DME Capital Management Fully Exits Seadrill Position
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 13 2026
0mins
Should l Buy SDRL?
Source: Fool
- Complete Exit: DME Capital Management disclosed in a February 17 SEC filing that it has fully exited its position in Seadrill by selling 1,588,828 shares, which previously accounted for approximately 1.9% of the fund's AUM, indicating a loss of confidence in the company's prospects.
- Impact of Share Changes: Following this transaction, DME's stake in Seadrill is now zero, reflecting a cautious outlook on the company's future, especially after a significant 11.1% drop in share price in 2025, despite a rebound of 21.7% in 2026 through March 12.
- Market Performance Comparison: Seadrill's stock has shown strong performance in 2026, contrasting sharply with the S&P 500's 2.3% decline, highlighting the company's recovery potential amid rising energy prices, although its revenue remains sensitive to commodity price fluctuations.
- Revenue Volatility Risk: Seadrill reported fourth-quarter contract revenue of $273 million, down 2.5% from the previous quarter, indicating that its business is highly dependent on the energy sector's market dynamics, necessitating a long-term investment perspective to manage revenue volatility.
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Analyst Views on SDRL
Wall Street analysts forecast SDRL stock price to fall
5 Analyst Rating
3 Buy
2 Hold
0 Sell
Moderate Buy
Current: 45.410
Low
32.00
Averages
44.20
High
80.00
Current: 45.410
Low
32.00
Averages
44.20
High
80.00
About SDRL
Seadrill Limited is an offshore drilling contractor. The Company is engaged in providing worldwide offshore drilling services to the oil and gas industry. Its primary business is the ownership and operation of drill ships, semi-submersible rigs, and jack-up rigs for operations in shallow to ultra-deepwater in both benign and harsh environments. Its fleet portfolio includes West Phoenix, West Aquarius, West Eclipse, Sevan Louisiana, West Capella, West Gemini, West Tellus, West Neptune, West Jupiter, West Saturn, West Carina, West Polaris, West Auriga, West Vela, West Castor, West Tucana, West Telesto, and West Elara. Its drill ships are self-propelled ships equipped for drilling offshore in water depths ranging from approximately 1,000 to 12,000 feet and are positioned over the well through a computer-controlled thruster system. Its customers include oil super-majors, state-owned national oil companies, and independent oil and gas companies. It also provides management services.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Seadrill Extends Contract with Sonangol for Sonangol Quenguela
- Contract Extension: Seadrill's 50:50 joint venture Sonadrill has secured a contract extension for the ultra-deepwater drillship Sonangol Quenguela, extending operations in Angola by approximately 480 days and ensuring deployment through June 2028.
- Management Fee Revenue: Under the joint venture structure with Sonangol E.P., Seadrill will continue to earn management fees for providing comprehensive operational and technical support, which will contribute to a stable revenue stream for the company.
- Improved Market Outlook: Seadrill's improved visibility into 2026-27 has led Citi to upgrade its rating from Sell, reflecting increased market confidence in the company's future performance.
- Revenue Target Setting: Seadrill has outlined a revenue target of $1.4B to $1.45B for 2026, indicating that the company is actively seeking growth opportunities amid rising day rates and utilization.
See More
Seadrill Extends Contract with Sonangol Joint Venture
- Contract Extension: Seadrill's joint venture Sonadrill has secured a contract extension for seven wells, extending operations in Angola by approximately 480 days until June 2028, ensuring a steady revenue stream for the company.
- Management Fee Revenue: Seadrill will earn management fees for providing operational and technical support to Sonadrill, enhancing its financial stability and competitive position in the offshore drilling market.
- Deepwater Drilling Standards: With its modern fleet and advanced technologies, Seadrill continues to set the standard in deepwater oil and gas drilling, bolstering its reputation and influence in the global market.
- Market Outlook: This contract extension reflects strong demand in the Angolan market, indicating that Seadrill will play a crucial role in future oil and gas extraction, supporting its long-term growth strategy.
See More
DME Capital Management Fully Exits Seadrill Position
- Complete Exit: DME Capital Management disclosed in a February 17 SEC filing that it has fully exited its position in Seadrill by selling 1,588,828 shares, which previously accounted for approximately 1.9% of the fund's AUM, indicating a loss of confidence in the company's prospects.
- Impact of Share Changes: Following this transaction, DME's stake in Seadrill is now zero, reflecting a cautious outlook on the company's future, especially after a significant 11.1% drop in share price in 2025, despite a rebound of 21.7% in 2026 through March 12.
- Market Performance Comparison: Seadrill's stock has shown strong performance in 2026, contrasting sharply with the S&P 500's 2.3% decline, highlighting the company's recovery potential amid rising energy prices, although its revenue remains sensitive to commodity price fluctuations.
- Revenue Volatility Risk: Seadrill reported fourth-quarter contract revenue of $273 million, down 2.5% from the previous quarter, indicating that its business is highly dependent on the energy sector's market dynamics, necessitating a long-term investment perspective to manage revenue volatility.
See More
DME Capital Fully Exits Seadrill Stake
- Share Sale Details: DME Capital has fully exited its position in Seadrill by selling approximately 1.6 million shares, which previously represented about 1.9% of the fund's AUM, indicating a cautious market stance.
