Seadrill to consider asset acquisitions, potential M&A, CEO says

Seadrill (NYSE:SDRL) is looking to buy more assets or create a larger company by merging with peers, CEO Simon Johnson said Wednesday, according to Reuters.

“We are not going to do anything crazy, we’ve proven our discipline,” Johnson said at an investor conference in Norway, but the amount of cash Seadrill (SDRL) has on its balance sheet, “which some consider inefficient, gives us both a defensive buffer and a basis for offense” through purchases of distressed assets or players with “distressed balance sheets.”

Debt restructurings following oil market crashes in 2014 and 2020 led to a wave of consolidation in the sector, which left fewer players with fewer rigs, resulting in higher drilling rates, and “we haven’t seen the end of consolidation” in the offshore drilling market, Johnson also said.

The CEO declined to say whether Seadrill (SDRL) was involved in any negotiations on a possible merger, but while looking to add drilling rigs in order to grow to 20-25 units, “we will be open to being a junior partner in an integration provided that we get the premium that reflects the quality of our assets.”

Also at the conference, Transocean (RIG) President and COO Keelan Adamson said he sees “room for one big consolidation, especially given that our customers are also consolidating.”