SEADRILL LTD, 6-K filed on 2/27/2023
Report of Foreign Issuer
v3.22.4
Cover Page
 12 Months Ended
Dec. 31, 2021
Document Information [Line Items]  
Document Type 6-K
Document Period End Date Dec. 31, 2021
Current Fiscal Year End Date --12-31
Entity Registrant Name SEADRILL LIMITED
Entity Central Index Key 0001737706
Document Fiscal Year Focus 2021
Document Fiscal Period Focus FY
Amendment Flag false
v3.22.4
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Operating revenues      
Contract revenues $ 663 $ 605 $ 863
Management contract revenue 177 289 338
Total operating revenues 907 961 1,254
Operating expenses      
Depreciation (127) (318) (397)
Amortization of intangibles 0 (1) (105)
Management contract expense [1] (174) (390) (302)
Selling, general and administrative expenses (67) (74) (91)
Total operating expenses (1,012) (1,358) (1,589)
Other operating items      
Loss on impairment of long-lived assets (152) (4,087) 0
Loss on impairment of intangibles 0 (21) 0
Gain on disposals 47 15 0
Other operating income [1] 54 9 39
Total other operating items (51) (4,084) 39
Operating loss (156) (4,481) (296)
Financial and other non-operating items      
Interest income [1] 1 8 33
Interest expense (109) (398) (407)
Loss on impairment of investments 0 0 (6)
Share in results from associated companies (net of tax) 3 0 (22)
Fair value measurement on deconsolidation of VIE 0 509 0
Loss on derivative financial instrument 0 (3) (37)
Foreign exchange loss (4) (23) (11)
Reorganization items, net (296) 0 0
Other financial and non-operating items [1] (11) (43) (1)
Total financial and other non-operating items, net (416) 50 (451)
Loss before income taxes (572) (4,431) (747)
Income tax benefit 0 1 44
Loss from continuing operations (572) (4,430) (703)
Loss from discontinued operations, net of income taxes (15) (233) (519)
Net loss (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 per share from continuing operations (US dollar) $ (5.7) $ (44.11) $ (7)
Diluted loss per share from continuing operations (US dollar) (5.7) (44.11) (7)
Basic loss per share (U.S. dollar) (5.85) (46.43) (12.18)
Diluted loss per share (U.S. dollar) $ (5.85) $ (46.43) $ (12.18)
Reimbursable revenues      
Operating revenues      
Reimbursable revenues $ 35 $ 37 $ 41
Operating expenses      
Expenses (32) (34) (39)
Other revenues      
Operating revenues      
Reimbursable revenues [1] 32 30 12
Vessel and rig operating expenses      
Operating expenses      
Expenses $ (612) $ (541) $ (655)
[1] Includes transactions with related parties. Refer to Note 27 - "Related party transactions" for further details.
v3.22.4
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Income Statement [Abstract]      
Revenue from related parties $ 189 $ 305 $ 333
Related party costs $ 70 $ 12 $ 3
v3.22.4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Statement of Comprehensive Income [Abstract]      
Net loss $ (587) $ (4,663) $ (1,222)
Other comprehensive loss, net of tax, relating to continuing operations:      
Actuarial loss relating to pensions 0 (2) (1)
Change in fair value of debt component of Archer convertible bond 2 4 3
Share of other comprehensive loss from associated companies 9 (15) (8)
Other comprehensive gain/(loss) 11 (13) (6)
Total comprehensive loss for the period (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)
v3.22.4
CONSOLIDATED BALANCE SHEETS - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Current assets    
Cash and cash equivalents $ 293 $ 485
Restricted cash 160 103
Accounts receivable, net 158 110
Amount due from related parties, net 28 85
Assets held for sale - current 1,145 109
Other current assets 197 187
Total current assets 1,981 1,079
Non-current assets    
Investment in associated companies 27 24
Drilling units 1,431 1,755
Restricted cash 63 65
Deferred tax assets 10 9
Equipment 11 19
Amount due from related parties, net 0 6
Assets held for sale - non-current 347 976
Other non-current assets 27 45
Total non-current assets 1,916 2,899
Total assets 3,897 3,978
Current liabilities    
Debt due within one year 0 5,545
Trade accounts payable 53 41
Amounts due to related parties - current 0 7
Liabilities associated with assets held for sale - current 983 692
Other current liabilities 219 277
Total current liabilities 1,255 6,562
Liabilities subject to compromise 6,117 0
Liabilities subject to compromise associated with assets held for sale 118 0
Non-current liabilities    
Long-term debt due to related parties 0 426
Deferred tax liabilities 9 10
Liabilities associated with assets held for sale non current 2 0
Other non-current liabilities 112 120
Total non-current liabilities 123 556
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 10 10
Additional paid in capital 3,504 3,504
Accumulated other comprehensive loss (15) (26)
Retained loss (7,215) (6,628)
Total deficit (3,716) (3,140)
Total liabilities and equity $ 3,897 $ 3,978
v3.22.4
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares
Dec. 31, 2021
Dec. 31, 2020
Statement of Financial Position [Abstract]    
Common shares, par value (in dollars per share) $ 0.1 $ 0.1
Common shares, authorized (in shares) 138,880,000 138,880,000
Common shares, issued (in shares) 100,384,435 100,384,435
v3.22.4
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Cash Flows from Operating Activities      
Net loss $ (587) $ (4,663) $ (1,222)
Net loss from continuing operations (572) (4,430) (703)
Net loss from discontinued operations (15) (233) (519)
Net operating net loss adjustments related to discontinued operations [1] 10 211 526
Adjustments to reconcile net loss to net cash used in operating activities:      
Depreciation 127 318 397
Amortization of unfavorable and favorable contracts 0 1 105
Share of results from associated companies (3) 0 22
Gain on disposals (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 152 4,087 0
Loss on impairment of intangibles 0 21 0
Loss on impairment of investments 0 0 6
Deferred tax benefit (3) (7) (60)
Unrealized foreign exchange loss 2 19 (3)
Amortization of discount on debt 84 121 36
Change in allowance for credit losses 34 144 0
Non-cash reorganization items 176 0 0
Other cash movements in operating activities:      
Payments for long-term maintenance (55) (110) (105)
Repayments made under lease arrangements (46) 0 0
Changes in operating assets and liabilities, net of effect of acquisitions and disposals:      
Trade accounts receivable (41) 49 25
Trade accounts payable 15 (37) 3
Prepaid expenses/accrued revenue (4) (54) (1)
Deferred revenue 7 (5) 13
Related party receivables (6) (103) (8)
Related party payables (7) (5) (30)
Other assets (21) 33 (16)
Other liabilities 59 73 14
Other, net 0 8 5
Net cash used in operating activities (154) (420) (256)
Cash Flows from Investing Activities      
Additions to drilling units and equipment (29) (27) (48)
Purchase of call option for non-controlling interest shares 0 (11) 0
Investment in associated companies 0 0 (25)
Loans granted to related party 0 (8) 0
Proceeds from disposal of rigs 43 0 0
Impact to cash resulting from deconsolidation of VIE 0 (22) 0
Net cash provided by investing activities - discontinued operations 23 36 47
Net cash provided by/(used in) investing activities 37 (32) (26)
Cash Flows from Financing Activities      
Repayments of secured credit facilities 0 (36) (34)
Purchase of redeemable AOD non-controlling interest 0 (31) 0
Net cash used in financing activities - discontinued operations 0 (96) (333)
Net cash used in financing activities 0 (163) (367)
Effect of exchange rate changes on cash and cash equivalents (2) (19) 3
Net decrease in cash and cash equivalents, including restricted cash (119) (634) (646)
Cash and cash equivalents, including restricted cash, at beginning of the year 723 1,357 2,003
Cash and cash equivalents, including restricted cash, at the beginning of year - continuing operations 653 [2] 1,205 [2] 1,572
Cash and cash equivalents, including restricted cash, at the beginning of year - discontinued operations 70 152 431
Cash and cash equivalents, including restricted cash, at the end of year 604 723 1,357
Cash and cash equivalents, including restricted cash, at the end of year - continuing operations (2) [2] 516 653 1,205
Cash and cash equivalents, including restricted cash, at the end of year - discontinued operations 88 70 152
Supplementary disclosure of cash flow information      
Interest paid 0 (174) (378)
Taxes paid (3) (10) (29)
Reorganization items, net paid $ (100) $ 0 $ 0
[1] 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).
[2] 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
assets $63 million (2020: $65 million, 2019: $83 million).
v3.22.4
CONSOLIDATED STATEMENTS OF CASH FLOWS (Parenthetical) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Statement of Cash Flows [Abstract]      
Net cash (used in)/provided by operating activities $ 5 $ 22 $ 7
Cash and cash equivalents 293 485 987
Current restricted cash 160 103 135
Non-current restricted cash $ 63 $ 65 $ 83
v3.22.4
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY - USD ($)
$ in Millions
Total
Cumulative Effect, Period Of Adoption, Adjustment
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
Common shares
Common shares
Cumulative Effect, Period of Adoption, Adjusted Balance
Additional paid in capital
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
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     $ 2,883         $ 3,491   $ (7)   $ (611)     $ 152  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Net loss from continuing operations (701)     (700)                 (700)     (1)  
Net loss from discontinued operations (519)     (519)                 (519)        
Other comprehensive loss from continuing operations (1)     (1)             (1)            
Other comprehensive loss from discontinued operations (5)     (5)             (5)            
Fair Value adjustment AOD Redeemable NCI (21)     (21)                 (21)        
Share-based compensation charge $ 5     5         5                
Ending balance, shares at Dec. 31, 2019 100,234,973           10,000,000                    
Ending balance at Dec. 31, 2019 $ 1,793 $ (143)   1,642 $ (143)       3,496   (13)   (1,851) $ (143)   151  
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Net loss from continuing operations (4,429)     (4,426)                 (4,426)     (3)  
Net loss from discontinued operations (233)     (233)                 (233)        
Other comprehensive loss from continuing operations (2)     (2)             (2)            
Other comprehensive loss from discontinued operations (11)     (11)             (11)            
Fair Value adjustment AOD Redeemable NCI 25     25                 25        
Purchase option on non-controlling interest (11)     0                       (11)  
Deconsolidation of VIE (137)     0                       (137)  
Share-based compensation charge 9     9         9                
Cash settlement for cancellation of share scheme $ (1)     (1)         (1)                
Ending balance, shares at Dec. 31, 2020 100,384,435           10,000,000 10,000,000                  
Ending balance at Dec. 31, 2020 $ (3,140)   $ 1,650 (3,140)   $ 1,499     3,504 $ 3,496 (26) $ (13) (6,628)   $ (1,994) 0 $ 151
Increase (Decrease) in Stockholders' Equity [Roll Forward]                                  
Net loss from continuing operations (572)     (572)                 (572)        
Net loss from discontinued operations (15)     (15)                 (15)        
Other comprehensive loss from discontinued operations $ 11     11             11            
Ending balance, shares at Dec. 31, 2021 100,384,435           10,000,000                    
Ending balance at Dec. 31, 2021 $ (3,716)     $ (3,716)         $ 3,504   $ (15)   $ (7,215)     $ 0  
v3.22.4
General information
 12 Months Ended
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 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.
v3.22.4
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
these estimates each reporting period as required.
Refer to Note 7—“Revenue from contracts with customers”.
Dayrate drilling revenue
- Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate invoices billed to the customer are typically determined based on the varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly incremental service it relates to. Revenue is recognized in line with the contractual rate billed for the services provided for any given hour.
Mobilization revenue
- We may receive fees (on either a fixed
lump-sum
or variable dayrate basis) for the mobilization of our rigs. These activities are not considered to be distinct within the context of the contract. The associated revenue is allocated to the overall performance obligation and recognized ratably over the expected term of the related drilling contract. We record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are rendered over the initial term of the related drilling contract.
Demobilization revenue
- We may receive fees (on either a fixed
lump-sum
or variable dayrate basis) for the demobilization of our rigs. Demobilization revenue expected to be received upon contract completion is estimated as part of the overall transaction price at contract inception and recognized over the term of the contract. In most of our contracts, there is uncertainty as to the likelihood and amount of expected demobilization revenue to be received. For example, the amount may vary dependent upon whether or not the rig has additional contracted work following the contract. Therefore, the estimate for such revenue may be constrained, as described above, depending on the facts and circumstances pertaining to the specific contract. We assess the likelihood of receiving such revenue based on past experience and knowledge of the market conditions.
Revenues related to reimbursable expenses
—We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof are highly dependent on factors outside of our influence. Accordingly, reimbursable revenue is fully constrained and not included in the total transaction price until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. We are generally considered a principal in such transactions and record the associated revenue at the gross amount billed to the customer, at a point in time, as “Reimbursable revenues” in our Consolidated Statements of Operations.
 
Local taxes
- In some countries, the local government or taxing authority may assess taxes on our revenues. Such taxes may include sales taxes, use taxes, value-added taxes, gross receipts taxes and excise taxes. We generally record
tax-assessed
revenue transactions on a net basis.
Deferred contract expenses
- Certain direct and incremental costs incurred for upfront preparation, initial mobilization and modifications of contracted rigs represent costs of fulfilling a contract as they relate directly to a contract, enhance resources that will be used in satisfying our performance obligations in the future and are expected to be recovered. Such costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract.
Management contract revenues
Management fees -
Revenues related to operation support and management services provided to Aquadrill (formerly Seadrill Partners), SeaMex, Sonadrill, and Northern Ocean. This includes both related and
non-related
companies.
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
- Other revenues also include amounts recognized as early termination fees under drilling contracts which have been terminated prior to the contract end date. Contract termination fees are recognized daily as and when any contingencies or uncertainties are resolved.
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
process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes.
 
