Seadrill Limited — Earnings Release 2014

Nov 26, 2014

SDRL - Seadrill Limited Announces Third Quarter 2014 Results

SDRL - Seadrill Limited Announces Third Quarter 2014 Results

Highlights

·       The Seadrill Group* on a consolidated basis reports EBITDA of US$842

million, a year over year increase of 27%

·       Seadrill Limited reports third quarter 2014 EBITDA* of US$635 million

·       Seadrill Limited reports third quarter 2014 net income of US$190

million and earnings per share of US$0.31

·       The Seadrill Group on a consolidated basis maintains orderbacklog of

approximately US$20 billion

·       Seadrill Limited is suspending dividend distributions and focusing on

debt reduction and value creating opportunities due to significant deterioration

in the broader markets

·       Seadrill receives a commitment for a US$1.35 billion credit facility

to refinance the credit facilities secured by the West Pegasus, West Gemini, and

West Orion.

·       Seadrill sells an additional 28% limited partner interest in Seadrill

Operating LP to Seadrill Partners for approximately US$373 million

·       Seadrill secures a contract with ExxonMobil for employment of the West

Saturn.  The contract is for a firm period of two years plus a one year option

and has a total revenue potential for the primary contract term of approximately

US$497 million, inclusive of mobilization.

·       Seadrill completes US$1.5 billion ECA facility to finance the West

Saturn, West Neptune, and West Jupiter.

Subsequent events

·       Seadrill receives Board authorization to buyback up to 10% of

outstanding shares.

·       Seadrill receives confirmation from Petrobras of approval for contract

awards on the Libra Field for the West Tellus and West Carina.  The contracts

are for a firm period of three years each and have a total revenue potential

including mobilization of US$1.1 billion.

·       Seadrill receives confirmation from Petrobras of approval for contract

extensions for the West Eminence and West Taurus.  The contracts are for a firm

period of three years each and have a total revenue potential of US$1.1 billion.

·       Seadrill secures a 145 day contract extension with Total for the semi-

submersible unit West Eclipse.  The total revenue potential for the extension is

approximately US$65 million.

·       Seadrill secures a new contract for the jack-up unit West Vigilant.

The total revenue potential for the new contract is approximately US$102

million.

·       Seadrill secures a new contract for the jack-up unit West Leda. The

total revenue potential for the new contract is approximately US$16 million.

·       Seadrill secures a new contract for the jack-up unit West Telesto.

This is in direct continuation from the previous contract in Australia and is

for one well.

·       Seadrill sells the ultra-deepwater drillship West Vela to Seadrill

Partners for US$900 million on a 100% basis.

·       Seadrill received commitments for a US$750 million credit facility for

SeaMex to refinance the West Oberon, West Intrepid, West Defender, West

Courageous, and West Titania.

·       Seadrill receives commitments for a US$950 million credit facility for

the financing of the West Carina and West Eclipse.

* EBITDA is defined as earnings before interest, depreciation and amortization

equal to operating profit plus depreciation and amortization.

* Seadrill Group is defined as all companies currently consolidated into

Seadrill Limited plus Seadrill Partners

Financial information

Third quarter 2014 results

Revenues for the third quarter of 2014 were US$1,293 million compared to

US$1,222 million in the second quarter of 2014.

Operating profit for the quarter was US$461 million compared to US$476 million

in the preceding quarter. The decrease is primarily due to a full quarter of

idle time for the West Tellus and downtime on the West Eminence and Sevan

Louisiana.

Net financial and other items for the quarter showed a loss of US$232 million

compared to a gain of US$71 million in the previous quarter. The loss is

primarily related to interest expense, losses on derivative financial

instruments and net loss on extinguishment of debt.

Income taxes for the third quarter were US$39 million, an increase of US$145

million from the previous quarter.  The increase is due to the release of a

reserve following the resolution of uncertain tax positions during the second

quarter.

Net income for the quarter was US$190 million representing basic and diluted

earnings per share of $0.31.

Balance sheet

As of September 30, 2014, total assets were US$27,387 million, an increase of

US$783 million compared to the previous quarter.

Total current assets increased to US$3,422 million from US$3,185 million over

the course of the quarter, primarily driven by an increase in cash and amounts

due from related party, offset by a decrease in marketable securities and

accounts receivable.

Total non-current assets increased to US$23,965 million from US$23,419 million

primarily due to an increase in newbuildings driven by the final yard

instalments for the West Jupiter, West Neptune, and West Saturn, offset by a

decrease in investment in associated companies following the sale of operating

company units to Seadrill Partners.

Total current liabilities decreased to US$3,609 million from US$4,103 million

largely due to normal quarterly debt instalments and debt refinancing, offset by

the drawdown in credit facilities for the newbuild program.

Long-term external interest bearing debt increased to US$11,422 million from

US$10,025 million over the course of the quarter and total net interest bearing

debt increased to US$12,640 million from US$12,405 million.  The increase is

primarily due to new credit facilities for newbuild deliveries and for

refinancing, offset by the conversion of the US$650 million convertible bond.

Total equity increased to US$10,944 million from US$10,747 million as of

September 30, 2014, primarily driven by net income for the quarter and the

issuance of new shares as a result of the convertible bond conversion, offset by

dividends paid.

Cash flow

As of September 30, 2014, cash and cash equivalents were US$638 million, an

increase of US$95 million compared to the previous quarter.

Net cash provided by operating activities for the nine month period ended

September 30, 2014 was US$1,295 million and net cash provided by investing

activities for the same period was US$229 million.  Net cash used in financing

activities was US$1,596 million.

This information is subject of the disclosure requirements pursuant to section

5-12 of the Norwegian Securities Trading Act.

[HUG#1874420]