Seadrill Limited — Capital/Financing Update 2021

Jul 2, 2021

Seadrill New Finance Limited (the "Issuer") - Update on Restructuring Discussions and Consent Solicitation Launch

Seadrill New Finance Limited (the "Issuer") - Update on Restructuring Discussions and Consent Solicitation Launch

Hamilton, Bermuda | July 2, 2021 - Seadrill Limited ("Seadrill" or the

"Company") (OSE: SDRL, OTCPK:SDRLF) and the Issuer announce that, further to the

announcement made by Seadrill and the Issuer on June 18, 2021, the Issuer and

certain of its subsidiaries have today agreed key commercial terms for a

comprehensive restructuring of the Issuer and entered into a restructuring

support agreement ("RSA") with approximately 79 per cent. in value of the

holders of the Issuer's 12.0% senior secured notes due 2025 (the "Notes")

pursuant to which the parties thereto have agreed to the terms of the

restructuring.  Under the RSA, the parties have also reached agreement on the

terms of a restructuring proposal in relation to the business and assets of

SeaMex Ltd (in provisional liquidation) ("SeaMex"), a 50/50 joint venture

entered into by one of the Issuer's subsidiaries, Seadrill JU Newco Bermuda

Ltd.  Seadrill and the Issuer also announce herein a consent solicitation

process to amend certain provisions of the indenture governing the Notes.

Restructuring of the Issuer

The key terms of the restructuring are described in the commercial term sheet

exhibited below and include:

· the release by the holders of the Notes (the "Noteholders") of all existing

guarantees and security and claims with respect to Seadrill and its subsidiaries

(excluding the Issuer and its subsidiaries);

· the Noteholders receiving 65% of pro forma equity in the Issuer, with

Seadrill Investment Holding Company (a subsidiary of Seadrill) retaining the

remaining 35% of pro forma equity in the Issuer (with voting rights and other

detailed arrangements between shareholders to be agreed), which shall effect a

separation of the Issuer and its subsidiaries (including the Seabras Sapura

assets and SeaMex assets) from the consolidated Seadrill group;

· the Noteholders will have appointment rights in respect of 4 out of 5 of the

Issuer's directors on the board of the restructured Issuer's group, with the

remaining director to be appointed by Seadrill;

· the Notes will remain in place, on amended terms including:

· maturity date: July 15, 2026

· interest: either (a) 9.0%, consisting of (i) 3.00% cash interest plus (ii)

6.00% PIK interest, or (b) 10.0% PIK, in each case payable quarterly

· call protection: redemption price on or after:

· July 15, 2021: 105%

· July 15, 2022: 102%

· July 15, 2023 and thereafter: 100%

· the Noteholders will have a first priority right to fund any additional

liquidity needs of the Issuer or its affiliates (including working capital

support, including up to $15 million of new super senior debt to provide further

funding to the SeaMex business if required); and

Seadrill will continue to provide management services to the Issuer's group, and

operate the SeaMex assets (with resolution and commercial agreement on payment

of historic and go forward management fees).  The restructuring of the Issuer

may be implemented out of court or through a court supervised process, the

latter likely involving a pre-packaged Chapter 11 process.

The Issuer and the consenting Noteholders intend to engage with other

Noteholders in order to invite them to execute the RSA and support the

restructuring.  This will allow those Noteholders who enter into the RSA to

participate in the next stage of the restructuring process, and in the event

that sufficient Noteholders enter into the RSA, will enable the restructuring to

be implemented through an out of court process that should reduce the time and

costs that would otherwise be involved in a court supervised process.

Pursuant to the RSA, the consenting Noteholders have also agreed to forbear from

exercising enforcement rights or otherwise take actions against the Issuer and

any subsidiary of the Issuer which is an obligor under the Notes in respect of

certain events of default that may arise under the Notes, including in respect

of the Issuer not making the semi-annual cash interest payments due to the

Noteholders on 15 January 2021 and 15 July 2021, until the earlier of the

completion of the restructuring transactions described therein and termination

of the RSA.

As of 28 June, 2021 the Issuer's cash balance was approximately $50.5 million.

SeaMex restructuring

As described in the June 18 announcement, on June 18, 2021, John C. McKenna of

Finance & Risk Services Ltd and Simon Appell of AlixPartners UK LLP (the "JPLs")

were appointed as joint provisional liquidators over SeaMex by an order of the

Supreme Court of Bermuda.  Furthermore, on June 18 2021, the joint venture

agreement governing the SeaMex joint venture was terminated with immediate

effect.  Pursuant to the RSA, the parties thereto have agreed to the terms of a

restructuring proposal in respect of the business and assets of SeaMex.  The key

terms of the proposal include:

· a refinancing of the SeaMex senior secured bank debt by the issuance of new

senior secured notes on the terms set out in the commercial term sheet exhibited

below (the "New SeaMex Notes"); and

· an offer to purchase the assets of SeaMex out of provisional liquidation, in

exchange for the release of all or substantially all of the subordinated debt

owed by SeaMex and certain of its subsidiaries to the Issuer and certain

subsidiaries of the Issuer, and a novation of SeaMex's guarantee of the senior

bank debt.

The JPLs are not party to the RSA, and the RSA does not bind the JPLs to accept

the proposal.  An independent valuation of the SeaMex group has been obtained

and the JPLs are conducting an accelerated market testing process in respect of

SeaMex, to ensure that any proposed transaction maximises value for creditors as

a whole when compared to alternative options that may be capable of

implementation.