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
exchange rate. Foreign currency translation gains or losses on consolidation are recorded as a separate component of other comprehensive income in shareholders’ equity.
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
basis and considered the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes.
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”
model, calculated by multiplying the exposure at default by the probability of default by the loss given default by a risk overlay multiplier over the life of the financial instrument (as defined by ASU
2016-13).
Our critical judgements relate to internal credit ratings and maturities used to determine probability of default, the subordination of debt to determine loss given default and the performance status of the receivable that can impact any management overlay. We determine management risk overlay based on management assessment of defaults, overdue amounts and other observable events that provide information on collection. Our internal credit ratings are based on the Moody’s scorecard approach (based on several quantitative and qualitative factors) and our approach relies on statistical data from Moody’s ‘Default and Ratings Analytics’ to derive the expected credit loss. We monitor the credit quality of receivables by
re-assessing
credit ratings, assumed maturities and
probability-of-default
on a quarterly basis. Due to the inherent uncertainty around these judgmental areas, it is at least reasonably possible that a material change in the CECL allowance can occur in the near term. We grouped financial assets with similar risk characteristics based on their contractual terms, historical credit loss pattern, internal and external credit ratings, maturity, collateral type, past due status and other relevant factors.
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”
model to that of Seadrill’s. Refer to Allowance for Credit Losses section above.
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 Consolidated Statement of Operations.
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 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
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
over the period the awards are expected to vest. The expense was classified as compensation cost and recognized ratably over the period during which the individuals are required to provide service in exchange for the reward.
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
liabilities”. If it becomes probable that we will have to perform under a guarantee, we remeasure the liability if the amount of the loss can be reasonably estimated. The recognition of fair value is not required for certain guarantees such as the parent’s guarantee of a subsidiary’s debt to a third party. Financial guarantees written are assessed for credit losses and any allowance is presented as a liability for
off-balance
sheet credit exposures where the balance exceeds the collateral provided over the remaining instrument life. The allowance is assessed at the individual guarantee level, calculated by multiplying the balance exposed on default by the probability of default and loss given default over the term of the guarantee.
v3.22.4
Recent Accounting Standards
 12 Months Ended
Dec. 31, 2021
Accounting Changes and Error Corrections [Abstract]  
Recent Accounting Standards
Note 3 – Recent Accounting Standards
1) Recently adopted accounting standards
We recently adopted the following accounting standard updates (“
ASUs
”):
a) ASU
2019-12
Income Taxes (Topic 740): Simplifying the accounting for income taxes
In December 2019, the FASB issued ASU
2019-12.
The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted ASU
2019-12
effective January 1, 2021. The adoption of this guidance did not have a material impact on our consolidated financial statements.
 
b) ASU
2021-08
Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
We early adopted ASU
2021-08
effective July 1, 2021. 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. This did not have a material impact on our financial statements.
c) ASU
2016-13
- Financial Instruments - Measurement of Credit Losses
(Also
2018-19,
2019-04
and
2019-11)
In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU
2016-13
Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments, including ASU
2018-19,
ASU
2019-04
and ASU
2019-11:
Codification Improvements to Topic 326 “Financial Instruments-Credit Losses”. Topic 326 replaces the incurred loss impairment methodology (that recognizes losses when a probable threshold is met) with a requirement to recognize lifetime expected credit losses (measured over the contractual life of the instrument) immediately, based on information about past events, current conditions and forecasts of future economic conditions. Under the CECL measurement financial assets are reflected at the net amount expected to be collected from the financial asset, CECL measurement is applicable to financial assets measured at amortized cost as well as
off-balance
sheet credit exposures not accounted for as insurance (including financial guarantees).
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
sheet exposures) and the net balance shown on the Consolidated Balance Sheet with associated credit loss expense in the Consolidated Statement of Operations.
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
- Clarifying the interactions between Topic 321, Topic 323 and Topic 815
 
 
•
  
ASU
2020-08
- Codification Improvements to Subtopic
310-20,
Receivables—Nonrefundable Fees and Other Costs
 
 
•
  
ASU 2020-9 - Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 
 
 
•
  
ASU
2020-10
- Codification Improvements
 
 
•
  
ASU
2020-11
- Financial Services—Insurance (Topic 944): Effective Date and Early Application
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
Reference Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
In March 2020, the FASB issued ASU
2020-04.
The amendments provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The applicable expedients for us are in relation to modifications of contracts within the scope of Topics 310, Receivables, 470, Debt, and 842, Leases. This optional guidance may be applied prospectively from any date beginning March 12, 2020 and cannot be applied to contract modifications that occur after December 31, 2022. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
b) ASU
2021-04
Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options
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
Leases (Topic 842) Lessors-Certain Leases with Variable Lease Payments
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
Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.
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.
v3.22.4
Chapter 11
 12 Months Ended
Dec. 31, 2021
Reorganizations [Abstract]  
Chapter 11
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
and
West Linus
substantially eliminated; and
 
  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
”), Seadrill rejected the
West Taurus
lease through the bankruptcy court in early 2021 and negotiated amendments to the leases of
West Hercules
and
West Linus
in August 2021 and February 2022, respectively. The amended leases for
West Hercules
and
West Linus
are short term and we expect to deliver both rigs back to SFL in 2022. In addition to reducing the lease terms, the lease amendments extinguished Seadrill’s obligations to purchase the units at the end of the leases (amongst other changes).
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
chapter 11 process and had the following major impacts:
 
  1.
Holders of the senior secured notes issued by NSNCo (“
notes
”,
“noteholders
”) released Seadrill from all guarantees and securities previously provided by Seadrill in respect of the notes;
 
  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,
the industry had experienced a sustained decline in oil prices which had culminated in an industry-wide supply and demand imbalance. During this period, market day rates for drilling rigs were lower than was anticipated when the debt associated with acquiring our rigs was incurred. This challenging business climate was further destabilized by challenges that arose due to the
COVID-19
pandemic. The actions taken by governmental authorities around the world to mitigate the spread of
COVID-19,
had a significant negative effect on oil consumption. This led to a further decrease in the demand for our services and had an adverse impact on our business and financial condition.
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
pandemic. Drilling programs that had been postponed have now begun or are back on schedule. As a result, the number of contracted rigs has rebounded, and fleet utilization (jackups, semi-submersibles and drillships) is nearing March 2020
pre-pandemic
levels. Dayrates for some rig types in certain regions, such as for US Gulf of Mexico drillships, have risen dramatically. Conversely, dayrates for rigs in other regions have remained stagnant or only risen modestly.
 
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
”) interest and by deferring certain scheduled amortization payments. In our 2020 first quarter earnings release, published on June 2, 2020, we announced that we would no longer proceed with efforts to obtain bank consent for a short-term solution and had instead appointed financial advisors to evaluate comprehensive restructuring alternatives to reduce debt service costs and overall indebtedness. We further stated that a comprehensive restructuring may require a substantial conversion of Seadrill’s indebtedness to equity.
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
and
West Taurus (“
SFL rigs
”)
. As a result, we entered into forbearance agreements with certain creditors in respect of our senior secured credit facility agreements, senior secured notes, and guarantee facility agreement. Pursuant to these agreements the creditors agreed not to exercise any voting rights, or otherwise take actions, in respect of the default.
In October 2020 we did not make the required charter payments due on the leasing arrangements for the SFL rigs. This constituted an event of default under the leasing agreements. From November 2020, we restarted making partial payments based on a percentage of the total due in return for SFL granting us permission to use certain restricted cash balances to cover operating costs of the SFL rigs.
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
of interest on our senior credit facilities and further violation of the cross-default covenant for the Senior Secured Notes, meant that the debt was callable on demand and therefore classified as current in our December 31, 2020 balance sheet. The scheduled interest and fees were converted to loan principal tranches and incurred
payment-in-kind
interest at their original rates plus an additional 2%.
iii. Three objectives of the comprehensive restructuring
Seadrill’s largest debt obligation at the petition date was the $5.7 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 $1.1 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 12.0% senior secured notes due July 2025, of which $0.5 billion remained outstanding as of the petition date. Seadrill held 100% 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 $6.2 billion in aggregate funded debt obligations. These obligations included $5.7 billion due under 12 Prepetition Credit Facilities (silos) and $0.5 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 $683 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 + 5%
cash-pay
+ 7.5% 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 $300 million
new-money
raise under the New First Lien Facility, and (c) receive 83 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 16.75 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 $300 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, 12.5% (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) $175 million term loan and (ii) $125 million revolving credit facility (RCF). The term loan facility bears interest at a margin of 7% per annum plus a compounded risk-free rate (and any applicable credit adjustment spread). The RCF bears interest at a margin of 7% per annum plus a compounded risk-free rate (and any applicable credit adjustment spread), and a commitment fee of 2.8% 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) 12.50% minus the Rights Offering Percentage (if under-subscribed) plus (ii) 4.25% 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 7.50% of the $300 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
thereafter
     
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
interest, as further outlined in the existing facility section above.
v. Hemen $50m convertible bond
$50 million convertible bonds with margin of LIBOR + 6%
cash-pay
and maturity date of March 2028 were issued to Hemen at par upon emergence. The bonds are convertible into the Conversion Shares in an amount equal to 5% of the fully-diluted ordinary 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, Shares at the option of the Lender at any time during the Conversion Period.
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
voting shares will receive less than 50 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 shares
     
% allocation
    
Equity dilution on
conversion of
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
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
C
hapter 11 process and had the following major impacts:
 
  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
in Seadrill’s December 2021 balance sheet. All periods presented have been recast for this change.
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
”) over SeaMex by an order of the Supreme Court of Bermuda. Further, the joint venture agreement governing the SeaMex joint venture between one of NSNCo’s subsidiaries, Seadrill JU Newco Bermuda Ltd., and an investment fund controlled by Fintech was terminated with immediate effect.
On July 2, 2021, a restructuring support agreement (“
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, 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
upon the acquisition. SeaMex, being a subsidiary of NSNCo, also meets the HFS criteria on the acquisition date and will be reported in discontinued operations as of December 31, 2021 measured at its carrying value, as it is less than the fair value less cost to sell.
iii. NSNCo Sale
NSNCo filed a
pre-packaged
bankruptcy that was heard on January 12, 2022 in a separate petition filing from Seadrill in the U.S. Bankruptcy Court for the Southern District of Texas. On January 20, 2022, NSNCo emerged from bankruptcy, having implemented the terms of the RSA described above.
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
bankruptcy), with any gain or loss on disposal being recognized. Upon NSNCo’s emergence date, Seadrill will retain a 35% interest in NSNCo, which will be recognized as an equity method investment.
Management determined that it meets the criteria for being
held-for-sale
(“
HFS
”) as of December 31, 2021 and represent a strategic-shift resulting in discontinued operations reporting 
in
 
Seadrill’s financial statements
.
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
and
West Hercules
and the jackup rig
West Linus
were leased to certain fully owned Seadrill entities under long term charter agreements (collectively, the “
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
lease rejection motion was approved by the Bankruptcy Court, and the rig was redelivered to SFL in April 2021, in accordance with the
West Taurus
settlement agreement. The lease termination led to a remeasurement of the outstanding amounts due to SFL held within liabilities subject to compromise to claim value, resulting in a $186 million loss within “Reorganization items, net” on the Consolidated Statement of Operations in 2021.
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
gain within “Reorganization items, net” on the Consolidated Statement of Operations in 2021.
On February 18, 2022, Seadrill signed a transition agreement with SFL pursuant to which the
West Linus
rig will be redelivered to SFL upon assignment of the ConocoPhillips drilling contract to SFL. The interim transition bareboat agreement with SFL will see Seadrill continuing to operate the
West Linus
until the rig is handed back to SFL and a new Manager, Odfjell, for a period of time estimated to last approximately 6 to 9 months from Seadrill’s emergence. The amendment charter no longer contains a purchase obligation and will therefore result in the derecognition of the rig asset of $175 million and liability of $158 million at emergence from Chapter 11 on February 22, 2022. The interim transition bareboat agreement will be accounted for as a short-term operating lease.
Detailed timeline
We have provided a detailed timeline covering the core events of the restructuring process below.
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
and
West Taurus
. As a result, we entered into forbearance agreements with certain creditors in respect of our senior secured credit facility agreements, senior secured notes, and guarantee facility agreement.
December 2020
- After triggering an additional event of default through not paying interest on our secured credit facilities, we entered into a forbearance agreement with certain creditors. Pursuant to this agreement, the consenting creditors had agreed not to act until January 29, 2021 in respect of certain events of default that may have arisen under nine of our twelve senior secured credit facility agreements, as a result of the group not making certain interest payments.
January 2021
- We did not make the semi-annual cash interest payment due on our senior secured notes.
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
- The
West Taurus
lease rejection motion was approved by the Bankruptcy Court.
April 2021
– The
West Taurus
rig was redelivered to SFL
June 2021
– John C. McKenna of Finance & Risk Services Ltd and Simon Appell of AlixPartners UK LLP were appointed as joint provisional liquidators over SeaMex by an order of the Supreme Court of Bermuda to maximize value for creditors and other stakeholders.
July
 2, 2021
– A restructuring support agreement was reached with the NSNCo Noteholders with regards to a comprehensive restructuring of the debt facility.
July
 9, 202
1 - NSNCo concluded a solicitation process 80% of the principal noteholders approving amendments to the indenture governing the Notes.
July
 23, 2021
- The Company entered into a Plan Support and
Lock-Up
Agreement with the Company, the Company Parties, certain Holders of Claims under the Company’s Credit Agreements, and Hemen.
July
 24, 2021
- The Company filed the first versions of the Joint Chapter 11 Plan of Reorganization and Disclosure Statement.
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.
August
 31, 2021
- The Company filed the First Amended Plan of Reorganization and the First Amended Disclosure Statement (the “
Disclosure Statement
”).
 
September
 2, 2021
- The Court approved the First Amended Disclosure Statement and the solicitation of the Plan of Reorganization.
October
 11, 2021
- The Company’s creditor classes voted to accept a court confirmed plan.
October
 26, 2021
- Seadrill’s Plan of Reorganization was confirmed by the U.S. Bankruptcy Court for the Southern District of Texas.
November
 2, 2021
– The sale of SeaMex to a subsidiary of NSNCo was completed.
Subsequent Events
January
 11, 2022
– NSNCo filed for a
pre-packaged
bankruptcy in a separate petition filing from Seadrill in the U.S. Bankruptcy Court for the Southern District of Texas.
January
 20, 2022
– Sale of 65% of NSNCo following emergence from its
pre-packaged
C
hapter 11 process.
February
 18, 2022
- Seadrill signed a short-term transition agreement with SFL, whereby Seadrill will continue to operate the
West Linus
until the rig is handed back to SFL.
February
 22, 2022
- Seadrill concluded its comprehensive restructuring process and emerged from Chapter 11 bankruptcy protection.
Other matters
 
i.
Liabilities subject to compromise
Liabilities subject to compromise distinguish
pre-petition
liabilities which may be affected by the Chapter 11 proceedings from those that will not. The liabilities held as subject to compromise are disclosed on a separate line on the consolidated balance sheet.
Liabilities subject to compromise, as presented on the Consolidated Balance Sheet as at December 31, 2021, include the following:
 
(In $ millions)
   
December 31, 2021
  
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,
Reorganizations. Contractual interest on liabilities subject to compromise not reflected in the Consolidated Statement of Operations was $298 million. Interest continued to be recognized on the Notes in 2021 as NSNCo did not file for chapter 11 until January 2022.
Refer to “Note 10 – Interest expense” to the Consolidated Financial Statements included herein for more information regarding interest expense.
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
December 31, 2021
  
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
” or “
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
intra-group receivables due to DIP from entities not in bankruptcy of $21 million and $9 million respectively;
 
  •  
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.
v3.22.4
Current expected credit losses
 12 Months Ended
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. The following table summarizes the movement in the allowance for credit losses for the year ended December 31, 2021.
 
(In $ millions)
   
Allowance
for credit
losses - other

current assets
     
Allowance
for credit
losses -
related party
ST
     
Allowance
for credit
losses related
party LT
     
Total
Allowance
for credit
losses
  
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
positions held and resulted in a
write-off
of $54 million of trading receivables.
(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
of $129 million of trading receivables and $3 million of reimbursement receivables.
The below table shows the classification of the credit loss expense within the Consolidated Statements of Operations.
 
(In $ millions)
   
Year ended
December

31, 2021
     
Year ended
December

31, 2020
  
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
of Northern Ocean and Aquadrill balances following settlement agreements. Refer to Note 27 – “Related party transactions” for details. There is no expected credit loss allowance on the SeaMex trade receivables and loan balances as they were expected to be settled shortly after emergence from Chapter 11. Both the trading and loan balances were fully settled in March 2022.
v3.22.4
Segment information
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Segment information
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
”) 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
: Includes contract revenues, management contract revenue, reimbursable revenue and associated expenses for harsh environment semi-submersible and jackup rigs.
 
  2.
Floaters
: Includes contract revenues, management contract revenue, reimbursable revenue and associated expenses for benign environment semi-submersible rigs and drillships.
 
