation projects for the West Ariel , West Leda , and West Cressida were handed over to ADES following the sale of jackup units described below. Sale of jackup units in the Kingdom of Saudi Arabia On September 1, 2022, Seadrill entered into the Jackup SPA with subsidiaries of ADES for KSA Business non-current On October 18, 2022, the Jackup Sale closed and the rigs AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida West Leda West Ariel West Cressida West Leda adjustments. Paratus Energy Services Limited disposal On September 30, 2022, Seadrill entered into share purchase agreements under which it agreed to sell its entire 35% shareholding in Paratus Energy Services Limited (“ PES PES Sale Acquisition of Aquadrill In December 2022, Seadrill entered into a definitive agreement to acquire Aquadrill (formerly Seadrill Partners) in an all-stock transaction. Upon completion of the transaction, Seadrill will own Aquadrill’s four drillships, one semi-submersible, and three tender-assist units. The deal is expected to close in mid-2023, subject to customary closing conditions and regulatory approvals. |
Accounting policies (Policies)
Accounting policies (Policies) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accounting Policies [Abstract] | ||
Basis of presentation | Basis of presentation The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (“US GAAP”). The amounts are presented in United States dollar (“US dollar”, “$” or “US$”) rounded to the nearest million, unless otherwise stated. The accompanying Consolidated Financial Statements include the financial statements of Seadrill Limited, its consolidated subsidiaries, and any variable interest entity in which we are the primary beneficiary. The accompanying unaudited interim financial statements, in the opinion of management, include all material adjustments that are considered necessary for a fair statement of the Company’s financial statements in accordance with generally accepted accounting principles in the United States of America. The accompanying unaudited interim financial statements do not include all of the disclosures required in complete annual financial statements. These financial statements should be read in conjunction with our annual financial statements filed with the SEC on Form 20-F No. 001-39327). The financial information in this report has been prepared on the basis that we will continue as a going concern, which presumes that we will be able to realize our assets and discharge our liabilities in the normal course of business as they come due. | Basis of presentation The Consolidated Financial Statements are presented in accordance with generally accepted accounting principles in the United States of America (U.S. GAAP). The amounts are presented in United States dollar (“U.S. dollar” or “US$”) rounded to the nearest million, unless otherwise stated. The accompanying Consolidated Financial Statements include the financial statements of Seadrill Limited, its consolidated subsidiaries and any variable interest entity (“VIE”) in which we are the primary beneficiary. The January 2022 disposal of 65% of Seadrill’s equity interest in Paratus Energy Services (“PES”, formerly Seadrill New Finance Limited “NSNCo”) and October 2022 disposal of the KSA business represented strategic shifts in Seadrill’s operations which will have a major effect on its operations and financial results of the current year and going forward and therefore we have reclassified both the PES and the KSA Business as discontinued operations and their results have been reported separately from Seadrill’s continuing operations for both the current and comparative periods. In addition, the assets and liabilities of both PES and the KSA Business were reclassified as held for sale in all periods presented. Reclassifications to comparative period results, assets, and liabilities have been labelled “As adjusted”. |
Basis of consolidation | Basis of consolidation We consolidate entities in which we control directly or indirectly more than 50% of the voting rights. We also consolidate entities in which we hold a variable interest where we are the primary beneficiary of the entity. Subsidiaries, even if fully owned, are excluded from the Consolidated Financial Statements if we are not the primary beneficiary under the variable interest model. All intercompany balances and transactions have been eliminated. | Basis of consolidation We consolidate investments in companies in which we control directly or indirectly more than 50% of the voting rights. We also consolidate entities in which we hold a variable interest where we are the primary beneficiary of the entity. A VIE is defined as a legal entity where either (a) the total equity at risk is not sufficient to permit the entity to finance its activities without additional subordinated financial support; (b) equity interest holders as a group lack either (i) the power to direct the activities of the entity that most significantly impact on its economic performance, (ii) the obligation to absorb the expected losses of the entity, or (iii) the right to receive the expected residual returns of the entity; or (c) the voting rights of some investors in the entity are not proportional to their economic interests and the activities of the entity involve or are conducted on behalf of an investor with a disproportionately small voting interest. We are the primary beneficiary of a VIE when we have both (1) the power to direct the activities of the entity which most significantly impact on the entity’s economic performance, and (2) the right to receive benefits or the obligation to absorb losses from the entity which could potentially be significant to the entity. Subsidiaries, even if fully owned, are excluded from the Consolidated Financial Statements if we are not the primary beneficiary under the variable interest model. All intercompany balances and transactions have been eliminated. |
Fresh Start Reporting | Fresh Start accounting Upon emergence from bankruptcy on February 22, 2022 (the “Effective Date”), in accordance with ASC 852, Reorganizations | Fresh Start Reporting Upon emergence from bankruptcy on the Effective Date, in accordance with ASC 852, Seadrill Limited qualified for fresh start reporting and become a new entity for financial reporting purposes. We allocated the reorganization value resulting from fresh start reporting in accordance with the purchase price allocation performed as of the Effective Date. |
Revenue from contracts with customers, and contract assets and liabilities | Revenue from contracts with customers The activities that primarily drive the revenue earned from our drilling contracts include (i) providing a drilling rig and the crew and supplies necessary to operate the rig, (ii) mobilizing and demobilizing the rig to and from the drill site and (iii) performing rig preparation activities and/or modifications required for the contract with a customer. Consideration received for performing these activities may consist of dayrate drilling revenue, mobilization and demobilization revenue, contract preparation revenue and reimbursement revenue. We account for these integrated services as a single performance obligation that is (i) satisfied over time and (ii) comprised of a series of distinct time increments of service. We recognize revenues for activities that correspond to a distinct time increment of service within the contract term in the period when the services are performed. We recognize consideration for activities that are (i) not distinct within the context of our contracts and (ii) do not correspond to a distinct time increment of service, ratably over the estimated contract term. We determine the total transaction price for each individual contract by estimating both fixed and variable consideration expected to be earned over the term of the contract. The amount estimated for variable consideration may be constrained and is only included in the transaction price to the extent that it is probable that a significant reversal of previously recognized revenue will not occur throughout the term of the contract. When determining if variable consideration should be constrained, we consider whether there are factors outside of our control that could result in a significant reversal of revenue as well as the likelihood and magnitude of a potential reversal of revenue. We re-assess Dayrate drilling revenue Mobilization revenue lump-sum Demobilization revenue lump-sum Revenues related to reimbursable expenses Local taxes tax-assessed Deferred contract expenses Management contract revenues | |
Management contract revenues and Other revenues | Management fees – non-related Other revenues Other revenues consist of related party revenues, leasing income from rigs leased to Gulfdrill, external management fees, and early termination fees. Refer to Note 8 – “Other revenues”. Revenue is recognized as the performance obligation is satisfied, which on our leased rigs is on a straight-line basis. Early termination fees | |
Vessel and Rig Operating Expenses | Vessel and Rig Operating Expenses Vessel and rig operating expenses are costs associated with operating a drilling unit that is either in operation or stacked and include the remuneration of offshore crews and related costs, rig supplies, insurance costs, expenses for repairs and maintenance and costs for onshore support personnel. We expense such costs as incurred. | |
Mobilization and demobilization expenses | Mobilization and demobilization expenses We incur costs to prepare a drilling unit for a new customer contract and to move the rig to a new contract location. We capitalize the mobilization and preparation costs for a rig’s first contract as a part of the rig value and recognize them as depreciation expense over the expected useful life of the rig (i.e. 30 years). For subsequent contracts, we defer these costs over the expected contract term (see deferred contract costs above), unless we do not expect the costs to be recoverable, in which case we expense them as incurred. We incur costs to transfer a drilling unit to a safe harbor or different geographic area at the end of a contract. We expense such demobilization costs as incurred. We also expense any costs incurred to relocate drilling units that are not under contract. | |
Repairs, maintenance and periodic surveys | Repairs, maintenance and periodic surveys Costs related to periodic overhauls of drilling units are capitalized and amortized over the anticipated period between overhauls, which is generally five years . Related costs are primarily yard costs and the cost of employees directly involved in the work. We include amortization costs for periodic overhauls in depreciation expense. Costs for other repair and maintenance activities are included in vessel and rig operating expenses and are expensed as incurred. | |
Income taxes | Income taxes Seadrill is a Bermuda company that has subsidiaries and affiliates in various jurisdictions. Currently, Seadrill and our Bermudan subsidiaries and affiliates are not required to pay taxes in Bermuda on ordinary income or capital gains as they qualify as exempted companies. Seadrill and our subsidiaries and affiliates have received written assurance from the Minister of Finance in Bermuda that we will be exempt from taxation until March 2035. Certain subsidiaries operate in other jurisdictions where taxes are imposed. Consequently, income taxes have been recorded in these jurisdictions when appropriate. Our income tax expense is based on our income and statutory tax rates in the various jurisdictions in which we operate. We provide for income taxes based on the tax laws and rates in effect in the countries in which operations are conducted and income is earned. Refer to Note 12 – “Taxation”. The determination and evaluation of our annual group income tax provision involves interpretation of tax laws in various jurisdictions in which we operate and requires significant judgment and use of estimates and assumptions regarding significant future events, such as amounts, timing and character of income, deductions and tax credits. There are certain transactions for which the ultimate tax determination is unclear due to uncertainty in the ordinary course of business. We recognize liabilities for uncertain tax positions based on a two-step Current income tax expense reflects an estimate of our income tax liability for the current year, withholding taxes, changes in prior year tax estimates as tax returns are filed, or from tax audit adjustments. Income tax expense consists of taxes currently payable and changes in deferred tax assets and liabilities calculated according to local tax rules. We recognize the income tax effects of intercompany sales or transfers of assets, other than inventory, in the Consolidated Statement of Operations as income tax expense (or benefit) in the period of sale or transfer occurs. Deferred tax assets and liabilities are based on temporary differences that arise between carrying values used for financial reporting purposes and amounts used for taxation purposes of assets and liabilities and the future tax benefits of tax loss carry forwards. Our deferred tax expense or benefit represents the change in the balance of deferred tax assets or liabilities as reflected on the balance sheet. Valuation allowances are determined to reduce deferred tax assets when it is more likely than not that some portion or all of the deferred tax assets will not be realized. To determine the amount of deferred tax assets and liabilities, as well as at the valuation allowances, we must make estimates and certain assumptions regarding future taxable income, including where our drilling units are expected to be deployed, as well as other assumptions related to our future tax position. A change in such estimates and assumptions, along with any changes in tax laws, could require us to adjust the deferred tax assets, liabilities, or valuation allowances. The amount of deferred tax provided is based upon the expected manner of settlement of the carrying amount of assets and liabilities, using tax rates enacted at the balance sheet date. The impact of tax law changes is recognized in periods when the change is enacted. | |
Foreign currencies | Foreign currencies The majority of our revenues and expenses are denominated in U.S. dollars and therefore the majority of our subsidiaries use U.S. dollars as their functional currency. Our reporting currency is also U.S. dollars. For subsidiaries that maintain their accounts in currencies other than U.S. dollars, we use the current method of translation whereby items of income and expense are translated using the average exchange rate for the period and the assets and liabilities are translated using the year-end Transactions in foreign currencies are translated into U.S. dollars at the rates of exchange in effect at the date of the transaction. Foreign currency denominated monetary assets and liabilities are remeasured using rates of exchange at the balance sheet date. Gains and losses on foreign currency transactions are included in the Consolidated Statements of Operations. | |
Loss per share | Loss per share Basic loss per share (“LPS”) is calculated based on the loss for the period available to common shareholders divided by the weighted average number of shares outstanding. Diluted loss per share includes the effect of the assumed conversion of potentially dilutive instruments such as our restricted stock units. The determination of dilutive loss per share may require us to make adjustments to net loss and the weighted average shares outstanding. Refer to Note 13 – “Loss per share”. | |
Fair value measurements | Fair value measurements We estimate fair value at a price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants in the principal market for the asset or liability. Hierarchy Levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy Level 1 inputs are unadjusted quoted prices for identical assets or liabilities in active markets. Hierarchy Level 2 inputs are significant other observable inputs, including direct or indirect market data for similar assets or liabilities in active markets or identical assets or liabilities in less active markets. Hierarchy Level 3 inputs are significant unobservable inputs, including those that require considerable judgment for which there is little or no market data. When a valuation requires multiple input levels, we categorize the entire fair value measurement according to the lowest level of input that is significant to the measurement even though we may have also utilized significant inputs that are more readily observable. | |
Current and non-current classification | Current and non-current classification Generally, assets and liabilities (excluding deferred taxes and liabilities subject to compromise) are classified as current assets and liabilities respectively if their maturity is within one year of the balance sheet date. In addition, we classify any derivative financial instruments as current. Current liabilities will include where amounts from lenders are payable on demand at their discretion due to event of default clauses being met. Generally, assets and liabilities are classified as non-current assets and liabilities respectively if their maturity is beyond one year of the balance sheet date. In addition, we classify loan fees based on the classification of the associated debt principal. | |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents consist of cash, bank deposits and highly liquid financial instruments with maturities of three months or less. Amounts are presented net of allowances for credit losses. Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts that are expected to be used after one year from balance sheet date are classified as non-current assets. Amounts are presented net of allowances for credit losses, which are assessed based on consideration of whether the balances have short-term maturities and whether the counterparty has an investment grade credit rating, limiting any credit exposure. Refer to Note 14 – “Restricted cash”. | |
Restricted cash | Restricted cash consists of bank deposits which are subject to restrictions due to legislation, regulation or contractual arrangements. Restricted cash amounts that are expected to be used after one year from balance sheet date are classified as non-current assets. Amounts are presented net of allowances for credit losses, which are assessed based on consideration of whether the balances have short-term maturities and whether the counterparty has an investment grade credit rating, limiting any credit exposure. Refer to Note 14 – “Restricted cash”. | |
Receivables | Receivables Receivables, including accounts receivable, are recorded in the balance sheet at their nominal amount net of expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 15 – “Accounts receivable”. Allowance for credit losses In 2020 we adopted the current expected credit loss (“CECL”) model which replaced the “incurred loss” model required under the guidance for FY 2019. The CECL model requires recognition of expected credit losses over the life of a financial asset upon its initial recognition. Periods prior to adoption are presented under the previous guidance with an allowance against a receivable balance recognized only if it was probable that we would not recover the full amount due to us. We determined doubtful accounts on a case-by-case The CECL model contemplates a broader range of information to estimate expected credit losses over the contractual lifetime of an asset. It also requires to consider the risk of loss even if it is remote. We estimate expected credit losses based on relevant information about past events, including historical experience, current conditions, and reasonable and supportable forecasts of events which may affect the collectability. We estimate the CECL allowance using a “probability-of-default” 2016-13). re-assessing probability-of-default The CECL model applies to external trade receivables, related party receivables and other financial assets measured at amortized cost as well as to off-balance sheet credit exposures not accounted for as insurance. We have elected to calculate expected credit losses on the combined balance of both the amortized cost and accrued interest from the unpaid principal balance. The allowance for credit losses reflects the net amount expected to be collected on the financial asset. Any change in credit allowance is reflected in the Consolidated Statement of Operations based on the nature of the financial asset receivable. Amounts are written off against the allowance in the period when efforts to collect a balance have been exhausted. Any write-offs in excess of credit allowance by category of financial asset reduces the asset’s carrying amount and is reflected in the Consolidated Statement of Operations. Expected recoveries will not exceed the amounts previously written-off or current credit loss allowance by financial asset category and are recognized in the Consolidated Statement of Operations in the period of receipt. | |
Related parties | they are subject to common control or common significant influence. 10% shareholders that do not have significant influence are also considered to be related parties. Amounts receivable from related parties are presented net of allowances for expected credit losses and write-offs. Interest income on receivables is recognized as earned. Refer to Note 27 –” Related party transactions” for details of balances and material transactions with related parties. | |
Business Combinations | Business Combinations We account for business combinations in accordance with ASC 805 – Business Combinations. As described in “Note 32 – Business Combinations”, on November 2, 2021, NSNCo (wholly owned subsidiary of Seadrill Limited) consolidated SeaMex in a business combination. Management determined that the Transaction qualified as a business combination under ASC 805 because (i) SeaMex as the acquiree met the definition of a business and (ii) NSNCo as the acquirer obtained control of SeaMex. As a result, the acquisition method was applied, and the identifiable assets acquired and liabilities assumed were recognized at fair value on the acquisition date. i. Accounts receivable, net SeaMex’s CECL model estimates the allowance using a similar “probability-of-default” ii. Drilling Units The fair value of drilling units are estimated through the DCF approach. The DCF approach derives values of rigs from the cash flows associated with the remaining useful life of the rig. Forecasted revenues used in the DCF model are derived from a “general pool” whereby the rigs receive a global dayrate assumption and a contract probability factor. All future cash flows are discounted using a WACC. Key assumptions used in the DCF include contracted dayrate and utilization forecasts. iii. Contracts Management values the favorable intangible drilling contracts by comparing the signed contract rates against the expected rates achievable for the rig type in the market, both adjusted for economic utilization and taxes. The gain or loss on the signed contract compared to the market rates are then discounted using an adjusted WACC. iv. Convenience date Where a business combination does not occur on a natural period end reporting date, the Company assesses the use of a convenience date based on materiality. | |
Equity investments | Equity investments Investments in common stock are accounted for using the equity method if we have the ability to significantly influence, but not control, the investee. Significant influence is presumed to exist if our ownership interest in the voting stock of the investee is between 20% and 50%. We also consider other factors such as representation on the investee’s board of directors and the nature of commercial arrangements, We classify our equity investees as “Investments in Associated Companies”. We recognize our share of earnings or losses from our equity method investments in the Consolidated Statements of Operations as “Share in results from associated companies”. Refer to Note 17 – “Investment in associated companies”. We assess our equity method investments for impairment at each reporting period when events or circumstances suggest that the carrying amount of the investments may be impaired. We record an impairment charge for other-than-temporary declines in value when the value is not anticipated to recover above the cost within a reasonable period after the measurement date. We consider (1) the length of time and extent to which fair value is below carrying value, (2) the financial condition and near-term prospects of the investee, and (3) our intent and ability to hold the investment until any anticipated recovery. If an impairment loss is recognized, subsequent recoveries in value are not reflected in earnings until sale of the equity method investee occurs. All other equity investments including investments that do not give us the ability to exercise significant influence and investments in equity instruments other than common stock, are accounted for at fair value, if readily determinable. We classify our other equity investments as “marketable securities” with gains or losses on remeasurement to fair value recognized as “loss on marketable securities”. If we cannot readily ascertain the fair value, we record the investment at cost less impairment. We perform a qualitative impairment analysis for our equity investments recorded at cost at each reporting period to evaluate whether an event or change in circumstances has occurred that indicates that the investment is impaired. We record an impairment loss to the extent that the carrying amount of the investment exceeds its estimated fair value. | |
Drilling units, and Equipment | Drilling units Rigs, vessels and related equipment are recorded at historical cost less accumulated depreciation. The cost of these assets, less estimated residual value is depreciated on a straight-line basis over their estimated remaining economic useful lives. The estimated residual value is taken to be offset by any decommissioning costs that may be incurred. The estimated economic useful life of our floaters and, jackup rigs, when new, is 30 years. The direct and incremental costs of significant capital projects, such as rig upgrades and reactivation projects, are capitalized and depreciated over the remaining life of the asset. Drilling units acquired in a business combination are measured at fair value at the date of acquisition. Cost of property and equipment sold or retired, with the related accumulated depreciation and impairment is removed from the Consolidated Balance Sheet, and resulting gains or losses are included in the Consolidated Statement of Operations. We re-assess the remaining useful lives of our drilling units when events occur which may impact our assessment of their remaining useful lives. These include changes in the operating condition or functional capability of our rigs, technological advances, changes in market and economic conditions as well as changes in laws or regulations affecting the drilling industry. Equipment Equipment is recorded at historical cost less accumulated depreciation and impairment and is depreciated over its estimated remaining useful life. The estimated economic useful life of equipment, when new, is between three and five years depending on the type of asset. Refer to Note 19 – “Equipment”. | |
Assets held for sale and discontinued operations | Assets held for sale and discontinued operations Assets are classified as held for sale when all of the following criteria are met: management commits to a plan to sell the asset (disposal group), the asset is available for immediate sale in its present condition subject only to terms that are usual and customary for sales of such assets, an active program to locate a buyer and other actions required to complete the plan to sell the asset (disposal group) have been initiated, the sale of the asset is probable, and transfer of the asset is expected to qualify for recognition as a completed sale, within one year. The term probable refers to a future sale that is likely to occur, the asset is being actively marketed for sale at a price that is reasonable in relation to its current fair value and actions required to complete the plan indicate that it is unlikely that significant changes to the plan will be made or that the plan will be withdrawn. Assets held for sale are measured at the lower of carrying value or fair value less costs to sell. Management assesses whether an operation should be reported as discontinued operation under the three criteria set out in ASC 205: a) a discontinued operation may include a component of the business or group of components of the business, 2) if the disposal represents a strategic shift that has (or will have) a major effect on an the business’s operations and financial results, and 3) examples of a strategic shift that has (or will have) a major effect on an the business’s operations and financial results could include a disposal of a major geographical area, a major line of business, a major equity method investment, or other major parts of the business. When an operation meets these ASC 205 criteria, the results of that operation are reported as “discontinued operations” in the statement of operations and all comparative periods of the consolidated financial statements and associated notes are recast for this classification. | |
Leases, Lessee | Leases Lessee – When we enter into a new contract, or modify an existing contract, we identify whether that contract has a finance or operating lease component. We do not have, nor expect to have any leases classified as finance leases. We determine the lease commencement date by reference to the date the rig (or other leased asset) is available for use and transfer of control has occurred from the lessee. At the lease commencement date, we measure and recognize a lease liability and a right of use (“ROU”) asset in the financial statements. The lease liability is measured at the present value of the lease payments not yet paid, discounted using the estimated incremental borrowing rate at lease commencement. The ROU asset is measured at the initial measurement of the lease liability, plus any lease payments made to the lessor at or before the commencement date, minus any lease incentives received, plus any initial direct costs incurred by us. After the commencement date, we adjust the carrying amount of the lease liability by the amount of payments made in the period as well as the unwinding of the discount over the lease term using the effective interest method. After commencement date, we amortize the ROU asset by the amount required to keep total lease expense including interest constant (straight-line over the lease term). Absent an impairment of the ROU asset, the single lease cost is calculated so that the remaining cost of the lease is allocated over the remaining lease term on straight-line basis. Seadrill assesses a ROU asset for impairment and recognizes any impairment loss in accordance with the accounting policy on impairment of long-lived assets. We applied the following significant assumptions and judgments in accounting for our leases. • We apply judgment in determining whether a contract contains a lease or a lease component as defined by Topic 842. • We have elected to combine leases and non-lease components. As a result, we do not allocate our consideration between leases and non-lease components. • The discount rate applied to our operating leases is our incremental borrowing rate. We estimated our incremental borrowing rate based on the rate for our traded debt. • Within the terms and conditions of some of our operating leases we have options to extend or terminate the lease. In instances where we are reasonably certain to exercise available options to extend or terminate, then the option was included in determining the appropriate lease term to apply. Options to renew our lease terms are included in determining the right-of-use asset and lease liability when it is reasonably certain that we will exercise that option. • Where a leasing arrangement is a failed sale and leaseback transaction as no transfer of control has occurred as defined by Topic 606, any monies received will be treated as a financing transaction. | |
Leases, Lessor | Lessor – When we enter into a new contract, or modify an existing contract, we identify whether that contract has a sales-type, direct financing or operating lease. We do not have, nor expect to have any leases classified as sales-type or direct financing. For our operating lease, the underlying asset remains on the balance sheet and we record periodic depreciation expense and lease revenue. | |
Impairment of long-lived assets | Impairment of long-lived assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. We first assess recoverability of the carrying value of the asset by estimating the undiscounted future net cash flows expected to be generated from the asset, including eventual disposal. If the undiscounted future net cash flows are less than the carrying value of the asset, then we compare the carrying value of the asset with the discounted future net cash flows, using a relevant weighted-average cost of capital. The impairment loss to be recognized during the period, is the amount by which the carrying value of the asset exceeds the discounted future net cash flows. | |
Other intangible assets and liabilities | Other intangible assets and liabilities Intangible assets and liabilities were recorded at fair value on the date of Seadrill’s previous emergence from Chapter 11 in 2018 less accumulated amortization. The amounts of these assets and liabilities less any estimated residual value are amortized on a straight-line basis over the estimated remaining economic useful life or contractual period. We classify amortization of these intangible assets and liabilities within operating expenses. Our intangible assets include favorable and unfavorable drilling contracts and management services contracts. Refer to Note 16 – “Other assets”. Our intangible liabilities include unfavorable drilling contracts and unfavorable leasehold improvements. Refer to Note 21 – “Other liabilities”. | |
Derivative financial instruments and hedging activities | Derivative financial instruments and hedging activities Our derivative financial instruments are measured at fair value and are not designated as a hedging instruments. Changes in fair value are recorded as a gain or loss as a separate line item within “financial items” in the Consolidated Statements of Operations. Refer to Note 28 – “Financial instruments and risk management”. | |
Trade payables | Trade payables Trade payables are liabilities to a supplier for a good or service provided to us. | |
Deferred charges | Deferred charges Loan related costs, including debt issuance, arrangement fees and legal expenses, are capitalized and presented in the balance sheet as a direct deduction from the carrying amount of the related debt liability, amortized over the term of the related loan. The amortization is included in interest expense. On emergence from Seadrill’s previous Chapter 11 in 2018, our loan costs were reduced to nil. We recognized a discount on our debt to reduce its carrying value to its fair value. The debt discount was due to be unwound over the remaining terms of the debt facilities. | |
Debt | Debt We have financed a significant proportion of the cost of acquiring our fleet of drilling units through the issue of debt instruments. At the inception of a term debt arrangement, or whenever we make the initial drawdown on a revolving debt arrangement, we incur a liability for the principal to be repaid. On emergence from the Chapter 11, we issued new debt instruments. Refer to Note 20 – “Debt” for more information on our debt instruments. | |
