• Seadrill Limited recently reported a series of contract wins and extensions, including Equinor Brasil Energia Ltda exercising a one-year, US$114 million option on the ultra-deepwater drillship West Saturn, alongside new work for the West Capella, West Elara and an extension for the West Carina.
• Together, these awards lift Seadrill’s contracted backlog and extend visibility on asset utilization across Brazil, Malaysia and Norway through 2027, indicating stronger multi-year employment for key rigs.
• We’ll now examine how this expanded multi-year contract backlog, particularly the West Saturn option, shapes Seadrill’s broader investment narrative.

We've found 12 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

What Is Seadrill's Investment Narrative?

To own Seadrill, you really have to believe in the durability of offshore drilling demand and the company’s ability to convert its modern fleet and growing backlog into steadier earnings. The latest West Saturn option and the new work for West Capella, West Elara and West Carina directly support that story by locking in US$349 million of additional firm backlog and stretching visibility into 2027, which matters when recent quarters have swung from strong 2024 profits to 2025 losses and thin margins. In the near term, these contracts may ease concerns around utilization and revenue volatility ahead of the upcoming Q4 2025 results, but they do not fully resolve the key risks: a high earnings multiple, low current returns on equity, past one off items in reported profits and reliance on a concentrated set of large offshore projects.

However, one issue in Seadrill’s earnings profile is especially important for investors to understand. Despite retreating, Seadrill's shares might still be trading above their fair value and there could be some more downside. Discover how much.

Exploring Other Perspectives

Many of the 5 Simply Wall St Community fair value estimates cluster around US$40 to US$80, yet one stretches up near US$376, highlighting how differently people see Seadrill’s potential. When you weigh that spread against the recent contract wins that extend backlog through 2027, it becomes even more important to consider how much contract quality and execution risk you are comfortable with before forming your own view.

Explore 5 other fair value estimates on Seadrill - why the stock might be worth over 9x more than the current price!

Build Your Own Seadrill Narrative

Disagree with this assessment? Create your own narrative in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Seadrill research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Seadrill research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Seadrill's overall financial health at a glance.

Looking For Alternative Opportunities?

Our top stock finds are flying under the radar-for now. Get in early:

• Rare earth metals are the new gold rush. Find out which 31 stocks are leading the charge.
• The end of cancer? These 29 emerging AI stocks are developing tech that will allow early identification of life changing diseases like cancer and Alzheimer's.
• Trump's oil boom is here - pipelines are primed to profit. Discover the 22 US stocks riding the wave.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.