  3.
Jackups
: Includes contract revenues, management contract revenue, reimbursable revenue and associated expenses for benign environment jackup rigs.
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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
                  
(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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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, 2021
     
December

31, 2020
  
    
(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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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, 2021
     
December

31, 2020
  
    
(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
December

31, 2021
    
Year ended
December

31, 2020
    
Year ended
December

31, 2019
  
         
(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
% 
     
 
 
    
 
 
    
 
 
  
v3.22.4
Revenue from contracts with customers
 12 Months Ended
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, contract assets and contract liabilities from our contracts with customers:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(As adjusted)
     
(As adjusted)
  
Accounts receivable, net
      158        110  
Current contract liabilities (deferred revenues)
(1)
      (25 )       (18 ) 
Non-current
contract liabilities (deferred revenues)
(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 changes in the contract assets and the contract liabilities balances during the year ended December 31, 2020 were as follows:
 
(In $ millions)
   
Contract
Assets
     
Contract
Liabilities
     
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
Assets
     
Contract
Liabilities
     
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
liabilities” is expected to be realized within the following twelve months. The deferred revenue consists primarily of mobilization and upgrade revenue for both wholly and partially unsatisfied performance obligations as well as expected variable mobilization and upgrade revenue for partially unsatisfied performance obligations, which has been estimated for purposes of allocating across the entire corresponding performance obligations.
v3.22.4
Other revenues
 12 Months Ended
Dec. 31, 2021
Revenues [Abstract]  
Other revenues
Note 8 – Other revenues
Other revenues consist of the following:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
and
West Tucana
to Gulfdrill, one of our related parties. Refer to Note 27 – “Related party transactions” for further details.
ii. Early termination fees
Early termination fees were received in 2021 for the
West Bollsta,
in 2020 for the
West Gemini
and in 2019
for the
West Jupiter
and
West Castor
.
 
v3.22.4
Other operating items
 12 Months Ended
Dec. 31, 2021
Other Operating Income (Loss) [Abstract]  
Other operating items
Note 9 – Other operating items
Other operating items consist of the following:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
was impaired by $152 million. Refer to Note 11 – “Loss on impairment of long-lived assets” for further details.
In 2020, we determined the global impact of the
COVID-19
pandemic, and continued down cycle in the offshore drilling industry, were indicators of impairment on certain assets. Following assessments of recoverability in March 2020 and December 2020, we recorded total impairment charges of $4,087 million against our drilling fleet.
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
Pre-petition
liabilities
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
of prepetition lease liabilities to Northern Ocean for the
West Bollsta
of $19 million and
pre-petition
liabilities to Aquadrill of $8 million following settlement agreements reached in 2021.
b) War risk insurance rebate
Receipt of $22 million distribution from The Norwegian Shipowners’ Mutual War Risks Insurance Association (“
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.
v3.22.4
Interest expense
 12 Months Ended
Dec. 31, 2021
Interest Expense [Abstract]  
Interest expense
Note 10 – Interest expense
Interest expense consists of the following:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
interest on our debt facilities. This is summarized in the table below.
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
of interest on our secured credit facilities that constituted an event of cross-default. The event of default resulted in the expense of unamortized debt discount of $86 million in 2020.
v3.22.4
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
pandemic resulted in expected decreases in utilization going forward and downward pressure on dayrates. We concluded that an impairment triggering event had occurred for our drilling unit fleet and, based on the results of further testing, recorded an impairment charge of $4.087 billion.
 
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
and
West Linus
have led us to conclude that an impairment triggering event has occurred for these two rigs.
During 2021, the undiscounted future net cash flows to be generated for Seadrill by the
West Hercules
and
West Linus
were revised due to anticipated changes in leasing arrangements that may result in the rigs being handed back to SFL before the end of their estimated useful lives. The revised undiscounted future net cash flows for the
West Hercules
were less than the rig’s carrying value meaning that the “step one” or “asset recoverability” test was failed for that rig. Following this assessment, we recorded an impairment charge of $152 million to reduce the rig’s book value to its estimated fair value, which we estimated using a discounted cash flow model. There was no impairment charge for the
West Linus
as it passed the asset recoverability test.
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.
v3.22.4
Taxation
 12 Months Ended
Dec. 31, 2021
Income Tax Disclosure [Abstract]  
Taxation
Note 12 – Taxation
Income taxes consist of the following:
 
(In $ millions)
   
Year ended
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
    
(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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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,
2021
     
December 31,
2020
  
    
(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,
2021
     
December 31,
2020
  
    
(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 forwards was $320 million (December 31, 2020: $240 million), which can be used to offset future taxable income. NOL carry forwards which were generated in various jurisdictions, include $234 million (December 31, 2020: $230 million) that will not expire and $86 million (December 31, 2020: $10 million) that will expire between 2022 and 2041 if not utilized.
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
Open Year
  
Kuwait
      2012  
Nigeria
      2014  
United States
      2018  
Mexico
      2011  
Norway
      2015  
Brazil
      2008  
v3.22.4
Loss per share
 12 Months Ended
Dec. 31, 2021
Earnings Per Share [Abstract]  
Loss per share
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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.
v3.22.4
Restricted cash
 12 Months Ended
Dec. 31, 2021
Restricted Cash and Investments [Abstract]  
Restricted cash
Note 14 – Restricted cash
Restricted cash consists of the following:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
           
(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)
Proceeds from rig disposals to be paid to the lenders in 2022 and classified as restricted until then.
 
(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
in the Consolidated Balance Sheet.
 
(iv)
Accounts pledged to SFL for lease arrangements for the
West Linus
and
West Hercules.
Restricted cash is presented in our Consolidated Balance Sheets as follows:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
           
(As adjusted)
  
Current restricted cash
      160        103  
Non-current
restricted cash
      63        65  
  
 
 
     
 
 
  
Total restricted cash
   
 
223
 
   
 
168
 
  
 
 
     
 
 
  
v3.22.4
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.
 
v3.22.4
Other assets
 12 Months Ended
Dec. 31, 2021
Other Assets [Abstract]  
Other assets
Note 16 – Other assets
As at December 31, 2021 and 2020, other assets included the following:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(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,
2021
     
December 31,
2020
  
    
(As adjusted)
     
(As adjusted)
  
Other current assets
      197        187  
Other
non-current
assets
      27        45  
  
 
 
     
 
 
  
Total other assets
   
 
224
 
   
 
232
 
  
 
 
     
 
 
  
v3.22.4
Investment in associated companies
 12 Months Ended
Dec. 31, 2021
Equity Method Investments and Joint Ventures [Abstract]  
Investment in associated companies
Note 17 – Investment in associated companies
We have the following investments in associated companies:
 
Ownership percentage
   
Joint venture partner
   
December 31,
2021
    
December 31,
2020
  
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”)
. We lease three of our jackup rigs to the joint venture, with an additional two units being leased from a third party shipyard.
 
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”)
. Both Seadrill and Sonangol agreed to bareboat two units each into the joint venture with Seadrill due to manage the two Sonangol owned drillships. On October 1, 2019, the first bareboat and management agreements for the Sonangol drilling unit,
Libongos
, became effective. The rig commenced its first drilling contract on October 10, 2019. The
Libongos,
is
currently operating in Angola, while the
Quenguela
is contracted to start with Total in early 2022. The two committed Seadrill rigs will be leased to the joint venture when required; to date no further contracts have been secured for these rigs.
Share in results from associated companies
Our share in results of our associated companies (net of tax) were as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
           
(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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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,
2021
     
December 31,
2020
  
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,
2021
    
December 31,
2020
  
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,
2021
    
December 31,
2020
  
Current assets
      120       67  
Non-current
assets
      173       102  
Current liabilities
      (182 )      (135 ) 
Non-current
liabilities
      (113 )      (31 ) 
  
 
 
    
 
 
  
Net (liabilities)/assets
   
 
(2
) 
  
 
3
 
Seadrill ownership percentage
      50 %      50 % 
  
 
 
    
 
 
  
Book value of Seadrill investment
   
 
—  
 
  
 
2
 
  
 
 
    
 
 
  
v3.22.4
Drilling units
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Drilling units
Note 18 – Drilling units
Changes in drilling units for the periods presented in this report were as follows:
 
(In $ millions)
   
Cost
     
Accumulated
depreciation
     
Net book
value
  
    
(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
was amended such that the rig was derecognized from drilling units and replaced with a right of use asset within other assets.
v3.22.4
Equipment
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Equipment
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
depreciation
     
Net book
value
  
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
 
  
 
 
     
 
 
     
 
 
  
v3.22.4
Debt
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Debt
Note 20 – Debt
As at December 31, 2021 and 2020, we had the following liabilities for third party debt agreements:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(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
—“Chapter 11 Proceedings”.
v3.22.4
Other liabilities
 12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]  
Other liabilities
Note 21 – Other liabilities
As at December 31, 2021 and December 31, 2020, other liabilities included the following:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(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,
2021
     
December 31,
2020
  
    
(As adjusted)
     
(As adjusted)
  
Other current liabilities
      219        277  
Other
non-current
liabilities
      112        120  
  
 
 
     
 
 
  
Total Other Liabilities
   
 
331
 
   
 
397
 
  
 
 
     
 
 
  
v3.22.4
Leases
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Leases
Note 22—Leases
As of December 31, 2021, we held operating leases for both the
West Bollsta
and
West Hercules
. As of December 31, 2021, the negotiations over the
West Linus
lease amendment had not been concluded yet. Therefore, we still maintain the rig asset on balance sheet along with the finance liability to SFL (held in liabilities subject to compromise). We also have operating leases relating to our premises, the most significant being our offices in London, Liverpool, Oslo, Stavanger, Singapore, Houston, Rio de Janeiro and Dubai. In accordance with Topic 842, we record lease liabilities and associated
right-of-use
assets for our portfolio of operating leases.
We continue to lease three of our benign environment jackup rigs,
West Castor, West Telesto
and
West Tucana,
to our joint venture, Gulfdrill, for a contract with GDI in Qatar.
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
rig from Northern Ocean. The rig was mobilized and commenced operations in early October after being available at the drill location in September, 2020. This operating lease arrangement resulted in the recognition of a lease liability and offsetting right of use asset. During 2021, the charter was amended to cancel the drilling of the 10th well, resulting in an early termination fee of $6 million and
right-of-use
asset impairment charge of $10 million being recorded.
Seadrill entered into sale and leaseback arrangements for the
West Hercules
semi-submersible rig with SFL Hercules Ltd in 2008, the
West Linus
Jack-up
rig with SFL Linus Ltd in 2014, and the
West Taurus
semi-submersible rig with SFL Deepwater Ltd (
“Deepwater”
) in 2008, all wholly owned subsidiaries of SFL Corporation Ltd (
“SFL”
), a related party.
The
West Taurus
lease was terminated in March 2021 and the
West Taurus
was delivered back to SFL on May 6, 2021.
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
obligation, that previously resulted in the failed sale and lease back treatment, was removed in this amendment, resulting in a deemed disposal of the
West Hercules
. Seadrill is leasing the
West Hercules
from SFL under an operating lease until the end of the Canada contract. The lease is expected to end in October 2022. Refer to Note 27 – “Related party transactions” for further information.
 
Seadrill leases and operates the
West Linus
on a drilling contract with ConocoPhillips, the term of which were expected to end in December, 2028. The existing lease with SFL is not considered sustainable as part of the new capital structure. Chapter 11 affords Seadrill the option to reject or renegotiate this lease on more economically viable terms. On February 18, 2022, subsequent to
year-end,
Seadrill entered an interim transition charter with SFL, which will see Seadrill continuing to operate the
West Linus
until the rig is delivered back to SFL. The amendment is expected to result in the recognition of a short-term operating lease and the removal of the buyback obligation is expected to result in a deemed disposal of the
West Linus.
For operating leases where we are the lessee, our future undiscounted cash flows are as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
  
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
December 31,
2021
     
Year ended
December 31,
2020
  
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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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- Operating Cash flows
      42       21       13  
Right-of-use
assets obtained in exchange for operating lease liabilities during the period
      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
and
West Tucana
to Gulfdrill. The estimated future undiscounted cash flows on these leases are as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
  
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.
v3.22.4
Common shares
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Common shares
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
capital $0.10 par value each
  
    
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,
the Board of Directors is authorized to issue any of the authorized but unissued common shares. There are no limitations on the right of
non-Bermudians
or
non-residents
of Bermuda to hold or vote in the Company’s common shares.
Holders of common shares have no
pre-emptive,
redemption, conversion or sinking fund rights. Holders of common shares are entitled to one vote per common share on all matters submitted to a vote of holders of common shares. Unless a different majority is required by law or the
Bye-Laws,
resolutions to be approved by holders of common shares require the approval by an ordinary resolution (being a resolution approved by a simple majority of votes cast at a general meeting at which a quorum is present). Under the
Bye-Laws,
each common share is entitled to dividends if, as and when dividends are declared by the Board of Directors, subject to any preferred dividend right of the holders of any preference shares.
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.
v3.22.4
Accumulated other comprehensive income/(loss)
 12 Months Ended
Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Accumulated other comprehensive income/(loss)
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
gain/(loss)
relating to
pension
     
Share in
unrealized

losses from
associated
companies
     
Change in
debt
component
on Archer
facility
     
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
) 
  
 
 
     
 
 
     
 
 
     
 
 
  
v3.22.4
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
”) plans in the Consolidated Statements of Operations are as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
compensatory cash payment to holders of performance share unit and restricted share unit awards that had been granted under our company incentive plans that amounted to $0.5 million. On cancellation of the schemes the remaining charge relating to the unvested awards have been 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.
v3.22.4
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
pension at 62 years of age.
 
Consolidated Balance Sheet position
Net defined benefit pension asset/(obligation) is as follows:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
Defined benefit
obligation—Non-current
liabilities
      (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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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,
2021
     
December 31,
2020
  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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,
2021
     
December 31,
2020
     
December 31,
2019
  
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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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,
2021
    
December 31,
2020
  
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 1, 2020 the company terminated two 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,
2021
  
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.
v3.22.4
Related party transactions
 12 Months Ended
Dec. 31, 2021
Related Party Transactions [Abstract]  
Related party transactions
Note 27 – Related party transactions
Prior to emerging from Chapter 11 on February 22, 2022, our main related parties included (i) affiliated companies over which we held significant influence, (ii) affiliated companies and (iii) 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 will substantially decrease and companies who were either controlled by or whose policies were significantly influenced by Hemen will no longer be related parties.
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
           
(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
or dayrate basis.
(b)
We recognized reimbursable revenues from Northern Ocean for work performed to mobilize the Northern Ocean rigs
West Mira
and
West Bollsta
, as well as from Sonangol relating to preparation costs for the
Quenguela
contract commencing in January 2022. Following the cancellation of the Wintershall contract, a settlement agreement has been signed with Northern Ocean extinguishing all outstanding claims. In December
 
2021, the agreement became effective and the CECL provision of $138 million was written 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
and
West Tucana
to Gulfdrill.
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
West Bollsta
lease
(d)
      57        10        —    
West Hercules
lease
(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
rig from Northern Ocean in 2020. Refer to Note 22
—
“Leases” for details.
(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,
2021
     
December 31,
2020
  
           
(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 - current
      28        85  
Amounts due from related parties -
non-current
      —          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
US LIBOR.
(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
December 31,
2021
     
Year ended
December 31,
2020
  
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
- Measurement of Credit Losses on Financial Instruments. Refer to Note 5
–
“Current expected credit losses” for details.
 