Pension benefits | Pension benefits We have several defined benefit pension plans, defined contribution pension plans and other post-employment benefit obligations which provide retirement, death and early termination benefits. We recognize the service cost, as “Vessel and rig operating expenses” or as “Selling, general and administrative expenses” in our Consolidated Statements of Operations depending on the whether or not the related employee’s role is directly attributable to rig activities. Several defined benefit pension plans cover a number of our Norwegian employees that are all administered by a life insurance company. Our net obligation is calculated by estimating the amount of the future benefit that employees have earned in return for their cumulative service. The aggregated projected future benefit obligation is discounted to present value, from which the aggregated fair value of plan assets is deducted. The discount rate is the market yield at the balance sheet date on government bonds in the relevant currency and based on terms consistent with the post-employment benefit obligations. We record the actuarial gains and losses in the Consolidated Statements of Operations when the net cumulative unrecognized actuarial gains or losses for each individual plan at the end of the previous reporting year exceed 10 percent of the higher of the present value of the defined benefit obligation and the fair value of plan assets at that date. These actuarial gains and losses are recognized over the expected remaining working lives of the employees participating in the plans. Otherwise, recognition of actuarial gains and losses is included in other comprehensive income. Those amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts recognized in accumulated other comprehensive income. On retirement, or when an employee leaves the company, the member’s pension liability is transferred to the life insurance company administering the plan, and the pension plan no longer retains an obligation relating to the leaving member. This action is deemed to represent a settlement under U.S. GAAP, as it represents the elimination of significant risks relating to the pension obligation and related assets. Under settlement accounting, the portion of the net unrealized actuarial gains/losses corresponding to the relative value of the obligation reduction is recognized through the Consolidated Statement of Operations. However, settlement accounting is not required if the cost of all settlements in a year is not deemed to be significant in the context of the plan. We deem the settlement not to be significant when the cost of settlements in the year is less than the sum of service cost and interest cost in the year. In this case, the difference between the reduction in benefit obligation and the plan assets transferred to the life insurance company is recognized within “other comprehensive income,” rather than being recognized in the Consolidated Statement of Operations. | |
Loss contingencies | Loss contingencies We recognize a loss contingency in the Consolidated Balance Sheets where we have a present legal or constructive obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate of the amount can be made. If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Refer to Note 30 – “Commitments and contingencies”. | |
Treasury shares | Treasury shares Treasury shares are recognized at cost as a component of equity. We record the nominal value of treasury shares purchased as a reduction in share capital. The amount paid in excess of the nominal value is treated as a reduction of additional paid-in capital. Upon Seadrill’s previous emergence from Chapter 11 in 2018, we no longer had any treasury shares. | |
Share-based compensation | Share-based compensation After emerging from the Previous Chapter 11, we made several awards under our employee benefit plan (see Note 25 – “Share based compensation”), which have been cancelled in July 2020 for a cash payment. The compensation for our unvested awards at date of cancellation was based on the fair value of the Shares at the cancellation date. The cash compensation paid to settle the award was charged directly to equity. For our cancelled awards any remaining unrecognized compensation cost for unvested awards was recognized immediately on the settlement date. Before cancellation we expensed the fair value of stock-based compensation issued to employees and non-employees | |
Guarantees | Guarantees Guarantees issued by us, excluding those that are guaranteeing our own performance, are recognized at fair value at the time that the guarantees are issued and reported in “Other current liabilities” and “Other non-current off-balance | |
Recently adopted and issued accounting standards | Recently adopted accounting standards We adopted the following accounting standard update (“ASUs”) since the reporting date of our Form 20-F ASU 2020-06 470-20) Simplifies the guidance in U.S. GAAP on the issuer’s accounting for convertible debt instruments. Under current guidance, applying the separation models in ASC 470-20 2020-06. ASU 2021-05 Requires a lessor to classify a lease with variable lease payments that do not depend on an index or rate (hereafter referred to as “variable payments”) as an operating lease on the commencement date of the lease if specified criteria are met. Seadrill does not have any sales-type or direct financing leases. ASU 2021-08 Requires contract assets and liabilities (i.e., deferred revenue) acquired in a business combination to be recognized and measured on the acquisition date in accordance with ASC 606. The Company elected to early adopt and apply this standard as of January 1, 2022 as it is relevant to the emergence from Chapter 11 bankruptcy and application of fresh-start accounting. The Company’s deferred revenues balances were evaluated on the basis of ASC 606 at the measurement date (in accordance with ASU 2021-08). ASU 2022-03 Clarifies that a “contractual sale restriction prohibiting the sale of an equity security is a characteristic of the reporting entity holding the equity security” and is not included in the equity security’s unit of account. Accordingly, an entity should not consider the contractual sale restriction when measuring the equity security’s fair value (i.e., the entity should not apply a discount related to the contractual sale restriction). In addition, the ASU prohibits an entity from recognizing a contractual sale restriction as a separate unit of account. Seadrill does not apply any discounts related to contractual sale restrictions. ASU 2022-04 The amendments in this ASU address investor and other financial statement user requests for additional information about the use of supplier finance programs by the buyer party to understand the effect of those programs on an entity’s working capital, liquidity, and cash flows. Seadrill does not have any supplier finance programs. Recently issued accounting standards There are currently no recently issued ASUs that are expected to affect our Consolidated Financial Statements and related disclosures in future periods. | 1) Recently adopted accounting standards We recently adopted the following accounting standard updates (“ASUs”): a) ASU 2019-12 In December 2019, the FASB issued ASU 2019-12. 2019-12 b) ASU 2021-08 We early adopted ASU 2021-08 c) ASU 2016-13 (Also 2018-19, 2019-04 2019-11) In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU 2016-13 2018-19, 2019-04 2019-11: off-balance Seadrill adopted the requirements of Topic 326 in FY 2020. Reporting periods beginning after January 1, 2020 are presented under Topic 326 while comparative periods continue to be reported in accordance with previously applicable GAAP and have not been restated. The allowance for credit losses is presented as a deduction from the asset’s amortized cost (or liability for off-balance The CECL allowance related primarily to subordinated loan receivables due from related parties (refer to Note 27 – “Related party transactions”). Our external customers are mostly international or national oil companies with high credit standing. We have historically had a very low incidence of credit losses from these customers. Therefore, adoption of the new guidance has not had a material impact on receivables due from our customers. d) Other accounting standard updates We additionally adopted the following accounting standard updates in the year which did not have any material impact on our Consolidated Financial Statements and related disclosures: • ASU 2020-01 • ASU 2020-08 310-20, • ASU 2020-9 – Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 • ASU 2020-10 • ASU 2020-11 2) Recently issued accounting standards Recently issued ASUs by the FASB that we have not yet adopted but which could affect our Consolidated Financial Statements and related disclosures in future periods: a) ASU 2020-04 In March 2020, the FASB issued ASU 2020-04. b) ASU 2021-04 The FASB issued this update to clarify and reduce diversity in an issuer’s accounting for modifications or exchanges of freestanding equity-classified written call options (for example, warrants) that remain equity classified after modification or exchange. We do not anticipate this will have a material impact on our financial statements. c) ASU 2021-05 The amendments in this Update affect lessors with lease contracts that (1) have variable lease payments that do not depend on a reference index or a rate and (2) would have resulted in the recognition of a selling loss at lease commencement if classified as sales-type or direct financing. We do not anticipate this will have a material impact on our financial statements. d) ASU 2021-10 The FASB issued this Update to increase the transparency of government assistance including the disclosure of (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on an entity’s financial statements. We do not anticipate this will have a material impact on our financial statements. e) Other accounting standard updates issued by the FASB As of April 29, 2022, the FASB have issued several further updates not included above. We do not currently expect any of these updates to affect our Consolidated Financial Statements and related disclosures either on transition or in future periods. |
Significant accounting policies | Significant accounting policies The accounting policies adopted in the preparation of the unaudited interim financial statements are consistent with those followed in the preparation of our annual audited Consolidated Financial Statements for the year ended December 31, 2021. Within the comparative periods presented in these financial statements, Seadrill had not incurred significant rig reactivation costs, and therefore we had not disclosed our accounting policy for rig reactivations in the Consolidated Financial Statements for the year ended December 31, 2021. Though not a change in accounting policy, due to the significant increase in rig reactivation activity starting in the first half of 2022, management has therefore disclosed below our current accounting policy for these costs. | |
Rig reactivation project costs | Rig reactivation project costs Most reactivation costs are capitalized. The incremental cost of equipment depreservation activities and one-time Rig upgrade costs that increase the marketability of the rig beyond the current contract are depreciated over the remaining lives of the rigs. Costs incurred to install equipment or modify to current rig specifications that will not increase the marketability of the rig beyond the current contract, and rig mobilization costs, are deferred and amortized over the initial contract period. The cost of reactivation project related long-term maintenance (LTM) activities such as major classification surveys and other major certifications are capitalized and depreciated over a period of between 2 and 5 years (depending on the period covered by the re-certification). | |
Immaterial revisions to prior period | Immaterial revisions to prior period We have revised the Company’s previously issued Unaudited Consolidated Statement of Changes in Equity for the period from January 1, 2022 through February 22, 2022 (Predecessor) due to the improper presentation of fresh start accounting. We evaluated the effects of this error on our previously-issued condensed consolidated financial statements in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 250, Accounting Changes and Error Corrections Assessing Materiality Considering the Effects of Prior Year Misstatements when Quantifying Misstatements in Current Year Financial Statements (collectively, “ASC Topic 250”) A summary of the effects of the revisions on the unaudited consolidated statements of changes in equity for the period from January 1, 2022 through February 22, 2022 (Predecessor) are as follows: • improperly including a subtotal labelled Balance as at February 22, 2022 (Predecessor) • presenting separately the net gain from reorganization adjustments of $5,066 million, and net gain from Fresh Start adjustments of $242 million. These separately stated amounts have now been presented within net profit from continuing operations ($3,813 million) and issuance of successor common stock ($1,495 million). • omitting a total of equity as at February 22, 2022 (Predecessor). The total of equity has been added to reflect additional paid-in capital and total equity of $1,499 million each as at February 22, 2022 (Predecessor). |
Chapter 11 (Tables)
Chapter 11 (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Reorganizations [Abstract] | ||
Schedule of debt maturities | The outstanding debt as at September 30, 2022 (Successor) was repayable as follows, for the years ended December 31: (In $ millions) Term Loan Second (1) Convertible Total 2023 — 42 — 42 2024 — 42 — 42 2025 — 42 — 42 2026 180 42 — 222 2027 — 580 — 580 2028 and thereafter — — 50 50 Total debt principal and exit fee payments 180 748 50 978 | As at the Effective Date, the outstanding external debt is repayable as set out in the table below: (In $ millions) 2022 2023 2024 2025 2026 and Total Total Debt Repayments (a) 0 40 40 40 788 908 (a) The repayment schedule is net of fees and assumes that all interest is paid in cash as opposed to any capitalized pay-if-you-can |
Schedule of allocation of shares | The breakout shown below shows the equity allocation before and after the conversion of the convertible bond. Recipient of Shares Number of shares % allocation Equity dilution on convertible bond Allocation to predecessor senior secured lenders 41,499,999 83.00 % 78.85 % Allocation to new money lenders – holders of subscription rights 6,250,001 12.50 % 11.87 % Allocation to new money lenders – backstop parties 2,125,000 4.25 % 4.04 % Allocation to predecessor shareholders 124,998 0.25 % 0.24 % Allocation to convertible bondholder — — % 5.00 % Total shares issued on emergence 49,999,998 100.00 % 100.00 % | The breakout shown below shows the equity allocation before and after the conversion of the convertible bond. Recipient of Shares Number of % allocation Equity dilution on Allocation to predecessor senior secured lenders 41,499,999 83.00 % 78.85 % Allocation to new money lenders – holders of subscription rights 6,250,001 12.50 % 11.87 % Allocation to new money lenders – backstop parties 2,125,000 4.25 % 4.04 % Allocation to predecessor shareholders 124,998 0.25 % 0.24 % Allocation to convertible bondholder — — % 5.00 % Total shares issued on emergence 49,999,998 100.00 % 100.00 % |
Liabilities subject to compromise | Liabilities subject to compromise prior to emergence from Chapter 11 proceedings, as presented on the consolidated balance sheet at February 22, 2022 immediately prior to emergence, included the following: (In $ millions) February 22, 2022 Senior under-secured external debt 5,662 Accounts payable and other liabilities 35 Accrued interest on external debt 34 Amounts due to SFL Corporation under leases for the West Taurus West Linus 506 Liabilities subject to compromise 6,237 Attributable to: Continuing operations 6,119 Discontinued operations 118 | Liabilities subject to compromise, as presented on the Consolidated Balance Sheet as at December 31, 2021, include the following: (In $ millions) December 31, Senior under-secured external debt 5,662 Accounts payable and other liabilities 36 Accrued interest on external debt 34 Amount due to related party 503 Liabilities subject to compromise 6,235 Attributable to: Continuing operations 6,117 Discontinued operations 118 |
Schedule of reorganization items | The following table summarizes the reorganization items recognized in the year ended December 31, 2021: (In $ millions) Year ended Advisory and professional fees after filing (127 ) Remeasurement of terminated lease to allowed claim (186 ) Interest income on surplus cash 3 Total reorganization items, net (310 ) Attributable to: Continuing operations (296 ) Discontinued operations (14 ) | |
Schedule of fresh-start adjustments | The following table summarizes the reorganization items recognized in the three months ended September 30, 2022 (Successor), the period from February 23, 2022 through September 30, 2022 (Successor), period from January 1, 2022 through February 22, 2022 (Predecessor), and three and nine months ended September 30, 2021 (Predecessor). Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Gain on settlement of liabilities subject to compromise (a) — — — 3,581 — Fresh Start valuation adjustments (b) — — — 242 — Loss on deconsolidation of Paratus Energy Services (c) — — — (112 ) — Advisory and professional fees (d) (3 ) (36 ) (12 ) (44 ) (88 ) Gain on write-off — 5 — — 13 Expense of predecessor Directors & Officers insurance policy — — — (17 ) — Remeasurement of terminated lease to allowed claim — — — — (186 ) Interest income on surplus cash — 2 — 1 2 Total reorganization items, net (3 ) (29 ) (12 ) 3,651 (259 ) Attributable to: Continuing operations (3 ) (24 ) (12 ) 3,683 (250 ) Discontinued operations — (5 ) — (32 ) (9 ) a. Gain on liabilities subject to compromise On emergence from Chapter 11 proceedings, we settled liabilities subject to compromise in accordance with the Plan. This includes extinguishment of our secured external debt and amounts due under our sale and leaseback agreements with SFL Corporation. Refer to Note 4 – “Fresh Start accounting” for further information. b. Fresh Start valuation adjustments On emergence from Chapter 11 proceedings and under the application of Fresh Start accounting, we allocated the reorganization value to our assets and liabilities based on their estimated fair values. The effects of the application of Fresh Start accounting applied as of February 22, 2022. The new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet at September 30, 2022 (Successor) and the related adjustments were recorded in the Consolidated Statements of Operations in the Predecessor. Refer to Note 4 – “Fresh Start accounting” for further information. c. Loss on deconsolidation of Paratus Energy Services Ltd The loss on deconsolidation reflects the impact of the sale of 65 recorded the 35% retained interest at fair value. The difference between the net assets deconsolidated and retained 35% interest represents a loss on deconsolidation. (In $ millions) January 20, Carrying value of Paratus Energy Services Ltd equity at January 20, 2022 (152 ) Fair value of retained 35% interest in Paratus Energy Services Ltd 56 Reclassification of NSNCo accumulated other comprehensive losses to income on disposal (16 ) Loss on deconsolidation of Paratus Energy Services Ltd (112 ) d. Advisory and professional fees Professional and advisory fees incurred for post-petition Chapter 11 expenses. Professional and advisory expenses have been incurred post-emergence but relate to our Chapter 11 proceedings. explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair value and significant assumptions or inputs. February 22, 2022 February 23, (In $ millions) Predecessor Reorganization Fresh Start Successor ASSETS Current assets Cash and cash equivalents 281 74 (a ) — 355 Restricted cash 135 (50 ) (b ) — 85 Accounts receivable, net 201 — — 201 Amount due from related parties, net 42 — — 42 Other current assets (u) 206 (17 ) (c ) 31 (k ) 220 Total current assets 865 7 31 903 Non-current Investment in associated companies 81 — (17 ) (l ) 64 Drilling units (u) 1,778 (175 ) (d ) 279 (m ) 1,882 Restricted cash 69 — — 69 Deferred tax assets 9 — 1 (n ) 10 Equipment 11 — (2 ) (o ) 9 Other non-current 13 — 29 (p ) 42 Total non-current 1,961 (175 ) 290 2,076 Total assets 2,826 (168 ) 321 2,979 LIABILITIES AND EQUITY Current liabilities Trade accounts payable 59 — — 59 Other current liabilities 222 52 (e ) 17 (q ) 291 Total current liabilities 281 52 17 350 Liabilities subject to compromise (u) 6,237 (6,237 ) (f ) — — Non-current Long-term debt — 951 (g ) — 951 Deferred tax liabilities 7 — (1 ) (r ) 6 Other non-current 110 — 63 (s ) 173 Total non-current 117 951 62 1,130 EQUITY Predecessor common shares of par value 10 (10 ) (h ) — — Predecessor additional paid-in 3,504 (3,504 ) (h ) — — Accumulated other comprehensive loss (1 ) 1 (h ) — — Retained (deficit)/earnings (7,322 ) 7,080 (i ) 242 (t ) — Successor common shares of par value — — — — Successor additional paid-in — 1,499 (j ) — 1,499 Total shareholders’ (deficit)/equity (3,809 ) 5,066 242 1,499 Total liabilities and equity 2,826 (168 ) 321 2,979 Reorganization Adjustments (a) Reflects the net cash receipts that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Receipt of cash from the issuance of the Term Loan Facility 175 Receipt of cash from the issuance of the Convertible Bonds 50 Proceeds from the issuance of the New Second Lien Facility 683 Settlement of the Prepetition Credit Agreement (683 ) Payment of the AOD cash out option (116 ) Payment of success-based advisor fees (28 ) Payment of the arrangement & financing fee for the Term Loan Facility (5 ) Transfer of cash to restricted cash for the professional fee escrow account funding (2 ) Change in cash and cash equivalents 74 (b) Reflects the net restricted cash payments that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Payment of net scrap rig proceeds to holders of Prepetition Credit agreement claims (45 ) Return of cash collateral to SFL for the amended West Linus lease agreement (7 ) Cash transferred from unrestricted cash for the professional fee escrow account funding 2 Change in restricted cash (50 ) (c) Reflects the change in other current assets for the following activities: (In $ millions) February 22, 2022 (Predecessor) Expense of Predecessor Directors & Officers insurance policy (17 ) Expense of the Commitment Premium and other capitalized debt issuance costs (24 ) Recognition of the right-of-use 24 Change in other current assets (17 ) (d) Reflects the change in drilling units for the derecognition of the West Linus (e) Reflects the change in other current liabilities: (In $ millions) February 22, 2022 (Predecessor) Accrued liability due to holders of Prepetition Credit agreement claims for sold rig proceeds 27 Recognition of lease liability and other accrued liability associated with the amended West Linus lease 25 Change in other current liabilities 52 (f) Liabilities subject to compromise were settled as follows in accordance with the Plan: (In $ millions) February 22, 2022 (Predecessor) Senior under-secured external debt 5,662 Accounts payable and other liabilities 35 Accrued interest on external debt 34 Amounts due to SFL Corporation under leases for the West Taurus West Linus 506 Total liabilities subject to compromise 6,237 Attributable to: Continuing operations 6,119 Discontinued operations 118 Payment of the AOD cash out option (116 ) Issuance of the New Second Lien Facility (717 ) Premium associated with the Term Loan Facility (9 ) Debt issuance costs (30 ) Payment of the rig sale proceeds (45 ) Amounts due to Prepetition Credit agreement claims for sold rig proceeds not yet paid (27 ) Issuance of New Seadrill Common Shares to holders of Prepetition Credit Agreement claims (1,244 ) Issuance of New Seadrill Common Shares to the Rights Offering Participants (187 ) Issuance of New Seadrill Common Shares associated with the Equity Commitment Premium (64 ) Derecognition of West Linus (182 ) Reversal of the release of certain general unsecured operating accruals (35 ) Pre-tax 3,581 (g) Reflects the changes in long-term debt for the following activities: (In $ millions) February 22, 2022 (Predecessor) Issuance of the Term Loan Facility 175 Issuance of the New Second Lien Facility 683 Issuance of the Convertible Bonds 50 Record the premium on the Term Loan Facility and New Second Lien Facility 43 Change in long-term debt 951 (h) Reflects the cancellation of the Predecessor’s common shares, additional paid in capital, and accumulated other comprehensive income. (i) Reflects the cumulative net impact on retained loss as follows: (In $ millions) February 22, 2022 (Predecessor) Pre-tax 3,581 Release of general unsecured operating accruals 35 Payment of success fees recognized on the Effective Date (28 ) Expense of Predecessor Directors & Officers insurance policy (17 ) Impact to net income 3,571 Cancellation of Predecessor common shares and additional paid in capital 3,513 Issuance of New Seadrill Common Shares to Predecessor equity holders (4 ) Net impact to retained loss 7,080 (j) Reflects the reorganization adjustments made to the Successor additional paid-in (In $ millions) February 22, 2022 (Predecessor) Fair value of New Seadrill Common Shares issued to holders of Prepetition Credit Agreement claims 1,456 Fair value of New Seadrill Common Shares issued to Predecessor equity holders 4 Fair value of the conversion option on the Convertible Bond 39 Successor additional paid-in 1,499 Fresh Start Adjustments (k) Reflects the fair value adjustment to other current assets for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 68 Write-off (15 ) Off-market right-of-use West Hercules West Linus (22 ) Change in other current assets 31 Attributable to: Continuing operations 20 Discontinued operations 11 (l) Reflects the fair value adjustment to the investments in Paratus of $14 million and in Sonadrill of $3 million. (m) Reflects the fair value adjustment to drilling units and the elimination of accumulated depreciation. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 279 Attributable to: Continuing operations 316 Discontinued operations (37 ) (n) Reflects the fair value adjustment to deferred tax assets of $1 million for favorable management contracts. (o) Reflects the fair value adjustment to equipment and the elimination of accumulated depreciation. (p) Reflects fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 42 Write-off non-current (9 ) Write-off non-current (4 ) Change in other non-current 29 Attributable to: Continuing operations 26 Discontinued operations 3 (q) Reflects the fair value adjustment to other current liabilities for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 18 Write-off (1 ) Change in other current liabilities 17 (r) Reflects the fair value adjustment to deferred tax liabilities of $1 million to write-off (s) Reflects the fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 67 Write-off non-current (4 ) Change in other non-current 63 (t) Reflects the cumulative impact of the Fresh Start accounting adjustments discussed above. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 242 Attributable to: Continuing operations 266 Discontinued operations (24 ) (u) These line items include current and non-current |
Fresh Start accounting (Tables)
Fresh Start accounting (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Reorganization, Chapter 11 [Line Items] | |
Schedule of fresh-start adjustments | The following table summarizes the reorganization items recognized in the three months ended September 30, 2022 (Successor), the period from February 23, 2022 through September 30, 2022 (Successor), period from January 1, 2022 through February 22, 2022 (Predecessor), and three and nine months ended September 30, 2021 (Predecessor). Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Gain on settlement of liabilities subject to compromise (a) — — — 3,581 — Fresh Start valuation adjustments (b) — — — 242 — Loss on deconsolidation of Paratus Energy Services (c) — — — (112 ) — Advisory and professional fees (d) (3 ) (36 ) (12 ) (44 ) (88 ) Gain on write-off — 5 — — 13 Expense of predecessor Directors & Officers insurance policy — — — (17 ) — Remeasurement of terminated lease to allowed claim — — — — (186 ) Interest income on surplus cash — 2 — 1 2 Total reorganization items, net (3 ) (29 ) (12 ) 3,651 (259 ) Attributable to: Continuing operations (3 ) (24 ) (12 ) 3,683 (250 ) Discontinued operations — (5 ) — (32 ) (9 ) a. Gain on liabilities subject to compromise On emergence from Chapter 11 proceedings, we settled liabilities subject to compromise in accordance with the Plan. This includes extinguishment of our secured external debt and amounts due under our sale and leaseback agreements with SFL Corporation. Refer to Note 4 – “Fresh Start accounting” for further information. b. Fresh Start valuation adjustments On emergence from Chapter 11 proceedings and under the application of Fresh Start accounting, we allocated the reorganization value to our assets and liabilities based on their estimated fair values. The effects of the application of Fresh Start accounting applied as of February 22, 2022. The new basis of our assets and liabilities are reflected in the Consolidated Balance Sheet at September 30, 2022 (Successor) and the related adjustments were recorded in the Consolidated Statements of Operations in the Predecessor. Refer to Note 4 – “Fresh Start accounting” for further information. c. Loss on deconsolidation of Paratus Energy Services Ltd The loss on deconsolidation reflects the impact of the sale of 65 recorded the 35% retained interest at fair value. The difference between the net assets deconsolidated and retained 35% interest represents a loss on deconsolidation. (In $ millions) January 20, Carrying value of Paratus Energy Services Ltd equity at January 20, 2022 (152 ) Fair value of retained 35% interest in Paratus Energy Services Ltd 56 Reclassification of NSNCo accumulated other comprehensive losses to income on disposal (16 ) Loss on deconsolidation of Paratus Energy Services Ltd (112 ) d. Advisory and professional fees Professional and advisory fees incurred for post-petition Chapter 11 expenses. Professional and advisory expenses have been incurred post-emergence but relate to our Chapter 11 proceedings. explanatory notes provide additional information with regard to the adjustments recorded, the methods used to determine fair value and significant assumptions or inputs. February 22, 2022 February 23, (In $ millions) Predecessor Reorganization Fresh Start Successor ASSETS Current assets Cash and cash equivalents 281 74 (a ) — 355 Restricted cash 135 (50 ) (b ) — 85 Accounts receivable, net 201 — — 201 Amount due from related parties, net 42 — — 42 Other current assets (u) 206 (17 ) (c ) 31 (k ) 220 Total current assets 865 7 31 903 Non-current Investment in associated companies 81 — (17 ) (l ) 64 Drilling units (u) 1,778 (175 ) (d ) 279 (m ) 1,882 Restricted cash 69 — — 69 Deferred tax assets 9 — 1 (n ) 10 Equipment 11 — (2 ) (o ) 9 Other non-current 13 — 29 (p ) 42 Total non-current 1,961 (175 ) 290 2,076 Total assets 2,826 (168 ) 321 2,979 LIABILITIES AND EQUITY Current liabilities Trade accounts payable 59 — — 59 Other current liabilities 222 52 (e ) 17 (q ) 291 Total current liabilities 281 52 17 350 Liabilities subject to compromise (u) 6,237 (6,237 ) (f ) — — Non-current Long-term debt — 951 (g ) — 951 Deferred tax liabilities 7 — (1 ) (r ) 6 Other non-current 110 — 63 (s ) 173 Total non-current 117 951 62 1,130 EQUITY Predecessor common shares of par value 10 (10 ) (h ) — — Predecessor additional paid-in 3,504 (3,504 ) (h ) — — Accumulated other comprehensive loss (1 ) 1 (h ) — — Retained (deficit)/earnings (7,322 ) 7,080 (i ) 242 (t ) — Successor common shares of par value — — — — Successor additional paid-in — 1,499 (j ) — 1,499 Total shareholders’ (deficit)/equity (3,809 ) 5,066 242 1,499 Total liabilities and equity 2,826 (168 ) 321 2,979 Reorganization Adjustments (a) Reflects the net cash receipts that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Receipt of cash from the issuance of the Term Loan Facility 175 Receipt of cash from the issuance of the Convertible Bonds 50 Proceeds from the issuance of the New Second Lien Facility 683 Settlement of the Prepetition Credit Agreement (683 ) Payment of the AOD cash out option (116 ) Payment of success-based advisor fees (28 ) Payment of the arrangement & financing fee for the Term Loan Facility (5 ) Transfer of cash to restricted cash for the professional fee escrow account funding (2 ) Change in cash and cash equivalents 74 (b) Reflects the net restricted cash payments that occurred on the Effective Date as follows: (In $ millions) February 22, 2022 (Predecessor) Payment of net scrap rig proceeds to holders of Prepetition Credit agreement claims (45 ) Return of cash collateral to SFL for the amended West Linus lease agreement (7 ) Cash transferred from unrestricted cash for the professional fee escrow account funding 2 Change in restricted cash (50 ) (c) Reflects the change in other current assets for the following activities: (In $ millions) February 22, 2022 (Predecessor) Expense of Predecessor Directors & Officers insurance policy (17 ) Expense of the Commitment Premium and other capitalized debt issuance costs (24 ) Recognition of the right-of-use 24 Change in other current assets (17 ) (d) Reflects the change in drilling units for the derecognition of the West Linus (e) Reflects the change in other current liabilities: (In $ millions) February 22, 2022 (Predecessor) Accrued liability due to holders of Prepetition Credit agreement claims for sold rig proceeds 27 Recognition of lease liability and other accrued liability associated with the amended West Linus lease 25 Change in other current liabilities 52 (f) Liabilities subject to compromise were settled as follows in accordance with the Plan: (In $ millions) February 22, 2022 (Predecessor) Senior under-secured external debt 5,662 Accounts payable and other liabilities 35 Accrued interest on external debt 34 Amounts due to SFL Corporation under leases for the West Taurus West Linus 506 Total liabilities subject to compromise 6,237 Attributable to: Continuing operations 6,119 Discontinued operations 118 Payment of the AOD cash out option (116 ) Issuance of the New Second Lien Facility (717 ) Premium associated with the Term Loan Facility (9 ) Debt issuance costs (30 ) Payment of the rig sale proceeds (45 ) Amounts due to Prepetition Credit agreement claims for sold rig proceeds not yet paid (27 ) Issuance of New Seadrill Common Shares to holders of Prepetition Credit Agreement claims (1,244 ) Issuance of New Seadrill Common Shares to the Rights Offering Participants (187 ) Issuance of New Seadrill Common Shares associated with the Equity Commitment Premium (64 ) Derecognition of West Linus (182 ) Reversal of the release of certain general unsecured operating accruals (35 ) Pre-tax 3,581 (g) Reflects the changes in long-term debt for the following activities: (In $ millions) February 22, 2022 (Predecessor) Issuance of the Term Loan Facility 175 Issuance of the New Second Lien Facility 683 Issuance of the Convertible Bonds 50 Record the premium on the Term Loan Facility and New Second Lien Facility 43 Change in long-term debt 951 (h) Reflects the cancellation of the Predecessor’s common shares, additional paid in capital, and accumulated other comprehensive income. (i) Reflects the cumulative net impact on retained loss as follows: (In $ millions) February 22, 2022 (Predecessor) Pre-tax 3,581 Release of general unsecured operating accruals 35 Payment of success fees recognized on the Effective Date (28 ) Expense of Predecessor Directors & Officers insurance policy (17 ) Impact to net income 3,571 Cancellation of Predecessor common shares and additional paid in capital 3,513 Issuance of New Seadrill Common Shares to Predecessor equity holders (4 ) Net impact to retained loss 7,080 (j) Reflects the reorganization adjustments made to the Successor additional paid-in (In $ millions) February 22, 2022 (Predecessor) Fair value of New Seadrill Common Shares issued to holders of Prepetition Credit Agreement claims 1,456 Fair value of New Seadrill Common Shares issued to Predecessor equity holders 4 Fair value of the conversion option on the Convertible Bond 39 Successor additional paid-in 1,499 Fresh Start Adjustments (k) Reflects the fair value adjustment to other current assets for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 68 Write-off (15 ) Off-market right-of-use West Hercules West Linus (22 ) Change in other current assets 31 Attributable to: Continuing operations 20 Discontinued operations 11 (l) Reflects the fair value adjustment to the investments in Paratus of $14 million and in Sonadrill of $3 million. (m) Reflects the fair value adjustment to drilling units and the elimination of accumulated depreciation. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 279 Attributable to: Continuing operations 316 Discontinued operations (37 ) (n) Reflects the fair value adjustment to deferred tax assets of $1 million for favorable management contracts. (o) Reflects the fair value adjustment to equipment and the elimination of accumulated depreciation. (p) Reflects fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for favorable drilling and management service contracts 42 Write-off non-current (9 ) Write-off non-current (4 ) Change in other non-current 29 Attributable to: Continuing operations 26 Discontinued operations 3 (q) Reflects the fair value adjustment to other current liabilities for the following: (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 18 Write-off (1 ) Change in other current liabilities 17 (r) Reflects the fair value adjustment to deferred tax liabilities of $1 million to write-off (s) Reflects the fair value adjustment to other non-current (In $ millions) February 22, 2022 (Predecessor) Record fair value adjustment for unfavorable drilling contracts 67 Write-off non-current (4 ) Change in other non-current 63 (t) Reflects the cumulative impact of the Fresh Start accounting adjustments discussed above. (In $ millions) February 22, 2022 (Predecessor) Total Fresh start adjustments 242 Attributable to: Continuing operations 266 Discontinued operations (24 ) (u) These line items include current and non-current |
