Seadrill Reports Robust 4Q 2014 Results

Seadrill Limited reported its fourth quarter results for the three months ended December 31, 2014.

 Financial Highlights
    ·           The Seadrill Group* on a combined basis reports EBITDA of US$897 million, a year over year increase of 17%
    ·           Seadrill Limited reports fourth quarter 2014 EBITDA* of US$672 million
    ·           Seadrill Limited reports fourth quarter 2014 net income of US$150 million and earnings per share of US$0.32
    ·           Seadrill Group on a combined basis reports orderbacklog of approximately US$17.2 billion
    ·           Seadrill Limited sells the ultra-deepwater drillship West Vela to Seadrill Partners for US$900 million on a 100% basis.  Seadrill Limited sold a 51% stake in the unit.
    ·           Seadrill receives commitments for a US$750 million credit facility for SeaMex to refinance the West Oberon, West Intrepid, West Defender, West Courageous, and West Titania.
    ·           Seadrill receives commitments for a US$950 million credit facility for the financing of the West Carina and West Eclipse.
    ·           Seadrill exercises a purchase option for the West Polaris, a 6th generation Ultra-Deepwater drillship, from Ship Finance International Ltd.  The purchase option price is US$456 million and total consideration payable to Ship Finance is US$111 million after accounting for existing debt on the unit.
* EBITDA is defined as earnings before interest, depreciation and amortization equal to operating profit plus depreciation and amortization and after adjusting for non-cash loss on impairment and gains on disposals and deconsolidations.
* Seadrill Group is defined as all companies currently consolidated into Seadrill Limited plus Seadrill Partners.  The results and measures presented for the Seadrill Group are designed to aid comparability with periods prior to the deconsolidation of Seadrill Partners on January 2, 2014.
* Seadrill Group combined EBITDA is defined as EBITDA for Seadrill Limited plus EBITDA for Seadrill Partners.

Operational Highlights

   ·           Seadrill achieves 94% economic utilization* for its floater fleet and 98% for its Jack-up fleet for the fourth quarter 2014.
   ·           Seadrill secures executed contract awards with Petrobras for the Libra Field for the West Tellus and West Carina.  The contracts are for a firm period of three years each and have a total revenue potential including mobilization of US$1.1 billion.
    ·           Seadrill secures a 145 day contract extension with Total for the semi-submersible unit West Eclipse.  The total revenue potential for the extension is approximately US$65 million.
    ·           Seadrill secures a new contract for the jack-up unit West Leda. The total revenue potential for the new contract is approximately US$16 million.
    ·           Seadrill secures a new contract for the jack-up unit West Telesto. This is in direct continuation from the previous contract in Australia and is for one well.  The total revenue potential for the new contract is US$4 million.
    ·           Seadrill secures a new contract for the jack-up unit West Mischief. The total revenue potential for the new contract is approximately US$112 million.

Commenting today, Per Wullf, CEO and President of Seadrill Management Ltd., said, "Together with the rest of the industry, we are facing challenging times. Seadrill operates in a market that is, and will continue to be cyclical. We have taken prudent and positive action during 2014, and will continue to do so in 2015, to position ourselves to have the flexibility, from an operational and financial perspective, to manage through this downturn. I personally thank all employees, offshore and onshore, for their efforts in driving performance and efficiencies in this difficult environment.

We are optimistic that the drilling industry will benefit from the rebalancing that is occurring as older rigs are retired, and believe that this will ultimately result in a more healthy industry in the long run. We have built Seadrill's business with an eye towards generating returns through the cycle and we believe that we are well positioned to take advantage of this downturn and come out stronger."