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,
2021
     
December 31,
2020
  
Liabilities from Seadrill to SFL
(k)
      503        426  
Trading balances
(l)
      —          7  
  
 
 
     
 
 
  
Total related party liabilities
   
 
503
 
   
 
433
 
  
 
 
     
 
 
  
Of which:
      
Amounts due to related parties - current
      —          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,
2021
     
December 31,
2020
  
West Taurus
lease liability
      345        147  
West Linus
lease liability
      158        142  
West Hercules
lease liability
      —          137  
  
 
 
     
 
 
  
Total lease liabilities to SFL
   
 
503
 
   
 
426
 
The lease on the
West Taurus
was rejected through the bankruptcy court which resulted in a remeasurement of the liability to its expected claim value, which will be extinguished on emergence from
C
hapter 11.
The
West Hercules
and
West Linus
leases were modified in August 2021 and February 2022 respectively, with the associated liabilities being derecognized at the point of lease amendment. See Note 34 – Subsequent events for more details on the
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
positions held were waived.
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.
v3.22.4
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
by such counterparties. However, we have established an allowance on our loans and trade receivables due from related parties reflecting their current financial position, lower credit rating and overdue balances.
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 assumptions. It is our policy to enter into master netting agreements with the counterparties to derivative financial instrument contracts, which give us the legal right to discharge all or a portion of amounts owed to a counterparty by offsetting them against amounts that the counterparty owes to us.
 
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
US LIBOR is 2.87% and covers the period from June 15, 2018 to June 15, 2023. The
3-month
LIBOR rate as at December 31, 2021 was 0.209%
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
US LIBOR.
v3.22.4
Fair values of financial instruments
 12 Months Ended
Dec. 31, 2021
Fair Value Disclosures [Abstract]  
Fair values of financial instruments
Note 29 - Fair values 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 December 31, 2021 and December 31, 2020 are as follows:
 
    
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- Secured credit facilities (
Level 3)
      1,966        5,544        922        5,545  
Liability subject to compromise - Related Party Loans Payable
(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. The fair values were derived using a combination of discounted cash flow model of future free cash flows using a weighted average cost of capital of
17.0% and the market approach from each rig. 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
was derived using the court approved maximum cash settlement amount of $0.25 million. For the
West Linus
the fair value was derived using a discounted cash flow model of future free cash flows based on the contractual cash flows under the bareboat charter agreement together with the LIBOR linked interest payments, as well as assumed cash outflows under the mandatory repurchase obligation at the end of the lease term. These cash flows were discounted using the weighted average cost of capital of 10%. As at December 31, 2020 the fair value was derived using a discounted cash flow model of future free cash flows based on the contractual cash flows under the bareboat charter agreement together with the LIBOR linked interest payments, as well as assumed cash outflows under the mandatory repurchase obligation at the end of the lease term. These cash flows were discounted using the Senior Secured Note yield of 37%. We have categorized this at level 3 on the fair value hierarchy. Refer to 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.
v3.22.4
Commitments and contingencies
 12 Months Ended
Dec. 31, 2021
Commitments and Contingencies Disclosure [Abstract]  
Commitments and contingencies
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
and other claims and commercial disputes arising from the construction or operation of our drilling units, in the ordinary course of business or in connection with our acquisition or disposal activities. We believe that the resolution of such claims will not have a material impact, individually or in the aggregate, on our operations or financial results. Our best estimate of the outcome of the various disputes has been reflected in our Consolidated Financial Statements as at December 31, 2021.
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
along with other defendants including Oro Negro bondholders. With respect to Seadrill, the complaint asserts claims relating to alleged tortious interference but does not seek to quantify damages. On August 25, 2019, Seadrill submitted a motion to dismiss the complaint on technical legal grounds. Oro Negro responded to this motion on October 25, 2019. The Company has the opportunity to reply to this in further support of the motion, the date of which has not yet been determined. Seadrill intends to vigorously defend against the claims Oro Negro asserts and dispute the allegations set forth in the complaint. The proceedings have been stayed since March 2020. On August 6, 2021 the United States Bankruptcy Court was notified that the auction of Oro Negro’s assets was approved by the Mexican Concurso court.
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
(an Aquadrill rig) and the
West Saturn
and
West Jupiter
(Seadrill rigs). On June 28, 2019, the Federal High Court of Nigeria delivered a judgement finding that: (1) Drilling operations fall within the definition of “Coastal Trade” or “Cabotage” under the Act and (2) Drilling Rigs fall within the definition of “Vessels” under the Cabotage Act. The impact of this decision is that the Nigerian Maritime Administration and Safety Agency (“
NIMASA
”) may impose a 2% surcharge on contract revenue from offshore drilling operations in Nigeria, as well as requiring SMUNL register for Cabotage with NIMASA and pay all fees and
 
tariffs as may be published in the guidelines that may be issued by the Minister of Transportation in accordance with the Cabotage Act. However, on July 22, 2019, SMUNL filed an appeal to the Court of Appeal challenging the decision of the Federal High Court. Due to the volume of cases currently being handled by the Court of Appeal sitting in Lagos the Group anticipate a decision within
3-5
years.
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,
2021
     
December 31,
2020
  
           
(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.
v3.22.4
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
investing and financing activities relating to the periods presented:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
Non-cash
investing activities
         
Proceeds from sale of
West Epsilon
rig
(1)
      —          12        —    
Non-cash
financing activities
         
Repayment of debt following sale of
West Epsilon
rig
(1)
      —          (12 )       —    
 
(1)
During September 2020, the
West Epsilon
was sold for net proceeds of $12 million. The proceeds were paid directly to the banks as an early repayment against our external debt.
v3.22.4
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
”) to sell the assets of SeaMex out of provisional liquidation to a newly incorporated wholly owned subsidiary of NSNCo in return for the extinguishment of $0.4 billion of the various forms of debt instruments owed to NSNCo, gross of expected credit loss allowances previously recognized totaling $65 million. On November 2, 2021 the SPA closed and NSNCo obtained the remaining 50% equity interest in SeaMex, resulting in the consolidation of SeaMex into NSNCo in a business combination.
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 at acquisition
  
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, 2021
until December 31, 2021
  
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
items
   
Interest expense
      (4 ) 
Others
      (1 ) 
  
 
 
  
Total financial items
   
 
(5
) 
  
 
 
  
Income before tax
   
 
4
 
  
 
 
  
Income tax benefit
      2  
  
 
 
  
Income after tax
   
 
6
 
  
 
 
  
v3.22.4
Assets and Liabilities Held for Sale/Discontinued Operations
 12 Months Ended
Dec. 31, 2021
Discontinued Operations and Disposal Groups [Abstract]  
Assets and Liabilities Held for Sale/Discontinued Operations
Note 33 - Assets and Liabilities Held for Sale/ Discontinued Operations
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
the sale of the entities that own and operate seven jackup units (the
“Jackup Sale
”) in the Kingdom of Saudi Arabia (the “
KSA Business
”). The sale represented a strategic shift in Seadrill’s operations which will have a major effect on its operations and financial results going forward and therefore we have reclassified the KSA Business as a discontinued operation and its results have been reported separately from Seadrill’s continuing operations for both the current and comparative periods. In addition, the assets and liabilities of the KSA Business were reclassified as held for sale as of September 1, 2022. We ceased all depreciation and amortization of held for sale
non-current
assets at the point they qualified as held for sale.
On October 18, 2022, the Jackup Sale closed and the rigs
AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida
, and
West Leda
are now owned by ADES. ADES employs the crews operating the rigs and holds the drilling contract related to the rigs. The consideration for the Jackup Sale was $670 million, comprising initial consideration of $628 million and reimbursements to Seadrill of $50 million for estimated working capital and project costs spent, at the time of closing, in relation to the reactivation of the three stacked jackups: the
West Ariel
,
West Cressida
and
West Leda
, less $8 million held in escrow until completion of these rig reactivation projects. The consideration is subject to any further adjustment for working capital, project costs, and other items. We have determined an accounting gain on disposal of $276 million, subject to final post-closing adjustments.
 
Disposal of 65% interest in Seadrill New Finance Limited
As set out in “Note 4 - Chapter 11 proceedings”, 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 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
Sale
     
Total
     
NSNCo
     
Jackup
Sale
     
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
December 31,
2021
 
  
 
 
  
Year ended
December 31,
2020
 
  
 
 
  
Year ended
December 31,
2019
 
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
December 31,
2021
     
As at
December 31,
2020
  
Carrying amounts of major classes of assets included as part of discontinued operations
                  
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 operations
                  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
items
                           
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 December 31,
2021
     
As at December 31,
2020
  
Carrying amounts of major classes of assets included as part of discontinued operations
                  
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 operations
                  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
items
                           
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—
In November 2012, a subsidiary of Seabras Sapura Participações S.A. entered into a $179 million senior secured credit facility agreement in order to part fund the acquisition of the Sapura Esmeralda pipe-laying support vessel, with a maturity in 2032. During 2013 an additional facility of $36 million was entered into, but this facility matured in 2020. As a condition to the lenders making the loan available, a subsidiary of Seadrill has provided a sponsor guarantee, on a joint and several basis with the joint venture partner, Sapura Energy, in respect of the obligations of the borrower. The total amount guaranteed by the joint venture partners as at December 31, 2021 was $127 million (December 31, 2020: $132 million).
v3.22.4
Subsequent Events
 12 Months Ended
Dec. 31, 2021
Subsequent Events [Abstract]  
Subsequent Events
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 $5,662 million to $683 million and raised an additional $350 million of liquidity through issuance of new debt. In addition, future obligations under finance lease arrangements in respect of the West Taurus, West Hercules and West Linus were substantially eliminated.
Please see “Note 4 - Chapter 11” for further details.
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
bankruptcy that was heard on January 12, 2022 in a separate petition filing from Seadrill in U.S. Bankruptcy Court for the Southern District of Texas. NSNCo, soon to be Paratus Energy Services, emerged from their Chapter 11 on January 20, 2022. As a result, NSNCo’s net assets, which had a book value of $155 million as at December 31, 2021, and are shown within the
held-for-sale
line items, were
de-recognized
and replaced with an equity method investment, representing the 35% retained interest. We anticipate that this will lead to an accounting loss on disposal to be recorded by Seadrill in its first quarter 2022 financial statements. We are still evaluating what the accounting loss will be.
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
rig will be delivered back to SFL upon assignment of the ConocoPhilips drilling contract to SFL. Seadrill has been leasing the harsh environment jackup rig,
West Linus
, from SFL, which had been accounted for as a failed sale leaseback due to contractual purchase obligations in the original charter, resulting in Seadrill recognizing the rig asset on its balance sheet and fair value of the liability to SFL for future bareboat payments within LSTC. The Chapter 11 Proceedings afforded Seadrill the option to reject or amend the lease.
The interim transition bareboat agreement with SFL will see Seadrill continuing to operate the
West Linus
until the rig is handed back to SFL and a new Manager, Odfjell, for a period of time estimated to last approximately 6 to 9 months from Seadrill’s emergence. The amendment charter no longer contains a purchase obligation and will therefore result in the
de-recognition
of the rig asset of $175 million and liability of $158 million at emergence from Chapter 11 on February 22, 2022. The interim transition bareboat agreement will be accounted for as a short-term operating lease.
Rig disposals
The
West Venture
was sold for scrapping to Rota Shipping Inc. for $7 million on January 19, 2022. As the rig was fully impaired the total consideration, less any costs to sell, will be recognized as a gain on disposal.
The
Sevan Driller
and the
Sevan Brasil
were sold to New Fortress Energy for $18 million and $6 million respectively on April 7,
2022.
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
, 2023, the date the financial statements were available to be reissued.
Rig reactivations
Seadrill has commenced reactivation of five previously cold-stacked drilling units. Reactivation of the drillships
West Carina
and
West Jupiter
commenced in December 2021 and February 2022 respectively, with reactivation of the jackup rigs
West Ariel, West Leda,
and
West Cressida
commencing in April 2022.
 
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
the sale of the entities that own and operate seven jackup units (the
“Jackup Sale
”) in the Kingdom of Saudi Arabia (the “
KSA Business
”). The sale represented a strategic shift in Seadrill’s operations which will have a major effect on its operations and financial results going forward and therefore we have reclassified the KSA Business as a discontinued operation and its results have been reported separately from Seadrill’s continuing operations for both the current and comparative periods. In addition, the assets and liabilities of the KSA Business were reclassified as held for sale as of September 1, 2022. We ceased all depreciation and amortization of held for sale
non-current
assets at the point they qualified as held for sale.
On October 18, 2022, the Jackup Sale closed and the rigs
AOD I, AOD II, AOD III, West Callisto, West Ariel, West Cressida
, and
West Leda
are now owned by ADES. ADES employs the crews operating the rigs and holds the drilling contract related to the rigs. The consideration for the Jackup Sale was $670 million, comprising initial consideration of $628 million and reimbursements to Seadrill of $50 million for estimated working capital and project costs spent, at the time of closing, in relation to the reactivation of the three stacked jackups: the
West Ariel
,
West Cressida
and
West Leda
, less $8 million held in escrow until completion of these rig reactivation projects. The consideration is subject to any further adjustment for working capital, project costs, and other items. We have determined an accounting gain on disposal of $276 million, subject to final post-closing
 
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
”) (formerly Seadrill New Finance Limited) and certain other interests (the “
PES Sale
”). PES is the entity through which investments in the SeaMex Group, Seabras Sapura, and Archer Ltd are held. The sale closed on February 24, 2023, following the satisfaction of customary closing conditions, including the approval of competition authorities in relevant jurisdictions.
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.
v3.22.4
Accounting policies (Policies)
 12 Months Ended
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 (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 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 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
these estimates each reporting period as required.
Refer to Note 7—“Revenue from contracts with customers”.
Dayrate drilling revenue
- Our drilling contracts generally provide for payment on a dayrate basis, with higher rates for periods when the drilling unit is operating and lower rates or zero rates for periods when drilling operations are interrupted or restricted. The dayrate invoices billed to the customer are typically determined based on the varying rates applicable to the specific activities performed on an hourly basis. Such dayrate consideration is allocated to the distinct hourly incremental service it relates to. Revenue is recognized in line with the contractual rate billed for the services provided for any given hour.
Mobilization revenue
- We may receive fees (on either a fixed
lump-sum
or variable dayrate basis) for the mobilization of our rigs. These activities are not considered to be distinct within the context of the contract. The associated revenue is allocated to the overall performance obligation and recognized ratably over the expected term of the related drilling contract. We record a contract liability for mobilization fees received, which is amortized ratably to contract drilling revenue as services are rendered over the initial term of the related drilling contract.
Demobilization revenue
- We may receive fees (on either a fixed
lump-sum
or variable dayrate basis) for the demobilization of our rigs. Demobilization revenue expected to be received upon contract completion is estimated as part of the overall transaction price at contract inception and recognized over the term of the contract. In most of our contracts, there is uncertainty as to the likelihood and amount of expected demobilization revenue to be received. For example, the amount may vary dependent upon whether or not the rig has additional contracted work following the contract. Therefore, the estimate for such revenue may be constrained, as described above, depending on the facts and circumstances pertaining to the specific contract. We assess the likelihood of receiving such revenue based on past experience and knowledge of the market conditions.
Revenues related to reimbursable expenses
—We generally receive reimbursements from our customers for the purchase of supplies, equipment, personnel services and other services provided at their request in accordance with a drilling contract or other agreement. Such reimbursable revenue is variable and subject to uncertainty, as the amounts received and timing thereof are highly dependent on factors outside of our influence. Accordingly, reimbursable revenue is fully constrained and not included in the total transaction price until the uncertainty is resolved, which typically occurs when the related costs are incurred on behalf of a customer. We are generally considered a principal in such transactions and record the associated revenue at the gross amount billed to the customer, at a point in time, as “Reimbursable revenues” in our Consolidated Statements of Operations.
Local taxes
- In some countries, the local government or taxing authority may assess taxes on our revenues. Such taxes may include sales taxes, use taxes, value-added taxes, gross receipts taxes and excise taxes. We generally record
tax-assessed
revenue transactions on a net basis.
Deferred contract expenses
- Certain direct and incremental costs incurred for upfront preparation, initial mobilization and modifications of contracted rigs represent costs of fulfilling a contract as they relate directly to a contract, enhance resources that will be used in satisfying our performance obligations in the future and are expected to be recovered. Such costs are deferred and amortized ratably to contract drilling expense as services are rendered over the initial term of the related drilling contract.
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.
Management contract revenues and Other revenues
Management contract revenues
Management fees -
Revenues related to operation support and management services provided to Aquadrill (formerly Seadrill Partners), SeaMex, Sonadrill, and Northern Ocean. This includes both related and
non-related
companies.
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
- Other revenues also include amounts recognized as early termination fees under drilling contracts which have been terminated prior to the contract end date. Contract termination fees are recognized daily as and when any contingencies or uncertainties are resolved.
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
process. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates that it is more likely than not that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely of being realized upon settlement. While we believe we have appropriate support for the positions taken on our tax returns, we regularly assess the potential outcomes of examinations by tax authorities in determining the adequacy of our provision for income taxes.
 