Reconciliation Of Enterprise Value And Reorganization Value | The following table reconciles the enterprise value to the estimated fair value of the Successor’s common shares as of the Effective Date: (In $ millions, except per share amount) As at (Successor) Enterprise value 2,095 Plus: Cash and cash equivalents at emergence 355 Less: Fair value of long-term debt (951 ) Implied value of Successor equity 1,499 Shares issued upon emergence 49,999,998 Per share value (US$) 29.98 The following table reconciles enterprise value to the reorganization value of the Successor (i.e., value of the total assets of the Successor) as of the Effective Date: (In $ millions) As at (Successor) Enterprise value 2,095 Plus: Cash and cash equivalents at emergence 355 Plus: Non-interest-bearing 350 Plus: Non-interest-bearing non-current 179 Total value of Successor Entity’s assets on Emergence 2,979 |
Discontinued Operations [Member] | |
Reorganization, Chapter 11 [Line Items] | |
Schedule of fresh-start adjustments | The below table discloses the impact of Reorganization and Fresh Start adjustments related to the discontinued operations’ Balance Sheet items: February 22, 2022 February 23, (In $ millions) Predecessor Reorganization Fresh Start Successor ASSETS Current assets Cash and cash equivalents 19 — — 19 Accounts receivable, net 32 — — 32 Other current assets 12 — 11 (k ) 23 Total current assets 63 — 11 74 Non-current Drilling units 344 — (37 ) (m ) 307 Deferred tax assets 1 — — 1 Other non-current — — 3 (p ) 3 Total non-current 345 — (34 ) 311 Total assets 408 — (23 ) 385 LIABILITIES AND EQUITY Current liabilities Trade accounts payable 6 — — 6 Other current liabilities 58 — — 58 Total current liabilities 64 — — 64 Liabilities subject to compromise 118 (118 ) (f ) — — Non-current Other non-current 2 — — 2 Total non-current 2 — — 2 EQUITY Total equity 224 118 (i ) (23 ) 319 Total liabilities and equity 408 — (23 ) 385 |
Current expected credit losses
Current expected credit losses (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Movement in allowance for credit losses and credit loss expense | The following table summarizes the movement in the allowance for credit losses for the year ended December 31, 2021. (In $ millions) Allowance Allowance Allowance Total January 1, 2020 — 9 — 9 Credit loss expense 3 139 2 144 December 31, 2020 3 148 2 153 Credit loss expense — 36 (2 ) 34 Write-off (1)/(2) (3 ) (183 ) — (186 ) December 31, 2021 — 1 — 1 (1) In April 2021 we signed a settlement agreement with Aquadrill (formerly Seadrill Partners) which waived all claims on pre-petition write-off (2) Following the cancellation of the Wintershall contract, a settlement agreement was reached with Northern Ocean to extinguish all outstanding claims. The agreement became effective in December 2021 resulting in the write-off The below table shows the classification of the credit loss expense within the Consolidated Statements of Operations. (In $ millions) Year ended Year ended Management contract expenses 36 142 Other financial items (2 ) 2 Total 34 144 |
Segment information (Tables)
Segment information (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Segment Reporting [Abstract] | ||
Schedule of segment results | Total operating revenue Operating revenues consist of contract revenues, reimbursable revenues, management contract revenues and other revenues. The segmental analysis of operating revenues is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 125 125 261 78 357 Floaters 133 85 327 85 239 Jackups 11 10 27 6 28 Other — 2 — — 8 Total operating revenues 269 222 615 169 632 Depreciation We record depreciation expense to reduce the carrying value of drilling unit and equipment balances to their residual value over their expected remaining useful economic lives. The segmental analysis of depreciation is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 7 13 18 7 56 Floaters 18 11 42 6 30 Jackups 3 3 8 4 9 Total 28 27 68 17 95 Amortization of intangibles We record amortization of favorable and unfavorable contracts over the remaining lives of the contracts. The segmental analysis of amortization is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 5 — 12 — — Floaters 5 — 10 — — Total 10 — 22 — — Operating profit/(loss) – Net profit/(loss) The segmental analysis is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 24 6 22 16 (171 ) Floaters (7 ) (13 ) 23 9 (40 ) Jackups 1 8 — 9 13 Other 2 (5 ) — 3 (52 ) Operating profit / (loss) 20 (4 ) 45 37 (250 ) Unallocated items: Total financial and other items (36 ) (48 ) (85 ) 3,704 (354 ) Income taxes (2 ) (3 ) (10 ) (2 ) (11 ) Net (loss)/profit from continuing operations (18 ) (55 ) (50 ) 3,739 (615 ) Drilling units – Total assets The segmental analysis of drilling assets and total assets is shown in the table below. Successor Predecessor (In $ millions) As at As at Harsh Environment 308 709 Floaters 1,179 524 Jackups 161 198 Total drilling units 1,648 1,431 Unallocated items: Investments in associated companies 79 27 Assets held for sale 392 1,492 Cash and restricted cash 349 516 Other assets 514 431 Total assets 2,982 3,897 Drilling units – Capital expenditures The segmental analysis of capital expenditures is shown in the table below. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Harsh Environment 2 9 3 2 26 Floaters 87 11 162 18 23 Jackups — — — — 3 Other — — — — 1 Total 89 20 165 20 53 | Operating revenues consist of contract revenues, reimbursable revenues, management contract revenues and other revenues. The segmental analysis of operating revenues is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment 495 526 510 Floaters 363 358 625 Jackup rigs 38 59 95 Other 11 18 24 Total 907 961 1,254 Depreciation We record depreciation expense to reduce the carrying value of drilling unit and equipment balances to their residual value over their expected remaining useful economic lives. The segmental analysis of depreciation is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment 73 93 125 Floaters 37 176 224 Jackup rigs 16 20 19 Other 1 29 29 Total 127 318 397 Amortization of intangibles We record amortization of favorable and unfavorable contracts over the remaining lives of the contracts. The segmental analysis of amortization is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) Harsh environment — 1 — Floaters — — 105 Total — 1 105 Impairment of drilling units and intangible assets We review the carrying value of our long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may no longer be appropriate. The segmental analysis of impairment is shown in the table below. (In $ millions) Year ended Year ended Year ended Harsh environment 152 419 — Floaters — 3,555 — Jackups — 86 — Other — 48 — Total 152 4,108 — Operating net loss The segmental analysis of operating net losses is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment (138 ) (396 ) (69 ) Floaters (21 ) (3,781 ) (201 ) Jackups 17 (86 ) (3 ) Other (14 ) (218 ) (23 ) Operating loss (156 ) (4,481 ) (296 ) Unallocated items: Total financial items and other (416 ) 50 (451 ) Loss before income taxes (572 ) (4,431 ) (747 ) Drilling assets – Total assets The segmental analysis of drilling assets and total assets is shown in the table below. (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Harsh environment rigs 709 1,032 Floaters 524 528 Jackup rigs 198 195 Total Drilling Units 1,431 1,755 Unallocated items: Investments in associated companies 27 24 Assets held for sale 1,492 1,085 Cash and restricted cash 516 653 Other assets 431 461 Total assets 3,897 3,978 Drilling units – Capital expenditures (1) The segmental analysis of capital expenditures is shown in the table below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Harsh environment 30 26 34 Floaters 35 110 111 Jackups 19 1 8 Total 84 137 153 (1) Capital expenditure includes long term maintenance projects. |
Schedule of revenues and fixed assets by geographic area | The following presents our revenues and fixed assets by geographic area: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Norway 74 112 180 78 346 Angola 63 32 160 43 85 United States 44 20 100 20 66 Canada 51 — 80 — — Brazil 26 32 67 19 86 Others (1) 11 26 28 9 49 Total 269 222 615 169 632 (1) Other countries represent countries in which we operate that individually had revenues representing less than 10% of total revenues earned for any of the periods presented. Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area based on location as at end of the period are as follows: Successor Predecessor (In $ millions) As at As at Brazil 348 169 Norway 308 710 United States 274 92 Spain 346 47 Qatar 147 156 Other 225 257 Drilling units 1,648 1,431 (1) Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. (2) “Other” represents countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented. | Revenues are attributed to geographical segments based on the country of operations for drilling activities, i.e. the country where the revenues are generated. The following presents our revenues and fixed assets by geographic area: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Norway 486 480 469 Angola 125 89 215 Brazil 121 51 137 United States 105 107 74 Nigeria — — 198 Others (1) 70 234 161 Total Revenue 907 961 1,254 (1) Other countries represent countries in which we operate that individually had revenues representing less than 10% of total revenues earned for any of the periods presented. Fixed assets – drilling units (1) Drilling unit fixed assets by geographic area based on location as at end of the year are as follows: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Norway 710 1,044 Brazil 169 79 Qatar 156 151 Malaysia 40 94 USA 92 87 Spain 47 49 Others (2) 217 251 Total 1,431 1,755 (1) Asset locations at the end of a period are not necessarily indicative of the geographic distribution of the revenues or operating profits generated by such assets during such period. (2) Other countries represent countries in which we operate that individually had fixed assets representing less than 10% of total fixed assets for any of the periods presented. |
Schedule of customer with contract revenues by major customers | We had the following customers with total revenues greater than 10% in any of the periods presented: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Sonadrill 22 % 14 % 22 % 9 % 12 % Equinor 19 % 15 % 13 % 10 % 15 % ConocoPhillips 14 % 18 % 15 % 13 % 20 % Var Energi 13 % 7 % 13 % 11 % 2 % Lundin — % 13 % 1 % 12 % 14 % Other 32 % 33 % 36 % 45 % 37 % | In the years ended December 31, 2021, 2020 and 2019, we had the following customers with total revenues greater than 10% in any of the years presented: Segment Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) ConocoPhillips Harsh Environment 18 % 18 % 12 % Equinor Harsh Environment 15 % 13 % 18 % Lundin Floaters 13 % 2 % — % Northern Ocean Harsh Environment 4 % 13 % 13 % TotalEnergies Floaters — % 5 % 20 % Other 50 % 49 % 37 % Total 100 % 100 % 100 % |
Revenue from contracts with c_2
Revenue from contracts with customers (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Schedule of contract assets and contract liabilities from contracts with customers | The following table provides information about receivables and contract liabilities from our contracts with customers: Successor Predecessor (In $ millions) As at As at Accounts receivable, net 143 158 Current contract liabilities (classified within other current liabilities) (9 ) (25 ) Non-current non-current (7 ) (10 ) Significant changes in the contract liabilities balances during the period, from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through September 30, 2022 (Successor) are as follows: (In $ millions) Contract Net contract liability at January 1, 2022 (Predecessor) (35 ) Amortization of revenue that was included in the beginning contract liability balance 16 Net contract liability at February 22, 2022 (Predecessor) (19 ) Net contract liability at February 23, 2022 (Successor) (19 ) Cash received, excluding amounts recognized as revenue (3 ) Net contract liability at March 31, 2022 (Successor) (22 ) Amortization of revenue that was included in the beginning contract liability balance 14 Cash received, excluding amounts recognized as revenue (22 ) Net contract liability at June 30, 2022 (Successor) (30 ) Amortization of revenue that was included in the beginning contract liability balance 14 Net contract liability at September 30, 2022 (Successor) (16 ) The Company does not have any material contract assets. Significant changes in the contract liabilities balances during the nine months ended September 30, 2021 (Predecessor) are as follows: (In $ millions) Contract Net contract liability at January 1, 2021 (Predecessor) (31 ) Amortization of revenue that was included in the beginning contract liability balance 5 Cash received, excluding amounts recognized as revenue (2 ) Net contract liability at March 31, 2021 (Predecessor) (28 ) Amortization of revenue that was included in the beginning contract liability balance 5 Cash received, excluding amounts recognized as revenue (8 ) Net contract liability at June 30, 2021 (Predecessor) (31 ) Amortization of revenue that was included in the beginning contract liability balance 17 Cash received, excluding amounts recognized as revenue (22 ) Net contract liability at September 30, 2021 (Predecessor) (36 ) | The following table provides information about receivables, contract assets and contract liabilities from our contracts with customers: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Accounts receivable, net 158 110 Current contract liabilities (deferred revenues) (1) (25 ) (18 ) Non-current (1) (10 ) (13 ) (1) Current contract liabilities balances are included in “Other current liabilities,” in our Consolidated Balance Sheets as at December 31, 2021. Significant (In $ millions) Contract Contract Net Contract Balances Net contract liability at January 1, 2020 — (29 ) (29 ) Amortization of revenue that was included in the beginning contract liability balance — 23 23 Cash received, excluding amounts recognized as revenue — (25 ) (25 ) Net contract liability at December 31, 2020 — (31 ) (31 ) Significant changes in the contract assets and the contract liabilities balances during the year ended December 31, 2021 are as follows: (In $ millions) Contract Contract Net Contract Balances Net contract liability at January 1, 2021 — (31 ) (31 ) Amortization of revenue that was included in the beginning contract liability balance — 24 24 Cash received, excluding amounts recognized as revenue — (28 ) (28 ) Net contract liability at December 31, 2021 — (35 ) (35 ) |
Other revenues (Tables)
Other revenues (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Revenues [Abstract] | ||
Other revenues | Other revenues consist of the following: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Leasing revenues (a) 7 7 16 4 19 Other (b) 3 — 3 1 — Total other revenues 10 7 19 5 19 | Other revenues consist of the following: (In $ millions) Year ended Year ended Year ended Leasing revenues (i) 26 19 1 Early termination fees (ii) 6 11 11 Total other revenues 32 30 12 |
Other operating items (Tables)
Other operating items (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | ||
Other operating items | Other operating items consist of the following: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Impairment of long lived assets — — — — (152 ) Gain on disposals 1 11 1 2 22 Other — — — — 3 Total other operating items 1 11 1 2 (127 ) | Other operating items consist of the following: (In $ millions) Year ended Year ended Year ended Impairment of long lived assets (i) (152 ) (4,087 ) — Impairment of intangibles (ii) — (21 ) — Gain on disposals (iii) 47 15 — Other operating income (iv) 54 9 39 Total other operating items (51 ) (4,084 ) 39 |
Other operating income | Other operating income consist of the following: (In $ millions) Year ended Year ended Year ended Pre-petition write-off (a) 27 — — War risk insurance rebate (b) 22 — — Loss of hire insurance settlement (c) 2 9 10 Receipt of overdue receivable (d) — — 26 Other 3 — 3 Total other operating income 54 9 39 |
Interest expense (Tables)
Interest expense (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Interest Expense [Abstract] | ||
Summary of interest expense | Interest expense consists of the following: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Cash and payment-in-kind (32 ) — (73 ) — (24 ) Interest on SFL leases — (18 ) — (7 ) (73 ) Unwinding of debt premium — — 1 — — Guarantee and commission fees (1 ) — (1 ) — — Interest expense (33 ) (18 ) (73 ) (7 ) (97 ) Cash and payment We incur cash and payment-in-kind Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Pre-filing — — — — (24 ) Post-emergence first-lien senior secured (4 ) — (9 ) — — Post-emergence second lien senior secured (27 ) — (62 ) — — Post-emergence unsecured convertible bond (1 ) — (2 ) — — Cash and payment-in-kind (32 ) — (73 ) — (24 ) | Interest expense consists of the following: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Cash interest on debt facilities (a) (25 ) (256 ) (360 ) Interest on SFL leases (b) (84 ) (12 ) — Unwind of discount debt — (44 ) (47 ) Write off of discount on debt (c) — (86 ) — Interest expense (109 ) (398 ) (407 ) (a) Cash interest on debt facilities We incur cash and payment-in-kind below. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Senior credit facilities and unsecured bonds (25 ) (229 ) (313 ) Debt of consolidated variable interest entities — (27 ) (47 ) Cash interest (25 ) (256 ) (360 ) |
Taxation (Tables)
Taxation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |
Schedule of income taxes | Income taxes consist of the following: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Current tax expense/(benefit): Bermuda — — — Foreign 2 6 17 Deferred tax expense/(benefit): Bermuda — — — Foreign (2 ) (7 ) (61 ) Total tax expense/(benefit) — (1 ) (44 ) Effective tax rate — % — % (5.9 )% |
Schedule of income tax reconciliation | The income taxes for the year ended December 31, 2021, the year ended December 31, 2020 and the year ended December 31, 2019 differed from the amount computed by applying the Bermuda statutory income tax rate of 0% as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Effect of change on unrecognized tax benefits 2 (8 ) (11 ) Effect of unremitted earnings of subsidiaries — (2 ) (17 ) Effect of taxable income in various countries (2 ) 9 (16 ) Total tax expense/(benefit) — (1 ) (44 ) |
Schedule of deferred income taxes | Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. The net deferred tax assets/(liabilities) consist of the following: Deferred tax assets: (In $ millions) December 31, December 31, (As adjusted) Pensions and stock options 3 1 Provisions 30 31 Property, plant and equipment 51 — Net operating losses carried forward 320 240 Intangibles — 4 Other 9 3 Gross deferred tax assets 413 279 Valuation allowance (403 ) (208 ) Deferred tax assets, net of valuation allowance 10 71 Deferred tax liabilities: (In $ millions) December 31, December 31, (As adjusted) Property, plant and equipment — 30 Unremitted Earnings of Subsidiaries 8 8 Deferred gain — 34 Intangibles 1 — Gross deferred tax liabilities 9 72 Net deferred tax asset/(liability) 1 (1 ) |
Schedule of changes in uncertain tax positions | The changes to our balance related to unrecognized tax benefits were as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) Balance at the beginning of the period 82 89 132 Increases as a result of positions taken in prior periods 2 1 8 Increases as a result of positions taken during the current period 2 — 29 Decreases as a result of positions taken in prior periods (1 ) (4 ) (34 ) Decreases due to settlements (1 ) (1 ) (46 ) Decreases as a result of a lapse of the applicable statute of limitations (1 ) (3 ) — Balance at the end of the period 83 82 89 |
Summary of tax years that remain subject to examination | The following table summarizes the earliest tax years that remain subject to examination by other major taxable jurisdictions in which we operate. Jurisdiction Earliest Kuwait 2012 Nigeria 2014 United States 2018 Mexico 2011 Norway 2015 Brazil 2008 |
Earnings_(Loss) per share (Tabl
Earnings/(Loss) per share (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Earnings Per Share [Abstract] | ||
Schedule of calculation of basic and diluted EPS | The components of the numerator for the calculation of basic and diluted EPS/LPS were as follows: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months (Loss)/profit from continuing operations (18 ) (55 ) (50 ) 3,739 (615 ) Profit/(loss) from discontinued operations 2 (31 ) 2 (33 ) (76 ) (Loss)/profit available to stockholders (16 ) (86 ) (48 ) 3,706 (691 ) Effect of dilution — — — — — Diluted (loss)/profit available to stockholders (16 ) (86 ) (48 ) 3,706 (691 ) The components of the denominator for the calculation of basic and diluted EPS/LPS were as follows: Successor Predecessor Successor Predecessor (In millions) Three months Three months Period from Period from Nine months Basic (loss)/earnings per share: Weighted average number of common shares outstanding 50 100 50 100 100 Diluted(loss)/earnings per share: Effect of dilution — — — — — Weighted average number of common shares outstanding adjusted for the effects of dilution 50 100 50 100 100 The basic and diluted (loss)/earnings per share were as follows: Successor Predecessor Successor Predecessor (In $) Three months Three months Period from Period from Nine months Basic/diluted (loss)/earnings per share from continuing operations (0.36 ) (0.55 ) (1.00 ) 37.25 (6.13 ) Basic/diluted earnings/(loss) per share from discontinued operations 0.04 (0.31 ) 0.04 (0.33 ) (0.75 ) Basic/diluted (loss)/earnings per share (0.32 ) (0.86 ) (0.96 ) 36.92 (6.88 ) | The components of the numerator for the calculation of basic and diluted LPS are as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) (As adjusted) Net loss from continuing operations (572 ) (4,430 ) (703 ) Profit /(loss) from discontinued operations (15 ) (233 ) (519 ) Net loss attributable to the parent (587 ) (4,663 ) (1,222 ) Less: Allocation to participating securities — — — Net loss available to stockholders (587 ) (4,663 ) (1,222 ) Effect of dilution — — — Diluted net loss available to stockholders (587 ) (4,663 ) (1,222 ) The components of the denominator for the calculation of basic and diluted LPS are as follows: (In millions) Year ended Year ended Year ended Basic loss per share: Weighted average number of common shares outstanding 100 100 100 Diluted loss per share: Effect of dilution — — — Weighted average number of common shares outstanding adjusted for the effects of dilution 100 100 100 The basic and diluted loss per share are as follows: (In $) Year ended Year ended Year ended Basic Loss per share from continuing operations (5.70 ) (44.11 ) (7.00 ) Diluted Loss per share from continuing operations (5.70 ) (44.11 ) (7.00 ) Basic loss per share (5.85 ) (46.43 ) (12.18 ) Diluted loss per share (5.85 ) (46.43 ) (12.18 ) |
Restricted cash (Tables)
Restricted cash (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Restricted Cash and Investments [Abstract] | ||
Schedule of restricted cash | Restricted cash as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) was as follows: Successor Predecessor (In $ millions) As at As at Demand deposit pledged as collateral for tax related guarantee 70 63 Cash held in escrow in Saudi Arabia 23 23 Accounts pledged as collateral for performance bonds and similar guarantees 11 28 Accounts pledged as collateral for SFL leases 8 37 Accounts pledged as collateral for guarantees related to rig recycling 6 14 Proceeds from rig sales 2 47 Other 5 11 Total restricted cash 125 223 Restricted cash is presented in our Consolidated Balance Sheets as follows: Successor Predecessor (In $ millions) As at As at Current restricted cash 55 160 Non-current 70 63 Total restricted cash 125 223 | Restricted cash consists of the following: (In $ millions) December 31, December 31, (As adjusted) Accounts pledged as collateral for performance bonds and similar guarantees (i) 42 48 Proceeds from rig sales (ii) 47 — Demand deposit pledged as collateral for tax related guarantee (iii) 63 65 Accounts pledged as collateral for SFL leases (iv) 37 22 Other 34 33 Total restricted cash 223 168 (i) Cash collateral in respect to bank guarantee facilities with Danske Bank and DNB. (ii) (iii) We placed a total of 330 million Brazilian Reais of collateral with BTG Pactual under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current (iv) Accounts pledged to SFL for lease arrangements for the West Linus West Hercules. Restricted cash is presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, December 31, (As adjusted) Current restricted cash 160 103 Non-current 63 65 Total restricted cash 223 168 |
Other assets (Tables)
Other assets (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Other Assets [Abstract] | ||
Schedule of other assets | As at September 30, 2022 (Successor) and December 31, 2021 (Predecessor), other assets included the following: Successor Predecessor (In $ millions) As at As at Deferred contract costs 75 15 Favorable drilling and management services contracts 62 9 Prepaid expenses 52 51 Taxes receivable 45 48 Right of use asset 10 24 Derivative asset – interest rate cap 8 — Reimbursable amounts due from customers 7 13 Restructuring backstop commitment fee — 20 Other 31 44 Total other assets 290 224 Other assets were presented in our Consolidated Balance Sheet as follows: Successor Predecessor (In $ millions) As at As at Other current assets 267 197 Other non-current 23 27 Total other assets 290 224 The following table summarizes the movement for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Gross carrying Accumulated Net carrying As at January 1, 2021 (Predecessor) 266 (256 ) 10 Amortization — — — As at March 31, 2021 (Predecessor) 266 (256 ) 10 Amortization — — — As at June 30, 2021 (Predecessor) 266 (256 ) 10 Amortization — — — As at September 30, 2021 (Predecessor) 266 (256 ) 10 The following table summarizes the movement for the period from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Gross Carrying Accumulated Net carrying As at January 1, 2022 (Predecessor) 266 (257 ) 9 Amortization — — — As at February 22, 2022 (Predecessor) 266 (257 ) 9 Fresh Start accounting (170 ) 257 87 As at February 23, 2022 (Successor) 96 — 96 Amortization — (5 ) (5 ) As at March 31, 2022 (Successor) 96 (5 ) 91 Amortization — (16 ) (16 ) As at June 30, 2022 (Successor) 96 (21 ) 75 Amortization — (13 ) (13 ) As at September 30, 2022 (Successor) 96 (34 ) 62 | As at December 31, 2021 and 2020, other assets included the following: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Prepaid expenses 51 65 Taxes receivable 48 32 Right of use asset 24 57 Deferred contract costs 15 14 Reimbursable amounts due from customers 13 11 Favorable drilling and management services contracts 9 10 Restructuring backstop commitment fee 20 — Other 44 43 Total other assets 224 232 Other assets are presented in our Consolidated Balance Sheets as follows: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Other current assets 197 187 Other non-current 27 45 Total other assets 224 232 |
Amortization of favorable contracts | The table below shows the amounts relating to favorable contracts that is expected to be amortized over the following periods: Period ended December 31 (In $ millions) 2022 2023 2024 2025 and Total Amortization of favorable contracts 31 29 1 1 62 |
Investment in associated comp_2
Investment in associated companies (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity Method Investments and Joint Ventures [Abstract] | ||
Schedule of ownership percentages and book values in associated companies | We have the following investments in associated companies: Ownership percentage Joint venture partner December 31, December 31, Gulfdrill (i) Gulf Drilling International 50.0 % 50.0 % Sonadrill (ii) Sonangol E.P. 50.0 % 50.0 % We own 50% equity interests in the above entities. The remaining 50% equity interest is owned by the above joint venture partners. We account for our 50% investments in the joint ventures under the equity method. For transactions with related parties refer to Note 27 – “Related party transactions”. At the year end, the book values of our investments in our associated companies were as follows: (In $ millions) December 31, December 31, Sonadrill 27 22 Gulfdrill — 2 Total 27 24 | |
Share in results from associated companies | As at September 30, 2022 (Successor) and December 31, 2021 (Predecessor), the carrying values of our investments in associated companies were as follows. Successor Predecessor (In $ millions) As at As at Paratus Energy Services 31 — Sonadrill 46 27 Gulfdrill 2 — Total investment in associated companies 79 27 | Our share in results of our associated companies (net of tax) were as follows: (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) Seadrill Partners — — (21 ) Sonadrill 5 (2 ) (1 ) Gulfdrill (2 ) 2 — Total share in results from associated companies (net of tax) 3 — (22 ) |
Summary of Consolidated Statements of Operations for our equity method investees | The results of the Sonadrill companies and our share in those results (net of tax) were as follows: Sonadrill (In $ millions) Year ended Year ended Year ended Operating revenues 94 56 22 Net operating income/(loss) 18 (2 ) (1 ) Net income/(loss) 11 (5 ) (2 ) Seadrill ownership percentage 50 % 50 % 50 % Share of results from Sonadrill (net of tax) 5 (2 ) (1 ) The results of the Gulfdrill companies and our share in those results (net of tax) were as follows: Gulfdrill (In $ millions) Year ended Year ended Year ended Operating revenues 142 44 — Net operating income/(loss) (4 ) 6 — Net income/(loss) (4 ) 4 — Seadrill ownership percentage 50 % 50 % 50 % Share of results from Gulfdrill (net of tax) (2 ) 2 — | |
Summarized Consolidated Balance sheets for our equity method investees | The summarized balance sheets of the Sonadrill companies and our share of recorded equity in those companies was as follows: Sonadrill (In $ millions) December 31, December 31, Current assets 72 54 Current liabilities (18 ) (11 ) Net Assets 54 43 Seadrill ownership percentage 50 % 50 % Book value of Seadrill investment 27 22 The summarized balance sheets of the Gulfdrill companies and our share of recorded equity in those companies was as follows: Gulfdrill (In $ millions) December 31, December 31, Current assets 120 67 Non-current 173 102 Current liabilities (182 ) (135 ) Non-current (113 ) (31 ) Net (liabilities)/assets (2 ) 3 Seadrill ownership percentage 50 % 50 % Book value of Seadrill investment — 2 |
Drilling units (Tables)
Drilling units (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Schedule of drilling units | The following table summarizes the movement for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Cost Accumulated Net book As at January 1, 2021 (Predecessor) 2,669 (914 ) 1,755 Additions 8 — 8 Depreciation — (34 ) (34 ) As at March 31, 2021 (Predecessor) 2,677 (948 ) 1,729 Additions 25 — 25 Depreciation — (32 ) (32 ) Impairment (152 ) — (152 ) As at June 30, 2021 (Predecessor) 2,550 (980 ) 1,570 Additions 20 — 20 West Hercules (364 ) 227 (137 ) Depreciation — (25 ) (25 ) As at September 30, 2021 (Predecessor) 2,206 (778 ) 1,428 The following table summarizes the movement for the period from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Cost Accumulated Net book As at January 1, 2022 (Predecessor) 2,217 (786 ) 1,431 Additions 20 — 20 Disposal of West Venture (23 ) 23 — Depreciation — (17 ) (17 ) As at February 22, 2022 (Predecessor) 2,214 (780 ) 1,434 Derecognition of West Linus (211 ) 36 (175 ) Fresh Start accounting (428 ) 744 316 As at February 23, 2022 (Successor) 1,575 — 1,575 Additions 16 — 16 Depreciation — (12 ) (12 ) As at March 31, 2022 (Successor) 1,591 (12 ) 1,579 Additions 60 — 60 Disposal of Sevan Brasil Sevan Driller (24 ) — (24 ) Depreciation — (28 ) (28 ) As at June 30, 2022 (Successor) 1,627 (40 ) 1,587 Additions 89 — 89 Depreciation — (28 ) (28 ) As at September 30, 2022 (Successor) 1,716 (68 ) 1,648 | Changes in drilling units for the periods presented in this report were as follows: (In $ millions) Cost Accumulated Net book (As adjusted) (As adjusted) (As adjusted) January 1, 2020 6,624 (605 ) 6,019 Additions 136 — 136 Depreciation — (313 ) (313 ) Impairment (4,087 ) — (4,087 ) December 31, 2020 2,673 (918 ) 1,755 Additions 84 — 84 Depreciation — (119 ) (119 ) Impairment (1) (152 ) — (152 ) Disposal (2) (364 ) 227 (137 ) December 31, 2021 (1)(2) 2,241 (810 ) 1,431 (1) In June 2021 we recorded an impairment of $152 million (December 31, 2020: $4.1 billion) which was reported within “Loss on impairment of long-lived assets” on our Consolidated Statement of Operations. Please refer to Note 11 – “Loss on impairment of long-lived assets” for further details. (2) In August, 2021, the lease agreement with SFL for the West Hercules |
Equipment (Tables)
Equipment (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | ||
Equipment | The following table summarizes the movement for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Cost Accumulated Net book value As at January 1, 2021 (Predecessor) 39 (20 ) 19 Depreciation — (1 ) (1 ) As at March 31, 2021 (Predecessor) 39 (21 ) 18 Depreciation — (2 ) (2 ) As at June 30, 2021 (Predecessor) 39 (23 ) 16 Additions 2 — 2 Depreciation — (2 ) (2 ) As at September 30, 2021 (Predecessor) 41 (25 ) 16 The following table summarizes the movement for the period from January 1, 2022 through February 22, 2022 (Predecessor) and the period from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Cost Accumulated Net book value As at January 1, 2022 (Predecessor) 39 (28 ) 11 As at February 22, 2022 (Predecessor) 39 (28 ) 11 Fresh Start adjustments (30 ) 28 (2 ) As at February 23, 2022 (Successor) 9 — 9 As at March 31, 2022 (Successor) 9 — 9 Additions 1 — 1 Depreciation — (1 ) (1 ) As at June 30, 2022 (Successor) 10 (1 ) 9 Additions 1 — 1 Depreciation — (1 ) (1 ) As at September 30, 2022 (Successor) 11 (2 ) 9 | Equipment consists of office equipment, software, furniture and fittings. Changes in equipment balances for the periods presented in this report were as follows: (In $ millions) Cost Accumulated Net book January 1, 2020 38 (15 ) 23 Additions 1 — 1 Depreciation — (5 ) (5 ) December 31, 2020 39 (20 ) 19 Depreciation — (8 ) (8 ) December 31, 2021 39 (28 ) 11 |
Debt (Tables)
Debt (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Disclosure [Abstract] | ||
Schedule of Debt and Balance Sheet Presentation | The table below sets our external debt agreements as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor): Successor Predecessor (In $ millions) As at As at Secured debt: Term Loan Facility 175 — Second Lien Facility 713 — Total Secured debt 888 — Unsecured notes Unsecured convertible notes 50 — Total Unsecured notes 50 — Total principal debt 938 — Exit fee Term Loan Facility 5 — Second Lien Facility 35 — Debt premium Term Loan Facility 4 — Total debt 982 — Debt was presented in our Consolidated Balance Sheets as: Successor Predecessor (In $ millions) As at As at Debt due within one year 32 — Long-term debt 950 — Total debt 982 — | As at December 31, 2021 and 2020, we had the following liabilities for third party debt agreements: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Secured credit facilities 5,545 5,545 Total debt principal 5,545 5,545 Less: Debt balance held as subject to compromise (5,545 ) — Carrying value — 5,545 |
Schedule of debt maturities | The outstanding debt as at September 30, 2022 (Successor) was repayable as follows, for the years ended December 31: (In $ millions) Term Loan Second (1) Convertible Total 2023 — 42 — 42 2024 — 42 — 42 2025 — 42 — 42 2026 180 42 — 222 2027 — 580 — 580 2028 and thereafter — — 50 50 Total debt principal and exit fee payments 180 748 50 978 | As at the Effective Date, the outstanding external debt is repayable as set out in the table below: (In $ millions) 2022 2023 2024 2025 2026 and Total Total Debt Repayments (a) 0 40 40 40 788 908 (a) The repayment schedule is net of fees and assumes that all interest is paid in cash as opposed to any capitalized pay-if-you-can |
Other liabilities (Tables)
Other liabilities (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Payables and Accruals [Abstract] | ||
Other liabilities | As at September 30, 2022 (Successor) and December 31, 2021 (Predecessor), other liabilities included the following: Successor Predecessor (In $ millions) As at As at Accrued expenses 114 78 Uncertain tax positions 86 83 Unfavorable contracts to be amortized 74 6 Employee withheld taxes, social security and vacation payments 45 43 Taxes payable 23 23 Liability for below-market lease 19 — Contract liabilities 16 35 Lease liabilities 14 35 Accrued interest expense 6 — Other liabilities 28 28 Total other liabilities 425 331 Other liabilities are presented in our Consolidated Balance Sheet as follows: Successor Predecessor (In $ millions) As at As at Other current liabilities 273 219 Other non-current 152 112 Total other liabilities 425 331 | As at December 31, 2021 and December 31, 2020, other liabilities included the following: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Uncertain tax positions 83 79 Accrued expenses 78 107 Employee withheld taxes, social security and vacation payments 43 44 Lease liabilities 35 68 Contract liabilities 35 31 Taxes payable 23 25 Accrued interest expense — 10 Other liabilities 34 33 Total Other Liabilities 331 397 Other liabilities are presented in our Consolidated Balance Sheet as follows: (In $ millions) December 31, December 31, (As adjusted) (As adjusted) Other current liabilities 219 277 Other non-current 112 120 Total Other Liabilities 331 397 |