Further to the June 18 announcement, certain Noteholders are now the holders of

the entire senior secured bank debt borrowed by certain subsidiaries of SeaMex,

and the RSA also provides for their support in that capacity, for the

restructuring of SeaMex and the Issuer. The Issuer intends to continue to engage

in a constructive dialogue with SeaMex's key customer, Pemex Exploración y

Producción ("Pemex") in relation to the recovery of historic unpaid invoices

(including approximately $245 million which have been issued but remain unpaid

(Copades)), and potential amendments to the terms of SeaMex's contracts with

Pemex.  The existing drilling contracts with Pemex have contract terms until

between October 2024 and November 2026 assuming that they run to full term.  In

the meantime, pursuant to the RSA, the Issuer has obtained the requisite

agreement from Noteholders to obtain access to funds in the Issuer's mandatory

offer holding account as may be required to ensure that the SeaMex group has

continued access to funding, and is launching a consent solicitation process to

formalise the requisite amendments to the indenture governing the Notes (see

further detail below).

Restructuring support agreement

The RSA contains certain covenants on the part of the Issuer and certain of its

subsidiaries and the consenting Noteholders, including commitments by the

consenting Noteholders to support the restructuring on the terms outlined in the

commercial term sheet, and on the parties to negotiate in good faith to finalise

the documents and agreements governing the restructuring.  The RSA also provides

for certain conditions to the obligations of the parties and for termination

upon the occurrence of certain events, including without limitation the failure

to achieve certain milestones and certain breaches by the parties under the

RSA.  In particular, the RSA anticipates that the restructuring of the Issuer

will be launched by August 6, 2021, and consummated as soon as reasonably

practicable thereafter, with a long-stop date of September 30, 2021, in each

case unless such dates are otherwise extended by the Issuer and the requisite

percentage of Noteholders that are party to the RSA.

Consent solicitation

Seadrill and the Issuer also announce a consent solicitation (the "Consent

Solicitation") to amend certain provisions of the indenture dated as of July 2,

2018 governing the Notes, as amended and supplemented by that certain first

supplemental indenture dated as of March 11, 2019 (together, the "Indenture").

The proposed amendment amends certain terms and covenants of the Indenture to

allow the Issuer to use Net Realization Proceeds (as defined in the Indenture)

as of the date of the proposed amendment to the Indenture that have not

previously been deemed to constitute "Excess Proceeds."  The funds will be used

for reorganization expenses of the Issuer and to advance funds by way of loans

to SeaMex and its successors and its and their respective subsidiaries to meet

their ongoing operating and administrative needs, including operating

disbursements, personnel costs, personnel taxes, direct and indirect taxes, debt

service and other costs and expenses.

The Consent Solicitation will expire at 5pm p.m., New York City time, on July 9,

2021, unless extended or earlier terminated by the Issuer. Consents may not be

revoked after the time the Issuer enters into the proposed amendment.

The required majority of Noteholders representing greater than 50% of the

aggregate principal amount outstanding have, pursuant to the RSA, agreed to

provide consent to the proposed amendment.

Seabras Sapura

Also exhibited below are cleansing materials in relation to Seabras Sapura.

Seabras Sapura is a group of related companies that own and operate six pipe

-laying service vessels in Brazil. The Issuer has a 50% ownership stake in each

of these companies, with the remaining 50% interest owned by Sapura Energy

Berhad.

Seadrill does not undertake any obligation to publicly update the information

contained in the cleansing materials to reflect circumstances existing after the

date of this release or to reflect the occurrence of future events, even in the

event that any or all of the assumptions underlying the information are shown to

be in error.

RSA Accession

Noteholders wishing to accede to the RSA are invited to contact the Issuer's

counsel, Slaughter and May at ProjectParatusSMTeam@SlaughterandMay.com.  Subject

to Noteholders providing satisfactory evidence of their holdings of Notes and

entering into a non-disclosure agreement with the Issuer, Noteholders will be

provided with a copy of the RSA and invited to accede as a consenting

Noteholder.

About Seadrill

Seadrill is a leading offshore drilling contractor utilizing advanced technology

to unlock oil and gas resources for clients across harsh and benign locations

across the globe. Seadrill's high quality, technologically advanced fleet spans

all asset classes allowing its experienced crews to conduct its operations from

shallow to ultra-deep-water environments. The company operates 43 rigs, which

includes drillships, jack-ups and semi-submersibles.

Seadrill is listed on the Oslo Børs and OTC Pink markets. For more information,

visit https://www.seadrill.com/.

FORWARD LOOKING STATEMENTS

This news release includes forward looking statements. Such statements are

generally not historical in nature, and specifically include statements about

the Company's plans, strategies, business prospects, changes and trends in its

business, the markets in which it operates and its restructuring efforts. These

statements are made based upon management's current plans, expectations,

assumptions and beliefs concerning future events impacting the Company and

therefore involve a number of risks, uncertainties and assumptions that could

cause actual results to differ materially from those expressed or implied in the

forward-looking statements, which speak only as of the date of this news

release. Consequently, no forward-looking statement can be guaranteed. When

considering these forward-looking statements, you should keep in mind the risks

described from time to time in the Company's regulatory filings and periodical

reporting. The Company undertakes no obligation to update any forward looking

statements to reflect events or circumstances after the date on which such

statement is made or to reflect the occurrence of unanticipated events. New

factors emerge from time to time, and it is not possible for the Company to

predict all of these factors. Further, the Company cannot assess the impact of

each such factor on its business or the extent to which any factor, or

combination of factors, may cause actual results to be materially different from

those contained in any forward looking statement.

This information is subject to the disclosure requirements pursuant to section 5

-12 of the Norwegian Securities Trading Act.

Documents

· Commercial Term Sheet

Seabras Sapura - Cleansing Materials

seadrill@hawthornadvisors.com

020 3745 4960