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
exchange rate. Foreign currency translation gains or losses on consolidation are recorded as a separate component of other comprehensive income in shareholders’ equity.
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 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
basis and considered the financial condition of the customer as well as specific circumstances related to the receivable such as customer disputes.
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”
model, calculated by multiplying the exposure at default by the probability of default by the loss given default by a risk overlay multiplier over the life of the financial instrument (as defined by ASU
2016-13).
Our critical judgements relate to internal credit ratings and maturities used to determine probability of default, the subordination of debt to determine loss given default and the performance status of the receivable that can impact any management overlay. We determine management risk overlay based on management assessment of defaults, overdue amounts and other observable events that provide information on collection. Our internal credit ratings are based on the Moody’s scorecard approach (based on several quantitative and qualitative factors) and our approach relies on statistical data from Moody’s ‘Default and Ratings Analytics’ to derive the expected credit loss. We monitor the credit quality of receivables by
re-assessing
credit ratings, assumed maturities and
probability-of-default
on a quarterly basis. Due to the inherent uncertainty around these judgmental areas, it is at least reasonably possible that a material change in the CECL allowance can occur in the near term. We grouped financial assets with similar risk characteristics based on their contractual terms, historical credit loss pattern, internal and external credit ratings, maturity, collateral type, past due status and other relevant factors.
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
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
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”
model to that of Seadrill’s. Refer to Allowance for Credit Losses section above.
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
over the period the awards are expected to vest. The expense was classified as compensation cost and recognized ratably over the period during which the individuals are required to provide service in exchange for the reward.
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
liabilities”. If it becomes probable that we will have to perform under a guarantee, we remeasure the liability if the amount of the loss can be reasonably estimated. The recognition of fair value is not required for certain guarantees such as the parent’s guarantee of a subsidiary’s debt to a third party. Financial guarantees written are assessed for credit losses and any allowance is presented as a liability for
off-balance
sheet credit exposures where the balance exceeds the collateral provided over the remaining instrument life. The allowance is assessed at the individual guarantee level, calculated by multiplying the balance exposed on default by the probability of default and loss given default over the term of the guarantee.
Recently adopted and issued accounting standards
1) Recently adopted accounting standards
We recently adopted the following accounting standard updates (“
ASUs
”):
a) ASU
2019-12
Income Taxes (Topic 740): Simplifying the accounting for income taxes
In December 2019, the FASB issued ASU
2019-12.
The amendments in this Update simplify the accounting for income taxes by removing certain exceptions to the general principles in Topic 740. The amendments also improve consistent application of and simplify GAAP for other areas of Topic 740 by clarifying and amending existing guidance. We adopted ASU
2019-12
effective January 1, 2021. The adoption of this guidance did not have a material impact on our consolidated financial statements.
 
b) ASU
2021-08
Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers
We early adopted ASU
2021-08
effective July 1, 2021. 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. This did not have a material impact on our financial statements.
c) ASU
2016-13
- Financial Instruments - Measurement of Credit Losses
(Also
2018-19,
2019-04
and
2019-11)
In June 2016, the Financial Accounting Standards Board (the “FASB”) issued ASU
2016-13
Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments and subsequent amendments, including ASU
2018-19,
ASU
2019-04
and ASU
2019-11:
Codification Improvements to Topic 326 “Financial Instruments-Credit Losses”. Topic 326 replaces the incurred loss impairment methodology (that recognizes losses when a probable threshold is met) with a requirement to recognize lifetime expected credit losses (measured over the contractual life of the instrument) immediately, based on information about past events, current conditions and forecasts of future economic conditions. Under the CECL measurement financial assets are reflected at the net amount expected to be collected from the financial asset, CECL measurement is applicable to financial assets measured at amortized cost as well as
off-balance
sheet credit exposures not accounted for as insurance (including financial guarantees).
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
sheet exposures) and the net balance shown on the Consolidated Balance Sheet with associated credit loss expense in the Consolidated Statement of Operations.
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
- Clarifying the interactions between Topic 321, Topic 323 and Topic 815
 
 
•
  
ASU
2020-08
- Codification Improvements to Subtopic
310-20,
Receivables—Nonrefundable Fees and Other Costs
 
 
•
  
ASU 2020-9 - Debt (Topic 470): Amendments to SEC Paragraphs Pursuant to SEC Release No. 33-10762 
 
 
•
  
ASU
2020-10
- Codification Improvements
 
 
•
  
ASU
2020-11
- Financial Services—Insurance (Topic 944): Effective Date and Early Application
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
Reference Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting
In March 2020, the FASB issued ASU
2020-04.
The amendments provide temporary optional expedients and exceptions for applying U.S. GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform if certain criteria are met. The applicable expedients for us are in relation to modifications of contracts within the scope of Topics 310, Receivables, 470, Debt, and 842, Leases. This optional guidance may be applied prospectively from any date beginning March 12, 2020 and cannot be applied to contract modifications that occur after December 31, 2022. We are in the process of evaluating the impact of this standard update on our consolidated financial statements and related disclosures.
b) ASU
2021-04
Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options
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
Leases (Topic 842) Lessors-Certain Leases with Variable Lease Payments
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
Government Assistance (Topic 832): Disclosures by Business Entities about Government Assistance.
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.
v3.22.4
Chapter 11 (Tables)
 12 Months Ended
Dec. 31, 2021
Reorganizations [Abstract]  
Schedule of debt maturities
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
thereafter
     
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
interest, as further outlined in the existing facility section above.
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
conversion of
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
% 
    
 
 
     
 
 
    
 
 
  
Liabilities subject to compromise
Liabilities subject to compromise, as presented on the Consolidated Balance Sheet as at December 31, 2021, include the following:
 
(In $ millions)
   
December 31, 2021
  
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
December 31, 2021
  
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 ) 
    
 
 
  
v3.22.4
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
for credit
losses - other

current assets
     
Allowance
for credit
losses -
related party
ST
     
Allowance
for credit
losses related
party LT
     
Total
Allowance
for credit
losses
  
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
positions held and resulted in a
write-off
of $54 million of trading receivables.
(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
of $129 million of trading receivables and $3 million of reimbursement receivables.
The below table shows the classification of the credit loss expense within the Consolidated Statements of Operations.
 
(In $ millions)
   
Year ended
December

31, 2021
     
Year ended
December

31, 2020
  
Management contract expenses
      36        142  
Other financial items
      (2 )       2  
  
 
 
     
 
 
  
Total
   
 
34
 
   
 
144
 
  
 
 
     
 
 
  
v3.22.4
Segment information (Tables)
 12 Months Ended
Dec. 31, 2021
Segment Reporting [Abstract]  
Schedule of segment results
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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
                  
(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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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, 2021
     
December

31, 2020
  
    
(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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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
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
December

31, 2021
     
Year ended
December

31, 2020
     
Year ended
December

31, 2019
  
    
(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, 2021
     
December

31, 2020
  
    
(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
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
December

31, 2021
    
Year ended
December

31, 2020
    
Year ended
December

31, 2019
  
         
(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
% 
     
 
 
    
 
 
    
 
 
  
v3.22.4
Revenue from contracts with customers (Tables)
 12 Months Ended
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, contract assets and contract liabilities from our contracts with customers:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(As adjusted)
     
(As adjusted)
  
Accounts receivable, net
      158        110  
Current contract liabilities (deferred revenues)
(1)
      (25 )       (18 ) 
Non-current
contract liabilities (deferred revenues)
(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 changes in the contract assets and the contract liabilities balances during the year ended December 31, 2020 were as follows:
 
(In $ millions)
   
Contract
Assets
     
Contract
Liabilities
     
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
Assets
     
Contract
Liabilities
     
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
) 
  
 
 
     
 
 
     
 
 
  
v3.22.4
Other revenues (Tables)
 12 Months Ended
Dec. 31, 2021
Revenues [Abstract]  
Other revenues
Other revenues consist of the following:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
Leasing revenues
(i)
      26        19        1  
Early termination fees
(ii)
      6        11        11  
  
 
 
     
 
 
     
 
 
  
Total other revenues
   
 
32
 
   
 
30
 
   
 
12
 
  
 
 
     
 
 
     
 
 
  
v3.22.4
Other operating items (Tables)
 12 Months Ended
Dec. 31, 2021
Other Income and Expenses [Abstract]  
Other operating items
Other operating items consist of the following:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
Pre-petition
liabilities
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
 
  
 
 
     
 
 
     
 
 
  
v3.22.4
Interest expense (Tables)
 12 Months Ended
Dec. 31, 2021
Interest Expense [Abstract]  
Summary of interest expense
Interest expense consists of the following:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
interest on our debt facilities. This is summarized in the table below.
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
) 
  
 
 
     
 
 
     
 
 
  
v3.22.4
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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
    
(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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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,
2021
     
December 31,
2020
  
    
(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,
2021
     
December 31,
2020
  
    
(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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
Open Year
  
Kuwait
      2012  
Nigeria
      2014  
United States
      2018  
Mexico
      2011  
Norway
      2015  
Brazil
      2008  
v3.22.4
Loss per share (Tables)
 12 Months Ended
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 LPS are as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
    
(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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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 ) 
v3.22.4
Restricted cash (Tables)
 12 Months Ended
Dec. 31, 2021
Restricted Cash and Investments [Abstract]  
Schedule of restricted cash
Restricted cash consists of the following:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
           
(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)
Proceeds from rig disposals to be paid to the lenders in 2022 and classified as restricted until then.
 
(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
in the Consolidated Balance Sheet.
 
(iv)
Accounts pledged to SFL for lease arrangements for the
West Linus
and
West Hercules.
Restricted cash is presented in our Consolidated Balance Sheets as follows:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
           
(As adjusted)
  
Current restricted cash
      160        103  
Non-current
restricted cash
      63        65  
  
 
 
     
 
 
  
Total restricted cash
   
 
223
 
   
 
168
 
  
 
 
     
 
 
  
v3.22.4
Other assets (Tables)
 12 Months Ended
Dec. 31, 2021
Other Assets [Abstract]  
Schedule of other assets
As at December 31, 2021 and 2020, other assets included the following:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(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,
2021
     
December 31,
2020
  
    
(As adjusted)
     
(As adjusted)
  
Other current assets
      197        187  
Other
non-current
assets
      27        45  
  
 
 
     
 
 
  
Total other assets
   
 
224
 
   
 
232
 
  
 
 
     
 
 
  
v3.22.4
Investment in associated companies (Tables)
 12 Months Ended
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,
2021
    
December 31,
2020
  
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,
2021
     
December 31,
2020
  
Sonadrill
      27        22  
Gulfdrill
      —          2  
  
 
 
     
 
 
  
Total
   
 
27
 
   
 
24
 
  
 
 
     
 
 
  
Share in results from associated companies
Our share in results of our associated companies (net of tax) were as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
           
(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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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,
2021
    
December 31,
2020
  
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,
2021
    
December 31,
2020
  
Current assets
      120       67  
Non-current
assets
      173       102  
Current liabilities
      (182 )      (135 ) 
Non-current
liabilities
      (113 )      (31 ) 
  
 
 
    
 
 
  
Net (liabilities)/assets
   
 
(2
) 
  
 
3
 
Seadrill ownership percentage
      50 %      50 % 
  
 
 
    
 
 
  
Book value of Seadrill investment
   
 
—  
 
  
 
2
 
  
 
 
    
 
 
  
v3.22.4
Drilling units (Tables)
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
Schedule of drilling units
Changes in drilling units for the periods presented in this report were as follows:
 
(In $ millions)
   
Cost
     
Accumulated
depreciation
     
Net book
value
  
    
(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
was amended such that the rig was derecognized from drilling units and replaced with a right of use asset within other assets.
v3.22.4
Equipment (Tables)
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Abstract]  
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
depreciation
     
Net book
value
  
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
 
  
 
 
     
 
 
     
 
 
  
v3.22.4
Debt (Tables)
 12 Months Ended
Dec. 31, 2021
Debt Disclosure [Abstract]  
Schedule of Debt and Balance Sheet Presentation
As at December 31, 2021 and 2020, we had the following liabilities for third party debt agreements:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(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
 
  
 
 
     
 
 
  
v3.22.4
Other liabilities (Tables)
 12 Months Ended
Dec. 31, 2021
Payables and Accruals [Abstract]  
Other liabilities
As at December 31, 2021 and December 31, 2020, other liabilities included the following:
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
    
(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,
2021
     
December 31,
2020
  
    
(As adjusted)
     
(As adjusted)
  
Other current liabilities
      219        277  
Other
non-current
liabilities
      112        120  
  
 
 
     
 
 
  
Total Other Liabilities
   
 
331
 
   
 
397
 
  
 
 
     
 
 
  
v3.22.4
Leases (Tables)
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Future undiscounted cash flows for operating leases and reconciliation to operating lease liability
For operating leases where we are the lessee, our future undiscounted cash flows are as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
  
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
December 31,
2021
     
Year ended
December 31,
2020
  
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
 
  
 
 
     
 
 
  
Supplementary information regarding lease accounting
The following table gives supplementary information regarding our lease accounting at December 31, 2021:
 
(In $ million)
   
Year ended
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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- Operating Cash flows
      42       21       13  
Right-of-use
assets obtained in exchange for operating lease liabilities during the period
      24       53       19  
Weighted-average remaining lease term in months
      19       14       18  
Weighted-average discount rate
      10 %      24 %      13 % 
Operating subleases and leases, lessor, future undiscounted cash flows, and income
On November 25, 2019, March, 15 2020 and November 15, 2020 we leased the
West Castor,
West Telesto
and
West Tucana
to Gulfdrill. The estimated future undiscounted cash flows on these leases are as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
  
2022
      28  
2023
      28  
2024
      21  
2025
      18  
2026 and thereafter
      2  
  
 
 
  
Total
   
 
97
 
  
 
 
  
v3.22.4
Common shares (Tables)
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Change in common shares
Changes in predecessor common shares for the periods presented in this report were as follows:
 
    
Issued and fully paid share
capital $0.10 par value each
  
    
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
 
  
 
 
     
 
 
  
v3.22.4
Accumulated other comprehensive income/(loss) (Tables)
 12 Months Ended
Dec. 31, 2021
Accumulated Other Comprehensive Income (Loss), Net of Tax [Abstract]  
Schedule of 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
gain/(loss)
relating to
pension
     
Share in
unrealized

losses from
associated
companies
     
Change in
debt
component
on Archer
facility
     
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
) 
  
 
 
     
 
 
     
 
 
     
 
 
  
v3.22.4
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
”) plans in the Consolidated Statements of Operations are as follows:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
Share-based compensation expense
      —          8        5  
  
 
 
     
 
 
     
 
 
  
Total share-based compensation expense
   
 
—  
 
   
 
8
 
   
 
5
 
  
 
 
     
 
 
     
 
 
  
v3.22.4
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,
2021
     
December 31,
2020
  
Defined benefit
obligation—Non-current
liabilities
      (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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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,
2021
     
December 31,
2020
  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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,
2021
     
December 31,
2020
     
December 31,
2019
  
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
December 31,
2021
    
Year ended
December 31,
2020
    
Year ended
December 31,
2019
  
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,
2021
    
December 31,
2020
  
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,
2021
  
2022
      1  
2023
      1  
2024
      1  
2025
      1  
2025-2030
      3  
  
 
 
  
Total payments expected during the next 10 years
   
 
7
 
  
 
 
  
v3.22.4
Related party transactions (Tables)
 12 Months Ended
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.
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
           
(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
or dayrate basis.
(b)
We recognized reimbursable revenues from Northern Ocean for work performed to mobilize the Northern Ocean rigs
West Mira
and
West Bollsta
, as well as from Sonangol relating to preparation costs for the
Quenguela
contract commencing in January 2022. Following the cancellation of the Wintershall contract, a settlement agreement has been signed with Northern Ocean extinguishing all outstanding claims. In December
 
2021, the agreement became effective and the CECL provision of $138 million was written 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
and
West Tucana
to Gulfdrill.
The below table provides an analysis of related party operating expenses for periods presented in this report.
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
West Bollsta
lease
(d)
      57        10        —    
West Hercules
lease
(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
rig from Northern Ocean in 2020. Refer to Note 22
—
“Leases” for details.
(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,
2021
     
December 31,
2020
  
           
(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 - current
      28        85  
Amounts due from related parties -
non-current
      —          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
US LIBOR.
(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
December 31,
2021
     
Year ended
December 31,
2020
  
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
- Measurement of Credit Losses on Financial Instruments. Refer to Note 5
–
“Current expected credit losses” for details.
The below table provides an analysis of related party payable balances for periods presented in this report.
 