Movement In Unfavorable Drilling Contracts Table TextBlock | The following table summarizes the movement in unfavorable drilling contracts and management services contracts for the nine months ended September 30, 2021 (Predecessor): (In $ millions) Gross Carrying Accumulated Net carrying As at January 1, 2021 (Predecessor) 66 (59 ) 7 Amortization — — — As at March 31, 2021 (Predecessor) 66 (59 ) 7 Amortization — — — As at June 30, 2021 (Predecessor) 66 (59 ) 7 Amortization — — — As at September 30, 2021 (Predecessor) 66 (59 ) 7 The following table summarizes the movement in unfavorable drilling contracts and management services contracts for the period from January 1, 2022 through February 22, 2022 (Predecessor) and from February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor): (In $ millions) Gross Carrying Accumulated Net carrying As at January 1, 2022 (Predecessor) 66 (60 ) 6 Amortization — — — As at February 22, 2022 (Predecessor) 66 (60 ) 6 Fresh Start accounting 19 60 79 As at February 23, 2022 (Successor) 85 — 85 Amortization — (3 ) (3 ) As at March 31, 2022 (Successor) 85 (3 ) 82 Amortization — (5 ) (5 ) As at June 30, 2022 (Successor) 85 (8 ) 77 Amortization — (3 ) (3 ) As at September 30, 2022 (Successor) 85 (11 ) 74 | |
Amounts Relating To Unfavorable Contracts That Is Expected To Be Amortized Table TextBlock | The table below shows the amounts relating to unfavorable contracts that is expected to be amortized over the following periods: Period ended December 31 (In $ millions) Remainder 2023 2024 2025 and Total Amortization of unfavorable contracts 4 24 24 22 74 |
Leases (Tables)
Leases (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Leases [Abstract] | ||
Schedule of future undiscounted cash flows | For operating leases where we are the lessee, our future undiscounted cash flows as at September 30, 2022 (Successor) are as follows: (In $ millions) Year ended Remainder of 2022 8 2023 2 2024 2 2025 2 2026 and thereafter 2 Total 16 | For operating leases where we are the lessee, our future undiscounted cash flows are as follows: (In $ millions) Year ended 2022 32 2023 3 2024 1 2025 and thereafter 1 Total 37 |
Schedule of reconciliation and supplementary information | The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheets as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor): Successor Predecessor (In $ millions) As at As at Total undiscounted cash flows 16 37 Less discount (2 ) (2 ) Operating lease liability 14 35 Of which: Curren 7 30 Non-curr 7 5 The following table gives supplementary information regarding our lease accounting for the three months ended September 30, 2022 (Successor) and September 30, 2021 (Predecessor), the period from January 1, 2022 through February 22, 2022 (Predecessor), the period February 23, 2022 through September 30, 2022 (Successor) and the nine months ended September 30, 2021 (Predecessor): Successor Predecessor Successor Predecessor (In $ million) Three months Three months Period from Period from Nine months Operating lease cost: Operating lease cost 11 27 31 4 32 Short-term lease cost 1 — 3 1 — Total lease cost 12 27 34 5 32 Other information: Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows 12 27 34 5 32 Right-of-use Non-cash — — 4 24 — Weighted-average remaining lease term in months 37 25 37 22 25 Weighted-average discount rate 10 % 16 % 10 % 9 % 16 % | The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liability recognized in our Consolidated Balance Sheet as at December 31, 2021: (In $ millions) Year ended Year ended Total undiscounted cash flows 37 79 Less short term leases — — Less discount (2 ) (11 ) Operating lease liability 35 68 Of which: Current 30 51 Non-current 5 17 Total 35 68 The following table gives supplementary information regarding our lease accounting at December 31, 2021: (In $ million) Year ended Year ended Year ended Operating Lease Cost: Operating lease cost 42 19 12 Short-term lease cost 1 2 1 Total lease cost 43 21 13 Other information: Cash paid for amounts included in the measurement of lease liabilities – 42 21 13 Right-of-use 24 53 19 Weighted-average remaining lease term in months 19 14 18 Weighted-average discount rate 10 % 24 % 13 % |
Schedule of operating subleases | T he estimated future undiscounted cash flows on these leases are as follows: (In $ millions) Year ended 2022 7 2023 28 2024 21 2025 and thereafter 20 Total 76 | The estimated future undiscounted cash flows on these leases are as follows: (In $ millions) Year ended 2022 28 2023 28 2024 21 2025 18 2026 and thereafter 2 Total 97 |
Common shares (Tables)
Common shares (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Equity [Abstract] | ||
Schedule of share capital | Share capital as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) was as follows: Issued and fully paid share capital Shares Par value each $ As at January 1, 2022 and February 22, 2022 (Predecessor) 100,384,435 $ 0.10 10,038,444 Cancellation of Predecessor equity (100,384,435 ) $ 0.10 (10,038,444 ) Issuance of Successor common stock 49,999,998 $ 0.01 500,000 As at February 23, 2022, March 31, 2022, June 30, 2022 and September 30, 2022 (Successor) 49,999,998 0.01 500,000 Please refer to Note 3 – “Chapter 11” for further details on the changes share | Changes in predecessor common shares for the periods presented in this report were as follows: Issued and fully paid share Shares $ millions December 31, 2019 100,234,973 10 2020 RSU share issuance 149,462 — December 31, 2020 and December 31, 2021 100,384,435 10 |
Accumulated other comprehensi_2
Accumulated other comprehensive (loss)/income (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract] | ||
Schedule of accumulated other comprehensive (loss)/income | Accumulated other comprehensive loss for the three month period ended September 30, 2021 (Predecessor) were as follows: (In $ millions) Actuarial gain Share in Change in debt Total As at January 1, 2021 (Predecessor) (2 ) (28 ) 4 (26 ) Other comprehensive income — (1 ) 1 — March 31, 2021 (Predecessor) (2 ) (29 ) 5 (26 ) Other comprehensive income — 5 — 5 As at June 30, 2021 (Predecessor) (2 ) (24 ) 5 (21 ) Other comprehensive income — 1 — 1 As at September 30, 2021 (Predecessor) (2 ) (23 ) 5 (20 ) Accumulated other comprehensive income/(loss) for the periods from January 1, 2022 through February 22, 2022 (Predecessor) and February 23, 2022 through March 31, 2022, June 30, 2022 and September 30, 2022 (Successor) were as follows: (In $ millions) Actuarial Share in Change in debt Total As at January 1, 2022 (Predecessor) (2 ) (19 ) 6 (15 ) Other comprehensive income from continuing operations 1 — — 1 Other comprehensive loss from discontinued operations — (2 ) (1 ) (3 ) Recycling of accumulated other comprehensive loss on sale of Paratus Energy Services — 21 (5 ) 16 As at February 22, 2022 (Predecessor) (1 ) — — (1 ) Reset accumulated other comprehensive loss 1 — — 1 As at February 23, 2022 (Successor) — — — — Other comprehensive income — — — — As at March 31, 2022 (Successor) — — — — Other comprehensive income 3 — — 3 As at June 30, 2022 (Successor) 3 — — 3 Other comprehensive income — — — — As at September 30, 2022 (Successor) 3 — — 3 | Changes in accumulated other comprehensive income/(loss) for the periods presented in this report were as follows: (In $ millions) Actuarial Share in Change in Total January 1, 2020 — (13 ) — (13 ) Other comprehensive loss from continuing operations (2 ) — — (2 ) Other comprehensive (loss)/income from discontinued operations — (15 ) 4 (11 ) December 31, 2020 (2 ) (28 ) 4 (26 ) Other comprehensive income from continuing operations — — — — Other comprehensive income from discontinued operations — 9 2 11 December 31, 2021 (2 ) (19 ) 6 (15 ) |
Share based compensation (Table
Share based compensation (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based compensation expense | The share-based compensation expense for our share options and Restricted Stock Unit (“ RSU (In $ millions) Year ended Year ended Year ended Share-based compensation expense — 8 5 Total share-based compensation expense — 8 5 |
Pension benefits (Tables)
Pension benefits (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |
Schedule of consolidated balance sheet position | Net defined benefit pension asset/(obligation) is as follows: (In $ millions) December 31, December 31, Defined benefit obligation – Non-current liabilitie s (5 ) — Deferred tax asset 1 1 Net defined benefit pension (obligation)/asset (4 ) 1 |
Schedule of annual pension cost | We record pension costs in the period during which the services are rendered by the employees. (In $ millions) Year ended Year ended Year ended Service cost — 1 3 Interest cost on prior years’ benefit obligation — — 1 Gross pension cost for the year — 1 4 Expected return on plan assets — — (1 ) Net pension cost for the year — 1 3 Impact of settlement/curtailment of defined benefit plans 2 1 — Total net pension cost 2 2 3 |
Schedule of funded status of the defined benefit plan | Funded defined benefit pension obligation is as follows: (In $ millions) December 31, December 31, Projected defined benefit obligations (16 ) (16 ) Plan assets at market value 11 16 Funded defined benefit pension obligation (5 ) — |
Change in projected benefit obligations | Change in projected benefit obligation is as follows: (In $ millions) Year ended Year ended Year ended Projected benefit obligations at beginning of period 16 40 37 Interest cost — — 1 Service cost — 1 3 Benefits paid (1 ) (1 ) (2 ) Change in unrecognized actuarial gain 1 2 — Settlement (1) — (25 ) — Foreign currency translations — (1 ) 1 Projected benefit obligations at end of period 16 16 40 (1) Two Norwegian defined benefit plans were settled and paid out in the year ending 31 December, 2020. |
Change in pension plan assets | Change in pension plan assets is as follows: (In $ millions) December 31, December 31, December 31, Fair value of plan assets at beginning of year 16 39 33 Estimated return — — 1 Contribution by employer 1 6 6 Benefits paid (1 ) (1 ) (2 ) Actuarial gain — — — Settlement (2) (1 ) (27 ) — Foreign currency translations — (1 ) 1 Other (1) (4 ) — — Fair value of plan assets at end of year 11 16 39 (1) In 2021, we received the contribution back for two Norwegian defined benefit plans that were terminated in 2020. (2) Two Norwegian defined benefit plans were settled and paid out in 2020. |
Schedule of assumptions used in calculation of pension obligations | Assumptions used in calculation of pension obligations Year ended Year ended Year ended Rate of compensation increase at the end of year 2.25 % 2.25 % 2.25 % Discount rate at the end of year 1.50 % 1.70 % 2.30 % Prescribed pension index factor 1.20 % 1.20 % 2.00 % Expected return on plan assets for the year 2.90 % 2.60 % 2.60 % Employee turnover 4.00 % 4.00 % 4.00 % Expected increases in Social Security Base 2.25 % 2.00 % 2.50 % |
Schedule of weighted-average asset allocation of funds related to defined benefit plan | The weighted-average asset allocation of funds related to our defined benefit plan at December 31, was as follows: Pension benefit plan assets December 31, December 31, Equity securities 9.7 % 7.2 % Debt securities 65.3 % 68.2 % Real estate 13.6 % 13.6 % Money market 10.6 % 10.6 % Other 0.8 % 0.4 % Total 100.0 % 100.0 % |
Schedule of expected annual pension plan contributions | The table below shows our expected annual pension plans contributions under defined benefit plans for the years ending December 31, 2021-2030. The expected payments are based on the assumptions used to measure our obligations at December 31, 2021 and include estimated future employee services. (In $ millions) December 31, 2022 1 2023 1 2024 1 2025 1 2025-2030 3 Total payments expected during the next 10 years 7 |
Related party transactions (Tab
Related party transactions (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Related Party Transactions [Abstract] | ||
Schedule of Related Party Transactions | The below table provides an analysis of related party revenues for periods presented in this report. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months Management fees revenues (a) 58 22 118 12 77 Reimbursable revenue (b) 4 17 9 3 46 Lease revenue (c) 7 7 16 4 19 Total related party operating revenues 69 46 143 19 142 (a) We provide management and administrative services to SeaMex, PES, Sonadrill and, in the Predecessor period, Aquadrill. We provide operational and technical support services to SeaMex, Sonadrill and, in the Predecessor period, Aquadrill and Northern Ocean. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis. (b) We recognized reimbursable revenues from Sonadrill for project work on the Quenguela (c) Lease revenue earned on the charter of the West Castor, West Telesto West Tucana Related party operating expenses The below table provides an analysis of related party operating expenses for periods presented in this report. Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months West Bollsta lease (d) — (10 ) — — (31 ) West Hercules lease (e) — (2 ) — (3 ) (2 ) Other related party operating expenses (f) — (1 ) — — (3 ) Total related party operating expenses — (13 ) — (3 ) (36 ) (d) Seadrill entered a charter agreement to lease the West Bollsta – (e) Seadrill incurred operating lease expense related to its lease of the West Hercules – (f) We received services from certain other related parties. These included management and administrative services from Frontline, warehouse rental from Seabras Sapura and other services from Archer and Seatankers. Following emergence from Chapter 11 proceedings, these companies are no longer related parties. Related party receivable balances The below table provides an analysis of related party receivable balances for periods presented in this report. Successor Predecessor (In $ millions) As at As at Related party loans and interest (g) — 9 Trading and other balances (h) 63 20 Allowance for expected credit losses (i) (1 ) (1 ) Total related party receivables 62 28 Of which: Amounts due from related parties – current 62 28 Amounts due from related parties – non-current — — (g) In 2021, the Sponsor Minimum Liquidity Shortfall loan receivable from SeaMex, which earned interest at 6.5% plus 3-month (h) Trading and other balances are primarily comprised of receivables from Gulfdrill for lease income, as well as from SeaMex, PES and Sonadrill for related party management and crewing fees. Per our contractual terms, these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. (i) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 – The below table provides an analysis of the receivable balance by counterparty: Successor Predecessor (In $ millions) As at As at Sonadrill 53 4 Gulfdrill 7 13 PES / SeaMex (j) 3 12 Gross amount receivable 63 29 Less: CECL allowance (1 ) (1 ) Receivable net of CECL allowance 62 28 (j) Receivables from PES / SeaMex as at December 31, 2021, represent balances between the continuing operations of Seadrill and the discontinued operations held for sale. Related party payable balances The below table provides an analysis of related party payable balances as of September 30, 2022 (Successor) and December 31, 2021 (Predecessor) presented in this report. Successor Predecessor (In $ millions) As at As at Liabilities from Seadrill to SFL (k) — 503 Total related party liabilities — 503 Of which: Amounts due to related parties – current — — Liabilities subject to compromise — 503 (k) On filing for Chapter 11, our prepetition related party payables were reclassified to Liabilities subject to compromise (“LSTC”) in our Consolidated Balance Sheets at December 31, 2021 (Predecessor). Upon emergence from Chapter 11 proceedings in February 2022, all LSTC balances were extinguished with a gain on settlement recognized in “Reorganization items, net”. For further information refer to Note 4 – “Fresh Start accounting”. Following emergence from Chapter 11 proceedings, SFL is no longer a related party. The following table provides a summary of the related party lease liabilities to SFL as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor). Successor Predecessor (In $ millions) As at As at West Taurus — 345 West Linus — 158 Total lease liabilities to SFL — 503 | The below table provides an analysis of related party revenues for periods presented in this report. (In $ millions) Year ended Year ended Year ended (As adjusted) (As adjusted) Management fee revenues (a) 98 135 113 Reimbursable revenues (b) 65 148 218 Leasing revenues (c) 26 19 1 Other — 3 1 Total related party operating revenues 189 305 333 (a) We provide management and administrative services to SeaMex, Sonadrill and, until May 2021, Aquadrill, as well as operational and technical support services to SeaMex, Sonadrill, Northern Ocean and, until May 2021, Aquadrill. We charge our affiliates for support services provided either on a cost-plus mark-up (b) We recognized reimbursable revenues from Northern Ocean for work performed to mobilize the Northern Ocean rigs West Mira West Bollsta Quenguela In December 2021, the off against the receivable. The remaining receivable of $18 million was net was settled for no cash against the lease liability owed to Northern Ocean for the West Bollsta (c) Lease revenue earned on the charter of the West Castor, West Telesto West Tucana The below table provides an analysis of related party operating expenses for periods presented in this report. (In $ millions) Year ended Year ended Year ended West Bollsta (d) 57 10 — West Hercules (e) 10 — — Other related party operating expenses (f) 3 2 3 Total related party operating expenses 70 12 3 (d) Seadrill entered a charter agreement to lease the West Bollsta (e) Lease expense following the change to operating lease in August 2021. Refer to Note 22 – “Leases” for details. (f) We received services from certain other related parties. These included management and administrative services from Frontline and other services from Seatankers. The below table provides an analysis of related party receivable balances for periods presented in this report. (In $ millions) December 31, December 31, (As adjusted) Related party loans and interest (g) 9 8 Trading balances (h) 20 236 Allowance for expected credit loss (i) (1 ) (153 ) Total related party receivables 28 91 Of which: Amounts due from related parties – 28 85 Amounts due from related parties – non-curren t — 6 Total amounts due from related parties 28 91 (g) Sponsor Minimum Liquidity Shortfall loan receivable from SeaMex which earns interest at 6.5% plus 3-month (h) Trading balances are primarily comprised of receivables from Gulfdrill for lease income, as well as from SeaMex and Sonadrill for related party management and crewing fees. Per our contractual terms these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. After its emergence from Chapter 11 in May 2021, Aquadrill is no longer considered a related party and any amounts due from them have been reclassified to “Accounts receivable, net” in our Consolidated Balance Sheets. The below table provides an analysis of the receivable balance: (In $ millions) Year ended Year ended Northern Ocean — 140 Aquadrill — 61 Gulfdrill 13 17 Sonadrill 4 10 NSNCo/SeaMex (Discontinued operations) 3 8 Gross amount receivable 20 236 Less: CECL allowance (1 ) (153 ) Receivable net of CECL allowance 19 83 (i) Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 – The below table provides an analysis of related party payable balances for periods presented in this report. (In $ millions) December 31, December 31, Liabilities from Seadrill to SFL (k) 503 426 Trading balances (l) — 7 Total related party liabilities 503 433 Of which: Amounts due to — 7 Long-term debt due to related parties — 426 Liabilities subject to compromise 503 — On filing for Chapter 11, our prepetition related party payables were reclassified to “liabilities subject to compromise” in our Consolidated Balance Sheets at December 31, 2021. For further information on our bankruptcy proceedings refer to Note 4 – Chapter 11 of our Consolidated Financial Statements included herein. (k) The liabilities to SFL represented $1.1 billion of lease liabilities between Seadrill and certain special purpose vehicles (“SPVs”), that are legal subsidiaries, of SFL. Seadrill consolidated these SPVs under the variable interest model until December 2020, when their deconsolidation was triggered by default on the leases. Refer to Note 4 – Chapter 11 for further details. On deconsolidation, Seadrill recognized the lease liabilities at a significant discount, reflecting its credit position at the time. The following table provides a summary of the lease liabilities to SFL as at December 31, 2021 and December 31, 2020. (In $ millions) December 31, December 31, West Taurus 345 147 West Linus 158 142 West Hercules — 137 Total lease liabilities to SFL 503 426 The lease on the West Taurus The West Hercules West Linus West Linus (l) Trading balances in 2020 primarily included related party payables due to Aquadrill and SeaMex. As part of the settlement agreement with Aquadrill all claims on pre-petition |
Fair values of financial inst_2
Fair values of financial instruments (Tables) | 7 Months Ended | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Fair Value Disclosures [Abstract] | |||
Schedule of fair value of financial instruments measured at amortized cost | The carrying value and estimated fair value of our financial instruments that are measured at amortized cost as at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) are as follows: Successor Predecessor As at September 30, As at December 31, (In $ millions) Fair Carrying Fair Carrying Assets Related party loans receivable (Level 2) — — 9 9 Liabilities Liability subject to compromise – Secured credit facilities ( Level 3) — — 1,966 5,544 Liability subject to compromise – Related Party Loans Payable (Level 3) — — 176 503 First Lien Senior Secured (Level 3) 188 184 — — Second Lien Senior Secured (Level 3) 748 748 — — Unsecured Convertible note – debt component (Level 3) * 42 50 — — * The conversion option, together with the issue discount, was recorded in the Predecessor equity which was subsequently cancelled on emergence from Chapter 11 proceedings. | The carrying value and estimated fair value of o ur fina December 31, 2021 December 31, 2020 (As adjusted) (As adjusted) (In $ millions) Fair value Carrying value Fair value Carrying value Assets Related party loans receivable (Level 2) 9 9 6 6 Liabilities Liability subject to compromise – Level 3) 1,966 5,544 922 5,545 Liability subject to compromise – (Level 3) 176 503 424 426 | |
Fair Value, Assets Measured on Recurring Basis [Table Text Block] | The carrying value and estimated fair value of our financial instruments that are measured at fair value on a recurring basis at September 30, 2022 (Successor) and December 31, 2021 (Predecessor) are as follows: Successor Predecessor As at September 30, As at December 31, (In $ millions) Fair Carrying Fair Carrying Assets Cash and cash equivalents ( Level 1) 224 224 293 293 Restricted cash (Level 1) 125 125 223 223 Interest rate cap (Level 2) 8 8 — — |
Commitments and contingencies (
Commitments and contingencies (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of guarantees in favor of third parties | We have issued guarantees in favor of third parties as follows, which is the maximum potential future payment for each type of guarantee: (In $ millions) December 31, December 31, (As adjusted) Guarantees in favor of customers Guarantees to Northern Ocean (1) 150 100 Guarantees to Sonadrill (2) 400 50 Total 550 150 (1) Guarantees in favor of customers are performance guarantees provided on behalf of Northern Ocean of $150 million (December 31, 2020: $100 million) for a contract that matures in 2022. (2) Guarantees in favor of customers are performance guarantees provided on behalf of Sonadrill of $400 million (December 31, 2020: $50 million). Contract maturity in November 2022 ($50 million) and March 2023 ($350 million). |
Supplementary cash flow infor_2
Supplementary cash flow information (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Supplemental Cash Flow Elements [Abstract] | |
Summary of non-cash investing and financing activities | The table below summarizes the non-cash (In $ millions) Year ended Year ended Year ended Non-cash Proceeds from sale of West Epsilon (1) — 12 — Non-cash Repayment of debt following sale of West Epsilon (1) — (12 ) — (1) During September 2020, the West Epsilon |
Business combination (Tables)
Business combination (Tables) | 12 Months Ended |
Dec. 31, 2021 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Seamex's Identifiable Assets Acquired and Liabilities Assumed as at Acquisition Date | The following is a summary of SeaMex’s identifiable assets acquired and liabilities assumed as at acquisition date: (In $ millions) As Carrying amounts of major classes of assets Cash and cash equivalents 41 Restricted cash 21 Accounts receivable, net 316 Intangible drilling contracts 172 Drilling units 216 Other assets 17 Total assets 783 Carrying amounts of major classes of liabilities Amounts due to related parties 133 Long-term debt 234 Other liabilities 88 Total liabilities 455 Net asset acquired 328 |
Schedule of Seamex's Operation Results Since the Acquisition Date Included in Discontinued Operations | The following is a summary of SeaMex’s operation results since the acquisition date included in the discontinued operations for the reporting period: (In $ millions) Period November 2, Results from business combination Operating revenues Contract revenues 36 Total operating revenues 36 Operating expenses Vessel and rig operating expenses (25 ) Selling, general and administrative expenses (2 ) Total operating expenses (27 ) Operating profit 9 Financial and non-operating Interest expense (4 ) Others (1 ) Total financial items (5 ) Income before tax 4 Income tax benefit 2 Income after tax 6 |
Assets and Liabilities Held f_2
Assets and Liabilities Held for Sale/Discontinued Operations (Tables) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 | Dec. 31, 2021 | |
Long-Lived Assets Held-for-sale [Line Items] | ||
Summary of long lived assets held for sale text block | The table below shows the assets and liabilities classified as held for sale as at September 30, 2022, and December 31, 2021: Successor Predecessor As at September 30, 2022 As at December 31, 2021 (In $ millions) Jackup Total NSNCo Jackup Total Assets held for sale Current 392 392 1,103 42 1,145 Non-current — — — 347 347 Total assets held for sale 392 392 1,103 389 1,492 Liabilities associated with assets held for sale Current 37 37 948 35 983 Liabilities subject to compromise — — — 118 118 Non-current — — — 2 2 Total liabilities associated with assets held for sale 37 37 948 155 1,103 | The table below shows the assets and liabilities classified as held for sale as at December 31, 2021, and December 31, 2020: As at December 31, 2021 As at December 31, 2020 (In $ millions) NSNCo Jackup Total NSNCo Jackup Total Assets held for sale Current 1,103 42 1,145 74 35 109 Non-current — 347 347 611 365 976 Total assets held for sale 1,103 389 1,492 685 400 1,085 Liabilities associated with assets held for sale Current 948 35 983 546 146 692 Liabilities subject to compromise — 118 118 — — — Non-current — 2 2 — — — Total liabilities associated with assets held for sale 948 155 1,103 546 146 692 |
Summary of Major Classes of Line Items Constituting Profit/(Loss) of Discontinued Operations | The table below shows the income/(loss) from discontinued operations: Successor Predecessor Successor Predecessor (In $ millions) Three months Three months Period from Period from Nine months NSNCo — (28 ) — (4 ) (59 ) Jackup Sale 2 (3 ) 2 (29 ) (17 ) Total profit/(loss) from discontinued operations 2 (31 ) 2 (33 ) (76 ) | The table below shows the income/(loss) from discontinued operations: (In $ millions) Year ended Year ended Year ended NSNCo 5 (215 ) (502 ) Jackup Sale (20 ) (18 ) (17 ) Total loss from discontinued operations, net of tax (15 ) (233 ) (519 ) Basic/diluted loss per share from discontinued operations (0.15 ) (2.32 ) (5.18 ) |
Schedule of major classes of line items constituting cash flows discontinued operations table text block. | The table below shows the cash flows from discontinued operations: (In $ millions) Year ended Year ended Year ended Net cash (used in)/provided by operating activities (5 ) (22 ) 7 NSNCo (18 ) (24 ) (33 ) Jackup Sale 13 2 40 Net cash provided by investing activities 23 36 47 NSNCo 23 36 47 Jackup Sale — — — Net cash used in used in financing activities — (96 ) (333 ) NSNCo — — (333 ) Jackup Sale — (96 ) — | |
NSNCo [Member] | ||
Long-Lived Assets Held-for-sale [Line Items] | ||
Summary of long lived assets held for sale text block | The table below shows the carrying amounts of major classes of assets and liabilities classified as held-for- sales: (In $ millions) As at As at Carrying amounts of major classes of assets included as part of discontinued Cash and cash equivalents 48 35 Restricted cash 21 29 Accounts receivable 318 — Intangible drilling contracts 165 — Drilling units 215 — Investment in associated companies 239 224 Amount due from related parties 69 387 Deferred tax assets 6 — Other assets 22 10 Total assets of discontinued operations classified as held for sale 1,103 685 Carrying amounts of major classes of liabilities included as part of discontinued Trade accounts payable 7 — Amounts due to related parties 12 — Long-term debt 814 515 Uncertain tax positions 25 — Other liabilities 90 31 Total liabilities of discontinued operations classified as held for sale 948 546 | |
Summary of Major Classes of Line Items Constituting Profit/(Loss) of Discontinued Operations | Major classes of line items constituting profit/(loss) of discontinued operations: (In $ millions, except per share data) Year ended Year ended Year ended Operating revenues Contract revenues 36 — — Total operating revenues 36 — — Operating expenses Operating expenses (27 ) — — Total operating expenses (27 ) — — Operating profit 9 — — Financial and other non-operating Interest income 18 26 34 Interest expense (77 ) (60 ) (66 ) Share in results from associated companies (net of tax) 14 (77 ) (93 ) Loss on impairment of investments — (47 ) (296 ) Loss impairment of convertible bond from related party — (29 ) (11 ) Net loss on debt extinguishments — — (22 ) Gain/(loss) on marketable securities 2 (3 ) (46 ) Other financial items 37 (24 ) (1 ) Total financial items (6 ) (214 ) (501 ) Net profit/(Loss) before tax from discontinued operations 3 (214 ) (501 ) Income tax benefit/(expense) 2 (1 ) (1 ) Net profit/(Loss) after tax from discontinued operations 5 (215 ) (502 ) Basic Earning/(Loss) per share from discontinued operations 0.05 (2.14 ) (5.02 ) Diluted Earning/(Loss) per share from discontinued operations 0.05 (2.14 ) (5.02 ) | |
Jack up Rigs [Member] | ||
Long-Lived Assets Held-for-sale [Line Items] | ||
Summary of long lived assets held for sale text block | The table below shows the carrying amounts of major classes of assets and liabilities classified as held for sale as of September 30, 2022 and December 31, 2021: Successor Predecessor (In $ millions) As at As at Carrying amounts of major classes of assets included as part of discontinued operations Cash and cash equivalents 8 19 Accounts receivable 21 12 Intangible drilling contracts 7 — Drilling units 339 346 Other assets 17 12 Total assets of discontinued operations classified as held for sale 392 389 Carrying amounts of major classes of liabilities included as part of discontinued operations Trade accounts payable 6 6 Other liabilities 31 31 Total liabilities of discontinued operations classified as held for sale 37 37 Carrying amounts of liabilities subject to compromise included as part of discontinued operations Liabilities subject to compromise — 118 | The table below shows the carrying amounts of major classes of assets and liabilities classified as held-for- sales: (In $ millions) As at As at Carrying amounts of major classes of assets included as part of discontinued Cash and cash equivalents 19 6 Accounts receivable 12 15 Drilling units 346 365 Other assets 12 14 Total assets of discontinued operations classified as held for sale 389 400 Carrying amounts of major classes of liabilities included as part of discontinued Trade accounts payable 6 4 Long-term debt (including current portion) — 117 Uncertain tax positions 2 — Other liabilities 29 25 Total liabilities of discontinued operations classified as held for sale 37 146 Carrying amounts of liabilities subject to compromise included as part of discontinued operations Liabilities subject to compromise 118 — |
Summary of Major Classes of Line Items Constituting Profit/(Loss) of Discontinued Operations | Major classes of line items constituting profit/(loss) of discontinued operations: Successor Predecessor Successor Predecessor (In $ millions, except per share data) Three months Three months Period from Period from Nine months Operating revenues Contract revenues 35 29 79 18 71 Total operating revenues 35 29 79 18 71 Operating expenses Vessel and rig operating expenses (18 ) (17 ) (42 ) (10 ) (46 ) Selling, general and administrative expenses (3 ) (2 ) (7 ) (1 ) (7 ) Depreciation and amortization (4 ) (7 ) (14 ) (4 ) (21 ) Amortization of intangibles (2 ) — (7 ) — — Costs associated with disposal (5 ) — (5 ) — — Total operating expenses (32 ) (26 ) (75 ) (15 ) (74 ) Operating profit 3 3 4 3 (3 ) Financial and other non-operating Interest expense — — — — (1 ) Reorganization items — (5 ) — (32 ) (9 ) Other financial items (1 ) — (1 ) — — Net profit/(loss) before tax from discontinued operations 2 (2 ) 3 (29 ) (13 ) Income tax expense — (1 ) (1 ) — (4 ) Net profit/(loss) after tax from discontinued operations 2 (3 ) 2 (29 ) (17 ) Basic Earning/(loss) per share from discontinued operations 0.04 (0.03 ) 0.04 (0.29 ) (0.17 ) Diluted Earning/(loss) per share from discontinued operations 0.04 (0.03 ) 0.04 (0.29 ) (0.17 ) | Major classes of line items constituting loss of discontinued operations: (In $ millions, except per share data) Year ended Year ended Year ended Operating revenues Contract revenues 101 98 134 Total operating revenues 101 98 134 Operating expenses Operating expenses (102 ) (99 ) (133 ) Total operating expenses (102 ) (99 ) (133 ) Operating (loss)/profit (1 ) (1 ) 1 Financial and other non-operating Interest income — 1 2 Interest expense — (11 ) (14 ) Reorganization items, net (14 ) — — Other financial items — (2 ) (2 ) Total financial items (14 ) (12 ) (14 ) Net loss before tax from discontinued operations (15 ) (13 ) (13 ) Income tax expense (5 ) (5 ) (4 ) Net loss after tax from discontinued operations (20 ) (18 ) (17 ) Basic loss per share from discontinued operations (0.20 ) (0.18 ) (0.16 ) Diluted loss per share from discontinued operations (0.20 ) (0.18 ) (0.16 ) |
General information (Details)
General information (Details) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||
Feb. 22, 2022 USD ($) | Sep. 30, 2022 USD ($) rig | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) rig | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) rig | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Oct. 31, 2022 rig | Jun. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Feb. 23, 2022 USD ($) | Jun. 30, 2021 USD ($) | Mar. 31, 2021 USD ($) | Dec. 31, 2018 USD ($) | |
Disclosure of General information [Line Items] | |||||||||||||||
Number of offshore drilling units owned by the Company | rig | 21 | 21 | 24 | 14 | |||||||||||
Number of rigs under lease | rig | 3 | ||||||||||||||
Number of managed and operated rigs | rig | 9 | ||||||||||||||
Number of offshore drilling units Sold | rig | 7 | ||||||||||||||
Number of offshore drilling units managed and operated for related parties | rig | 7 | 7 | |||||||||||||
Net gain from reorganization adjustments | $ (3,683) | $ 3 | $ 24 | $ 12 | $ 250 | $ 296 | $ 0 | $ 0 | |||||||
Net gain from Fresh Start adjustments | 0 | 0 | 0 | (186) | |||||||||||
Issuance of successor common stock | 1,495 | ||||||||||||||
Total equity | 1,499 | 1,454 | (3,825) | 1,454 | (3,825) | (3,716) | (3,140) | 1,793 | $ 1,470 | $ 1,503 | $ 1,499 | $ (3,740) | $ (3,451) | $ 3,035 | |
Additional paid in capital | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Issuance of successor common stock | 1,499 | ||||||||||||||
Total equity | 1,499 | 1,499 | 3,504 | 1,499 | 3,504 | 3,504 | $ 3,504 | $ 3,496 | 1,499 | 1,499 | 1,499 | $ 3,504 | $ 3,504 | $ 3,491 | |
Reorganization, chapter 11, predecessor, before adjustment | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Net gain from reorganization adjustments | (3,651) | 29 | $ 259 | ||||||||||||
Net gain from Fresh Start adjustments | 242 | $ 0 | |||||||||||||
Total equity | (3,809) | ||||||||||||||
Reorganization, chapter 11, predecessor, before adjustment | Additional paid in capital | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Total equity | $ 0 | $ 0 | $ 3,504 | $ 0 | $ 0 | $ 0 | |||||||||