(In $ millions)
   
December 31,
2021
     
December 31,
2020
  
Liabilities from Seadrill to SFL
(k)
      503        426  
Trading balances
(l)
      —          7  
  
 
 
     
 
 
  
Total related party liabilities
   
 
503
 
   
 
433
 
  
 
 
     
 
 
  
Of which:
      
Amounts due to related parties - current
      —          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,
2021
     
December 31,
2020
  
West Taurus
lease liability
      345        147  
West Linus
lease liability
      158        142  
West Hercules
lease liability
      —          137  
  
 
 
     
 
 
  
Total lease liabilities to SFL
   
 
503
 
   
 
426
 
The lease on the
West Taurus
was rejected through the bankruptcy court which resulted in a remeasurement of the liability to its expected claim value, which will be extinguished on emergence from
C
hapter 11.
The
West Hercules
and
West Linus
leases were modified in August 2021 and February 2022 respectively, with the associated liabilities being derecognized at the point of lease amendment. See Note 34 – Subsequent events for more details on the
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
positions held were waived.
v3.22.4
Fair values of financial instruments (Tables)
 12 Months Ended
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 December 31, 2021 and December 31, 2020 are as follows:
 
    
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- Secured credit facilities (
Level 3)
      1,966        5,544        922        5,545  
Liability subject to compromise - Related Party Loans Payable
(Level 3)
      176        503        424        426  
v3.22.4
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,
2021
     
December 31,
2020
  
           
(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).
v3.22.4
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
investing and financing activities relating to the periods presented:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
Non-cash
investing activities
         
Proceeds from sale of
West Epsilon
rig
(1)
      —          12        —    
Non-cash
financing activities
         
Repayment of debt following sale of
West Epsilon
rig
(1)
      —          (12 )       —    
 
(1)
During September 2020, the
West Epsilon
was sold for net proceeds of $12 million. The proceeds were paid directly to the banks as an early repayment against our external debt.
v3.22.4
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 at acquisition
  
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, 2021
until December 31, 2021
  
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
items
   
Interest expense
      (4 ) 
Others
      (1 ) 
  
 
 
  
Total financial items
   
 
(5
) 
  
 
 
  
Income before tax
   
 
4
 
  
 
 
  
Income tax benefit
      2  
  
 
 
  
Income after tax
   
 
6
 
  
 
 
  
v3.22.4
Assets and Liabilities Held for Sale/Discontinued Operations (Tables)
 12 Months Ended
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 December 31, 2021, and December 31, 2020:
 
    
As at December 31, 2021
     
As at December 31, 2020
  
(In $ millions)
   
NSNCo
     
Jackup
Sale
     
Total
     
NSNCo
     
Jackup
Sale
     
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:
 
(In $ millions)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
December 31,
2021
 
  
 
 
  
Year ended
December 31,
2020
 
  
 
 
  
Year ended
December 31,
2019
 
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 December 31,
2021
     
As at December 31,
2020
  
Carrying amounts of major classes of assets included as part of discontinued operations
                  
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 operations
                  
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
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
items
                           
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-sales:
 
(In $ millions)
   
As at
December 31,
2021
     
As at
December 31,
2020
  
Carrying amounts of major classes of assets included as part of discontinued operations
                  
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 operations
                  
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 loss of discontinued operations:
 
(In $ millions, except per share data)
   