Revision of Prior Period, Adjustment [Member] | Additional paid in capital | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Total equity | 1,499 | ||||||||||||||
Revision of Prior Period, Adjustment [Member] | Reorganization, chapter 11, predecessor, before adjustment | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Net gain from reorganization adjustments | 5,066 | ||||||||||||||
Net gain from Fresh Start adjustments | 242 | ||||||||||||||
Net profit from continuing operation | 3,813 | ||||||||||||||
Issuance of successor common stock | $ 1,495 | ||||||||||||||
Rig Reactivation Costs [Member] | Maximum [Member] | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Estimated economic useful life | 5 years | ||||||||||||||
Rig Reactivation Costs [Member] | Minimum [Member] | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Estimated economic useful life | 2 years | ||||||||||||||
Sonadrill [Member] | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Number of offshore drilling units managed and operated for related parties | rig | 2 | 2 | |||||||||||||
SeaMex Limited [Member] | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Number of offshore drilling units managed and operated for related parties | rig | 5 | 5 | |||||||||||||
SFL Corporation [Member] | |||||||||||||||
Disclosure of General information [Line Items] | |||||||||||||||
Number of leased rigs | rig | 1 | 1 |
Accounting policies (Details)
Accounting policies (Details) | 12 Months Ended |
Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |
Threshold percentage for recognizing actuarial gains and losses | 10% |
West Bollsta | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 30 years |
Drilling units | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 30 years |
Overhauls of drilling units | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 5 years |
Equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 3 years |
Equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Estimated economic useful life | 5 years |
Chapter 11 - Summary, Backgroun
Chapter 11 - Summary, Background and Objectives (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Feb. 22, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | Nov. 02, 2021 | Oct. 02, 2021 | Sep. 30, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | Jul. 02, 2018 | |||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Long-term debt | $ 982 | $ 951 | $ 5,545 | $ 6,200 | $ 5,545 | ||||||||||||
Cash and restricted cash | 349 | $ 490 | 516 | [1] | $ 521 | 653 | [1] | $ 1,205 | [1] | $ 1,572 | |||||||
Cash and cash equivalents | 224 | $ 355 | 293 | 485 | $ 987 | ||||||||||||
Total restricted cash | 125 | $ 223 | 168 | ||||||||||||||
Additional interest on payment-in-kind interest | 2% | ||||||||||||||||
Lease liability | $ 0 | $ 503 | $ 1,100 | 426 | |||||||||||||
SeaMex | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | 50% | |||||||||||||||
NSNCo | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 100% | ||||||||||||||||
NSNCo | NSNCo Noteholders | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 35% | 65% | |||||||||||||||
Credit Facility Maturing 2027 | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Long-term debt | 5,662 | $ 5,700 | $ 5,700 | ||||||||||||||
New First Lien Term Loan | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Debt instrument, interest rate (as percent) | 7% | ||||||||||||||||
Senior Secured Notes | Secured Debt | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Long-term debt | $ 500 | $ 500 | |||||||||||||||
Debt instrument, interest rate (as percent) | 12% | ||||||||||||||||
Subsequent Event | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Plan of reorganization, new financing raised | 350 | ||||||||||||||||
Long-term debt | 908 | ||||||||||||||||
Cash and restricted cash | 509 | ||||||||||||||||
Cash and cash equivalents | 355 | ||||||||||||||||
Total restricted cash | 154 | ||||||||||||||||
Undrawn amount on revolving credit facility | 125 | ||||||||||||||||
Liquidty | 480 | ||||||||||||||||
Net debt | 399 | ||||||||||||||||
Subsequent Event | SeaMex | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | ||||||||||||||||
Subsequent Event | NSNCo | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 35% | ||||||||||||||||
Subsequent Event | NSNCo | NSNCo Noteholders | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Noncontrolling interest, ownership percentage by parent | 65% | ||||||||||||||||
Subsequent Event | Credit Facility Maturing 2027 | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Long-term debt | 683 | ||||||||||||||||
Subsequent Event | New First Lien Term Loan | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Long-term debt | 175 | ||||||||||||||||
Subsequent Event | Hemen Convertible Bond | |||||||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||||||
Long-term debt | $ 50 | ||||||||||||||||
[1]Comprised of cash and cash equivalents $293 million (2020: $485 million, 2019: $987 million), restricted cash $160 million (2020: $103 million, 2019: $135 million), and restricted cash included in non-current |
Chapter 11 - Seadrill Proceedin
Chapter 11 - Seadrill Proceedings (Details) - USD ($) $ in Millions | Oct. 27, 2021 | Feb. 10, 2021 | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | ||||||
Long-term debt | $ 6,200 | $ 982 | $ 951 | $ 5,545 | $ 5,545 | |
Rights Offering Percentage | 12.50% | |||||
Backstop Parties, percentage of new shares issued minus the Rights Offering Percentage (if under-subscribed) | 12.50% | |||||
Equity commitment premium percentage | 4.25% | |||||
Commitment premium | 20% | 7.50% | ||||
Reorganized Seadrill | Maximum | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 83% | |||||
Reorganized Seadrill | Minimum | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Noncontrolling interest, ownership percentage by parent | 16.75% | |||||
Allowed Credit Agreement Claim | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Long-term debt | $ 683 | |||||
Stated interest rate, paid-in-kind portion (as a percent) | 7.50% | |||||
Allowed Credit Agreement Claim | LIBOR | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Basis spread on variable rate (as a percent) | 5% | |||||
New First Lien Facility | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Maximum borrowing capacity | $ 300 | |||||
New First Lien Term Loan | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Maximum borrowing capacity | $ 175 | |||||
Debt instrument, interest rate (as percent) | 7% | |||||
New First Lien Revolving Credit Facility | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Maximum borrowing capacity | $ 125 | |||||
Debt instrument, interest rate (as percent) | 7% | |||||
Commitment fee percentage | 2.80% |
Chapter 11 - Long Term Debt Mat
Chapter 11 - Long Term Debt Maturity (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | Feb. 10, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | ||||||
Carrying value | $ 982 | $ 951 | $ 5,545 | $ 6,200 | $ 5,545 | |
Subsequent Event | ||||||
Debt Instrument [Line Items] | ||||||
2022 | $ 0 | |||||
2023 | 40 | |||||
2024 | 40 | |||||
2025 | 40 | |||||
2026 and thereafter | 788 | |||||
Carrying value | $ 908 |
Chapter 11 - Hemen Convertible
Chapter 11 - Hemen Convertible Bond (Details) - Convertible Debt - Hermen Convertible Bond $ in Millions | Feb. 28, 2022 USD ($) |
Debt Instrument [Line Items] | |
Debt, face amount | $ 50 |
Subsequent Event | |
Debt Instrument [Line Items] | |
Debt, face amount | $ 50 |
Basis spread on variable rate (as a percent) | 5% |
LIBOR | Subsequent Event | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 6% |
Chapter 11 - Emergence and New
Chapter 11 - Emergence and New Seadrill Equity Allocation Table (Details) | Feb. 22, 2022 |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 100% |
Class 4 Credit Agreement Claimants | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 83% |
Rights Offering Participants, | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 12.50% |
Backstop Parties | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 4.25% |
Class 9 predecessor shareholders | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 0.25% |
Subsequent Event | |
Reorganization, Chapter 11 [Line Items] | |
Pre-confirmation voting share holders, percentage of voting shares upon emergence | 50% |
Percentage of common stock issued | 100% |
Subsequent Event | Class 4 Credit Agreement Claimants | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 83% |
Subsequent Event | Rights Offering Participants, | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 12.50% |
Subsequent Event | Backstop Parties | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 4.25% |
Subsequent Event | Class 9 predecessor shareholders | |
Reorganization, Chapter 11 [Line Items] | |
Percentage of common stock issued | 0.25% |
Chapter 11 - Common Stock Alloc
Chapter 11 - Common Stock Allocated (Details) - shares | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 49,999,998 | 49,999,998 | 49,999,998 | 49,999,998 | 100,384,435 | 100,384,435 | 100,234,973 |
Percentage of common stock issued | 100% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 100% | ||||||
Class 4 Credit Agreement Claimants | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 41,499,999 | ||||||
Percentage of common stock issued | 83% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 78.85% | ||||||
Rights Offering Participants, | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 6,250,001 | ||||||
Percentage of common stock issued | 12.50% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 11.87% | ||||||
Backstop Parties | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 2,125,000 | ||||||
Percentage of common stock issued | 4.25% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 4.04% | ||||||
Class 9 predecessor shareholders | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 124,998 | ||||||
Percentage of common stock issued | 0.25% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 0.24% | ||||||
Convertible Bondholders | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 0 | ||||||
Percentage of common stock issued | 0% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 5% | ||||||
Subsequent Event | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 49,999,998 | ||||||
Percentage of common stock issued | 100% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 100% | ||||||
Subsequent Event | Class 4 Credit Agreement Claimants | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 41,499,999 | ||||||
Percentage of common stock issued | 83% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 78.85% | ||||||
Subsequent Event | Rights Offering Participants, | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 6,250,001 | ||||||
Percentage of common stock issued | 12.50% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 11.87% | ||||||
Subsequent Event | Backstop Parties | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 2,125,000 | ||||||
Percentage of common stock issued | 4.25% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 4.04% | ||||||
Subsequent Event | Class 9 predecessor shareholders | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 124,998 | ||||||
Percentage of common stock issued | 0.25% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 0.24% | ||||||
Subsequent Event | Convertible Bondholders | |||||||
Class of Stock [Line Items] | |||||||
Common shares, issued (in shares) | 0 | ||||||
Percentage of common stock issued | 0% | ||||||
Percentage of common stock issued, after equity dilution on conversion of convertible bond | 5% |
Chapter 11 - NSNCo Restructurin
Chapter 11 - NSNCo Restructuring (Details) - USD ($) $ in Millions | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Oct. 02, 2022 | Feb. 18, 2022 | Sep. 02, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Jun. 30, 2022 | Feb. 22, 2022 | Jan. 20, 2022 | Nov. 30, 2021 | Nov. 02, 2021 | Feb. 10, 2021 | |
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Remeasurement of terminated lease to allowed claim | $ 0 | $ 0 | $ 0 | $ (186) | |||||||||
Derecognition of rig asset and finance liability | $ 10 | ||||||||||||
Rig asset derecognized | $ 175 | ||||||||||||
Financial liability, rig asset derecognized | 161 | ||||||||||||
Reorganization value, cash held as collateral | 7 | ||||||||||||
Paratus Energy Services [Member] | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Ownership interest (as percent) | 35% | 35% | 35% | 35% | |||||||||
Subsequent Event | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Rig asset derecognized | 175 | ||||||||||||
Financial liability, rig asset derecognized | $ 158 | ||||||||||||
Subsequent Event | Minimum | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Interim transition bareboat agreement period | 6 months | ||||||||||||
Subsequent Event | Maximum | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Interim transition bareboat agreement period | 9 months | ||||||||||||
SeaMex | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | 50% | |||||||||||
Extinguishment of debt | $ 400 | $ 400 | |||||||||||
SeaMex | Subsequent Event | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | ||||||||||||
NSNCo | SeaMex | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | ||||||||||||
NSNCo | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Ownership interest prior to disposal | 100% | ||||||||||||
NSNCo | Subsequent Event | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 35% | ||||||||||||
NSNCo | NSNCo Noteholders | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Ownership interest prior to disposal | 35% | 35% | 65% | ||||||||||
NSNCo | NSNCo Noteholders | Subsequent Event | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Ownership interest prior to disposal | 65% | ||||||||||||
Paratus Formerly NSNCo [Member] | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 35% | ||||||||||||
Paratus Formerly NSNCo [Member] | SeaMex | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | ||||||||||||
Paratus Formerly NSNCo [Member] | NSNCo Noteholders | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Ownership interest prior to disposal | 65% |
Chapter 11 - Detailed Timeline
Chapter 11 - Detailed Timeline (Details) | Sep. 30, 2022 | Jan. 20, 2022 | Jul. 09, 2021 | Feb. 10, 2021 |
NSNCo | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Percent of principal noteholders approving amendments to the indenture governing the notes | 80% | |||
NSNCo | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Ownership interest prior to disposal | 100% | |||
NSNCo | NSNCo Noteholders | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Ownership interest prior to disposal | 35% | 65% | ||
NSNCo | NSNCo Noteholders | Subsequent Event | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Ownership interest prior to disposal | 65% |
Chapter 11 - Schedule of Liabil
Chapter 11 - Schedule of Liabilities Subject to Compromise (Details) - USD ($) $ in Millions | 2 Months Ended | 11 Months Ended | 12 Months Ended | ||
Feb. 22, 2022 | Dec. 31, 2021 | Dec. 31, 2021 | Sep. 30, 2022 | Dec. 31, 2020 | |
Reorganization, Chapter 11 [Line Items] | |||||
Senior under-secured external debt | $ 5,662 | $ 5,662 | |||
Accounts payable and other liabilities | 36 | 36 | |||
Accrued interest on external debt | 34 | 34 | |||
Amount due to related party | 503 | 503 | |||
Liabilities subject to compromise | $ 6,237 | 6,235 | 6,235 | ||
Interest expense, not recorded due to reorganization | 48 | 298 | 298 | ||
Continuing operations | 6,117 | 6,117 | $ 0 | $ 0 | |
Discontinued operations | 118 | 118 | |||
Continuing Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | 6,119 | ||||
Continuing operations | 6,117 | 6,117 | |||
Discontinued Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | 118 | ||||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Senior under-secured external debt | 5,662 | ||||
Accounts payable and other liabilities | 35 | ||||
Accrued interest on external debt | 34 | ||||
Amount due to related party | 506 | ||||
Liabilities subject to compromise | 6,237 | (310) | (310) | ||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Continuing Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | 6,119 | (296) | (296) | ||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Discontinued Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | $ 118 | $ (14) | $ (14) |
Chapter 11 - Schedule of Reorga
Chapter 11 - Schedule of Reorganization Items (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reorganization, Chapter 11 [Line Items] | ||||||||
Gain on settlement of liabilities subject to compromise | $ 0 | $ 0 | $ 0 | |||||
Fresh Start valuation adjustments | 0 | 0 | 0 | $ (186) | ||||
Loss on deconsolidation of Paratus Energy Services | 0 | 0 | 0 | |||||
Advisory and professional fees after filing | (3) | (12) | (88) | (127) | ||||
Gain on write-off of related party payables | 0 | 0 | 13 | |||||
Expense of predecessor Directors & Officers insurance policy | 0 | 0 | 0 | |||||
Remeasurement of terminated lease to allowed claim | 0 | 0 | (186) | |||||
Interest income on surplus cash | 0 | 0 | 2 | 3 | ||||
Total reorganization items, net | $ 3,683 | (3) | $ (24) | (12) | (250) | $ (296) | $ 0 | $ 0 |
Continuing Operations [Member] | ||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||
Continuing operations | 3,683 | (3) | (24) | (12) | (250) | |||
Discontinued Operations [Member] | ||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||
Discontinued operations | (32) | $ 0 | (5) | $ 0 | (9) | |||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | ||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||
Gain on settlement of liabilities subject to compromise | 3,581 | 0 | ||||||
Fresh Start valuation adjustments | 242 | 0 | ||||||
Loss on deconsolidation of Paratus Energy Services | (112) | 0 | ||||||
Advisory and professional fees after filing | (44) | (36) | ||||||
Gain on write-off of related party payables | 0 | 5 | ||||||
Expense of predecessor Directors & Officers insurance policy | (17) | 0 | ||||||
Remeasurement of terminated lease to allowed claim | 0 | 0 | ||||||
Interest income on surplus cash | 1 | 2 | ||||||
Total reorganization items, net | $ 3,651 | $ (29) | $ (259) |
Chapter 11 - Summary of Loss on
Chapter 11 - Summary of Loss on deconsolidation of Paratus Energy Services Ltd (Details) - USD ($) $ in Millions | Jan. 20, 2022 | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Reorganizations [Abstract] | |||||
Carrying value of Paratus Energy Services Ltd equity at January 20, 2022 | $ (152) | $ 79 | $ 64 | $ 27 | $ 24 |
Fair value of retained 35% interest in Paratus Energy Services Ltd | 56 | ||||
Reclassification of NSNCo accumulated other comprehensive losses to income on disposal | (16) | ||||
Loss on deconsolidation of Paratus Energy Services Ltd | $ (112) |
Chapter 11 - Condensed Combined
Chapter 11 - Condensed Combined Debtors Financial Statements (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2021 | Sep. 30, 2022 | Feb. 23, 2022 | Feb. 22, 2022 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reorganization, Chapter 11 [Line Items] | ||||||
Restricted cash portion of cash collateral securing Senior Notes | $ 223 | $ 125 | $ 168 | |||
Cash and cash equivalents | 293 | 224 | $ 355 | 485 | $ 987 | |
Amount due from related parties, net | 28 | 62 | $ 42 | 85 | ||
Due from Related Parties, Noncurrent | 0 | $ 0 | $ 6 | |||
Liabilities subject to compromise | 6,235 | $ 6,237 | ||||
Pro Forma | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Restricted cash portion of cash collateral securing Senior Notes | 136 | |||||
Entities Not In Bankruptcy | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Net cash outflows from changes in the above assets. | 4 | |||||
Entities Not In Bankruptcy | Pro Forma | ||||||
Reorganization, Chapter 11 [Line Items] | ||||||
Reduction to current restricted cash due to exclusion | 24 | |||||
Reduction to cash due to exclusion | 8 | |||||
Cash and cash equivalents | 304 | |||||
Amount due from related parties, net | 21 | |||||
Due from Related Parties, Noncurrent | 9 | |||||
Liabilities subject to compromise | $ 8 |
Chapter 11 - Narrative (Details
Chapter 11 - Narrative (Details) - USD ($) $ in Millions | Feb. 28, 2022 | Oct. 27, 2021 | Feb. 10, 2021 | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Reorganization, Chapter 11 [Line Items] | |||||||
Total debt | $ 6,200 | $ 982 | $ 951 | $ 5,545 | $ 5,545 | ||
Rights Offering Percentage | 12.50% | ||||||
Backstop parties, equity commitment premium percentage | 4.25% | ||||||
Backstop parties, commitment premium | 7.50% | ||||||
Backstop Parties, Commitment Premium | 20% | 7.50% | |||||
Allowed Credit Agreement Claim | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Total debt | $ 683 | ||||||
New First Lien Facility | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Maximum borrowing capacity | 300 | ||||||
New First Lien Term Loan | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Maximum borrowing capacity | 175 | ||||||
New First Lien Revolving Credit Facility | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Maximum borrowing capacity | $ 125 | ||||||
Hermen Convertible Bond | Convertible Debt | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Debt Instrument, Face Amount | $ 50 | ||||||
Conversion rate | 5% | ||||||
Reorganized Seadrill | Maximum | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Noncontrolling interest, ownership percentage by parent | 83% | ||||||
Reorganized Seadrill | Minimum | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Noncontrolling interest, ownership percentage by parent | 16.75% |
Fresh Start Accounting - Additi
Fresh Start Accounting - Additional Information (Details) $ in Millions | Feb. 23, 2022 USD ($) |
Reorganization, Chapter 11 [Line Items] | |
Enterprise value | $ 2,095 |
Maximum [Member] | |
Reorganization, Chapter 11 [Line Items] | |
Enterprise value | 2,396 |
Minimum [Member] | |
Reorganization, Chapter 11 [Line Items] | |
Enterprise value | 1,795 |
Median [Member] | |
Reorganization, Chapter 11 [Line Items] | |
Enterprise value | $ 2,095 |
Fresh Start Accounting -Reconci
Fresh Start Accounting -Reconciliation Of Enterprise Value And Reorganization Value (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 7 Months Ended | ||||
Feb. 22, 2022 | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reorganizations [Abstract] | ||||||
Enterprise value | $ 2,095 | |||||
Plus: Cash and cash equivalents at emergence | $ 224 | 355 | $ 293 | $ 485 | $ 987 | |
Less: Fair value of long-term debt | (951) | |||||
Implied value of Successor equity | $ 1,499 | |||||
Shares issued upon emergence (in shares) | 49,999,998 | 49,999,998 | ||||
Per share value (US$) (in usd per share) | $ 29.98 | |||||
Plus: Non-interest-bearing current liabilities | $ 32 | $ 350 | 0 | $ 5,545 | ||
Plus: Non-interest-bearing non-current liabilities | $ 950 | 179 | $ 0 | |||
Total value of Successor Entity's assets on Emergence | $ 2,979 |
Fresh Start accounting - Schedu
Fresh Start accounting - Schedule of Adjustments in Consolidated Balance Sheet (Details) - USD ($) | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Feb. 23, 2022 | Feb. 22, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Reorganization, Chapter 11 [Line Items] | ||||||||||||||
Cash and cash equivalents | $ 224,000,000 | $ 355,000,000 | $ 293,000,000 | $ 485,000,000 | $ 987,000,000 | |||||||||
Restricted cash | 55,000,000 | 85,000,000 | 160,000,000 | 103,000,000 | 135,000,000 | |||||||||
Accounts receivable, net | 143,000,000 | 201,000,000 | 158,000,000 | 110,000,000 | ||||||||||
Amount due from related parties, net | 62,000,000 | 42,000,000 | 28,000,000 | 85,000,000 | ||||||||||
Other current assets | 267,000,000 | 220,000,000 | 197,000,000 | 187,000,000 | ||||||||||
Total current assets | 1,143,000,000 | 903,000,000 | 1,981,000,000 | 1,079,000,000 | ||||||||||
Non-current assets | ||||||||||||||
Investment in associated companies | 79,000,000 | 64,000,000 | $ (152,000,000) | 27,000,000 | 24,000,000 | |||||||||
Drilling units | 1,882,000,000 | |||||||||||||
Restricted cash | 70,000,000 | 69,000,000 | 63,000,000 | 65,000,000 | 83,000,000 | |||||||||
Deferred tax assets | 10,000,000 | 10,000,000 | 10,000,000 | 9,000,000 | ||||||||||
Equipment | 9,000,000 | |||||||||||||
Other non-current assets (u) | 23,000,000 | 42,000,000 | 27,000,000 | 45,000,000 | ||||||||||
Total non-current assets | 1,839,000,000 | 2,076,000,000 | 1,916,000,000 | 2,899,000,000 | ||||||||||
Total assets | 2,982,000,000 | 2,979,000,000 | 3,897,000,000 | 3,978,000,000 | ||||||||||
Current liabilities | ||||||||||||||
Trade accounts payable | 59,000,000 | |||||||||||||
Other current liabilities | 273,000,000 | 291,000,000 | 219,000,000 | 277,000,000 | ||||||||||
Total current liabilities | 417,000,000 | 350,000,000 | 1,255,000,000 | 6,562,000,000 | ||||||||||
Liabilities subject to compromise | $ 6,237,000,000 | 6,235,000,000 | ||||||||||||
Non-current liabilities | ||||||||||||||
Long-term debt | 982,000,000 | 951,000,000 | 5,545,000,000 | $ 6,200,000,000 | 5,545,000,000 | |||||||||
Deferred tax liabilities | 9,000,000 | 6,000,000 | 9,000,000 | 10,000,000 | ||||||||||
Other non-current liabilities | 152,000,000 | 173,000,000 | 112,000,000 | 120,000,000 | ||||||||||
Total non-current liabilities | 1,111,000,000 | 1,130,000,000 | 123,000,000 | 556,000,000 | ||||||||||
EQUITY | ||||||||||||||
Common shares of par value | 500,000 | $ 500,000 | $ 500,000 | 500,000 | 10,038,444 | 10,038,444 | 10,000,000 | |||||||
Additional paid-in capital | 1,499,000,000 | 3,504,000,000 | 3,504,000,000 | |||||||||||
Accumulated other comprehensive loss | 3,000,000 | (15,000,000) | (26,000,000) | |||||||||||
Retained (deficit)/earnings | (48,000,000) | (7,215,000,000) | (6,628,000,000) | |||||||||||
Total equity | 1,454,000,000 | $ 1,470,000,000 | $ 1,503,000,000 | 1,499,000,000 | 1,499,000,000 | (3,716,000,000) | $ (3,825,000,000) | $ (3,740,000,000) | $ (3,451,000,000) | (3,140,000,000) | $ 1,793,000,000 | $ 3,035,000,000 | ||
Total liabilities and equity | $ 2,982,000,000 | 2,979,000,000 | 3,897,000,000 | $ 3,978,000,000 | ||||||||||
Successor [Member] | ||||||||||||||
EQUITY | ||||||||||||||
Additional paid-in capital | 1,499,000,000 | |||||||||||||
Discontinued Operations [Member] | ||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||
Cash and cash equivalents | 19,000,000 | |||||||||||||
Accounts receivable, net | 32,000,000 | |||||||||||||
Other current assets | 23,000,000 | |||||||||||||
Total current assets | 74,000,000 | |||||||||||||
Non-current assets | ||||||||||||||
Drilling units | 307,000,000 | |||||||||||||
Deferred tax assets | 1,000,000 | |||||||||||||
Other non-current assets (u) | 3,000,000 | |||||||||||||
Total non-current assets | 311,000,000 | |||||||||||||
Total assets | 385,000,000 | |||||||||||||
Current liabilities | ||||||||||||||
Trade accounts payable | 6,000,000 | |||||||||||||
Other current liabilities | 58,000,000 | |||||||||||||
Total current liabilities | 64,000,000 | |||||||||||||
Liabilities subject to compromise | 118,000,000 | |||||||||||||
Non-current liabilities | ||||||||||||||
Other non-current liabilities | 2,000,000 | |||||||||||||
Total non-current liabilities | 2,000,000 | |||||||||||||
EQUITY | ||||||||||||||
Total equity | 319,000,000 | |||||||||||||
Total liabilities and equity | $ 385,000,000 | |||||||||||||
Reorganization Adjustments | ||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||
Cash and cash equivalents | 74,000,000 | |||||||||||||
Restricted cash | (50,000,000) | |||||||||||||
Other current assets | (17,000,000) | |||||||||||||
Total current assets | 7,000,000 | |||||||||||||
Non-current assets | ||||||||||||||
Drilling units | (175,000,000) | |||||||||||||
Total non-current assets | (175,000,000) | |||||||||||||
Total assets | (168,000,000) | |||||||||||||
Current liabilities | ||||||||||||||
Other current liabilities | 52,000,000 | |||||||||||||
Total current liabilities | 52,000,000 | |||||||||||||
Liabilities subject to compromise | (6,237,000,000) | |||||||||||||
Non-current liabilities | ||||||||||||||
Long-term debt | 951,000,000 | |||||||||||||
Total non-current liabilities | 951,000,000 | |||||||||||||
EQUITY | ||||||||||||||
Additional paid-in capital | 1,499,000,000 | |||||||||||||
Accumulated other comprehensive loss | 1,000,000 | |||||||||||||
Retained (deficit)/earnings | 7,080,000,000 | |||||||||||||
Total equity | 5,066,000,000 | |||||||||||||
Total liabilities and equity | (168,000,000) | |||||||||||||
Reorganization Adjustments | Predecessor [Member] | ||||||||||||||
EQUITY | ||||||||||||||
Common shares of par value | (10,000,000) | |||||||||||||
Additional paid-in capital | (3,504,000,000) | |||||||||||||
Reorganization Adjustments | Discontinued Operations [Member] | ||||||||||||||
Current liabilities | ||||||||||||||
Liabilities subject to compromise | (118,000,000) | |||||||||||||
EQUITY | ||||||||||||||
Total equity | 118,000,000 | |||||||||||||
Reorganization, chapter 11, predecessor, before adjustment | ||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||
Cash and cash equivalents | 281,000,000 | |||||||||||||
Restricted cash | 135,000,000 | |||||||||||||
Accounts receivable, net | 201,000,000 | |||||||||||||
Amount due from related parties, net | 42,000,000 | |||||||||||||
Other current assets | 206,000,000 | |||||||||||||
Total current assets | 865,000,000 | |||||||||||||
Non-current assets | ||||||||||||||
Investment in associated companies | 81,000,000 | |||||||||||||
Drilling units | 1,778,000,000 | |||||||||||||
Restricted cash | 69,000,000 | |||||||||||||
Deferred tax assets | 9,000,000 | |||||||||||||
Equipment | 11,000,000 | |||||||||||||
Other non-current assets (u) | 13,000,000 | |||||||||||||
Total non-current assets | 1,961,000,000 | |||||||||||||
Total assets | 2,826,000,000 | |||||||||||||
Current liabilities | ||||||||||||||
Trade accounts payable | 59,000,000 | |||||||||||||
Other current liabilities | 222,000,000 | |||||||||||||
Total current liabilities | 281,000,000 | |||||||||||||
Liabilities subject to compromise | 6,237,000,000 | (310,000,000) | ||||||||||||
Non-current liabilities | ||||||||||||||
Deferred tax liabilities | 7,000,000 | |||||||||||||
Other non-current liabilities | 110,000,000 | |||||||||||||
Total non-current liabilities | 117,000,000 | |||||||||||||
EQUITY | ||||||||||||||
Accumulated other comprehensive loss | (1,000,000) | |||||||||||||
Retained (deficit)/earnings | (7,322,000,000) | |||||||||||||
Total equity | (3,809,000,000) | |||||||||||||
Total liabilities and equity | 2,826,000,000 | |||||||||||||
Reorganization, chapter 11, predecessor, before adjustment | Predecessor [Member] | ||||||||||||||
EQUITY | ||||||||||||||
Common shares of par value | 10,000,000 | |||||||||||||
Additional paid-in capital | 3,504,000,000 | |||||||||||||
Reorganization, chapter 11, predecessor, before adjustment | Discontinued Operations [Member] | ||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||
Cash and cash equivalents | 19,000,000 | |||||||||||||
Accounts receivable, net | 32,000,000 | |||||||||||||
Other current assets | 12,000,000 | |||||||||||||
Total current assets | 63,000,000 | |||||||||||||
Non-current assets | ||||||||||||||
Drilling units | 344,000,000 | |||||||||||||
Deferred tax assets | 1,000,000 | |||||||||||||
Total non-current assets | 345,000,000 | |||||||||||||
Total assets | 408,000,000 | |||||||||||||
Current liabilities | ||||||||||||||
Trade accounts payable | 6,000,000 | |||||||||||||
Other current liabilities | 58,000,000 | |||||||||||||
Total current liabilities | 64,000,000 | |||||||||||||
Liabilities subject to compromise | 118,000,000 | $ (14,000,000) | ||||||||||||
Non-current liabilities | ||||||||||||||
Other non-current liabilities | 2,000,000 | |||||||||||||
Total non-current liabilities | 2,000,000 | |||||||||||||
EQUITY | ||||||||||||||
Total equity | 224,000,000 | |||||||||||||
Total liabilities and equity | 408,000,000 | |||||||||||||
Reorganization, chapter 11, fresh-start adjustment | ||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||
Other current assets | 31,000,000 | |||||||||||||
Total current assets | 31,000,000 | |||||||||||||
Non-current assets | ||||||||||||||
Investment in associated companies | (17,000,000) | |||||||||||||
Drilling units | 279,000,000 | |||||||||||||
Deferred tax assets | 1,000,000 | |||||||||||||
Equipment | (2,000,000) | |||||||||||||
Other non-current assets (u) | 29,000,000 | |||||||||||||
Total non-current assets | 290,000,000 | |||||||||||||
Total assets | 321,000,000 | |||||||||||||
Current liabilities | ||||||||||||||
Other current liabilities | 17,000,000 | |||||||||||||
Total current liabilities | 17,000,000 | |||||||||||||
Non-current liabilities | ||||||||||||||
Deferred tax liabilities | (1,000,000) | |||||||||||||
Other non-current liabilities | 63,000,000 | |||||||||||||
Total non-current liabilities | 62,000,000 | |||||||||||||
EQUITY | ||||||||||||||
Retained (deficit)/earnings | 242,000,000 | |||||||||||||
Total equity | 242,000,000 | |||||||||||||
Total liabilities and equity | 321,000,000 | |||||||||||||
Reorganization, chapter 11, fresh-start adjustment | Discontinued Operations [Member] | ||||||||||||||
Reorganization, Chapter 11 [Line Items] | ||||||||||||||
Other current assets | 11,000,000 | |||||||||||||
Total current assets | 11,000,000 | |||||||||||||
Non-current assets | ||||||||||||||
Drilling units | (37,000,000) | |||||||||||||
Other non-current assets (u) | 3,000,000 | |||||||||||||
Total non-current assets | (34,000,000) | |||||||||||||
Total assets | (23,000,000) | |||||||||||||
EQUITY | ||||||||||||||
Total equity | (23,000,000) | |||||||||||||
Total liabilities and equity | $ (23,000,000) |
Fresh Start Accounting - Reorga
Fresh Start Accounting - Reorganization Adjustments, Cash and Cash Equivalents (Details) - USD ($) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Reorganization, Chapter 11 [Line Items] | |||||||
Receipt of cash from the issuance of the Term Loan Facility | $ 175 | $ 0 | $ 0 | ||||
Transfer of cash to restricted cash for the professional fee escrow account funding | 2 | ||||||
Change in cash and cash equivalents | $ (95) | (152) | $ (161) | $ (119) | $ (634) | $ (646) | |
Reorganization Adjustments | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Settlement of the Prepetition Credit Agreement | (683) | ||||||
Payment of the AOD cash out option | (116) | ||||||
Payment of success-based advisor fees | $ (28) | (28) | |||||
Payment of the arrangement & financing fee for the Term Loan Facility | (5) | ||||||
Transfer of cash to restricted cash for the professional fee escrow account funding | (2) | ||||||
Change in cash and cash equivalents | 74 | ||||||
Reorganization Adjustments | Term Loan Facility [Member] | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Receipt of cash from the issuance of the Term Loan Facility | 175 | ||||||
Reorganization Adjustments | Convertible Bonds [Member] | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Receipt of cash from the issuance of the Term Loan Facility | 50 | ||||||
Reorganization Adjustments | New Second Lien Facility [Member] | |||||||
Reorganization, Chapter 11 [Line Items] | |||||||
Receipt of cash from the issuance of the Term Loan Facility | $ 683 |
Fresh Start Accounting - Reor_2
Fresh Start Accounting - Reorganization Adjustments, Restricted Cash (Details) $ in Millions | 7 Months Ended |
Sep. 30, 2022 USD ($) | |
Reorganizations [Abstract] | |
Payment of net scrap rig proceeds to holders of Prepetition Credit agreement claims | $ (45) |
Return of cash collateral to SFL for the amended West Linus lease agreement | (7) |
Cash transferred from unrestricted cash for the professional fee escrow account funding | 2 |
Change in restricted cash | $ (50) |
Fresh Start Accounting - Reor_3
Fresh Start Accounting - Reorganization Adjustments, Other Current Assets (Details) $ in Millions | 7 Months Ended |
Sep. 30, 2022 USD ($) | |
Reorganizations [Abstract] | |
Expense of Predecessor Directors & Officers insurance policy | $ (17) |
Expense of the Commitment Premium and other capitalized debt issuance costs | (24) |
Recognition of the right-of-use asset associated with the modified West Linus bareboat lease | 24 |
Change in other current assets | $ (17) |
Fresh Start Accounting - Reor_4
Fresh Start Accounting - Reorganization Adjustments, Other Current Liabilities (Details) $ in Millions | 7 Months Ended |
Sep. 30, 2022 USD ($) | |
Reorganizations [Abstract] | |
Accrued liability due to holders of Prepetition Credit agreement claims for sold rig proceeds | $ 27 |
Recognition of lease liability and other accrued liability associated with the amended West Linus lease | 25 |
Change in other current liabilities | $ 52 |
Fresh Start Accounting - Reor_5
Fresh Start Accounting - Reorganization Adjustments, Long-term Debt (Details) - Reorganization Chapter11 Plan Effect Adjustment Member - USD ($) $ in Millions | 7 Months Ended | |
Sep. 30, 2022 | Feb. 22, 2022 | |
Reorganization, Chapter 11 [Line Items] | ||
Record the premium on the Term Loan Facility and New Second Lien Facility | $ 43 | |
Change in long-term debt | $ 951 | |
Term Loan Facility | ||
Reorganization, Chapter 11 [Line Items] | ||
Issuance of long-term debt | 175 | |
New Second Lien Facility | ||
Reorganization, Chapter 11 [Line Items] | ||
Issuance of long-term debt | 683 | |
Convertible Bonds | ||