Year ended
December 31,
2021
     
Year ended
December 31,
2020
     
Year ended
December 31,
2019
  
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
items
                           
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 ) 
v3.22.4
General information (Details)
Dec. 31, 2021
rig
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Number of offshore drilling units owned by the Company 24
Number of rigs under lease 3
Number of managed and operated rigs 9
v3.22.4
Accounting policies (Details)
 12 Months Ended
Dec. 31, 2021
Property, Plant and Equipment [Line Items]  
Threshold percentage for recognizing actuarial gains and losses 10.00%
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
v3.22.4
Chapter 11 - Summary, Background and Objectives (Details) - USD ($)
$ in Millions
Feb. 22, 2022
Feb. 10, 2022
Jan. 20, 2022
Dec. 31, 2021
Nov. 30, 2021
Nov. 02, 2021
Oct. 02, 2021
Feb. 10, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Jul. 02, 2018
Reorganization, Chapter 11 [Line Items]                        
Long-term debt       $ 5,545       $ 6,200 $ 5,545      
Cash and restricted cash       516 [1]         653 [1] $ 1,205 [1] $ 1,572  
Cash and cash equivalents       293         485 $ 987    
Total restricted cash       $ 223         168      
Additional interest on payment-in-kind interest       2.00%                
Lease liability       $ 503       $ 1,100 426      
SeaMex                        
Reorganization, Chapter 11 [Line Items]                        
Equity interest, acquisition of residual (in percent)         100.00% 50.00%            
NSNCo                        
Reorganization, Chapter 11 [Line Items]                        
Noncontrolling interest, ownership percentage by parent               100.00%        
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)               7.00%        
Senior Secured Notes | Secured Debt                        
Reorganization, Chapter 11 [Line Items]                        
Long-term debt             $ 500 $ 500        
Debt instrument, interest rate (as percent)                       12.00%
Subsequent Event                        
Reorganization, Chapter 11 [Line Items]                        
Plan of reorganization, new financing raised 350                      
Long-term debt 908 $ 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)     100.00%                  
Subsequent Event | NSNCo                        
Reorganization, Chapter 11 [Line Items]                        
Noncontrolling interest, ownership percentage by noncontrolling owners     35.00%                  
Subsequent Event | NSNCo | NSNCo Noteholders                        
Reorganization, Chapter 11 [Line Items]                        
Noncontrolling interest, ownership percentage by parent     65.00%                  
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
assets $63 million (2020: $65 million, 2019: $83 million).
v3.22.4
Chapter 11 - Seadrill Proceedings (Details) - USD ($)
$ in Millions
Feb. 10, 2021
Dec. 31, 2021
Dec. 31, 2020
Reorganization, Chapter 11 [Line Items]      
Long-term debt $ 6,200 $ 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 7.50%    
Reorganized Seadrill | Maximum      
Reorganization, Chapter 11 [Line Items]      
Noncontrolling interest, ownership percentage by parent 83.00%    
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) 5.00%    
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) 7.00%    
New First Lien Revolving Credit Facility      
Reorganization, Chapter 11 [Line Items]      
Maximum borrowing capacity $ 125    
Debt instrument, interest rate (as percent) 7.00%    
Commitment fee percentage 2.80%    
v3.22.4
Chapter 11 - Long Term Debt Maturity (Details) - USD ($)
$ in Millions
Feb. 22, 2022
Feb. 10, 2022
Dec. 31, 2021
Feb. 10, 2021
Dec. 31, 2020
Debt Instrument [Line Items]          
Carrying value     $ 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 $ 908      
v3.22.4
Chapter 11 - Hemen Convertible Bond (Details) - Convertible Debt - Hermen Convertible Bond - Subsequent Event
$ in Millions
Feb. 28, 2022
USD ($)
Debt Instrument [Line Items]  
Debt, face amount $ 50
Basis spread on variable rate (as a percent) 5.00%
LIBOR  
Debt Instrument [Line Items]  
Basis spread on variable rate (as a percent) 6.00%
v3.22.4
Chapter 11 - Emergence and New Seadrill Equity Allocation Table (Details) - Subsequent Event
Feb. 22, 2022
Reorganization, Chapter 11 [Line Items]  
Pre-confirmation voting share holders, percentage of voting shares upon emergence 50.00%
Percentage of common stock issued 100.00%
Class 4 Credit Agreement Claimants  
Reorganization, Chapter 11 [Line Items]  
Percentage of common stock issued 83.00%
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%
v3.22.4
Chapter 11 - Common Stock Allocated (Details) - shares
Feb. 22, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Class of Stock [Line Items]        
Common shares, issued (in shares)   100,384,435 100,384,435 100,234,973
Subsequent Event        
Class of Stock [Line Items]        
Common shares, issued (in shares) 49,999,998      
Percentage of common stock issued 100.00%      
Percentage of common stock issued, after equity dilution on conversion of convertible bond 100.00%      
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 83.00%      
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 0.00%      
Percentage of common stock issued, after equity dilution on conversion of convertible bond 5.00%      
v3.22.4
Chapter 11 - NSNCo Restructuring (Details) - USD ($)
$ in Millions
 12 Months Ended
Oct. 02, 2022
Feb. 18, 2022
Sep. 02, 2021
Dec. 31, 2021
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       $ 186          
Derecognition of rig asset and finance liability       $ 10          
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)             100.00% 50.00%  
Extinguishment of debt $ 400   $ 400            
SeaMex | Subsequent Event                  
Reorganization, Chapter 11 [Line Items]                  
Equity interest, acquisition of residual (in percent)           100.00%      
NSNCo | SeaMex                  
Reorganization, Chapter 11 [Line Items]                  
Equity interest, acquisition of residual (in percent)               100.00%  
NSNCo                  
Reorganization, Chapter 11 [Line Items]                  
Ownership interest prior to disposal                 100.00%
NSNCo | Subsequent Event                  
Reorganization, Chapter 11 [Line Items]                  
Noncontrolling interest, ownership percentage by noncontrolling owners           35.00%      
NSNCo | NSNCo Noteholders | Subsequent Event                  
Reorganization, Chapter 11 [Line Items]                  
Ownership interest prior to disposal           65.00%      
v3.22.4
Chapter 11 - Detailed Timeline (Details)
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   80.00%  
NSNCo      
Reorganization, Chapter 11 [Line Items]      
Ownership interest prior to disposal     100.00%
NSNCo | NSNCo Noteholders | Subsequent Event      
Reorganization, Chapter 11 [Line Items]      
Ownership interest prior to disposal 65.00%    
v3.22.4
Chapter 11 - Schedule of Liabilities Subject to Compromise (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Reorganizations [Abstract]    
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  
Interest expense, not recorded due to reorganization 298  
Continuing operations 6,117 $ 0
Discontinued operations $ 118 $ 0
v3.22.4
Chapter 11 - Schedule of Reorganization Items (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Reorganizations [Abstract]      
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)    
Continuing operations (296) $ 0 $ 0
Discontinued operations $ (14)    
v3.22.4
Chapter 11 - Condensed Combined Debtors Financial Statements (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Reorganization, Chapter 11 [Line Items]      
Restricted cash portion of cash collateral securing Senior Notes $ 223 $ 168  
Cash and cash equivalents 293 485 $ 987
Amount due from related parties, net 28 85  
Due from Related Parties, Noncurrent 0 $ 6  
Liabilities subject to compromise 6,235    
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    
v3.22.4
Current expected credit losses - Allowance for Credit Losses and Credit Loss Expense (Details) - USD ($)
$ in Millions
 1 Months Ended 12 Months Ended
Dec. 31, 2021
Apr. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]          
Beginning balance     $ 153 $ 9  
Credit loss expense     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     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     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     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)        
v3.22.4
Segment information - Results by Segment (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
segment
Dec. 31, 2020
USD ($)
Dec. 31, 2019
USD ($)
Dec. 31, 2018
USD ($)
Segment Reporting Information [Line Items]        
Number of reportable segments | segment 3      
Revenues $ 907 $ 961 $ 1,254  
Depreciation 127 318 397  
Amortization of intangibles 0 1 105  
Impairment of drilling units and intangible assets 152 4,108 0  
Operating Income - net income [Abstract]        
Operating profit/(loss) (156) (4,481) (296)  
Unallocated items:        
Total financial items and other (416) 50 (451)  
Loss before income taxes (572) (4,431) (747)  
Drilling units 1,431 1,755    
Book value of Seadrill investment 27 24    
Assets held for sale 1,492 1,085    
Cash and restricted cash 516 [1] 653 [1] 1,205 [1] $ 1,572
Other assets 431 461    
Total assets 3,897 3,978    
Capital expenditures 84 137 153  
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)  
Harsh environment        
Segment Reporting Information [Line Items]        
Amortization of intangibles 0 1 0  
Unallocated items:        
Drilling units 709 1,032    
Capital expenditures 30 26 34  
Harsh environment | Operating Segments        
Segment Reporting Information [Line Items]        
Revenues 495 526 510  
Depreciation 73 93 125  
Impairment of drilling units and intangible assets 152 419 0  
Operating Income - net income [Abstract]        
Operating profit/(loss) (138) (396) (69)  
Floaters        
Segment Reporting Information [Line Items]        
Amortization of intangibles 0 0 105  
Unallocated items:        
Drilling units 524 528    
Capital expenditures 35 110 111  
Floaters | Operating Segments        
Segment Reporting Information [Line Items]        
Revenues 363 358 625  
Depreciation 37 176 224  
Impairment of drilling units and intangible assets 0 3,555 0  
Operating Income - net income [Abstract]        
Operating profit/(loss) (21) (3,781) (201)  
Jackup rigs        
Unallocated items:        
Drilling units 198 195    
Capital expenditures 19 1 8  
Jackup rigs | Operating Segments        
Segment Reporting Information [Line Items]        
Revenues 38 59 95  
Depreciation 16 20 19  
Impairment of drilling units and intangible assets 0 86 0  
Operating Income - net income [Abstract]        
Operating profit/(loss) $ 17 $ (86) $ (3)  
[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
assets $63 million (2020: $65 million, 2019: $83 million).
v3.22.4
Segment information - Geographic Revenues (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total Revenue $ 907 $ 961 $ 1,254
Norway      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total Revenue 486 480 469
Angola      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total Revenue 125 89 215
Brazil      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total Revenue 121 51 137
United States      
Revenues from External Customers and Long-Lived Assets [Line Items]      
Total Revenue 105 107 74
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 $ 70 $ 234 $ 161
v3.22.4
Segment information - Geographic Assets (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units $ 1,431 $ 1,755
Norway    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 710 1,044
Brazil    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 169 79
Qatar    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 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 92 87
Spain    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units 47 49
Others    
Revenues from External Customers and Long-Lived Assets [Line Items]    
Drilling units $ 217 $ 251
v3.22.4
Segment information - Major Customers (Details) - Contract Revenues - Customer Concentration Risk
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Revenue, Major Customer [Line Items]      
Concentration risk percentage 100.00% 100.00% 100.00%
ConocoPhillips      
Revenue, Major Customer [Line Items]      
Concentration risk percentage 18.00% 18.00% 12.00%
Equinor      
Revenue, Major Customer [Line Items]      
Concentration risk percentage 15.00% 13.00% 18.00%
Lundin      
Revenue, Major Customer [Line Items]      
Concentration risk percentage 13.00% 2.00% 0.00%
Northern Ocean      
Revenue, Major Customer [Line Items]      
Concentration risk percentage 4.00% 13.00% 13.00%
TotalEnergies      
Revenue, Major Customer [Line Items]      
Concentration risk percentage 0.00% 5.00% 20.00%
Other      
Revenue, Major Customer [Line Items]      
Concentration risk percentage 50.00% 49.00% 37.00%
v3.22.4
Revenue from contracts with customers - Receivables, Contract Assets and Contract Liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]    
Accounts receivable, net $ 158 $ 110
Current contract liabilities (deferred revenues) (25) (18)
Non-current contract liabilities (deferred revenues) $ (10) $ (13)
v3.22.4
Revenue from contracts with customers - Significant Changes in Contract Assets and Contract Liabilities (Details) - USD ($)
$ in Millions
 12 Months Ended
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 (31) (29)  
Contract assets (liabilities), net, beginning balance (31) (29)  
Amortization of revenue that was included in the beginning contract liability balance 24 23  
Cash received, excluding amounts recognized as revenue (28) (25)  
Contract liabilities, ending balance (35) (31)  
Contract assets (liabilities), net, ending balance $ (35) $ (31)  
v3.22.4
Revenue from contracts with customers - Additional Information (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Revenue from Contract with Customer [Abstract]    
Deferred revenue, current $ 25 $ 18
Deferred revenue, noncurrent $ 10 $ 13
v3.22.4
Other revenues (Details) - Other revenues - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Variable Interest Entity [Line Items]      
Leasing revenues $ 26 $ 19 $ 1
Early termination fees 6 11 11
Total other revenues [1] $ 32 $ 30 $ 12
[1] Includes transactions with related parties. Refer to Note 27 - "Related party transactions" for further details.
v3.22.4
Other operating items - Other Operating Items (Details)
$ in Millions
 1 Months Ended 12 Months Ended
Jun. 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 $ (152) $ (4,087) $ 0
Loss on impairment of intangibles   0 (21) 0
Gain on disposals   47 15 0
Other operating income [1]   54 9 39
Total other operating items   $ (51) $ (4,084) $ 39
Number of rigs disposed of | rig   7 1  
[1] Includes transactions with related parties. Refer to Note 27 - "Related party transactions" for further details.
v3.22.4
Other operating items - Other Operating Income (Details) - USD ($)
$ in Millions
 12 Months Ended
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
Other operating income [1] 54 $ 9 $ 39
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 transactions with related parties. Refer to Note 27 - "Related party transactions" for further details.
v3.22.4
Interest expense - Schedule of Interest expense (Details) - USD ($)
$ in Millions
 4 Months Ended 12 Months Ended
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Interest Expense [Abstract]        
Cash interest on debt facilities   $ (25) $ (256) $ (360)
Interest on SFL leases   (84) (12) 0
Unwind of discount debt   0 (44) (47)
Write off of discount on debt $ (86) 0 (86) 0
Interest expense   $ (109) $ (398) $ (407)
v3.22.4
Interest expense - Cash and Payment-In-Kind Interest (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Debt Instrument [Line Items]      
Cash interest $ (25) $ (256) $ (360)
Debt of consolidated variable interest entities      
Debt Instrument [Line Items]      
Cash interest 0 (27) (47)
Secured Debt | Senior credit facilities and unsecured bonds      
Debt Instrument [Line Items]      
Cash interest $ (25) $ (229) $ (313)
v3.22.4
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 1.00%        
v3.22.4
Loss on impairment of long-lived assets (Details)
$ in Millions
 1 Months Ended 12 Months Ended
Jun. 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   50.00%    
Loss on impairment of long-lived assets $ (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 $ 4,087  
v3.22.4
Taxation - Components of Income Taxes (Details) - USD ($)
$ in Millions
 12 Months Ended
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) $ 0 $ (1) $ (44)
Effective tax rate 0.00% 0.00% (5.90%)
v3.22.4
Taxation - Additional Information (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Dec. 31, 2018
Related Party Transaction [Line Items]        
Effective tax rate 0.00% 0.00% (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      
Secretariat of the Federal Revenue Bureau of Brazil        
Related Party Transaction [Line Items]        
Income tax examination, estimate of possible loss 124      
Nigeria        
Related Party Transaction [Line Items]        
Income tax examination, estimate of possible loss 171      
Kuwaiti Tax Authority        
Related Party Transaction [Line Items]        
Income tax examination, estimate of possible loss 12      
Mexican Tax Authority        
Related Party Transaction [Line Items]        
Income tax examination, estimate of possible loss 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      
v3.22.4
Taxation - Income Tax Reconciliation (Details) - USD ($)
$ in Millions
 12 Months Ended
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) $ 0 $ (1) $ (44)
v3.22.4
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)
v3.22.4
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
v3.22.4
Loss per share (Details) - USD ($)
$ / shares in Units, shares in Millions, $ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Earnings Per Share [Abstract]      
Net loss from continuing operations $ (572) $ (4,430) $ (703)
Profit /(loss) from discontinued operations (15) (233) (519)
Net loss (587) (4,663) (1,222)
Less: Allocation to participating securities 0 0 0
Net loss available to stockholders (587) (4,663) (1,222)
Effect of dilution 0 0 0
Diluted net loss available to stockholders $ (587) $ (4,663) $ (1,222)
Basic loss per share:      
Weighted average number of common shares outstanding (in shares) 100 100 100
Diluted loss per share:      
Effect of dilution (in shares) 0 0 0
Weighted average number of common shares outstanding adjusted for the effects of dilution (in shares) 100 100 100
Basic loss per share from continuing operations (usd per share) $ (5.7) $ (44.11) $ (7)
Diluted loss per share from continuing operations (usd per share) (5.7) (44.11) (7)
Basic loss per share (usd per share) (5.85) (46.43) (12.18)
Diluted loss per share (usd per share) $ (5.85) $ (46.43) $ (12.18)
v3.22.4
Restricted cash (Details)
R$ in Millions, $ in Millions
Dec. 31, 2021
USD ($)
Dec. 31, 2020
USD ($)
Dec. 31, 2020
BRL (R$)
Dec. 31, 2019
USD ($)
Restricted Cash [Line Items]        
Total restricted cash $ 223 $ 168    
Current restricted cash 160 103   $ 135
Non-current restricted cash 63 65   $ 83
Accounts pledged as collateral for performance bonds and similar guarantees        
Restricted Cash [Line Items]        
Total restricted cash 42 48    
Proceeds from rig sales        
Restricted Cash [Line Items]        
Total restricted cash 47 0    
Demand deposit pledged as collateral for tax related guarantee        
Restricted Cash [Line Items]        
Total restricted cash 63 65 R$ 330  
Accounts pledged as collateral for leases        
Restricted Cash [Line Items]        
Total restricted cash 37 22    
Other        
Restricted Cash [Line Items]        
Total restricted cash $ 34 $ 33    
v3.22.4
Other assets (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Other Assets [Abstract]    
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 0
Other 44 43
Total other assets $ 224 $ 232
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] Current assets Current assets
v3.22.4
Other assets - Balance Sheet Presentation (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]    
Other current assets $ 197 $ 187
Other non-current assets 27 45
Total other assets $ 224 $ 232
v3.22.4
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 50.00% 50.00% 50.00%
Gulfdrill | Joint Venture Partner      
Schedule of Equity Method Investments [Line Items]      
Seadrill ownership percentage 50.00% 50.00%  
Sonadrill      
Schedule of Equity Method Investments [Line Items]      
Seadrill ownership percentage 50.00% 50.00% 50.00%
Sonadrill | Joint Venture Partner      
Schedule of Equity Method Investments [Line Items]      
Seadrill ownership percentage 50.00% 50.00%  
v3.22.4
Investment in associated companies - Narrative (Details) - rig
Mar. 31, 2022
Feb. 28, 2022
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Gulf Drilling International | Subsequent Event          
Schedule of Equity Method Investments [Line Items]          
Seadrill ownership percentage 50.00%        
Sonangol | Subsequent Event          
Schedule of Equity Method Investments [Line Items]          
Seadrill ownership percentage 50.00%        
Gulfdrill          
Schedule of Equity Method Investments [Line Items]          
Seadrill ownership percentage     50.00% 50.00% 50.00%
Gulfdrill | Subsequent Event          
Schedule of Equity Method Investments [Line Items]          
Number of premium jack-ups 5        
Seadrill ownership percentage 50.00%        
Gulfdrill | Seadrill Limited | Subsequent Event          
Schedule of Equity Method Investments [Line Items]          
Number of leased rigs 3        
Gulfdrill | Third Party | Subsequent Event          
Schedule of Equity Method Investments [Line Items]          
Number of leased rigs 2        
Sonadrill          
Schedule of Equity Method Investments [Line Items]          
Seadrill ownership percentage     50.00% 50.00% 50.00%
Sonadrill | Subsequent Event          
Schedule of Equity Method Investments [Line Items]          
Seadrill ownership percentage 50.00%        
Number of drillships   4      
v3.22.4
Investment in associated companies - Share in Results from Associated Companies (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]      
Share in results from associated companies (net of tax) $ 3 $ 0 $ (22)
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)
Gulfdrill      
Schedule of Equity Method Investments [Line Items]      
Share in results from associated companies (net of tax) $ (2) $ 2 $ 0
v3.22.4
Investment in associated companies - Statement of Operations (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]      
Operating revenues $ 907 $ 961 $ 1,254
Net operating income/(loss) (156) (4,481) (296)
Net income/(loss) $ (587) $ (4,659) $ (1,219)
Sonadrill      
Schedule of Equity Method Investments [Line Items]      
Seadrill ownership percentage 50.00% 50.00% 50.00%
Share of results from Sonadrill (net of tax) $ 5 $ (2) $ (1)
Gulfdrill      
Schedule of Equity Method Investments [Line Items]      
Seadrill ownership percentage 50.00% 50.00% 50.00%
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
v3.22.4
Investment in associated companies - Book Value (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Schedule of Equity Method Investments [Line Items]    
Book value of Seadrill investment $ 27 $ 24
Sonadrill    