Reorganization, Chapter 11 [Line Items] | ||
Issuance of long-term debt | $ 50 |
Fresh Start Accounting - Reor_6
Fresh Start Accounting - Reorganization Adjustments, Liabilities Subject to Compromise (Details) - USD ($) $ in Millions | 2 Months Ended | ||||
Feb. 22, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Reorganization, Chapter 11 [Line Items] | |||||
Accounts payable and other liabilities | $ 36 | ||||
Accrued interest on external debt | $ 6 | 0 | $ 10 | ||
Amounts due to SFL Corporation under leases for the West Taurus and West Linus | $ 14 | 35 | $ 68 | ||
Liabilities subject to compromise | $ 6,237 | $ 6,237 | 6,235 | ||
Stock Issued During Period, Value, New Issues | 1,495 | ||||
Continuing Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | 6,119 | 6,119 | |||
Discontinued Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | 118 | 118 | |||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Senior under-secured external debt | 5,662 | 5,662 | |||
Accounts payable and other liabilities | 35 | 35 | |||
Accrued interest on external debt | 34 | 34 | |||
Amounts due to SFL Corporation under leases for the West Taurus and West Linus | 506 | 506 | |||
Liabilities subject to compromise | 6,237 | 6,237 | (310) | ||
Payment of the AOD cash out option | (116) | ||||
Premium associated with the Term Loan Facility | (9) | ||||
Debt issuance costs | (30) | ||||
Payment of the rig sale proceeds | (45) | ||||
Amounts due to Prepetition Credit agreement claims for sold rig proceeds not yet paid | (27) | ||||
Derecognition of West Linus rig and return of cash collateral | (182) | ||||
Reversal of the release of certain general unsecured operating accruals | (35) | ||||
Pre-tax gain on settlement of liabilities subject to compromise | 3,581 | ||||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Continuing Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | 6,119 | 6,119 | (296) | ||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Discontinued Operations [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Liabilities subject to compromise | 118 | $ 118 | $ (14) | ||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | New Second Lien Facility [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Issuance of the New Second Lien Facility | (717) | ||||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Equity Commitment Premium [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Stock Issued During Period, Value, New Issues | (64) | ||||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Rights Offering Participants, | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Stock Issued During Period, Value, New Issues | (187) | ||||
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | Holders Of Prepetition Credit Agreement Claims [Member] | |||||
Reorganization, Chapter 11 [Line Items] | |||||
Stock Issued During Period, Value, New Issues | $ (1,244) |
Fresh Start Accounting - Reor_7
Fresh Start Accounting - Reorganization Adjustments, Retained Loss (Details) - USD ($) | 2 Months Ended | 7 Months Ended | ||
Feb. 23, 2022 | Feb. 22, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | |
Reorganization, Chapter 11 [Line Items] | ||||
Expense of Predecessor Directors & Officers insurance policy | $ (17,000,000) | |||
Cancellation of Predecessor common shares and additional paid in capital | $ 10,038,444 | |||
Issuance of New Seadrill Common Shares to Predecessor equity holders | 1,495,000,000 | |||
Reorganization, Chapter 11, Plan Effect Adjustment [Member] | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Pre-tax gain on settlement of liabilities subject to compromise | $ 3,581,000,000 | |||
Release of general unsecured operating accruals | 35,000,000 | |||
Payment of success fees recognized on the Effective Date | (28,000,000) | $ (28,000,000) | ||
Expense of Predecessor Directors & Officers insurance policy | (17,000,000) | |||
Impact to net income | 3,571,000,000 | 3,571,000,000 | ||
Net impact to retained loss | $ 7,080,000,000 | |||
Retained Earnings [Member] | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Cancellation of Predecessor common shares and additional paid in capital | $ 3,513,000,000 | 3,513,000,000 | ||
Issuance of New Seadrill Common Shares to Predecessor equity holders | $ (4,000,000) | $ (4,000,000) |
Fresh Start Accounting - Reor_8
Fresh Start Accounting - Reorganization Adjustments, Additional Paid-In Capital (Details) - USD ($) $ in Millions | 2 Months Ended | ||||||||||||
Feb. 22, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Issuance of Successor common stock | $ 1,495 | ||||||||||||
Successor additional paid-in capital | $ 1,499 | 1,499 | $ 1,454 | $ 1,470 | $ 1,503 | $ 1,499 | $ (3,716) | $ (3,825) | $ (3,740) | $ (3,451) | $ (3,140) | $ 1,793 | $ 3,035 |
Additional Paid-in Capital [Member] | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Issuance of Successor common stock | 1,499 | ||||||||||||
Successor additional paid-in capital | 1,499 | 1,499 | $ 1,499 | $ 1,499 | $ 1,499 | $ 1,499 | $ 3,504 | $ 3,504 | $ 3,504 | $ 3,504 | $ 3,504 | $ 3,496 | $ 3,491 |
Reorganization, Chapter 11, Plan Effect Adjustment [Member] | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Successor additional paid-in capital | 5,066 | 5,066 | |||||||||||
Reorganization, Chapter 11, Plan Effect Adjustment [Member] | Additional Paid-in Capital [Member] | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Fair value of the conversion option on the Convertible Bond | 39 | ||||||||||||
Successor additional paid-in capital | 1,499 | $ 1,499 | |||||||||||
Reorganization, Chapter 11, Plan Effect Adjustment [Member] | Holders Of Prepetition Credit Agreement Claims [Member] | Additional Paid-in Capital [Member] | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Issuance of Successor common stock | 1,456 | ||||||||||||
Reorganization, Chapter 11, Plan Effect Adjustment [Member] | Predecessor Equity Holders [Member] | Additional Paid-in Capital [Member] | |||||||||||||
Reorganization, Chapter 11 [Line Items] | |||||||||||||
Issuance of Successor common stock | $ 4 |
Fresh Start Accounting - Reor_9
Fresh Start Accounting - Reorganization Adjustments, Fresh Start adjustments (Details) - USD ($) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended | |
Feb. 22, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | |
Reorganization, Chapter 11 [Line Items] | ||||
Total Fresh start adjustments | $ (266) | $ 0 | $ 0 | |
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Record fair value adjustment for favorable drilling and management service contracts | $ 68 | |||
Write-off of current portion of deferred mobilization costs held at amortized cost | (15) | |||
Off-market right-of-use asset adjustment for the West Hercules and West Linus | (22) | (22) | ||
Change in other current assets | 31 | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 279 | 279 | ||
Record fair value adjustment for favorable drilling and management service contracts | 42 | |||
Write-off of non-current portion of historical favorable contracts held at amortized cost | (9) | |||
Write-off of non-current portion of deferred mobilization costs held at amortized cost | (4) | |||
Change in other non-current assets | 29 | |||
Record fair value adjustment for unfavorable drilling contracts | 18 | |||
Write-off of current portion of historical unfavorable contracts held at amortized cost | (1) | |||
Change in other current liabilities | 17 | |||
Record fair value adjustment for unfavorable drilling contracts | 67 | |||
Write-off of non-current portion of historical unfavorable contracts held at amortized cost | (4) | |||
Change in other non-current liabilities | 63 | |||
Total Fresh start adjustments | 242 | |||
Valuation Allowance, Deferred Tax Asset, Increase (Decrease), Amount | 1 | |||
Increase Decrease Deferred Tax Liabilities Write Off Of Balances | 1 | |||
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | Paratus Formerly NSNCo [Member] | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Fair value adjustment, investments | 14 | |||
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | Sonadrill [Member] | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Fair value adjustment, investments | 3 | |||
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | Continuing Operations [Member] | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Change in other current assets | 20 | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | 316 | 316 | ||
Change in other non-current assets | 26 | |||
Total Fresh start adjustments | 266 | |||
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | Discontinued Operations [Member] | ||||
Reorganization, Chapter 11 [Line Items] | ||||
Change in other current assets | 11 | |||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | (37) | $ (37) | ||
Change in other non-current assets | 3 | |||
Total Fresh start adjustments | $ (24) |
Current expected credit losse_2
Current expected credit losses - Allowance for Credit Losses and Credit Loss Expense (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Dec. 31, 2021 | Apr. 30, 2021 | Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Beginning balance | $ 1 | $ 153 | $ 153 | $ 9 | ||||
Credit loss expense | (1) | $ 0 | 47 | 34 | 144 | $ 0 | ||
Write-off | (186) | |||||||
Ending balance | $ 1 | 1 | 153 | 9 | ||||
Management contract expenses | ||||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Credit loss expense | 36 | 142 | ||||||
Other financial items | ||||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Credit loss expense | (2) | 2 | ||||||
Other current assets | ||||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Beginning balance | 0 | 3 | 3 | 0 | ||||
Credit loss expense | 0 | 3 | ||||||
Write-off | (3) | |||||||
Ending balance | 0 | 0 | 3 | 0 | ||||
Related party ST | ||||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Beginning balance | 1 | 148 | 148 | 9 | ||||
Credit loss expense | 36 | 139 | ||||||
Write-off | (183) | |||||||
Ending balance | 1 | 1 | 148 | 9 | ||||
Related party LT | ||||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Beginning balance | $ 0 | $ 2 | 2 | 0 | ||||
Credit loss expense | (2) | 2 | ||||||
Write-off | 0 | |||||||
Ending balance | 0 | $ 0 | $ 2 | $ 0 | ||||
Trade receivables | ||||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Write-off | (129) | $ (54) | ||||||
Reimbursement Receivable | ||||||||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||||||||
Write-off | $ (3) |
Current expected credit losse_3
Current expected credit losses (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | ||
Credit Loss [Abstract] | |||||
Allowance for expected credit losses | $ 1 | [1] | $ 1 | [1] | $ 153 |
[1]Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 – Measurement of Credit Losses on Financial Instruments. Refer to Note 5 – “Current expected credit losses” for further information. |
Segment information - Results b
Segment information - Results by Segment (Details) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Feb. 22, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) contract | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) segment | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Feb. 23, 2022 USD ($) | Jan. 20, 2022 USD ($) | Dec. 31, 2018 USD ($) | ||||
Segment Reporting Information [Line Items] | ||||||||||||||
Number of reportable segments | 3 | 3 | ||||||||||||
Revenues | $ 169 | $ 269 | $ 222 | $ 615 | $ 632 | $ 907 | $ 961 | $ 1,254 | ||||||
Depreciation | 17 | 28 | 27 | 68 | 95 | 127 | 318 | 397 | ||||||
Amortization of intangibles | 0 | 10 | 0 | 22 | 0 | 0 | 1 | 105 | ||||||
Impairment of drilling units and intangible assets | 152 | 4,108 | 0 | |||||||||||
Operating Income - net income [Abstract] | ||||||||||||||
Operating profit/(loss) | 37 | 20 | (4) | 45 | (250) | (156) | (4,481) | (296) | ||||||
Unallocated items: | ||||||||||||||
Total financial items and other | 3,704 | (36) | (48) | (85) | (354) | (416) | 50 | (451) | ||||||
Income tax | (2) | (2) | (3) | (10) | (11) | 0 | 1 | 44 | ||||||
Net (loss)/profit from continuing operations | 3,739 | (18) | (55) | (50) | (615) | (572) | (4,430) | (703) | ||||||
Loss before income taxes | 3,741 | (16) | (52) | (40) | (604) | (572) | (4,431) | (747) | ||||||
Drilling units | 1,648 | 1,648 | 1,431 | 1,755 | ||||||||||
Book value of Seadrill investment | 79 | 79 | 27 | 24 | $ 64 | $ (152) | ||||||||
Assets held for sale | 392 | 392 | 1,492 | 1,085 | ||||||||||
Cash and restricted cash | 490 | 349 | 521 | 349 | 521 | 516 | [1] | 653 | [1] | 1,205 | [1] | $ 1,572 | ||
Other assets | 514 | 514 | 431 | 461 | ||||||||||
Total assets | 2,982 | 2,982 | 3,897 | 3,978 | $ 2,979 | |||||||||
Capital expenditures | 20 | 89 | 20 | 165 | 53 | 84 | 137 | 153 | ||||||
Others | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 9 | 11 | 26 | 28 | 49 | 70 | 234 | 161 | ||||||
Unallocated items: | ||||||||||||||
Drilling units | 225 | 225 | 217 | 251 | ||||||||||
Other | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 11 | 18 | 24 | |||||||||||
Depreciation | 1 | 29 | 29 | |||||||||||
Impairment of drilling units and intangible assets | 0 | 48 | 0 | |||||||||||
Operating Income - net income [Abstract] | ||||||||||||||
Operating profit/(loss) | (14) | (218) | (23) | |||||||||||
Unallocated items: | ||||||||||||||
Capital expenditures | 0 | 0 | 0 | 0 | ||||||||||
Other | Others | ||||||||||||||
Unallocated items: | ||||||||||||||
Capital expenditures | 1 | |||||||||||||
Harsh environment | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Amortization of intangibles | 0 | 1 | 0 | |||||||||||
Unallocated items: | ||||||||||||||
Drilling units | 308 | 308 | 709 | 1,032 | ||||||||||
Capital expenditures | 2 | 2 | 9 | 3 | 26 | 30 | 26 | 34 | ||||||
Harsh environment | Operating Segments | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 78 | 125 | 125 | 261 | 357 | 495 | 526 | 510 | ||||||
Depreciation | 7 | 7 | 13 | 18 | 56 | 73 | 93 | 125 | ||||||
Amortization of intangibles | 0 | 5 | 0 | 12 | 0 | |||||||||
Impairment of drilling units and intangible assets | 152 | 419 | 0 | |||||||||||
Operating Income - net income [Abstract] | ||||||||||||||
Operating profit/(loss) | 16 | 24 | 6 | 22 | (171) | (138) | (396) | (69) | ||||||
Floaters | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Amortization of intangibles | 0 | 0 | 105 | |||||||||||
Unallocated items: | ||||||||||||||
Drilling units | 1,179 | 1,179 | 524 | 528 | ||||||||||
Capital expenditures | 18 | 87 | 11 | 162 | 23 | 35 | 110 | 111 | ||||||
Floaters | Operating Segments | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 85 | 133 | 85 | 327 | 239 | 363 | 358 | 625 | ||||||
Depreciation | 6 | 18 | 11 | 42 | 30 | 37 | 176 | 224 | ||||||
Amortization of intangibles | 0 | 5 | 0 | 10 | 0 | |||||||||
Impairment of drilling units and intangible assets | 0 | 3,555 | 0 | |||||||||||
Operating Income - net income [Abstract] | ||||||||||||||
Operating profit/(loss) | 9 | (7) | (13) | 23 | (40) | (21) | (3,781) | (201) | ||||||
Jackup rigs | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Amortization of intangibles | 0 | (2) | 0 | (7) | 0 | |||||||||
Unallocated items: | ||||||||||||||
Drilling units | 161 | 161 | 198 | 195 | ||||||||||
Capital expenditures | 0 | 0 | 0 | 0 | 3 | 19 | 1 | 8 | ||||||
Jackup rigs | Operating Segments | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 6 | 11 | 10 | 27 | 28 | 38 | 59 | 95 | ||||||
Depreciation | 4 | 3 | 3 | 8 | 9 | 16 | 20 | 19 | ||||||
Impairment of drilling units and intangible assets | 0 | 86 | 0 | |||||||||||
Operating Income - net income [Abstract] | ||||||||||||||
Operating profit/(loss) | 9 | 1 | 8 | 0 | 13 | $ 17 | $ (86) | $ (3) | ||||||
Other drilling units | Other | ||||||||||||||
Segment Reporting Information [Line Items] | ||||||||||||||
Revenues | 0 | 0 | 2 | 0 | 8 | |||||||||
Operating Income - net income [Abstract] | ||||||||||||||
Operating profit/(loss) | $ 3 | $ 2 | $ (5) | $ 0 | $ (52) | |||||||||
[1]Comprised of cash and cash equivalents $293 million (2020: $485 million, 2019: $987 million), restricted cash $160 million (2020: $103 million, 2019: $135 million), and restricted cash included in non-current |
Segment information - Geographi
Segment information - Geographic Revenues (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | $ 169 | $ 269 | $ 222 | $ 615 | $ 632 | $ 907 | $ 961 | $ 1,254 |
Norway | ||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | 78 | 74 | 112 | 180 | 346 | 486 | 480 | 469 |
Angola | ||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | 43 | 63 | 32 | 160 | 85 | 125 | 89 | 215 |
Brazil | ||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | 19 | 26 | 32 | 67 | 86 | 121 | 51 | 137 |
United States | ||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | 20 | 44 | 20 | 100 | 66 | 105 | 107 | 74 |
Canada | ||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | 0 | 51 | 0 | 80 | 0 | |||
Nigeria | ||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | 0 | 0 | 198 | |||||
Others | ||||||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||||||
Total Revenue | $ 9 | $ 11 | $ 26 | $ 28 | $ 49 | $ 70 | $ 234 | $ 161 |
Segment information - Geograp_2
Segment information - Geographic Assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | $ 1,648 | $ 1,431 | $ 1,755 |
Norway | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | 308 | 710 | 1,044 |
Brazil | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | 348 | 169 | 79 |
Qatar | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | 147 | 156 | 151 |
Malaysia | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | 40 | 94 | |
USA | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | 274 | 92 | 87 |
Spain | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | 346 | 47 | 49 |
Others | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | $ 225 | 217 | $ 251 |
Others | Predecessor [Member] | |||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||
Drilling units | $ 257 |
Segment information - Major Cus
Segment information - Major Customers (Details) - Contract Revenues - Customer Concentration Risk | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 100% | 100% | 100% | |||||
ConocoPhillips | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 13% | 14% | 18% | 15% | 20% | 18% | 18% | 12% |
Equinor | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 10% | 19% | 15% | 13% | 15% | 15% | 13% | 18% |
Lundin | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 12% | 0% | 13% | 1% | 14% | 13% | 2% | 0% |
Northern Ocean | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 4% | 13% | 13% | |||||
TotalEnergies | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 0% | 5% | 20% | |||||
Sonadrill | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 9% | 22% | 14% | 22% | 12% | |||
Var Energi | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 11% | 13% | 7% | 13% | 2% | |||
Other | ||||||||
Revenue, Major Customer [Line Items] | ||||||||
Concentration risk percentage | 45% | 32% | 33% | 36% | 37% | 50% | 49% | 37% |
Revenue from contracts with c_3
Revenue from contracts with customers - Receivables, Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | ||||
Accounts receivable, net | $ 143 | $ 201 | $ 158 | $ 110 |
Current contract liabilities (deferred revenues) | (9) | (25) | (18) | |
Non-current contract liabilities (deferred revenues) | $ (7) | $ (10) | $ (13) |
Revenue from contracts with c_4
Revenue from contracts with customers - Significant Changes in Contract Assets and Contract Liabilities (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Change In Contract With Customer, Asset And Liability [Roll Forward] | ||||||||||
Contract with Customer, Asset, after Allowance for Credit Loss | $ 0 | $ 0 | $ 0 | |||||||
Contract liabilities, beginning balance | $ (19) | $ (35) | $ (30) | $ (22) | $ (31) | $ (28) | $ (31) | (31) | (29) | |
Contract assets (liabilities), net, beginning balance | (35) | (31) | (31) | (29) | ||||||
Amortization of revenue that was included in the beginning contract liability balance | 16 | 14 | 14 | 17 | 5 | 5 | 24 | 23 | ||
Cash received, excluding amounts recognized as revenue | (3) | (22) | (22) | (8) | (2) | (28) | (25) | |||
Contract liabilities, ending balance | $ (22) | $ (19) | $ (16) | $ (30) | $ (36) | $ (31) | $ (28) | (35) | (31) | |
Contract assets (liabilities), net, ending balance | $ (35) | $ (31) |
Revenue from contracts with c_5
Revenue from contracts with customers - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Revenue from Contract with Customer [Abstract] | |||
Deferred revenue, current | $ 9 | $ 25 | $ 18 |
Deferred revenue, noncurrent | $ 7 | $ 10 | $ 13 |
Other revenues (Details)
Other revenues (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||||
Leasing revenues | $ 4 | $ 7 | $ 7 | $ 16 | $ 19 | ||||||||||||
Early termination fees | 1 | 3 | 0 | 3 | 0 | ||||||||||||
Other revenues | |||||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||||
Leasing revenues | [1] | $ 26 | $ 19 | $ 1 | |||||||||||||
Early termination fees | [2] | 6 | 11 | 11 | |||||||||||||
Total other revenues | $ 5 | [3] | $ 10 | [3] | $ 7 | [3] | $ 19 | [3] | $ 19 | [3] | $ 32 | [4] | $ 30 | [4] | $ 12 | [4] | |
[1]Revenue earned on the charter of the West Castor, West Telesto West Tucana West Bollsta, West Gemini West Jupiter West Castor Includes revenue received from related parties of $69 million and $46 million for the 3 months ended September 30, 2022 (Successor) and September 30, 2021 (Predecessor), and of $143 million, $19 million and $142 million for the period from February 23, 2022 through September 30, 2022 (Successor), Period from January 1, 2022 through February 22, 2022 (Predecessor) and for the nine months ended September 30, 2021 (Predecessor), and costs paid to related parties of $0 million and $13 million for the 3 months ended September 30, 2022 (Successor) and September 30, 2021 (Predecessor), and of $0 million, $3 million and $36 million for the period from February 23, 2022 through September 30, 2022 (Successor), Period from January 1, 2022 through February 22, 2022 (Predecessor) and for the nine months ended September 30, 2021 (Predecessor), respectively. Refer to Note 24 – “Related party transactions” for further details. |
Other revenue (Detail) (Parenth
Other revenue (Detail) (Parenthetical) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jul. 01, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Variable Interest Entity [Line Items] | |||||||||
Revenues | $ 169 | $ 269 | $ 222 | $ 615 | $ 632 | $ 907 | $ 961 | $ 1,254 | |
Sonadrill | |||||||||
Variable Interest Entity [Line Items] | |||||||||
Revenues | $ 25 |
Other operating items - Other O
Other operating items - Other Operating Items (Details) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Jun. 30, 2021 USD ($) | Feb. 22, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) rig | Dec. 31, 2020 USD ($) rig | Dec. 31, 2019 USD ($) | ||||
Other Operating Income (Loss) [Abstract] | ||||||||||||
Impairment of long lived assets | $ 152 | $ 0 | $ 0 | $ 0 | $ 0 | $ (152) | $ (152) | $ (4,087) | $ 0 | |||
Loss on impairment of intangibles | 0 | 0 | (152) | 0 | (21) | 0 | ||||||
Gain on disposals | 2 | 1 | 11 | 1 | 22 | 47 | 15 | 0 | ||||
Other operating income | 0 | 0 | 0 | 0 | 3 | 54 | [1] | 9 | [1] | 39 | [1] | |
Total other operating items | $ 2 | $ 1 | $ 11 | $ 1 | $ (127) | $ (51) | $ (4,084) | $ 39 | ||||
Number of rigs disposed of | rig | 7 | 1 | ||||||||||
[1]Includes revenue received from related parties of $189 million, $305 million and $333 million and costs paid to related parties of $70 million, $12 million, and $3 million for the years ended December 31, 2021, 2020 and 2019, respectively. Refer to Note 27 – “Related party transactions” for further details. |
Other operating items - Other_2
Other operating items - Other Operating Income (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Pre petition liability write off | $ 27 | $ 0 | $ 0 | ||||||||
War risk insurance rebate | 22 | 0 | 0 | ||||||||
Loss of hire insurance settlement | 2 | 9 | 10 | ||||||||
Receipt of overdue receivable | 0 | 0 | 26 | ||||||||
Other Settlement Income (Expense) | 3 | 0 | 3 | ||||||||
Total other operating income | $ 0 | $ 0 | $ 0 | $ 0 | $ 3 | 54 | [1] | $ 9 | [1] | $ 39 | [1] |
West Bollsta | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Pre petition liability write off | 19 | ||||||||||
Aquadrill | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Pre petition liability write off | $ 8 | ||||||||||
[1]Includes revenue received from related parties of $189 million, $305 million and $333 million and costs paid to related parties of $70 million, $12 million, and $3 million for the years ended December 31, 2021, 2020 and 2019, respectively. Refer to Note 27 – “Related party transactions” for further details. |
Interest expense - Schedule of
Interest expense - Schedule of Interest expense (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 4 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Interest Expense [Abstract] | |||||||||
Cash interest on debt facilities | $ 0 | $ (32) | $ 0 | $ (73) | $ (24) | $ (25) | $ (256) | $ (360) | |
Interest on SFL leases | (7) | 0 | (18) | 0 | (73) | (84) | (12) | 0 | |
Unwind of discount debt | 0 | 0 | 0 | 1 | 0 | 0 | (44) | (47) | |
Write off of discount on debt | $ (86) | 0 | (86) | 0 | |||||
Interest expense | (7) | (33) | (18) | (73) | (97) | $ (109) | $ (398) | $ (407) | |
Interest Expense, Debt | 0 | (32) | 0 | (73) | (24) | ||||
Guarantee and Commission Fees | $ 0 | $ (1) | $ 0 | $ (1) | $ 0 |
Interest expense - Cash and Pay
Interest expense - Cash and Payment-In-Kind Interest (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | ||||||||
Cash interest | $ 0 | $ (32) | $ 0 | $ (73) | $ (24) | $ (25) | $ (256) | $ (360) |
Debt of consolidated variable interest entities | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash interest | 0 | (27) | (47) | |||||
Pre Filing Senior Credit Facilities [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash interest | 0 | 0 | 0 | 0 | (24) | |||
Post Emergence First Lien Senior Secured [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash interest | 0 | (4) | 0 | (9) | 0 | |||
Post Emergence Second Lien Secured [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash interest | 0 | (27) | 0 | (62) | 0 | |||
Post Emergence Unsecured Convertible Bond Member | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash interest | $ 0 | $ (1) | $ 0 | $ (2) | $ 0 | |||
Secured Debt | Senior credit facilities and unsecured bonds | ||||||||
Debt Instrument [Line Items] | ||||||||
Cash interest | $ (25) | $ (229) | $ (313) |
Interest expense - Narrative (D
Interest expense - Narrative (Details) - USD ($) $ in Millions | 4 Months Ended | 12 Months Ended | |||
Jul. 02, 2018 | Dec. 31, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Debt Instrument [Line Items] | |||||
Write off of unamortized debt discount | $ 86 | $ 0 | $ 86 | $ 0 | |
Senior credit facilities | Secured Debt | LIBOR | |||||
Debt Instrument [Line Items] | |||||
Increase in basis spread on variable interest rate | 1% |
Loss on impairment of long-li_2
Loss on impairment of long-lived assets (Details) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Jun. 30, 2021 USD ($) | Feb. 22, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||||||
Impairment of long lived assets | $ 152 | $ 4,108 | $ 0 | |||||||
Increase in oil price | 50% | |||||||||
Loss on impairment of long-lived assets | $ (152) | $ 0 | $ 0 | $ 0 | $ 0 | $ 152 | $ 152 | 4,087 | $ 0 | |
Senior credit facilities | Discount rate | Discounted cash flow | ||||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||||||
Fair value, cost of debt percent | 0.118 | |||||||||
Drilling units | ||||||||||
Impaired Long-Lived Assets Held and Used [Line Items] | ||||||||||
Impairment of long lived assets | $ 4,087 | |||||||||
Loss on impairment of long-lived assets | $ 152 | [1] | $ 4,087 | |||||||
[1]In June 2021 we recorded an impairment of $152 million (December 31, 2020: $4.1 billion) which was reported within “Loss on impairment of long-lived assets” on our Consolidated Statement of Operations. Please refer to Note 11 – “Loss on impairment of long-lived assets” for further details. |
Taxation - Components of Income
Taxation - Components of Income Taxes (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Current tax expense/(benefit): | ||||||||
Bermuda | $ 0 | $ 0 | $ 0 | |||||
Foreign | 2 | 6 | 17 | |||||
Deferred tax expense/(benefit): | ||||||||
Bermuda | 0 | 0 | 0 | |||||
Foreign | (2) | (7) | (61) | |||||
Total tax expense/(benefit) | $ 2 | $ 2 | $ 3 | $ 10 | $ 11 | $ 0 | $ (1) | $ (44) |
Effective tax rate | 0.10% | 22% | 0% | 0% | (5.90%) |
Taxation - Additional Informati
Taxation - Additional Information (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||||||||
Effective tax rate | 0.10% | 22% | 0% | 0% | (5.90%) | ||||
Tax benefit, CARES Act | $ 2 | $ 5 | |||||||
Deferred tax assets, net operating loss carry forwards | 320 | 240 | |||||||
Deferred tax assets not subject to expiration | 234 | 230 | |||||||
Deferred tax assets subject to expiration | 86 | 10 | |||||||
Deferred tax liabilities, intangibles | 1 | 0 | |||||||
Unrecognized tax benefits | 83 | 82 | $ 89 | $ 132 | |||||
Accrued interest and penalties | 19 | 19 | |||||||
Interest and penalties expense (benefit) | 1 | 1 | 7 | ||||||
Unrecognized tax benefits that would have a favorable impact on effective tax rate | 85 | ||||||||
Income tax expense | $ 2 | $ 2 | $ 3 | $ 10 | $ 11 | 0 | $ (1) | $ (44) | |
Secretariat of the Federal Revenue Bureau of Brazil | |||||||||
Related Party Transaction [Line Items] | |||||||||
Income tax examination, estimate of possible loss | 124 | 124 | |||||||
Nigeria | |||||||||
Related Party Transaction [Line Items] | |||||||||
Income tax examination, estimate of possible loss | 171 | 171 | |||||||
Kuwaiti Tax Authority | |||||||||
Related Party Transaction [Line Items] | |||||||||
Income tax examination, estimate of possible loss | 12 | 12 | |||||||
Mexican Tax Authority | |||||||||
Related Party Transaction [Line Items] | |||||||||
Income tax examination, estimate of possible loss | 82 | 95 | |||||||
Mexican Tax Authority | Continuing Operations | |||||||||
Related Party Transaction [Line Items] | |||||||||
Income tax examination, estimate of possible loss | 49 | ||||||||
Mexican Tax Authority | Discontinued Operations | |||||||||
Related Party Transaction [Line Items] | |||||||||
Income tax examination, estimate of possible loss | $ 46 | ||||||||
Norwegian Tax Administration | |||||||||
Related Party Transaction [Line Items] | |||||||||
Income tax examination, estimate of possible loss | $ 17 |
Taxation - Income Tax Reconcili
Taxation - Income Tax Reconciliation (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||||||||
Effect of change on unrecognized tax benefits | $ 2 | $ (8) | $ (11) | |||||
Effect of unremitted earnings of subsidiaries | 0 | (2) | (17) | |||||
Effect of taxable income in various countries | (2) | 9 | (16) | |||||
Total tax expense/(benefit) | $ 2 | $ 2 | $ 3 | $ 10 | $ 11 | $ 0 | $ (1) | $ (44) |
Taxation - Deferred Income Taxe
Taxation - Deferred Income Taxes (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Tax Assets [Abstract] | ||
Pensions and stock options | $ 3 | $ 1 |
Provisions | 30 | 31 |
Property, plant and equipment | 51 | 0 |
Net operating losses carried forward | 320 | 240 |
Intangibles | 0 | 4 |
Other | 9 | 3 |
Gross deferred tax assets | 413 | 279 |
Valuation allowance | (403) | (208) |
Deferred tax assets, net of valuation allowance | 10 | 71 |
Deferred Tax Liability [Abstract] | ||
Property, plant and equipment | 0 | 30 |
Unremitted Earnings of Subsidiaries | 8 | 8 |
Deferred gain | 0 | 34 |
Intangibles | 1 | 0 |
Gross deferred tax liabilities | 9 | 72 |
Net deferred tax asset/(liability) | $ 1 | |
Net deferred tax asset/(liability) | $ (1) |
Taxation - Changes to Uncertain
Taxation - Changes to Uncertain Tax Positions, Excluding Interest and Penalties (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Changes to liabilities related to unrecognized tax benefits, excluding interest and penalties [Roll Forward] | |||
Balance at the beginning of the period | $ 82 | $ 89 | $ 132 |
Increases as a result of positions taken in prior periods | 2 | 1 | 8 |
Increases as a result of positions taken during the current period | 2 | 0 | 29 |
Decreases as a result of positions taken in prior periods | (1) | (4) | (34) |
Decreases due to settlements | (1) | (1) | (46) |
Decreases as a result of a lapse of the applicable statute of limitations | (1) | (3) | 0 |
Balance at the end of the period | $ 83 | $ 82 | $ 89 |
Earnings_(Loss) per share (Deta
Earnings/(Loss) per share (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||||||||||
(Loss)/profit from continuing operations | $ 3,739 | $ (18) | $ (55) | $ (50) | $ (615) | $ (572) | $ (4,430) | $ (703) | ||
Profit/(loss) from discontinued operations | (33) | 2 | (31) | $ (35) | $ (10) | 2 | (76) | (15) | (233) | (519) |
Net (loss)/profit | 3,706 | (16) | (86) | (48) | (691) | (587) | (4,663) | (1,222) | ||
Less: Allocation to participating securities | 0 | 0 | 0 | |||||||
(Loss)/profit available to stockholders | 3,706 | (16) | (86) | (48) | (691) | (587) | (4,663) | (1,222) | ||
Effect of dilution | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Diluted (loss)/profit available to stockholders | $ 3,706 | $ (16) | $ (86) | $ (48) | $ (691) | $ (587) | $ (4,663) | $ (1,222) | ||
Basic (loss)/earnings per share: | ||||||||||
Weighted average number of common shares outstanding | 100 | 50 | 100 | 50 | 100 | 100,000,000 | 100,000,000 | 100,000,000 | ||
Diluted(loss)/earnings per share: | ||||||||||
Effect of dilution | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | ||
Weighted average number of common shares outstanding adjusted for the effects of dilution (in shares) | 100 | 50 | 100 | 50 | 100 | 100,000,000 | 100,000,000 | 100,000,000 | ||
Basic loss per share from continuing operations (usd per share) | $ 37.25 | $ (0.36) | $ (0.55) | $ (1) | $ (6.13) | $ (5.7) | $ (44.11) | $ (7) | ||
Diluted loss per share from continuing operations (usd per share) | 37.25 | (0.36) | (0.55) | (1) | (6.13) | (5.7) | (44.11) | (7) | ||
Basic earnings/(loss) per share from discontinued operations | (0.33) | 0.04 | (0.31) | 0.04 | (0.75) | |||||
Diluted earnings/(loss) per share from discontinued operations | (0.33) | 0.04 | (0.31) | 0.04 | (0.75) | |||||
Basic loss per share (usd per share) | 36.92 | (0.32) | (0.86) | (0.96) | (6.88) | (5.85) | (46.43) | (12.18) | ||
Diluted loss per share (usd per share) | $ 36.92 | $ (0.32) | $ (0.86) | $ (0.96) | $ (6.88) | $ (5.85) | $ (46.43) | $ (12.18) |
Restricted cash (Details)
Restricted cash (Details) R$ in Millions, $ in Millions | Sep. 30, 2022 USD ($) | Feb. 23, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2020 BRL (R$) | Dec. 31, 2019 USD ($) | ||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | $ 125 | $ 223 | $ 168 | |||||
Current restricted cash | 55 | $ 85 | 160 | 103 | $ 135 | |||
Non-current restricted cash | 70 | $ 69 | 63 | 65 | $ 83 | |||
Accounts pledged as collateral for performance bonds and similar guarantees | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 11 | 42 | [1] | 48 | [1] | |||
Accounts pledged as collateral for performance bonds and similar guarantees | Predecessor [Member] | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 28 | |||||||
Proceeds from rig sales | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 2 | 47 | [2] | 0 | [2] | |||
Demand deposit pledged as collateral for tax related guarantee | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 70 | 63 | [3] | 65 | [3] | R$ 330 | ||
Accounts pledged as collateral for leases | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 8 | 37 | [4] | 22 | [4] | |||
Other | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 5 | 34 | $ 33 | |||||
Other | Predecessor [Member] | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 11 | |||||||
Cash held in escrow in Saudi Arabia | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | 23 | 23 | ||||||
Accounts pledged as collateral for guarantees related to rig recycling | ||||||||
Restricted Cash [Line Items] | ||||||||
Total restricted cash | $ 6 | $ 14 | ||||||
[1]Cash collateral in respect to bank guarantee facilities with Danske Bank and DNB.[2]Proceeds from rig disposals to be paid to the lenders in 2022 and classified as restricted until then.[3]We placed a total of 330 million Brazilian Reais of collateral with BTG Pactual under a letter of credit agreement. This related to long-running tax disputes which are currently being litigated through the Brazilian courts. This is held as non-current West Linus West Hercules. |
Other assets (Details)
Other assets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Other Assets [Abstract] | |||
Deferred contract costs | $ 75 | $ 15 | $ 14 |
Favorable drilling and management services contracts | 62 | 9 | 10 |
Prepaid expenses | 52 | 51 | 65 |
Taxes receivable | 45 | 48 | 32 |
Right of use asset | 10 | 24 | 57 |
Derivative asset - Interest rate cap | 8 | 0 | |
Reimbursable amounts due from customers | 7 | 13 | 11 |
Restructuring backstop commitment fee | 0 | 20 | 0 |
Other | 31 | 44 | 43 |
Total other assets | $ 290 | $ 224 | $ 232 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Current assets |
Other assets - Balance Sheet Pr
Other assets - Balance Sheet Presentation (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||||
Other current assets | $ 267 | $ 220 | $ 197 | $ 187 |
Other non-current assets | 23 | $ 42 | 27 | 45 |
Total other assets | $ 290 | $ 224 | $ 232 |
Other Assets - Roll forward (De
Other Assets - Roll forward (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||||
Mar. 31, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Beginning balance, Gross carrying amount | $ 96 | $ 266 | $ 96 | $ 96 | $ 266 | $ 266 | $ 266 |
Beginning balance, Accumulated amortization | 0 | (257) | (21) | (5) | (256) | (256) | (256) |
Beginning balance, Net carrying amount | 96 | 9 | 75 | 91 | 10 | 10 | 10 |
Ending balance, Gross carrying amount | 96 | 96 | 96 | 266 | 266 | 266 | |
Ending balance, Accumulated amortization | (5) | (34) | (21) | (256) | (256) | (256) | |
Ending balance, Net carrying amount | 91 | 62 | 75 | 10 | 10 | 10 | |
Reorganization, Chapter 11, Predecessor, before Adjustment [Member] | |||||||
Beginning balance, Accumulated amortization | 257 | ||||||
Ending balance, Gross carrying amount | 266 | ||||||
Ending balance, Accumulated amortization | (257) | ||||||
Ending balance, Net carrying amount | 9 | ||||||
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | |||||||
Beginning balance, Gross carrying amount | (170) | ||||||
Beginning balance, Net carrying amount | 87 | ||||||
Other Assets [Member] | |||||||
Amortization | $ (5) | $ 0 | $ (13) | $ (16) | $ 0 | $ 0 | $ 0 |
Other Assets - Narrative (Detai
Other Assets - Narrative (Details) | 7 Months Ended |
Sep. 30, 2022 | |
Other Assets [Abstract] | |
Weighted average remaining amortization period for the favorable contracts | 8 months |
Other Assets - Amortization (De
Other Assets - Amortization (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Other Assets [Abstract] | |
2022 | $ 31 |
2023 | 29 |
2024 | 1 |
2025 and thereafter | 1 |
Total | $ 62 |
Investment in associated comp_3
Investment in associated companies - Ownership Percentage (Details) | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Gulfdrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill ownership percentage | 50% | 50% | 50% | |
Gulfdrill | Joint Venture Partner | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill ownership percentage | [1] | 50% | 50% | |
Sonadrill | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill ownership percentage | 50% | 50% | 50% | |
Sonadrill | Joint Venture Partner | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Seadrill ownership percentage | [2] | 50% | 50% | |
[1] i. Gulfdrill Gulfdrill is a joint venture that manages and operates five premium jackups in Qatar with Qatargas. We have a 50% ownership stake in Gulfdrill. The remaining 50% interest is owned by Gulf Drilling International (“GDI”) ii. Sonadrill Sonadrill is a joint venture that will operate four drillships focusing on opportunities in Angolan waters. We have a 50% ownership stake in Sonadrill. The remaining 50% interest is owned by Sonangol EP (“Sonangol”) Libongos Libongos, Quenguela |
Investment in associated comp_4
Investment in associated companies - Narrative (Details) $ in Millions | 2 Months Ended | 3 Months Ended | 4 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Feb. 22, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | Jul. 01, 2022 USD ($) | Jun. 30, 2022 | Mar. 31, 2022 rig | Feb. 28, 2022 rig | Feb. 23, 2022 USD ($) | Jan. 20, 2022 USD ($) | |
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Income (loss) from equity method investments | $ (2) | $ (1) | $ 2 | $ (7) | $ 3 | $ 3 | $ 0 | $ (22) | |||||||
Investments in associated companies | 79 | $ 79 | 79 | $ 27 | $ 24 | $ 64 | $ (152) | ||||||||
Paratus Energy Services [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Noncontrolling interest, ownership percentage by parent | 65% | ||||||||||||||
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Investments in associated companies | $ (17) | ||||||||||||||
Gulfdrill | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Seadrill ownership percentage | 50% | 50% | 50% | ||||||||||||
Income (loss) from equity method investments | $ (2) | $ 2 | $ 0 | ||||||||||||
Investments in associated companies | 2 | 2 | 2 | $ 0 | $ 2 | ||||||||||
Gulfdrill | Subsequent Event | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Number of premium jack-ups | rig | 5 | ||||||||||||||
Seadrill ownership percentage | 50% | ||||||||||||||
Gulfdrill | Seadrill Limited | Subsequent Event | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Number of leased rigs | rig | 3 | ||||||||||||||
Gulfdrill | Third Party | Subsequent Event | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Number of leased rigs | rig | 2 | ||||||||||||||
Sonadrill | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Seadrill ownership percentage | 50% | 50% | 50% | ||||||||||||
Income (loss) from equity method investments | $ 5 | $ (2) | $ (1) | ||||||||||||
Investments in associated companies | 46 | 46 | 46 | 27 | $ 22 | ||||||||||
Liabilities, Fair Value Disclosure | $ 21 | ||||||||||||||
Sonadrill | Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Investments in associated companies | $ 25 | $ 25 | $ 25 | ||||||||||||
Sonadrill | Subsequent Event | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Seadrill ownership percentage | 50% | ||||||||||||||
Number of drillships | rig | 4 | ||||||||||||||
Paratus Energy Services [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Seadrill ownership percentage | 35% | 35% | 35% | 35% | 35% | ||||||||||
Equity method investments, fair value disclosure | $ 56 | ||||||||||||||
Income (loss) from equity method investments | $ 8 | ||||||||||||||
Investments in associated companies | $ 31 | $ 31 | $ 31 | $ 0 | |||||||||||
Paratus Energy Services [Member] | Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Assets, fair value adjustment | $ 39 | ||||||||||||||
Gulf Drilling International | Subsequent Event | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Seadrill ownership percentage | 50% | ||||||||||||||
Sonangol | Subsequent Event | |||||||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||||||
Seadrill ownership percentage | 50% |
Investment in associated comp_5
Investment in associated companies - Share in Results from Associated Companies (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 4 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Feb. 23, 2022 | Jan. 20, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||||||||||
Share in results from associated companies (net of tax) | $ (2) | $ (1) | $ 2 | $ (7) | $ 3 | $ 3 | $ 0 | $ (22) | |||
Investments in associated companies | 79 | $ 79 | 79 | 27 | 24 | $ 64 | $ (152) | ||||
Seadrill Partners | Seadrill Partners - Subordinated Units | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Share in results from associated companies (net of tax) | 0 | 0 | (21) | ||||||||
Sonadrill | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Share in results from associated companies (net of tax) | 5 | (2) | (1) | ||||||||
Investments in associated companies | 46 | 46 | 46 | 27 | 22 | ||||||
Gulfdrill | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Share in results from associated companies (net of tax) | (2) | 2 | $ 0 | ||||||||
Investments in associated companies | 2 | 2 | 2 | 0 | $ 2 | ||||||
Paratus Energy Services [Member] | |||||||||||
Schedule of Equity Method Investments [Line Items] | |||||||||||
Share in results from associated companies (net of tax) | 8 | ||||||||||
Investments in associated companies | $ 31 | $ 31 | $ 31 | $ 0 |
Investment in associated comp_6
Investment in associated companies - Statement of Operations (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Schedule of Equity Method Investments [Line Items] | ||||||||
Operating revenues | $ 169 | $ 269 | $ 222 | $ 615 | $ 632 | $ 907 | $ 961 | $ 1,254 |
Net operating income/(loss) | $ 37 | $ 20 | $ (4) | $ 45 | $ (250) | (156) | (4,481) | (296) |
Net income/(loss) | $ (587) | $ (4,659) | $ (1,219) | |||||
Sonadrill | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Seadrill ownership percentage | 50% | 50% | 50% | |||||
Share of results from Sonadrill (net of tax) | $ 5 | $ (2) | $ (1) | |||||
Gulfdrill | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Seadrill ownership percentage | 50% | 50% | 50% | |||||
Share of results from Sonadrill (net of tax) | $ (2) | $ 2 | $ 0 | |||||
Sonadrill | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Operating revenues | 94 | 56 | 22 | |||||
Net operating income/(loss) | 18 | (2) | (1) | |||||
Net income/(loss) | 11 | (5) | (2) | |||||
Gulfdrill | ||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||
Operating revenues | 142 | 44 | 0 | |||||
Net operating income/(loss) | (4) | 6 | 0 | |||||
Net income/(loss) | $ (4) | $ 4 | $ 0 |
Investment in associated comp_7
Investment in associated companies - Book Value (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Schedule of Equity Method Investments [Line Items] | |||||
Book value of Seadrill investment | $ 79 | $ 64 | $ (152) | $ 27 | $ 24 |
Sonadrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Book value of Seadrill investment | 46 | 27 | 22 | ||
Gulfdrill | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Book value of Seadrill investment | $ 2 | $ 0 | $ 2 |
Investment in associated comp_8
Investment in associated companies - Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||||||
Current assets | $ 1,143 | $ 903 | $ 1,981 | $ 1,079 | ||
Non-current assets | 1,839 | 2,076 | 1,916 | 2,899 | ||
Current liabilities | (417) | (350) | (1,255) | (6,562) | ||
Non-current liabilities | (1,111) | (1,130) | (123) | (556) | ||
Book value of Seadrill investment | 79 | $ 64 | $ (152) | $ 27 | $ 24 | |
Sonadrill | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Seadrill ownership percentage | 50% | 50% | 50% | |||
Book value of Seadrill investment | 46 | $ 27 | $ 22 | |||
Gulfdrill | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Seadrill ownership percentage | 50% | 50% | 50% | |||
Book value of Seadrill investment | $ 2 | $ 0 | $ 2 | |||
Sonadrill | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Current assets | 72 | 54 | ||||
Current liabilities | (18) | (11) | ||||
Net Assets | 54 | 43 | ||||
Gulfdrill | ||||||
Schedule of Equity Method Investments [Line Items] | ||||||
Current assets | 120 | 67 | ||||
Non-current assets | 173 | 102 | ||||
Current liabilities | (182) | (135) | ||||
Non-current liabilities | (113) | (31) | ||||
Net Assets | $ (2) | $ 3 |
Drilling units (Details)
Drilling units (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||||||||||
Feb. 23, 2022 | Mar. 31, 2022 | Jun. 30, 2021 | Feb. 22, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Jan. 01, 2022 | ||||
Cost | ||||||||||||||||||
Impairment | $ 152 | $ 0 | $ 0 | $ 0 | $ 0 | $ (152) | $ (152) | $ (4,087) | $ 0 | |||||||||
Accumulated depreciation | ||||||||||||||||||
Impairment of long lived assets | 152 | 0 | 0 | 0 | 0 | (152) | (152) | (4,087) | 0 | |||||||||
Fresh Start accounting | ||||||||||||||||||
Accumulated depreciation | ||||||||||||||||||
Opening balance | $ (279) | (279) | ||||||||||||||||
Closing balance | (279) | |||||||||||||||||
Drilling units | ||||||||||||||||||
Cost | ||||||||||||||||||
Opening balance | 2,241 | [1],[2] | $ 2,673 | 2,673 | 2,673 | 6,624 | ||||||||||||
Additions | 84 | 136 | ||||||||||||||||
Impairment | (152) | [2] | (4,087) | |||||||||||||||
Disposal, cost | [1] | (364) | ||||||||||||||||
Closing balance | 2,241 | [1],[2] | 2,673 | 6,624 | ||||||||||||||
Accumulated depreciation | ||||||||||||||||||
Opening balance | (810) | [1],[2] | (918) | (918) | (918) | (605) | ||||||||||||
Depreciation | (119) | (313) | ||||||||||||||||
Disposal, accumulated depreciation | [1] | 227 | ||||||||||||||||
Closing balance | (810) | [1],[2] | (918) | (605) | ||||||||||||||
Disposal, net | [1] | (137) | ||||||||||||||||
Net book value | 1,431 | [1],[2] | 1,755 | $ 6,019 | ||||||||||||||
Impairment of long lived assets | (152) | [2] | (4,087) | |||||||||||||||
Drilling units | Predecessor [Member] | ||||||||||||||||||
Cost | ||||||||||||||||||
Opening balance | 2,214 | 2,217 | 2,550 | $ 2,677 | 2,669 | 2,214 | 2,669 | 2,669 | ||||||||||
Additions | 20 | 20 | 25 | 8 | ||||||||||||||
Impairment | (152) | |||||||||||||||||
West Hercules derecognition | (364) | |||||||||||||||||
Disposal of West Venture | (23) | |||||||||||||||||
Derecognition of West Linus | (364) | |||||||||||||||||
Closing balance | 2,550 | 2,214 | 2,206 | 2,550 | 2,677 | 2,206 | 2,217 | 2,669 | ||||||||||
Accumulated depreciation | ||||||||||||||||||
Opening balance | (780) | (786) | (980) | (948) | (914) | (780) | (914) | (914) | ||||||||||
Depreciation | (17) | (25) | (32) | (34) | ||||||||||||||
West Hercules derecognition | 227 | |||||||||||||||||
Disposal of West Venture | 23 | |||||||||||||||||
Derecognition of West Linus | 227 | |||||||||||||||||
Closing balance | (980) | (780) | (778) | (980) | (948) | (778) | $ (786) | (914) | ||||||||||
Net book value | $ 1,570 | 1,434 | 1,428 | 1,570 | $ 1,729 | $ 1,428 | $ 1,755 | $ 1,431 | ||||||||||
Impairment of long lived assets | $ (152) | |||||||||||||||||
West Hercules derecognition | (137) | |||||||||||||||||
Disposal of West Venture | 0 | |||||||||||||||||
Derecognition of West Linus | $ (137) | |||||||||||||||||
Drilling units | Successor [Member] | ||||||||||||||||||
Cost | ||||||||||||||||||
Opening balance | $ 1,575 | 1,627 | $ 1,591 | |||||||||||||||
Additions | 16 | 89 | 60 | |||||||||||||||
West Hercules derecognition | (211) | |||||||||||||||||
Disposal of West Venture | (24) | |||||||||||||||||
Derecognition of West Linus | (211) | |||||||||||||||||
Closing balance | 1,575 | 1,591 | 1,716 | 1,627 | 1,716 | |||||||||||||
Accumulated depreciation | ||||||||||||||||||
Opening balance | 0 | (40) | (12) | |||||||||||||||
Depreciation | (12) | (28) | (28) | |||||||||||||||
West Hercules derecognition | 36 | |||||||||||||||||
Derecognition of West Linus | 36 | |||||||||||||||||
Closing balance | 0 | (12) | (68) | (40) | (68) | |||||||||||||
Net book value | 1,579 | 1,575 | $ 1,648 | $ 1,587 | $ 1,648 | |||||||||||||
West Hercules derecognition | (175) | |||||||||||||||||
Derecognition of West Linus | (175) | |||||||||||||||||
Drilling units | Fresh Start accounting | Successor [Member] | ||||||||||||||||||
Cost | ||||||||||||||||||
Opening balance | (428) | |||||||||||||||||
Closing balance | (428) | |||||||||||||||||
Accumulated depreciation | ||||||||||||||||||
Opening balance | $ 744 | |||||||||||||||||
Closing balance | $ 744 | |||||||||||||||||
Net book value | $ 316 | |||||||||||||||||
[1]In August, 2021, the lease agreement with SFL for the West Hercules was amended such that the rig was derecognized from drilling units and replaced with a right of use asset within other assets.[2]In June 2021 we recorded an impairment of $152 million (December 31, 2020: $4.1 billion) which was reported within “Loss on impairment of long-lived assets” on our Consolidated Statement of Operations. Please refer to Note 11 – “Loss on impairment of long-lived assets” for further details. |
Equipment (Details)
Equipment (Details) - Equipment - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Mar. 31, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Feb. 23, 2022 | Jan. 01, 2022 | Jan. 01, 2021 | Jan. 01, 2020 | |
Cost | |||||||||||||||
Opening balance | $ 39 | $ 10 | $ 9 | $ 39 | $ 39 | $ 39 | $ 39 | $ 39 | $ 39 | $ 38 | |||||
Additions | 1 | 1 | 2 | 1 | |||||||||||
Closing balance | $ 9 | 39 | 11 | 10 | 41 | 39 | 39 | 11 | 41 | 39 | 39 | ||||
Accumulated depreciation | |||||||||||||||
Opening balance | (28) | (1) | 0 | (23) | (21) | (20) | (28) | (20) | (20) | (15) | |||||
Depreciation | (1) | (1) | (2) | (2) | (1) | (8) | (5) | ||||||||
Closing balance | 0 | (28) | (2) | (1) | (25) | (23) | (21) | (2) | (25) | (28) | (20) | ||||
Net book value | 9 | 11 | $ 9 | 9 | $ 16 | $ 16 | $ 18 | $ 9 | $ 16 | $ 11 | $ 19 | $ 9 | $ 11 | $ 19 | $ 23 |
Reorganization, Chapter 11, Plan Effect Adjustment [Member] | |||||||||||||||
Cost | |||||||||||||||
Opening balance | (30) | ||||||||||||||
Closing balance | (30) | ||||||||||||||
Accumulated depreciation | |||||||||||||||
Opening balance | $ 28 | ||||||||||||||
Closing balance | $ 28 | ||||||||||||||
Net book value | $ (2) |
Equipment - Narrative (Details)
Equipment - Narrative (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||||||||
Reorganization Items | $ (3,683) | $ 3 | $ 24 | $ 12 | $ 250 | $ 296 | $ 0 | $ 0 |
Equipment | Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | ||||||||
Property, Plant and Equipment [Line Items] | ||||||||
Reorganization Items | $ 2 |
Debt - Schedule of Debt and Bal
Debt - Schedule of Debt and Balance Sheet Presentation (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Feb. 10, 2021 | Dec. 31, 2020 |
Debt Instrument [Line Items] | |||||
Total principal debt | $ 938 | $ 0 | |||
Less: Debt balance held as subject to compromise | (5,545) | ||||
Long-term debt | 950 | $ 179 | 0 | ||
Debt due within one year | 32 | 350 | 0 | $ 5,545 | |
Long-term debt | 982 | 951 | 5,545 | $ 6,200 | 5,545 |
Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Total principal debt | 888 | 0 | |||
Unsecured Debt | |||||
Debt Instrument [Line Items] | |||||
Total Unsecured debt | 50 | 0 | |||
Senior credit facilities | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Long-term debt | 5,545 | $ 5,545 | |||
Term Loan Facility | |||||
Debt Instrument [Line Items] | |||||
Debt premium | 4 | 0 | |||
Term Loan Facility | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Total principal debt | 175 | 0 | |||
Exit fee | 5 | 0 | |||
Second Lien Facility | Secured Debt | |||||
Debt Instrument [Line Items] | |||||
Total principal debt | 713 | 0 | |||
Exit fee | 35 | 35 | 0 | ||
Long-term debt | $ 683 | ||||
Unsecured Convertible Notes | |||||
Debt Instrument [Line Items] | |||||
Total principal debt | $ 50 | $ 0 |
Debt - Schedule of Debt Maturit
Debt - Schedule of Debt Maturities (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Debt Instrument [Line Items] | |
2023 | $ 42 |
2024 | 42 |
2025 | 42 |
2026 | 222 |
2027 | 580 |
2028 and thereafter | 50 |
Total debt principal | 978 |
Term Loan Facility | |
Debt Instrument [Line Items] | |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 180 |
2027 | 0 |
2028 and thereafter | 0 |
Total debt principal | 180 |
Second Lien Facility | |
Debt Instrument [Line Items] | |
2023 | 42 |
2024 | 42 |
2025 | 42 |
2026 | 42 |
2027 | 580 |
2028 and thereafter | 0 |
Total debt principal | 748 |
Unsecured Convertible Notes | |
Debt Instrument [Line Items] | |
2023 | 0 |
2024 | 0 |
2025 | 0 |
2026 | 0 |
2027 | 0 |
2028 and thereafter | 50 |
Total debt principal | $ 50 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) $ in Millions | 7 Months Ended | ||||||||
Oct. 18, 2022 | Sep. 15, 2022 | Feb. 23, 2022 | Sep. 30, 2022 | Nov. 14, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | |
Debt Instrument [Line Items] | |||||||||
Total debt | $ 951 | $ 982 | $ 5,545 | $ 6,200 | $ 5,545 | ||||
Total principal debt | 938 | 0 | |||||||
Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt | $ 908 | ||||||||
Super Senior Secured Credit Facility Due2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, debt default, percentage | 3% | ||||||||
Make-whole premium payable period | 3 years | ||||||||
Exit fee | $ 5 | ||||||||
Debt premium | $ 4 | ||||||||
Super Senior Secured Credit Facility Due2026 | Secured Overnight Financing Rate Sofr Overnight Index Swap Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 7% | ||||||||
Second Lien Facility | Subsequent Event [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Repayments of Long-Term Debt | $ 192 | ||||||||
Debt Instrument, Fee Amount | 10 | $ 13 | |||||||
Debt Instrument Accrued Interest | $ 2 | 6 | |||||||
Debt Instrument, Repurchase Amount | $ 250 | ||||||||
Unsecured Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Total principal debt | 50 | 0 | |||||||
Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Total principal debt | 888 | 0 | |||||||
Secured Debt | Super Senior Secured Credit Facility Due2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 300 | ||||||||
Secured Debt | Second Lien Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt | $ 683 | ||||||||
Basis spread on variable rate (as a percent) | 12.50% | ||||||||
Total principal debt | 713 | 0 | |||||||
Debt instrument, debt default, percentage | 5% | 5% | |||||||
Exit fee | $ 35 | $ 35 | $ 0 | ||||||
Interest costs capitalized | $ 14 | ||||||||
Secured Debt | Second Lien Facility | Cash | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 5% | ||||||||
Secured Debt | Second Lien Facility | Pay If You Can | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate (as a percent) | 7.50% | ||||||||
Secured Debt | Pari Passu Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Total principal debt | $ 50 | ||||||||
Line of Credit | Super Senior Secured Credit Facility Due2026 | Secured Debt | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt | 175 | ||||||||
Line of Credit | Super Senior Secured Credit Facility Due2026 | Revolving Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt | $ 125 | ||||||||
Line of credit facility, unused capacity, commitment fee percentage | 2.80% | ||||||||
Unsecured Notes | Unsecured Convertible Notes | |||||||||
Debt Instrument [Line Items] | |||||||||
Total debt | $ 50 | ||||||||
Basis spread on variable rate (as a percent) | 6% | ||||||||
Convertible note value as a percentage of fully-diluted ordinary shares | 5% | ||||||||
Unsecured Notes | Unsecured Convertible Notes | Three Month U S L I B O R | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, floating rate, duration | 3 months |
Other liabilities (Details)
Other liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Jun. 30, 2022 | Mar. 31, 2022 | Feb. 23, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Accrued expenses | $ 114 | $ 78 | $ 107 | ||||||||
Uncertain tax positions | 86 | 83 | 79 | ||||||||
Unfavorable contracts to be amortized | 74 | 6 | |||||||||
Employee withheld taxes, social security and vacation payments | 45 | 43 | 44 | ||||||||
Taxes payable | 23 | 23 | 25 | ||||||||
Liability for below-market lease | 19 | 0 | |||||||||
Contract liabilities | 16 | $ 30 | $ 22 | $ 19 | $ 19 | 35 | $ 36 | $ 31 | $ 28 | 31 | $ 29 |
Lease liabilities | 14 | 35 | 68 | ||||||||
Accrued interest expense | 6 | 0 | 10 | ||||||||
Other liabilities | 28 | 34 | 33 | ||||||||
Total Other Liabilities | $ 425 | 331 | $ 397 | ||||||||
Predecessor [Member] | |||||||||||
Other liabilities | $ 28 |
Other liabilities - Balance she
Other liabilities - Balance sheet presentation (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Other Liabilities [Abstract] | ||||
Other current liabilities | $ 273 | $ 291 | $ 219 | $ 277 |
Other non-current liabilities | 152 | $ 173 | 112 | 120 |
Total Other Liabilities | $ 425 | $ 331 | $ 397 |
Other liabilities - Movement In
Other liabilities - Movement In Unfavorable Drilling Contracts (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | ||||
Mar. 31, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Carrying amount, beginning balance | $ 85 | $ 66 | $ 85 | $ 85 | $ 66 | $ 66 | $ 66 |
Accumulated amortization, beginning balance | 0 | (60) | (8) | (3) | (59) | (59) | (59) |
Net carrying amount, beginning balance | 85 | 6 | 77 | 82 | 7 | 7 | 7 |
Amortization | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Amortization | (3) | 0 | (3) | (5) | 0 | 0 | 0 |
Amortization | (3) | 0 | (3) | (5) | 0 | 0 | 0 |
Carrying amount, ending balance | 85 | 66 | 85 | 85 | 66 | 66 | 66 |
Accumulated amortization, ending balance | (3) | (60) | (11) | (8) | (59) | (59) | (59) |
Net carrying amount, ending balance | 82 | $ 6 | $ 74 | $ 77 | $ 7 | $ 7 | $ 7 |
Reorganization, Chapter 11, Fresh-Start Adjustment [Member] | |||||||
Carrying amount, beginning balance | 19 | ||||||
Accumulated amortization, beginning balance | 60 | ||||||
Net carrying amount, beginning balance | $ 79 |
Other liabilities - Future amor
Other liabilities - Future amortization of unfavorable contracts (Details) $ in Millions | Sep. 30, 2022 USD ($) |
Other Liabilities [Abstract] | |
Remainder of 2022 | $ 4 |
2023 | 24 |
2024 | 24 |
2025 and thereafter | 22 |
Total | $ 74 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2022 USD ($) rig | Dec. 31, 2021 USD ($) RIG | Mar. 31, 2020 WELL | |
Lessor, Lease, Description [Line Items] | |||
Number of benign environment Jack-up rigs | 3 | 3 | |
Number of wells under drilling contract | WELL | 10 | ||
Number of optional wells under drilling contract | WELL | 4 | ||
Early termination fee | $ 6 | ||
Right-of-use asset impairment charge | $ 10 | ||
West Hercules [Member] | |||
Lessor, Lease, Description [Line Items] | |||
ROU asset adjustment | $ 9 | ||
West Linus [Member] | |||
Lessor, Lease, Description [Line Items] | |||
ROU asset adjustment | $ 13 |
Leases - Operating Leases Futur
Leases - Operating Leases Future Undiscounted Cash Flows (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | |||
Remainder of 2022 | $ 8 | ||
2023 | 2 | $ 32 | |
2024 | 2 | 3 | |
2025 | 2 | 1 | |
2026 and thereafter | 2 | 1 | |
Total | 16 | 37 | $ 79 |
Less short term leases | 0 | 0 | |
Less discount | (2) | (2) | (11) |
Operating lease liability | 14 | 35 | 68 |
Current | 7 | 30 | 51 |
Non-current | $ 7 | $ 5 | $ 17 |
Leases - Balance Sheet (Details
Leases - Balance Sheet (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Leases [Abstract] | |||
Total undiscounted cash flows | $ 16 | $ 37 | $ 79 |
Less discount | (2) | (2) | (11) |
Operating lease liability | $ 14 | 35 | 68 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Other current liabilities | ||
Current | $ 7 | 30 | 51 |
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] | Other non-current liabilities | ||
Non-current | $ 7 | $ 5 | $ 17 |
Leases - Supplementary Informat
Leases - Supplementary Information (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating Lease Cost: | ||||||||
Operating lease cost | $ 11 | $ 27 | $ 32 | $ 42 | $ 19 | $ 12 | ||
Short-term lease cost | $ 1 | 1 | $ 3 | 1 | 2 | 1 | ||
Total lease cost | 12 | 27 | 32 | 43 | 21 | 13 | ||
Other information: | ||||||||
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows | $ 12 | $ 27 | $ 32 | 42 | 21 | 13 | ||
Right-of-use assets obtained in exchange for operating lease liabilities during the period – Non-cash Investing items | $ 24 | $ 4 | $ 24 | $ 53 | $ 19 | |||
Weighted-average remaining lease term in months | 22 months | 37 months | 25 months | 37 months | 37 months | 19 months | 14 months | 18 months |
Weighted-average discount rate | 9% | 10% | 16% | 10% | 10% | 10% | 24% | 13% |
Predecessor [Member] | ||||||||
Operating Lease Cost: | ||||||||
Operating lease cost | $ 4 | |||||||
Total lease cost | 5 | |||||||
Other information: | ||||||||
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows | $ 5 | |||||||
Weighted-average remaining lease term in months | 25 months | 25 months | 25 months | |||||
Weighted-average discount rate | 16% | 16% | 16% | |||||
Successor [Member] | ||||||||
Operating Lease Cost: | ||||||||
Operating lease cost | $ 31 | |||||||
Total lease cost | 34 | |||||||
Other information: | ||||||||
Cash paid for amounts included in the measurement of lease liabilities- Operating Cash flows | $ 34 |
Leases - Operating Leases, Less
Leases - Operating Leases, Lessor, Future Undiscounted Cash Flows, and Income (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Operating lease payments receivable | ||
2022 | $ 7 | $ 28 |
2023 | 28 | 28 |
2024 | 21 | 21 |
2025 | 18 | |
2025 and thereafter | 20 | |
2026 and thereafter | 2 | |
Total | $ 76 | $ 97 |
Common shares (Details)
Common shares (Details) - USD ($) | 2 Months Ended | 4 Months Ended | 7 Months Ended | 12 Months Ended | |||||
Feb. 23, 2022 | Feb. 22, 2022 | Jun. 17, 2020 | Sep. 30, 2022 | Dec. 31, 2020 | Jun. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2019 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Beginning balance, shares | 49,999,998 | 100,384,435 | 49,999,998 | 100,234,973 | |||||
RSU share issuance (in shares) | 149,462 | 149,462 | |||||||
Cancellation of Predecessor equity (in shares) | $ (100,384,435) | ||||||||
Shares issued upon emergence (in shares) | 49,999,998 | 49,999,998 | |||||||
Ending balance, shares | 49,999,998 | 49,999,998 | 100,384,435 | ||||||
Beginning balance, common stock value | $ 500,000 | $ 10,038,444 | $ 500,000 | $ 10,000,000 | |||||
Cancellation of Predecessor equity | (10,038,444) | ||||||||
Issuance of Successor common stock | 500,000 | ||||||||
Ending balance, common stock value | $ 500,000 | $ 500,000 | $ 10,038,444 | ||||||
Common shares, par value (in dollars per share) | $ 0.01 | $ 0.1 | $ 0.01 | $ 0.1 | $ 0.01 | $ 0.01 | $ 0.1 | $ 0.1 | |
Cancellation of Predecessor equity (usd per share) | 0.1 | ||||||||
Issuance of Successor common stock (usd per share) | $ 0.01 |
Accumulated other comprehensi_3
Accumulated other comprehensive (loss)/income (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||
Feb. 22, 2022 | Mar. 31, 2022 | Feb. 22, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Beginning balance | $ 1,499 | $ (3,716) | $ 1,470 | $ 1,503 | $ (3,740) | $ (3,451) | $ (3,140) | $ 1,499 | $ (3,140) | $ (3,140) | $ 1,793 | $ 3,035 | |
Other comprehensive income | 14 | 0 | 1 | 3 | 6 | 11 | (13) | (6) | |||||
Ending balance | $ 1,499 | 1,503 | 1,499 | 1,454 | 1,470 | (3,825) | (3,740) | (3,451) | 1,454 | (3,825) | (3,716) | (3,140) | 1,793 |
Accumulated other comprehensive income/(loss) | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Beginning balance | 0 | (15) | 3 | 0 | (21) | (26) | (26) | (1) | (26) | (26) | (13) | (7) | |
Other comprehensive (loss)/income from continuing operations | 1 | 0 | (2) | ||||||||||
Other comprehensive (loss)/income from discontinued operations | (3) | 11 | (11) | ||||||||||
Recycling of accumulated other comprehensive loss on sale of Paratus Energy Services | 16 | ||||||||||||
Reset accumulated other comprehensive loss | 1 | ||||||||||||
Other comprehensive income | 0 | 0 | 3 | 1 | 5 | 0 | |||||||
Ending balance | (1) | 0 | (1) | 3 | 3 | (20) | (21) | (26) | 3 | (20) | (15) | (26) | (13) |
Actuarial (loss)/gain relating to pension | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Beginning balance | 0 | (2) | 3 | 0 | (2) | (2) | (2) | (1) | (2) | (2) | 0 | ||
Other comprehensive (loss)/income from continuing operations | 1 | 0 | (2) | ||||||||||
Other comprehensive (loss)/income from discontinued operations | 0 | 0 | 0 | ||||||||||
Recycling of accumulated other comprehensive loss on sale of Paratus Energy Services | 0 | ||||||||||||
Reset accumulated other comprehensive loss | 1 | ||||||||||||
Other comprehensive income | 0 | 0 | 3 | 0 | 0 | 0 | |||||||
Ending balance | (1) | 0 | (1) | 3 | 3 | (2) | (2) | (2) | 3 | (2) | (2) | (2) | 0 |
Share in unrealized losses from associated companies | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Beginning balance | 0 | (19) | 0 | 0 | (24) | (29) | (28) | 0 | (28) | (28) | (13) | ||
Other comprehensive (loss)/income from continuing operations | 0 | 0 | 0 | ||||||||||
Other comprehensive (loss)/income from discontinued operations | (2) | 9 | (15) | ||||||||||
Recycling of accumulated other comprehensive loss on sale of Paratus Energy Services | 21 | ||||||||||||
Reset accumulated other comprehensive loss | 0 | ||||||||||||
Other comprehensive income | 0 | 0 | 0 | 1 | 5 | (1) | |||||||
Ending balance | 0 | 0 | 0 | 0 | 0 | (23) | (24) | (29) | 0 | (23) | (19) | (28) | (13) |
Change in debt component on Archer bond | |||||||||||||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||||||||||||
Beginning balance | 0 | 6 | 0 | 0 | 5 | 5 | 4 | 0 | 4 | 4 | 0 | ||
Other comprehensive (loss)/income from continuing operations | 0 | 0 | 0 | ||||||||||
Other comprehensive (loss)/income from discontinued operations | (1) | 2 | 4 | ||||||||||
Recycling of accumulated other comprehensive loss on sale of Paratus Energy Services | (5) | ||||||||||||
Reset accumulated other comprehensive loss | 0 | ||||||||||||
Other comprehensive income | 0 | 0 | 0 | 0 | 0 | 1 | |||||||
Ending balance | $ 0 | $ 0 | $ 0 | $ 0 | $ 0 | $ 5 | $ 5 | $ 5 | $ 0 | $ 5 | $ 6 | $ 4 | $ 0 |
Share based compensation - Expe
Share based compensation - Expense Summary (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jul. 29, 2020 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Share-Based Payment Arrangement [Abstract] | ||||
Share-based compensation expense | $ 0.5 | $ 0 | $ 8 | $ 5 |
Share based compensation - Narr
Share based compensation - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||||
Jul. 29, 2020 | Sep. 04, 2019 | Aug. 23, 2019 | Sep. 04, 2018 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Apr. 26, 2019 | Aug. 16, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based compensation expense | $ 0.5 | $ 0 | $ 8 | $ 5 | |||||
Employee incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 11,100,000 | ||||||||
Restricted Stock Units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Percentage vested | 33% | 33% | |||||||
Vesting period | 3 years | 3 years | |||||||
Shares vested in period (in shares) | 200,000 | ||||||||
Restricted Stock Units | Employee incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 300,000 | 500,000 | |||||||
Performance Shares | Employee incentive plan | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of shares authorized (in shares) | 1,700,000 |
Pension benefits - Additional I
Pension benefits - Additional Information (Details) $ in Millions | 12 Months Ended | |||
Jan. 01, 2020 plan | Dec. 31, 2021 USD ($) | Dec. 31, 2020 USD ($) | Dec. 31, 2019 USD ($) | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Accumulated benefit obligation | $ 15 | $ 15 | ||
Number of defined benefit plans terminated | plan | 2 | |||
Total company contributions | $ 18 | $ 18 | $ 16 | |
Onshore Employees | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Retirement pension as a percent of salary (as percent) | 66% | |||
Retirement age | 67 years | |||
Retirement pension cap (as percent) | 66% | |||
Multiple of base | 12 | |||
Retirement age to receive pre-retirement pension | 62 years |
Pension benefits - Consolidated
Pension benefits - Consolidated Balance Sheet Position (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 |
Retirement Benefits [Abstract] | ||
Defined benefit obligation—Non-current liabilities | $ (5) | $ 0 |
Deferred tax asset | 1 | 1 |
Net defined benefit pension (obligation)/asset | $ (4) | $ 1 |
Pension benefits - Annual Pensi
Pension benefits - Annual Pension Cost (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Service cost | $ 0 | $ 1 | $ 3 |
Interest cost on prior years' benefit obligation | 0 | 0 | 1 |
Gross pension cost for the year | 0 | 1 | 4 |
Expected return on plan assets | 0 | 0 | (1) |
Net pension cost for the year | 0 | 1 | 3 |
Impact of settlement/curtailment of defined benefit plans | 2 | 1 | 0 |
Total net pension cost | $ 2 | $ 2 | $ 3 |
Pension benefits - Funded Statu
Pension benefits - Funded Status of the Defined Benefit Plan (Details) - USD ($) $ in Millions | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Retirement Benefits [Abstract] | ||||
Projected defined benefit obligations | $ (16) | $ (16) | $ (40) | $ (37) |
Plan assets at market value | 11 | 16 | $ 39 | $ 33 |
Funded defined benefit pension obligation | $ (5) | $ 0 |
Pension benefits - Change in Pr
Pension benefits - Change in Projected Benefit Obligations (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan, Change in Benefit Obligation [Roll Forward] | |||
Projected benefit obligations at beginning of period | $ 16 | $ 40 | $ 37 |
Interest cost | 0 | 0 | 1 |
Service cost | 0 | 1 | 3 |
Benefits paid | (1) | (1) | (2) |
Change in unrecognized actuarial gain | 1 | 2 | 0 |
Settlement | 0 | (25) | 0 |
Foreign currency translations | 0 | (1) | 1 |
Projected benefit obligations at end of period | $ 16 | $ 16 | $ 40 |
Pension benefits - Change in Pe
Pension benefits - Change in Pension Plan Assets (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Defined Benefit Plan, Change in Fair Value of Plan Assets [Roll Forward] | |||
Fair value of plan assets at beginning of year | $ 16 | $ 39 | $ 33 |
Estimated return | 0 | 0 | 1 |
Contribution by employer | 1 | 6 | 6 |
Benefits paid | (1) | (1) | (2) |
Actuarial gain | 0 | 0 | 0 |
Settlement | (1) | (27) | 0 |
Foreign currency translations | 0 | (1) | 1 |
Other | (4) | 0 | 0 |
Fair value of plan assets at end of year | $ 11 | $ 16 | $ 39 |
Pension benefits - Assumptions
Pension benefits - Assumptions Used in Calculation of Pension Obligations (Details) | 12 Months Ended | ||
Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Retirement Benefits [Abstract] | |||
Rate of compensation increase at the end of year (as percent) | 2.25% | 2.25% | 2.25% |
Discount rate at the end of year (as percent) | 1.50% | 1.70% | 2.30% |
Prescribed pension index factor (as percent) | 1.20% | 1.20% | 2% |
Expected return on plan assets for the year (as percent) | 2.90% | 2.60% | 2.60% |
Employee turnover (as percent) | 4% | 4% | 4% |
Expected increases in Social Security Base (as percent) | 2.25% | 2% | 2.50% |
Pension benefits - Weighted-Ave
Pension benefits - Weighted-Average Asset Allocation of Funds Related to Defined Benefit Plan (Details) | Dec. 31, 2021 | Dec. 31, 2020 |