Schedule of Equity Method Investments [Line Items]    
Book value of Seadrill investment 27 22
Gulfdrill    
Schedule of Equity Method Investments [Line Items]    
Book value of Seadrill investment $ 0 $ 2
v3.22.4
Investment in associated companies - Consolidated Balance Sheets (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Schedule of Equity Method Investments [Line Items]      
Current assets $ 1,981 $ 1,079  
Non-current assets 1,916 2,899  
Current liabilities (1,255) (6,562)  
Non-current liabilities (123) (556)  
Book value of Seadrill investment $ 27 $ 24  
Sonadrill      
Schedule of Equity Method Investments [Line Items]      
Seadrill ownership percentage 50.00% 50.00% 50.00%
Book value of Seadrill investment $ 27 $ 22  
Gulfdrill      
Schedule of Equity Method Investments [Line Items]      
Seadrill ownership percentage 50.00% 50.00% 50.00%
Book value of Seadrill investment $ 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  
v3.22.4
Drilling units (Details) - USD ($)
$ in Millions
 1 Months Ended 12 Months Ended
Jun. 30, 2021
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Cost        
Impairment $ 152 $ (152) $ (4,087) $ 0
Accumulated depreciation        
Impairment of long lived assets $ 152 (152) (4,087) 0
Drilling units        
Cost        
Opening balance   2,673 6,624  
Additions   84 136  
Impairment   (152) (4,087)  
Disposal, cost   (364)    
Closing balance   2,241 2,673 6,624
Accumulated depreciation        
Opening balance   (918) (605)  
Depreciation   (119) (313)  
Disposal, accumulated depreciation   227    
Closing balance   (810) (918) (605)
Disposal, net   (137)    
Net book value   1,431 1,755 $ 6,019
Impairment of long lived assets   $ (152) $ (4,087)  
v3.22.4
Equipment (Details) - Equipment - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Cost      
Opening balance $ 39 $ 38  
Additions   1  
Closing balance 39 39  
Accumulated depreciation      
Opening balance (20) (15)  
Depreciation (8) (5)  
Closing balance (28) (20)  
Net book value $ 11 $ 19 $ 23
v3.22.4
Debt - Schedule of Debt and Balance Sheet Presentation (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Feb. 10, 2021
Dec. 31, 2020
Debt Instrument [Line Items]      
Long-term debt $ 5,545 $ 6,200 $ 5,545
Less: Debt balance held as subject to compromise (5,545)    
Senior credit facilities | Secured Debt      
Debt Instrument [Line Items]      
Long-term debt $ 5,545   $ 5,545
v3.22.4
Other liabilities (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Payables and Accruals [Abstract]      
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 $ 29
Taxes payable 23 25  
Accrued interest expense 0 10  
Other liabilities 34 33  
Total Other Liabilities $ 331 $ 397  
Operating Lease, Liability, Statement of Financial Position [Extensible List] Total Other Liabilities Total Other Liabilities  
v3.22.4
Other liabilities - Balance sheet presentation (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Other Liabilities [Abstract]    
Other current liabilities $ 219 $ 277
Other non-current liabilities 112 120
Total Other Liabilities $ 331 $ 397
v3.22.4
Leases - Additional Information (Details)
$ in Millions
 12 Months Ended
Dec. 31, 2021
USD ($)
rig
Mar. 31, 2020
well
Leases [Abstract]    
Number of benign environment Jack-up rigs | rig 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  
v3.22.4
Leases - Future Undiscounted Cash Flows for Operating Leases and Reconciliation to Operating Lease Liability (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Leases [Abstract]    
2022 $ 32  
2023 3  
2024 1  
2025 and thereafter 1  
Total 37 $ 79
Less short term leases 0 0
Less discount (2) (11)
Operating lease liability $ 35 $ 68
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] Other current liabilities Other current liabilities
Current $ 30 $ 51
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible Enumeration] Other non-current liabilities Other non-current liabilities
Non-current $ 5 $ 17
v3.22.4
Leases - Supplementary Information Regarding Lease Accounting (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
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- Operating Cash flows 42 21 13
Right-of-use assets obtained in exchange for operating lease liabilities during the period $ 24 $ 53 $ 19
Weighted-average remaining lease term 19 months 14 months 18 months
Weighted-average discount rate 10.00% 24.00% 13.00%
v3.22.4
Leases - Operating Leases, Lessor, Future Undiscounted Cash Flows, and Income (Details)
$ in Millions
Dec. 31, 2021
USD ($)
Operating lease payments receivable  
2022 $ 28
2023 28
2024 21
2025 18
2026 and thereafter 2
Total $ 97
v3.22.4
Common shares (Details) - USD ($)
$ / shares in Units, $ in Millions
 4 Months Ended 12 Months Ended
Jun. 17, 2020
Dec. 31, 2020
Dec. 31, 2021
Dec. 31, 2019
Equity [Abstract]        
Common shares, par value (in dollars per share)   $ 0.1 $ 0.1 $ 0.1
Increase (Decrease) in Stockholders' Equity [Roll Forward]        
Beginning balance, shares   100,234,973    
Common stock, value issued   $ 10    
RSU share issuance (in shares) 149,462 149,462    
Ending balance, shares   100,384,435    
Common stock, value issued   $ 10    
v3.22.4
Accumulated other comprehensive income/(loss) (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Beginning balance $ (3,140) $ 1,793 $ 3,035
Other comprehensive (loss)/income from discontinued operations 11 (13) (6)
Ending balance (3,716) (3,140) 1,793
Accumulated other comprehensive income/(loss)      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Beginning balance (26) (13) (7)
Other comprehensive loss from continuing operations   (2)  
Other comprehensive (loss)/income from discontinued operations   (11)  
Other comprehensive income from continuing operations 0    
Other comprehensive income from discontinued operations 11    
Ending balance (15) (26) (13)
Actuarial gain/(loss) relating to pension      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Beginning balance (2) 0  
Other comprehensive loss from continuing operations   (2)  
Other comprehensive (loss)/income from discontinued operations   0  
Other comprehensive income from continuing operations 0    
Other comprehensive income from discontinued operations 0    
Ending balance (2) (2) 0
Share in unrealized losses from associated companies      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Beginning balance (28) (13)  
Other comprehensive loss from continuing operations   0  
Other comprehensive (loss)/income from discontinued operations   (15)  
Other comprehensive income from continuing operations 0    
Other comprehensive income from discontinued operations 9    
Ending balance (19) (28) (13)
Change in debt component on Archer facility      
AOCI Attributable to Parent, Net of Tax [Roll Forward]      
Beginning balance 4 0  
Other comprehensive loss from continuing operations   0  
Other comprehensive (loss)/income from discontinued operations   4  
Other comprehensive income from continuing operations 0    
Other comprehensive income from discontinued operations 2    
Ending balance $ 6 $ 4 $ 0
v3.22.4
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 $ 0.0 $ 8.0 $ 5.0
v3.22.4
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       $ 0.0 $ 8.0 $ 5.0    
Company Directors and Senior Management                  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                  
Share-based compensation expense $ 0.2                
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     33.00% 33.00%          
Vesting period     3 years 3 years          
Shares vested in period (in shares)   200,000              
Restricted Stock Units | Company Directors and Senior Management                  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                  
Number of shares held (in shares) 188,369                
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 | Company Directors and Senior Management                  
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]                  
Number of shares held (in shares) 510,234                
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  
v3.22.4
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)   66.00%    
Retirement age   67 years    
Retirement pension cap (as percent)   66.00%    
Multiple of base   12    
Retirement age to receive pre-retirement pension   62 years    
v3.22.4
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
v3.22.4
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
v3.22.4
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    
v3.22.4
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
v3.22.4
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  
Fair value of plan assets at end of year $ 11 $ 16 $ 39
v3.22.4
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 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%
v3.22.4
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) 100.00% 100.00%
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%
v3.22.4
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
v3.22.4
Related party transactions - Narrative (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Related Party Transaction [Line Items]    
Total amounts due from related parties $ 28 $ 91
SeaMex    
Related Party Transaction [Line Items]    
Seadrill ownership percentage 50.00%  
Interest income $ 1 $ 0
SeaMex | Sponsor Minimum Liquidity Shortfall    
Related Party Transaction [Line Items]    
Total amounts due from related parties $ 8  
v3.22.4
Related party transactions - Analysis of Related Party Revenues, Operating Expenses, and Financial Items (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Related Party Transaction [Line Items]      
Total related party operating revenues $ 189 $ 305 $ 333
Total related party operating expenses 70 12 3
Write-off 186    
Northern Ocean      
Related Party Transaction [Line Items]      
Write-off 138    
Non-cash settlement of receivables 18    
Management fee revenues      
Related Party Transaction [Line Items]      
Total related party operating revenues 98 135 113
Reimbursable revenues      
Related Party Transaction [Line Items]      
Total related party operating revenues 65 148 218
Leasing revenues      
Related Party Transaction [Line Items]      
Total related party operating revenues 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 liability      
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 $ 3 $ 2 $ 3
v3.22.4
Related party transactions - Analysis of Related Party Receivable Balances (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Related Party Transaction [Line Items]    
Allowance for expected credit loss $ (1) $ (153)
Total related party receivables 28 91
Amounts due from related parties - current 28 85
Amounts due from related parties - non-current 0 6
Total amounts due from related parties 28 91
Related party loans and interest    
Related Party Transaction [Line Items]    
Total related party receivables, gross 9 8
Trading balances    
Related Party Transaction [Line Items]    
Total related party receivables, gross 20 236
Total related party receivables 20 236
Total amounts due from related parties 20 $ 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%  
v3.22.4
Related party transactions - Analysis of Receivables Balance (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Related Party Transaction [Line Items]    
Total amounts due from related parties $ 28 $ 91
Trading balances    
Related Party Transaction [Line Items]    
Total amounts due from related parties 20 236
Less: CECL allowance (1) (153)
Receivable net of CECL allowance 19 83
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 13 17
Trading balances | Sonadrill    
Related Party Transaction [Line Items]    
Total amounts due from related parties 4 10
Trading balances | NSNCo/SeaMex (Discontinued operations)    
Related Party Transaction [Line Items]    
Total amounts due from related parties $ 3 $ 8
v3.22.4
Related party transactions - Analysis of Related Party Payable Balances (Details) - USD ($)
$ in Millions
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 6,235    
Lease liability $ 503 $ 1,100 $ 426
Finance Lease, Liability, Statement of Financial Position [Extensible Enumeration] Liabilities subject to compromise   Long-term debt due to related parties
Affiliated Entity      
Related Party Transaction [Line Items]      
Total related party liabilities $ 503   $ 433
Amounts due to related parties - current 0   7
Long-term debt due to related parties 0   426
Liabilities subject to compromise 503   0
West Taurus lease liability      
Related Party Transaction [Line Items]      
Lease liability 345   147
West Linus lease liability      
Related Party Transaction [Line Items]      
Lease liability 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 503   426
Trading balances | Affiliated Entity      
Related Party Transaction [Line Items]      
Total related party liabilities $ 0   $ 7
v3.22.4
Financial instruments and risk management - Additional Information (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Feb. 10, 2021
Dec. 31, 2020
May 11, 2018
Derivative [Line Items]        
Long-term debt $ 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 0.209%     2.87%
v3.22.4
Fair values of financial instruments - Carrying Value and Estimated Fair Value of our Financial Instrument (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]    
Related party loans receivable $ 28 $ 91
Liabilities    
Liabilities subject to compromise 6,235  
Fair value | Level 2    
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]    
Related party loans receivable 9 6
Fair value | Level 3    
Liabilities    
Liability subject to compromise - Related Party Loans Payables 176 424
Fair value | Level 3 | Senior credit facilities    
Liabilities    
Liabilities subject to compromise 1,966 922
Carrying value | Level 2    
Financial Instruments, Financial Assets, Balance Sheet Groupings [Abstract]    
Related party loans receivable 9 6
Carrying value | Level 3    
Liabilities    
Liability subject to compromise - Related Party Loans Payables 503 426
Carrying value | Level 3 | Senior credit facilities    
Liabilities    
Liabilities subject to compromise $ 5,544 $ 5,545
v3.22.4
Fair values of financial instruments - Additional Information (Details)
$ in Thousands
Dec. 31, 2021
USD ($)
Dec. 31, 2020
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]    
Fair value, cost of debt percent 0.118  
Discount rate | Senior credit facilities | Discounted cash flow | Minimum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value, cost of debt percent 10  
Discount rate | Senior credit facilities | Discounted cash flow | Maximum    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value, cost of debt percent 17  
v3.22.4
Commitments and contingencies (Details) - USD ($)
$ in Millions
 12 Months Ended
Dec. 31, 2021
Mar. 31, 2023
Nov. 30, 2022
Dec. 31, 2020
Jan. 01, 2019
Guarantor Obligations [Line Items]          
Maximum guarantee $ 550     $ 150  
Losses recoverable under insurance         $ 23
Loss incident - amounts recovered 20        
Northern Ocean          
Guarantor Obligations [Line Items]          
Maximum guarantee 150     100  
Sonadrill          
Guarantor Obligations [Line Items]          
Maximum guarantee 400     50  
Guarantees in favor of customers | Northern Ocean          
Guarantor Obligations [Line Items]          
Maximum guarantee 150     100  
Guarantees in favor of customers | Sonadrill          
Guarantor Obligations [Line Items]          
Maximum guarantee $ 400     $ 50  
Guarantees in favor of customers | Sonadrill | Forecast          
Guarantor Obligations [Line Items]          
Maximum guarantee   $ 350 $ 50    
v3.22.4
Supplementary cash flow information (Details) - USD ($)
$ in Millions
 1 Months Ended 12 Months Ended
Sep. 30, 2020
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   $ 47 $ 15 $ 0
West Epsilon        
Non-cash financing activities        
Gain on disposals $ 12      
[1] During September 2020, the
West Epsilon
was sold for net proceeds of $12 million. The proceeds were paid directly to the banks as an early repayment against our external debt.
v3.22.4
Business combination - Narrative (Details) - SeaMex - USD ($)
$ in Millions
Oct. 02, 2022
Sep. 02, 2021
Nov. 30, 2021
Nov. 02, 2021
Sep. 01, 2021
Business Acquisition [Line Items]          
Extinguishment of debt $ 400 $ 400      
Equity interest, acquisition of residual (in percent)     100.00% 50.00%  
Debt securities, allowance for credit loss   $ 65      
Seadrill ownership percentage         50.00%
v3.22.4
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
v3.22.4
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
v3.22.4
Assets and Liabilities Held for Sale/Discontinued Operations - Narrative (Details) - USD ($)
$ in Millions
Oct. 18, 2022
Oct. 02, 2022
Sep. 02, 2021
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               100.00%      
NSNCo Noteholders | NSNCo | Subsequent Event                      
Related Party Transaction [Line Items]                      
Ownership interest prior to disposal       65.00%              
SeaMex                      
Related Party Transaction [Line Items]                      
Equity interest, acquisition of residual (in percent)           100.00% 50.00%        
Extinguishment of debt   $ 400 $ 400                
SeaMex | Subsequent Event                      
Related Party Transaction [Line Items]                      
Equity interest, acquisition of residual (in percent)       100.00%              
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    
v3.22.4
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
Dec. 31, 2021
Dec. 31, 2020
Long Lived Assets Held-for-sale [Line Items]    
Total assets of discontinued operations classified as held for sale $ 1,492 $ 1,085
Carrying Amounts Of Liabilities Subject To Compromise Included As Part Of Discontinued Operations [Abstract]    
Liabilities subject to compromise 118 0
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 (including current portion) 814 515
Uncertain tax positions 25 0
Other liabilities 90 31
Total liabilities of discontinued operations classified as held for sale 948 546
Carrying Amounts Of Liabilities Subject To Compromise Included As Part Of Discontinued Operations [Abstract]    
Liabilities subject to compromise 0 0
Jack-up rigs    
Long Lived Assets Held-for-sale [Line Items]    
Total assets of discontinued operations classified as held for sale 389 400
Trade accounts payable 6 4
Long-term debt (including current portion) 0 117
Uncertain tax positions 2 0
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 [Abstract]    
Liabilities subject to compromise 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 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 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
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 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 | NSNCo [Member]    
Long Lived Assets Held-for-sale [Line Items]    
Total assets of discontinued operations classified as held for sale 22 10
Other assets | Jack-up rigs    
Long Lived Assets Held-for-sale [Line Items]    
Total assets of discontinued operations classified as held for sale $ 12 $ 14
v3.22.4
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
 12 Months Ended
Dec. 31, 2021
Dec. 31, 2020
Dec. 31, 2019
Operating expenses      
Net profit/(Loss) after tax from discontinued operations $ (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 (loss)/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 impairment of convertible bond from related party 0 (29) (11)
Loss on impairment of investments 0 (47) (296)
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 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]      
Financial and other non-operating items      
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
Interest income 0 1 2
Interest expense 0 (11) (14)
Other financial items 0 (2) (2)
Total financial items (14) (12) (14)
Net profit/(Loss) before tax from discontinued operations (15) (13) (13)
Income tax benefit/(expense) (5) (5) (4)
Net profit/(Loss) after tax from discontinued operations $ (20) $ (18) $ (17)
Basic Earning/(Loss) per share from discontinued operations $ (0.2) $ (0.18) $ (0.16)
Diluted Earning/(Loss) per share from discontinued operations $ (0.2) $ (0.18) $ (0.16)
Reorganization items, net $ (14) $ 0 $ 0
v3.22.4
Assets and Liabilities Held for Sale/ Discontinued Operations - Summary of assets and liabilities classified as held for sale (Details) - USD ($)
$ in Millions
Dec. 31, 2021
Dec. 31, 2020
Assets held for sale    
Disposal Group, Including Discontinued Operation, Assets $ 1,492 $ 1,085
Liabilities associated with assets held for sale    
Current 983 692
Liabilities subject to compromise 118 0
Non-current 2 0
Total liabilities associated with assets held for sale 1,103 692
Jack-up rigs    
Assets held for sale    
Disposal Group, Including Discontinued Operation, Assets 389 400
Liabilities associated with assets held for sale    
Current 35 146
Liabilities subject to compromise 118 0
Non-current 2 0
Total liabilities associated with assets held for sale 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 1,145 109
Current Assets [Member] | Jack-up rigs    
Assets held for sale    
Disposal Group, Including Discontinued Operation, Assets 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 347 976
Non Current Assets [Member] | Jack-up rigs    
Assets held for sale    
Disposal Group, Including Discontinued Operation, Assets 347 365
Non Current Assets [Member] | NSNCo    
Assets held for sale    
Disposal Group, Including Discontinued Operation, Assets $ 0 $ 611
v3.22.4
Assets and Liabilities Held for Sale/ Discontinued Operations - Summary of income/(loss) from discontinued operations (Details) - USD ($)
$ / shares in Units, $ in Millions
 12 Months Ended
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 $ (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 $ (20) $ (18) $ (17)
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Basic Share $ (0.2) $ (0.18) $ (0.16)
Discontinued Operation, Income (Loss) from Discontinued Operation, Net of Tax, Per Diluted Share $ (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 $ 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)
v3.22.4
Assets and Liabilities Held for Sale/ Discontinued Operations - Summary of cash flows from discontinued operations (Details) - USD ($)
$ in Millions
 12 Months Ended
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) $ (22) $ (7)
Net cash provided by investing activities 23 36 47
Net cash used in used in financing activities 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)
v3.22.4
Subsequent Events (Details) - USD ($)
$ in Millions
Oct. 18, 2022
Apr. 07, 2022
Feb. 22, 2022
Feb. 18, 2022
Jan. 19, 2022
Feb. 10, 2022
Jan. 20, 2022
Dec. 31, 2021
Feb. 10, 2021
Dec. 31, 2020
Subsequent Event [Line Items]                    
Long-term debt               $ 5,545 $ 6,200 $ 5,545
Net assets held for sale               155    
NSNCo                    
Subsequent Event [Line Items]                    
Ownership interest prior to disposal                 100.00%  
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     $ 908        
Plan of reorganization, new financing raised     350              
Rig asset derecognized     175              
Financial liability, rig asset derecognized     158              
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             35.00%      
Subsequent Event | NSNCo | NSNCo Noteholders                    
Subsequent Event [Line Items]                    
Ownership interest prior to disposal             65.00%      
Subsequent Event | Credit Facility Maturing 2027                    
Subsequent Event [Line Items]                    
Long-term debt     $ 683