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 100% | 100% |
Equity securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 9.70% | 7.20% |
Debt securities | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 65.30% | 68.20% |
Real estate | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 13.60% | 13.60% |
Money market | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 10.60% | 10.60% |
Other | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Weighted-average asset allocation of funds related to defined benefit plan (as percent) | 0.80% | 0.40% |
Pension benefits - Expected Ann
Pension benefits - Expected Annual Pension Plan Contributions Under Defined Benefit Plans (Details) $ in Millions | Dec. 31, 2021 USD ($) |
Defined Benefit Plan, Expected Future Employer Contributions [Abstract] | |
2022 | $ 1 |
2023 | 1 |
2024 | 1 |
2025 | 1 |
2025-2030 | 3 |
Total payments expected during the next 10 years | $ 7 |
Related party transactions - Na
Related party transactions - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||||
Dec. 31, 2021 | Dec. 31, 2020 | Sep. 30, 2022 | Jan. 31, 2022 | Nov. 30, 2021 | |
Related Party Transaction [Line Items] | |||||
Total amounts due from related parties | $ 28 | $ 91 | $ 62 | ||
SeaMex | |||||
Related Party Transaction [Line Items] | |||||
Ownership interest (as percent) | 50% | 100% | 50% | ||
N S N Co P E S [Member] | |||||
Related Party Transaction [Line Items] | |||||
Ownership interest (as percent) | 65% | 65% | |||
SeaMex | |||||
Related Party Transaction [Line Items] | |||||
Interest income | $ 1 | $ 0 | |||
SeaMex | Sponsor Minimum Liquidity Shortfall | |||||
Related Party Transaction [Line Items] | |||||
Total amounts due from related parties | $ 8 |
Related party transactions - An
Related party transactions - Analysis of Related Party Revenues, Operating Expenses, and Financial Items (Details) - USD ($) $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating revenues | $ 19 | $ 69 | $ 46 | $ 143 | $ 142 | $ 189 | $ 305 | $ 333 | ||||||
Total related party operating expenses | (3) | 0 | (13) | 0 | (36) | 70 | 12 | 3 | ||||||
Write-off | 186 | |||||||||||||
Northern Ocean | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Write-off | 138 | |||||||||||||
Non-cash settlement of receivables | 18 | |||||||||||||
West Bollsta | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating expenses | [1] | 0 | 0 | (10) | 0 | (31) | ||||||||
West Hercules lease | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating expenses | [2] | (3) | 0 | (2) | 0 | (2) | ||||||||
Management fee revenues | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating revenues | 12 | [3] | 58 | [3] | 22 | [3] | 118 | [3] | 77 | [3] | 98 | 135 | 113 | |
Reimbursable revenues | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating revenues | 3 | [4] | 4 | [4] | 17 | [4] | 9 | [4] | 46 | [4] | 65 | 148 | 218 | |
Lease revenues | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating revenues | 4 | [5] | 7 | [5] | 7 | [5] | 16 | [5] | 19 | [5] | 26 | 19 | 1 | |
Other | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating revenues | 0 | 3 | 1 | |||||||||||
Related Party Expenses, Leasing Arrangements | West Bollsta | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating expenses | 57 | 10 | 0 | |||||||||||
Related Party Expenses, Leasing Arrangements | West Hercules lease | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating expenses | 10 | 0 | 0 | |||||||||||
Other related party operating expenses | ||||||||||||||
Related Party Transaction [Line Items] | ||||||||||||||
Total related party operating expenses | $ 0 | [6] | $ 0 | [6] | $ (1) | [6] | $ 0 | [6] | $ (3) | [6] | $ 3 | $ 2 | $ 3 | |
[1]Seadrill entered a charter agreement to lease the West Bollsta rig from Northern Ocean in 2020. During 2021, the charter was amended to cancel the drilling of the 10th well. Following emergence from Chapter 11 proceedings, Northern Ocean is no longer a related party. Refer to Note 20 – “Leases’’ for details.[2]Seadrill incurred operating lease expense related to its lease of the West Hercules following a lease modification in August 2021 which resulted in the lease being reclassified as an operating lease rather than a finance lease. Refer to Note 20 – “Leases” for further details. Following emergence from Chapter 11 proceedings, SFL is no longer a related party.[3]We provide management and administrative services to SeaMex, PES, Sonadrill and, in the Predecessor period, Aquadrill. We provide operational and technical support services to SeaMex, Sonadrill and, in the Predecessor period, Aquadrill and Northern Ocean. We charge our affiliates for support services provided either on a cost-plus mark up or dayrate basis.[4]We recognized reimbursable revenues from Sonadrill for project work on the Quenguela rig.[5]Lease revenue earned on the charter of the West Castor, West Telesto and West Tucana to Gulfdrill.[6]We received services from certain other related parties. These included management and administrative services from Frontline, warehouse rental from Seabras Sapura and other services from Archer and Seatankers. Following emergence from Chapter 11 proceedings, these companies are no longer related parties. |
Related party transactions - _2
Related party transactions - Analysis of Related Party Receivable Balances (Details) - USD ($) $ in Millions | 12 Months Ended | |||||
Dec. 31, 2021 | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2020 | |||
Related Party Transaction [Line Items] | ||||||
Allowance for expected credit loss | $ (1) | [1] | $ (1) | [1] | $ (153) | |
Total related party receivables | 28 | 62 | 91 | |||
Amounts due from related parties - current | 28 | 62 | $ 42 | 85 | ||
Amounts due from related parties - non-current | 0 | 0 | 6 | |||
Total amounts due from related parties | 28 | 62 | 91 | |||
Related party loans and interest | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party receivables, gross | 9 | [2] | 0 | [2] | 8 | |
Trading balances | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party receivables, gross | 20 | [3] | 63 | [3] | 236 | |
Total related party receivables | 20 | 63 | 236 | |||
Total amounts due from related parties | 20 | $ 63 | $ 236 | |||
Sponsor Minimum Liquidity Shortfall | SeaMex | ||||||
Related Party Transaction [Line Items] | ||||||
Total related party receivables | 8 | |||||
Total amounts due from related parties | $ 8 | |||||
Interest rate on related party receivable | 6.50% | |||||
[1]Allowances recognized for expected credit losses on our related party loan and trade receivables following adoption of accounting standard update 2016-13 – Measurement of Credit Losses on Financial Instruments. Refer to Note 5 – “Current expected credit losses” for further information.[2]In 2021, the Sponsor Minimum Liquidity Shortfall loan receivable from SeaMex, which earned interest at 6.5% plus 3-month US LIBOR, was fully settled in March 2022.[3]Trading and other balances are primarily comprised of receivables from Gulfdrill for lease income, as well as from SeaMex, PES and Sonadrill for related party management and crewing fees. Per our contractual terms, these balances are either settled monthly or quarterly in arrears, or in certain cases, in advance. |
Related party transactions - _3
Related party transactions - Analysis of Receivables Balance (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | $ 62 | $ 28 | $ 91 | |
Trading balances | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | 63 | 20 | 236 | |
Less: CECL allowance | (1) | (1) | (153) | |
Receivable net of CECL allowance | 62 | 19 | 83 | |
Trading balances | Predecessor [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | 29 | |||
Receivable net of CECL allowance | 28 | |||
Trading balances | Northern Ocean | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | 0 | 140 | ||
Trading balances | Aquadrill | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | 0 | 61 | ||
Trading balances | Gulfdrill | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | 7 | 13 | 17 | |
Trading balances | Sonadrill | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | 53 | 4 | 10 | |
Trading balances | NSNCo | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | 3 | $ 8 | ||
Trading balances | PES [Member] | ||||
Related Party Transaction [Line Items] | ||||
Total amounts due from related parties | [1] | $ 3 | $ 12 | |
[1]Receivables from PES / SeaMex as at December 31, 2021, represent balances between the continuing operations of Seadrill and the discontinued operations held for sale. |
Related party transactions - _4
Related party transactions - Analysis of Related Party Payable Balances (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | ||
Related Party Transaction [Line Items] | |||||||
Amounts due to related parties - current | $ 0 | $ 7 | |||||
Long-term debt due to related parties | 0 | 426 | |||||
Liabilities subject to compromise | $ 6,237 | 6,235 | |||||
Lease liability | $ 0 | 503 | $ 1,100 | 426 | |||
Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party liabilities | 0 | 503 | 433 | ||||
Amounts due to related parties - current | 0 | 0 | 7 | ||||
Long-term debt due to related parties | 0 | 426 | |||||
Liabilities subject to compromise | 0 | 503 | 0 | ||||
West Taurus lease liability | |||||||
Related Party Transaction [Line Items] | |||||||
Lease liability | 0 | 345 | 147 | ||||
West Linus lease liability | |||||||
Related Party Transaction [Line Items] | |||||||
Lease liability | 0 | 158 | 142 | ||||
West Hercules lease liability | |||||||
Related Party Transaction [Line Items] | |||||||
Lease liability | 0 | 137 | |||||
Related party loans payable | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party liabilities | $ 0 | [1] | 503 | [1] | 426 | ||
Trading balances | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Total related party liabilities | $ 0 | $ 7 | |||||
[1]On filing for Chapter 11, our prepetition related party payables were reclassified to Liabilities subject to compromise (“LSTC”) in our Consolidated Balance Sheets at December 31, 2021 (Predecessor). Upon emergence from Chapter 11 proceedings in February 2022, all LSTC balances were extinguished with a gain on settlement recognized in “Reorganization items, net”. For further information refer to Note 4 – “Fresh Start accounting”. Following emergence from Chapter 11 proceedings, SFL is no longer a related party. |
Financial instruments and ris_2
Financial instruments and risk management - Additional Information (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | May 11, 2018 |
Derivative [Line Items] | ||||||
Long-term debt | $ 982 | $ 951 | $ 5,545 | $ 6,200 | $ 5,545 | |
Allowed Credit Agreement Claim | ||||||
Derivative [Line Items] | ||||||
Long-term debt | 683 | |||||
New First Lien Facility | ||||||
Derivative [Line Items] | ||||||
Maximum borrowing capacity | $ 300 | |||||
Interest rate cap | ||||||
Derivative [Line Items] | ||||||
Debt Instrument, Face Amount | $ 4,500 | |||||
Interest rate cap | Not designated as a hedge | ||||||
Derivative [Line Items] | ||||||
Derivative asset purchased | $ 68 | |||||
Capped rate | 3.755% | 0.209% | 2.87% |
Fair values of financial inst_3
Fair values of financial instruments - Carrying Value and Estimated Fair Value of our Financial Instrument (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||||
Related party loans receivable | $ 62 | $ 28 | $ 91 | |
Liabilities | ||||
Liabilities subject to compromise | $ 6,237 | 6,235 | ||
Fair value | Level 2 | ||||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||||
Related party loans receivable | 0 | 9 | 6 | |
Fair value | Level 3 | ||||
Liabilities | ||||
Liability subject to compromise - Related Party Loans Payables | 0 | 176 | ||
Fair value | Level 3 | Related party loans payable | ||||
Liabilities | ||||
Liability subject to compromise - Related Party Loans Payables | 176 | 424 | ||
Fair value | Level 3 | Unsecured Convertible Notes [Member] | ||||
Liabilities | ||||
Due to Related Parties | 42 | 0 | ||
Fair value | Level 3 | Second Lien Facility [Member] | ||||
Liabilities | ||||
Due to Related Parties | 748 | 0 | ||
Fair value | Level 3 | New First Lien Facility [Member] | ||||
Liabilities | ||||
Due to Related Parties | 188 | 0 | ||
Fair value | Level 3 | Senior credit facilities | ||||
Liabilities | ||||
Liabilities subject to compromise | 0 | 1,966 | 922 | |
Carrying value | Level 2 | ||||
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract] | ||||
Related party loans receivable | 0 | 9 | 6 | |
Carrying value | Level 3 | ||||
Liabilities | ||||
Liability subject to compromise - Related Party Loans Payables | 0 | 503 | ||
Carrying value | Level 3 | Related party loans payable | ||||
Liabilities | ||||
Liability subject to compromise - Related Party Loans Payables | 503 | 426 | ||
Carrying value | Level 3 | Unsecured Convertible Notes [Member] | ||||
Liabilities | ||||
Due to Related Parties | 50 | 0 | ||
Carrying value | Level 3 | Second Lien Facility [Member] | ||||
Liabilities | ||||
Due to Related Parties | 748 | 0 | ||
Carrying value | Level 3 | New First Lien Facility [Member] | ||||
Liabilities | ||||
Due to Related Parties | 184 | 0 | ||
Carrying value | Level 3 | Senior credit facilities | ||||
Liabilities | ||||
Liabilities subject to compromise | $ 0 | $ 5,544 | $ 5,545 |
Fair values of financial inst_4
Fair values of financial instruments - Schedule Of Financial instruments measured at fair value on a recurring basis (Detail) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 23, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | $ 224 | $ 355 | $ 293 | $ 485 | $ 987 |
Restricted cash | 125 | 223 | $ 168 | ||
Interest rate cap | 8 | 0 | |||
Fair Value, Inputs, Level 1 [Member] | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 224 | 293 | |||
Restricted cash | 125 | 223 | |||
Fair Value, Inputs, Level 1 [Member] | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Cash and cash equivalents | 224 | 293 | |||
Restricted cash | 125 | 223 | |||
Fair Value, Inputs, Level 2 [Member] | Fair value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Interest rate cap | 8 | 0 | |||
Fair Value, Inputs, Level 2 [Member] | Carrying value | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Interest rate cap | $ 8 | $ 0 |
Fair values of financial inst_5
Fair values of financial instruments - Additional Information (Details) $ in Thousands | Sep. 30, 2022 | Dec. 31, 2021 USD ($) | Dec. 31, 2020 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Related party loans payable, weighted average cost of capital | 10 | ||
West Taurus | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Related party loan, fair value | $ 250 | ||
Discount rate | Discounted cash flow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Related party loans payable, weighted average cost of capital | 37 | ||
Discount rate | Discounted cash flow | West Linus | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Related party loans payable, weighted average cost of capital | 10 | ||
Discount rate | Senior credit facilities | Discounted cash flow | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument, measurement input | 0.118 | ||
Discount rate | Senior credit facilities | Discounted cash flow | Predecessor [Member] | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument, measurement input | 17 | ||
Discount rate | Senior credit facilities | Discounted cash flow | Minimum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument, measurement input | 8.5 | 10 | |
Discount rate | Senior credit facilities | Discounted cash flow | Maximum | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Debt instrument, measurement input | 9.5 | 17 |
Commitments and contingencies_2
Commitments and contingencies (Details) - USD ($) $ in Millions | 12 Months Ended | ||||||
Dec. 31, 2021 | Mar. 31, 2023 | Nov. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2020 | Jun. 14, 2019 | Jan. 01, 2019 | |
Guarantor Obligations [Line Items] | |||||||
Guarantor obligations, maximum exposure, undiscounted | $ 550 | $ 150 | |||||
Losses recoverable under insurance | $ 23 | ||||||
Loss incident - amounts recovered | 20 | ||||||
Contract value deduction percentage | 2% | ||||||
Northern Ocean | |||||||
Guarantor Obligations [Line Items] | |||||||
Guarantor obligations, maximum exposure, undiscounted | 150 | 100 | |||||
Sonadrill | |||||||
Guarantor Obligations [Line Items] | |||||||
Guarantor obligations, maximum exposure, undiscounted | 400 | 50 | |||||
Guarantees in favor of customers | Northern Ocean | |||||||
Guarantor Obligations [Line Items] | |||||||
Guarantor obligations, maximum exposure, undiscounted | 150 | $ 100 | 100 | ||||
Guarantees in favor of customers | Sonadrill | |||||||
Guarantor Obligations [Line Items] | |||||||
Guarantor obligations, maximum exposure, undiscounted | $ 400 | $ 1,100 | $ 50 | ||||
Guarantees in favor of customers | Sonadrill | Forecast | |||||||
Guarantor Obligations [Line Items] | |||||||
Guarantor obligations, maximum exposure, undiscounted | $ 350 | $ 50 |
Supplementary cash flow infor_3
Supplementary cash flow information (Details) - USD ($) $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Sep. 30, 2020 | Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | ||
Non-cash investing activities | ||||||||||
Proceeds from sale of West Epsilon rig | [1] | $ 0 | $ 12 | $ 0 | ||||||
Non-cash financing activities | ||||||||||
Repayment of debt following sale of West Epsilon rig | [1] | 0 | (12) | 0 | ||||||
Gain on disposals | $ 2 | $ 1 | $ 11 | $ 1 | $ 22 | $ 47 | $ 15 | $ 0 | ||
West Epsilon | ||||||||||
Non-cash financing activities | ||||||||||
Gain on disposals | $ 12 | |||||||||
[1]During September 2020, the West Epsilon |
Business combination - Narrativ
Business combination - Narrative (Details) - USD ($) $ in Millions | Oct. 02, 2022 | Sep. 02, 2021 | Sep. 30, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | Nov. 02, 2021 |
SeaMex | ||||||
Business Acquisition [Line Items] | ||||||
Seadrill ownership percentage | 100% | 50% | 50% | |||
SeaMex | ||||||
Business Acquisition [Line Items] | ||||||
Extinguishment of debt | $ 400 | $ 400 | ||||
Equity interest, acquisition of residual (in percent) | 100% | 50% | ||||
Debt securities, allowance for credit loss | $ 65 |
Business combination - Summary
Business combination - Summary of Seamex's Identifiable Assets Acquired and Liabilities Assumed as at Acquisition Date (Details) - SeaMex $ in Millions | Nov. 01, 2021 USD ($) |
Business Acquisition [Line Items] | |
Cash and cash equivalents | $ 41 |
Restricted cash | 21 |
Accounts receivable, net | 316 |
Intangible drilling contracts | 172 |
Drilling units | 216 |
Other assets | 17 |
Total assets | 783 |
Amounts due to related parties | 133 |
Long-term debt | 234 |
Other liabilities | 88 |
Total liabilities | 455 |
Net assets acquired | $ 328 |
Business combination - Summar_2
Business combination - Summary of Seamex's Operation Results Since the Acquisition Date (Details) - SeaMex $ in Millions | 2 Months Ended |
Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | |
Contract revenues | $ 36 |
Total operating revenues | 36 |
Vessel and rig operating expenses | (25) |
Selling, general and administrative expenses | (2) |
Total operating expenses | (27) |
Operating profit | 9 |
Interest expense | (4) |
Others | (1) |
Total financial items | (5) |
Income before tax | 4 |
Income tax benefit | 2 |
Income after tax | $ 6 |
Assets and Liabilities Held f_3
Assets and Liabilities Held for Sale/Discontinued Operations - Narrative (Details) - USD ($) $ in Millions | Oct. 18, 2022 | Oct. 02, 2022 | Sep. 02, 2021 | Sep. 30, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | Nov. 30, 2021 | Nov. 02, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | Dec. 31, 2013 | Nov. 30, 2012 |
Subsequent Event | Jack up Rigs [Member] | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Proceeds from sale of oil and gas property and equipment | $ 670 | |||||||||||
Initial consideration received | 628 | |||||||||||
Reimbursement of working capital and project costs | 50 | |||||||||||
Escrow deposit | 8 | |||||||||||
Gain on sale of property | $ 276 | |||||||||||
NSNCo | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ownership interest prior to disposal | 100% | |||||||||||
NSNCo Noteholders | NSNCo | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ownership interest prior to disposal | 35% | 65% | ||||||||||
NSNCo Noteholders | NSNCo | Subsequent Event | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Ownership interest prior to disposal | 65% | |||||||||||
SeaMex | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | 50% | ||||||||||
Extinguishment of debt | $ 400 | $ 400 | ||||||||||
SeaMex | Subsequent Event | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Equity interest, acquisition of residual (in percent) | 100% | |||||||||||
Seabras Sapura Participacoes SA | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Senior secured credit facility | $ 36 | $ 179 | ||||||||||
Sapura Energy | ||||||||||||
Related Party Transaction [Line Items] | ||||||||||||
Amount guaranteed by joint venture | $ 127 | $ 132 |
Assets and Liabilities Held f_4
Assets and Liabilities Held for Sale/Discontinued Operations - Summary of Carrying Amounts of Major Classes of Assets and Liabilities Classified as Held-for-sale (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Feb. 22, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | $ 392 | $ 1,492 | $ 1,085 | |
Total liabilities of discontinued operations classified as held for sale | 37 | 1,103 | 692 | |
Carrying Amounts Of Liabilities Subject To Compromise Included As Part Of Discontinued Operations [Abstract] | ||||
Liabilities subject to compromise | $ 6,237 | 6,235 | ||
NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 1,103 | 685 | ||
Trade accounts payable | 7 | 0 | ||
Amounts due to related parties | 12 | 0 | ||
Long-term debt | 814 | 515 | ||
Uncertain tax positions | 25 | 0 | ||
Other liabilities | 90 | 31 | ||
Total liabilities of discontinued operations classified as held for sale | 948 | 546 | ||
Jack-up rigs | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 392 | 389 | 400 | |
Trade accounts payable | 6 | 6 | 4 | |
Long-term debt | 0 | 117 | ||
Uncertain tax positions | 2 | 0 | ||
Other liabilities | 29 | 25 | ||
Total liabilities of discontinued operations classified as held for sale | 37 | 37 | 146 | |
Jack-up rigs | Predecessor [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Other liabilities | 31 | |||
Jack-up rigs | Successor [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Other liabilities | 31 | |||
Jack-up rigs | Discontinued Operations [Member] | ||||
Carrying Amounts Of Liabilities Subject To Compromise Included As Part Of Discontinued Operations [Abstract] | ||||
Liabilities subject to compromise | 0 | 118 | 0 | |
Cash and cash equivalents | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 48 | 35 | ||
Cash and cash equivalents | Jack-up rigs | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 8 | 19 | 6 | |
Restricted cash | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 21 | 29 | ||
Accounts receivable | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 318 | 0 | ||
Accounts receivable | Jack-up rigs | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 21 | 12 | 15 | |
Intangible drilling contracts | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 165 | 0 | ||
Intangible drilling contracts | Jack-up rigs | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 7 | 0 | ||
Drilling units | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 215 | 0 | ||
Drilling units | Jack-up rigs | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 339 | 346 | 365 | |
Investment in associated companies | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 239 | 224 | ||
Amount due from related parties | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 69 | 387 | ||
Deferred tax assets | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 6 | 0 | ||
Other Assets [Member] | NSNCo [Member] | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | 22 | 10 | ||
Other Assets [Member] | Jack-up rigs | ||||
Long Lived Assets Held-for-sale [Line Items] | ||||
Total assets of discontinued operations classified as held for sale | $ 17 | $ 12 | $ 14 |
Assets and Liabilities Held f_5
Assets and Liabilities Held for Sale/Discontinued Operations - Summary of Major classes of line items constituting loss of discontinued operations (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Operating expenses | ||||||||||
Selling, general and administrative expenses | $ 6 | $ 18 | $ 16 | $ 42 | $ 48 | $ 67 | $ 74 | $ 91 | ||
Amortization of intangibles | 0 | 10 | 0 | 22 | 0 | 0 | 1 | 105 | ||
Net profit/(loss) after tax from discontinued operations | (33) | 2 | (31) | $ (35) | $ (10) | 2 | (76) | $ (15) | $ (233) | $ (519) |
Basic Earning/(Loss) per share from discontinued operations | $ 0.15 | $ 2.32 | $ 5.18 | |||||||
Diluted Earning/(Loss) per share from discontinued operations | $ 0.15 | $ 2.32 | $ 5.18 | |||||||
NSNCo [Member] | ||||||||||
Financial and other non-operating items | ||||||||||
Contract revenues | $ 36 | $ 0 | $ 0 | |||||||
Total operating revenues | 36 | 0 | 0 | |||||||
Operating expenses | ||||||||||
Operating expenses | (27) | 0 | 0 | |||||||
Total operating expenses | (27) | 0 | 0 | |||||||
Operating profit | 9 | 0 | 0 | |||||||
Interest income | 18 | 26 | 34 | |||||||
Interest expense | (77) | (60) | (66) | |||||||
Share in results from associated companies (net of tax) | 14 | (77) | (93) | |||||||
Loss on impairment of investments | 0 | (47) | (296) | |||||||
Loss impairment of convertible bond from related party | 0 | (29) | (11) | |||||||
Net loss on debt extinguishments | 0 | 0 | (22) | |||||||
Gain/(loss) on marketable securities | 2 | (3) | (46) | |||||||
Disposal Group, Including Discontinued Operation, Other Income | 37 | |||||||||
Other financial items | (24) | (1) | ||||||||
Total financial items | (6) | (214) | (501) | |||||||
Net profit/(Loss) before tax from discontinued operations | 3 | (214) | (501) | |||||||
Income tax expense | 2 | (1) | (1) | |||||||
Net profit/(loss) after tax from discontinued operations | $ 5 | $ (215) | $ (502) | |||||||
Basic Earning/(Loss) per share from discontinued operations | $ 0.05 | $ (2.14) | $ (5.02) | |||||||
Diluted Earning/(Loss) per share from discontinued operations | $ 0.05 | $ (2.14) | $ (5.02) | |||||||
Jack up Rigs [Member] | ||||||||||
Financial and other non-operating items | ||||||||||
Contract revenues | 18 | 35 | 29 | 79 | 71 | $ 101 | $ 98 | $ 134 | ||
Total operating revenues | 18 | 35 | 29 | 79 | 71 | 101 | 98 | 134 | ||
Operating expenses | ||||||||||
Operating expenses | (102) | (99) | (133) | |||||||
Vessel and rig operating expenses | (10) | (18) | (17) | (42) | (46) | |||||
Selling, general and administrative expenses | (1) | (3) | (2) | (7) | (7) | |||||
Depreciation, Depletion and Amortization | (4) | (4) | (7) | (14) | (21) | |||||
Amortization of intangibles | 0 | (2) | 0 | (7) | 0 | |||||
Costs associated with disposal | 0 | (5) | 0 | (5) | 0 | |||||
Total operating expenses | (15) | (32) | (26) | (75) | (74) | (102) | (99) | (133) | ||
Operating profit | 3 | 3 | 3 | 4 | (3) | (1) | (1) | 1 | ||
Interest income | 0 | 1 | 2 | |||||||
Interest expense | 0 | 0 | 0 | 0 | (1) | 0 | (11) | (14) | ||
Other financial items | 0 | (1) | 0 | (1) | 0 | 0 | (2) | (2) | ||
Total financial items | (14) | (12) | (14) | |||||||
Net profit/(Loss) before tax from discontinued operations | (29) | 2 | (2) | 3 | (13) | (15) | (13) | (13) | ||
Income tax expense | 0 | 0 | (1) | (1) | (4) | (5) | (5) | (4) | ||
Net profit/(loss) after tax from discontinued operations | $ (29) | $ 2 | $ (3) | $ 2 | $ (17) | $ (20) | $ (18) | $ (17) | ||
Basic Earning/(Loss) per share from discontinued operations | $ (0.29) | $ 0.04 | $ (0.03) | $ 0.04 | $ (0.17) | $ (0.2) | $ (0.18) | $ (0.16) | ||
Diluted Earning/(Loss) per share from discontinued operations | $ (0.29) | $ 0.04 | $ (0.03) | $ 0.04 | $ (0.17) | $ (0.2) | $ (0.18) | $ (0.16) | ||
Reorganization items, net | $ (32) | $ 0 | $ (5) | $ 0 | $ (9) | $ (14) | $ 0 | $ 0 |
Assets and Liabilities Held f_6
Assets and Liabilities Held for Sale/Discontinued Operations - Summary of assets and liabilities classified as held for sale (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | $ 392 | $ 1,492 | $ 1,085 |
Liabilities associated with assets held for sale | |||
Current | 37 | 983 | 692 |
Liabilities subject to compromise | 0 | 118 | 0 |
Non-current | 0 | 2 | 0 |
Total liabilities associated with assets held for sale | 37 | 1,103 | 692 |
Jack-up rigs | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | 392 | 389 | 400 |
Liabilities associated with assets held for sale | |||
Current | 37 | 35 | 146 |
Liabilities subject to compromise | 0 | 118 | 0 |
Non-current | 0 | 2 | 0 |
Total liabilities associated with assets held for sale | 37 | 155 | 146 |
NSNCo | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | 1,103 | 685 | |
Liabilities associated with assets held for sale | |||
Current | 948 | 546 | |
Liabilities subject to compromise | 0 | 0 | |
Non-current | 0 | 0 | |
Total liabilities associated with assets held for sale | 948 | 546 | |
Current Assets [Member] | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | 392 | 1,145 | 109 |
Current Assets [Member] | Jack-up rigs | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | 392 | 42 | 35 |
Current Assets [Member] | NSNCo | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | 1,103 | 74 | |
Non Current Assets [Member] | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | 0 | 347 | 976 |
Non Current Assets [Member] | Jack-up rigs | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | $ 0 | 347 | 365 |
Non Current Assets [Member] | NSNCo | |||
Assets held for sale | |||
Disposal Group, Including Discontinued Operation, Assets | $ 0 | $ 611 |
Assets and Liabilities Held f_7
Assets and Liabilities Held for Sale/Discontinued Operations - Summary of income/(loss) from discontinued operations (Details) - USD ($) $ / shares in Units, $ in Millions | 2 Months Ended | 3 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | |||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Long Lived Assets Held-for-sale [Line Items] | ||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ (33) | $ 2 | $ (31) | $ 2 | $ (76) | $ (15) | $ (233) | $ (519) |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | $ 0.15 | $ 2.32 | $ 5.18 | |||||
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | $ 0.15 | $ 2.32 | $ 5.18 | |||||
Jack-up rigs | ||||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ (29) | $ 2 | $ (3) | $ 2 | $ (17) | $ (20) | $ (18) | $ (17) |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | $ (0.29) | $ 0.04 | $ (0.03) | $ 0.04 | $ (0.17) | $ (0.2) | $ (0.18) | $ (0.16) |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | $ (0.29) | $ 0.04 | $ (0.03) | $ 0.04 | $ (0.17) | $ (0.2) | $ (0.18) | $ (0.16) |
NSNCo | ||||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||||
Income (Loss) from Discontinued Operations, Net of Tax, Including Portion Attributable to Noncontrolling Interest | $ (4) | $ 0 | $ (28) | $ 0 | $ (59) | $ 5 | $ (215) | $ (502) |
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share | $ 0.05 | $ (2.14) | $ (5.02) | |||||
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share | $ 0.05 | $ (2.14) | $ (5.02) |
Assets and Liabilities Held f_8
Assets and Liabilities Held for Sale/Discontinued Operations - Summary of cash flows from discontinued operations (Details) - USD ($) $ in Millions | 2 Months Ended | 7 Months Ended | 9 Months Ended | 12 Months Ended | ||
Feb. 22, 2022 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | Dec. 31, 2020 | Dec. 31, 2019 | |
Long Lived Assets Held-for-sale [Line Items] | ||||||
Net cash (used in)/provided by operating activities | $ (5) | $ (3) | $ (8) | $ (5) | $ (22) | $ (7) |
Net cash provided by investing activities | 0 | (30) | (38) | 23 | 36 | 47 |
Net cash used in used in financing activities | $ 20 | $ 16 | $ 0 | 0 | (96) | (333) |
Jack-up rigs | ||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||
Net cash (used in)/provided by operating activities | 13 | 2 | 40 | |||
Net cash provided by investing activities | 0 | 0 | 0 | |||
Net cash used in used in financing activities | 0 | (96) | 0 | |||
NSNCo | ||||||
Long Lived Assets Held-for-sale [Line Items] | ||||||
Net cash (used in)/provided by operating activities | (18) | (24) | (33) | |||
Net cash provided by investing activities | 23 | 36 | 47 | |||
Net cash used in used in financing activities | $ 0 | $ 0 | $ (333) |
Risk management and financial_2
Risk management and financial instruments (Details) - USD ($) $ in Millions | 3 Months Ended | |||
May 11, 2018 | Jun. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Debt Instrument [Line Items] | ||||
Percentage of debt hedged by interest rate derivatives | 89% | |||
Interest rate cap | ||||
Debt Instrument [Line Items] | ||||
Payments for Derivative Instrument, Financing Activities | $ 68 | |||
Percentage of derivatives terminated | 81% | |||
Derivative notional amount | $ 834 | |||
Interest rate cap | Not Designated as Hedging Instrument [Member] | ||||
Debt Instrument [Line Items] | ||||
Capped rate | 2.87% | 3.755% | 0.209% | |
Interest rate cap | Not Designated as Hedging Instrument [Member] | Predecessor [Member] | ||||
Debt Instrument [Line Items] | ||||
Capped rate | 2.877% |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) $ in Millions | 9 Months Ended | |||||||||||
Nov. 14, 2022 | Oct. 18, 2022 | Apr. 07, 2022 | Feb. 22, 2022 | Feb. 18, 2022 | Jan. 19, 2022 | Sep. 30, 2022 | Feb. 23, 2022 | Jan. 20, 2022 | Dec. 31, 2021 | Feb. 10, 2021 | Dec. 31, 2020 | |
Subsequent Event [Line Items] | ||||||||||||
Long-term debt | $ 982 | $ 951 | $ 5,545 | $ 6,200 | $ 5,545 | |||||||
Net assets held for sale | 155 | |||||||||||
Rig asset derecognized | $ 175 | |||||||||||
Financial liability, rig asset derecognized | 161 | |||||||||||
NSNCo | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Ownership interest prior to disposal | 100% | |||||||||||
NSNCo | NSNCo Noteholders | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Ownership interest prior to disposal | 35% | 65% | ||||||||||
Credit Facility Maturing 2027 | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Long-term debt | 5,662 | $ 5,700 | $ 5,700 | |||||||||
Subsequent Event | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Long-term debt | 908 | |||||||||||
Plan of reorganization, new financing raised | 350 | |||||||||||
Rig asset derecognized | 175 | |||||||||||
Financial liability, rig asset derecognized | 158 | |||||||||||
Subsequent Event | Secured Second Lien Debt Facility | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Repayments of long term lines of credit | $ 269 | $ 204 | $ 473 | |||||||||
Subsequent Event | Secured Second Lien Debt Facility | Debt Instrument Principal Portion | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Repayments of long term lines of credit | 250 | 192 | $ 442 | |||||||||
Subsequent Event | Secured Second Lien Debt Facility | Debt Instrument Exit Fee | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Repayments of long term lines of credit | 13 | 10 | ||||||||||
Subsequent Event | Secured Second Lien Debt Facility | Debt Instrument Accrued Interest | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Repayments of long term lines of credit | $ 6 | 2 | ||||||||||
Subsequent Event | Jackup Sale | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Disposal group, including discontinued operation, consideration | 670 | |||||||||||
Disposal group, including discontinued operation, initial consideration | 628 | |||||||||||
Disposal group, including discontinued operation, reimbursements | 50 | |||||||||||
Escrow deposit | 8 | |||||||||||
Subsequent Event | Jack up Rigs [Member] | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Proceeds from sale of oil and gas property and equipment | 670 | |||||||||||
Initial consideration received | 628 | |||||||||||
Reimbursement of working capital and project costs | 50 | |||||||||||
Escrow deposit | 8 | |||||||||||
Gain on sale of property | $ 276 | |||||||||||
Subsequent Event | West Venture | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Disposals | $ 7 | |||||||||||
Subsequent Event | Forecast | Sevan Driller | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Disposals | $ 18 | |||||||||||
Subsequent Event | Forecast | Sevan Brasil | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Disposals | 6 | |||||||||||
Subsequent Event | Minimum | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Interim transition bareboat agreement period | 6 months | |||||||||||
Subsequent Event | Maximum | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Interim transition bareboat agreement period | 9 months | |||||||||||
Subsequent Event | NSNCo | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 35% | |||||||||||
Subsequent Event | NSNCo | NSNCo Noteholders | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Ownership interest prior to disposal | 65% | |||||||||||
Subsequent Event | Credit Facility Maturing 2027 | ||||||||||||
Subsequent Event [Line Items] | ||||||||||||
Long-term debt | $ 683 |