- Market Performance Analysis: Although DME Capital sold early, Seadrill's stock rebounded by 21.7% from March 12, 2026, while the S&P 500 index fell by 2.3%, highlighting market volatility and unpredictability.
- Revenue Dependency: Seadrill's contract revenue for the latest quarter was $273 million, down 2.5% from the previous quarter, illustrating the company's high dependence on fluctuating energy sector prices, necessitating a long-term investment perspective from investors.
- Investment Advice: Despite Seadrill's recent stock recovery, it was not included in The Motley Fool's current list of top investment stocks, advising investors to carefully assess its investment potential.
See More
Citi Upgrades Seadrill to Neutral/High Risk with $46 Target
- Rating Upgrade: Citi upgraded Seadrill from Sell/High Risk to Neutral/High Risk, raising the price target from $32 to $46, reflecting positive signals from improving market demand and strengthened backlog coverage.
- Strong Financial Performance: Seadrill's Q4 EBITDA exceeded market expectations by 7%, and while the offshore market remains in a soft patch, ongoing contracting activity and dayrate resilience provide confidence for future recovery.
- Optimistic Medium-Term Outlook: The company reaffirmed its expectation for a more pronounced recovery in H2 2026, with enhanced revenue visibility as tendering activity broadens and contracting backlog improves, laying a foundation for 2027.
- Improved Relative Valuation: Although Seadrill shares have risen approximately 23% year-to-date, they have significantly lagged the broader oilfield services sector and peers, indicating an improvement in relative valuation, according to the analyst.
See More
Seadrill Q4 2025 Earnings Call Highlights
- Financial Performance Exceeds Expectations: Seadrill reported an EBITDA of $353 million for the full year 2025, surpassing the midpoint of original guidance, which enhances investor confidence amid a challenging market environment.
- Safety Record Innovation: The company achieved its best safety performance in history, with a total recordable incident rate 50% better than the IADC offshore industry benchmark, which not only enhances the company's reputation but may also reduce future insurance and operational costs.
- Backlog Growth: Contracted backlog increased to approximately $2.5 billion, with the West Capella's new contract contributing $152 million, indicating a recovery in market demand and the company's competitiveness in the deepwater sector.
- Optimistic Future Outlook: Management expects total operating revenues for 2026 to range between $1.4 billion and $1.45 billion, with EBITDA projected between $350 million and $400 million, reflecting confidence in future market conditions, particularly with rising day rates and utilization.
See More
Seadrill Extends Contract with Sonangol for Sonangol Quenguela
- Contract Extension: Seadrill's 50:50 joint venture Sonadrill has secured a contract extension for the ultra-deepwater drillship Sonangol Quenguela, extending operations in Angola by approximately 480 days and ensuring deployment through June 2028.
- Management Fee Revenue: Under the joint venture structure with Sonangol E.P., Seadrill will continue to earn management fees for providing comprehensive operational and technical support, which will contribute to a stable revenue stream for the company.
- Improved Market Outlook: Seadrill's improved visibility into 2026-27 has led Citi to upgrade its rating from Sell, reflecting increased market confidence in the company's future performance.
- Revenue Target Setting: Seadrill has outlined a revenue target of $1.4B to $1.45B for 2026, indicating that the company is actively seeking growth opportunities amid rising day rates and utilization.
See More
Seadrill Extends Contract with Sonangol Joint Venture
- Contract Extension: Seadrill's joint venture Sonadrill has secured a contract extension for seven wells, extending operations in Angola by approximately 480 days until June 2028, ensuring a steady revenue stream for the company.
- Management Fee Revenue: Seadrill will earn management fees for providing operational and technical support to Sonadrill, enhancing its financial stability and competitive position in the offshore drilling market.
- Deepwater Drilling Standards: With its modern fleet and advanced technologies, Seadrill continues to set the standard in deepwater oil and gas drilling, bolstering its reputation and influence in the global market.
- Market Outlook: This contract extension reflects strong demand in the Angolan market, indicating that Seadrill will play a crucial role in future oil and gas extraction, supporting its long-term growth strategy.
See More
DME Capital Management Fully Exits Seadrill Position
- Complete Exit: DME Capital Management disclosed in a February 17 SEC filing that it has fully exited its position in Seadrill by selling 1,588,828 shares, which previously accounted for approximately 1.9% of the fund's AUM, indicating a loss of confidence in the company's prospects.
- Impact of Share Changes: Following this transaction, DME's stake in Seadrill is now zero, reflecting a cautious outlook on the company's future, especially after a significant 11.1% drop in share price in 2025, despite a rebound of 21.7% in 2026 through March 12.
- Market Performance Comparison: Seadrill's stock has shown strong performance in 2026, contrasting sharply with the S&P 500's 2.3% decline, highlighting the company's recovery potential amid rising energy prices, although its revenue remains sensitive to commodity price fluctuations.
- Revenue Volatility Risk: Seadrill reported fourth-quarter contract revenue of $273 million, down 2.5% from the previous quarter, indicating that its business is highly dependent on the energy sector's market dynamics, necessitating a long-term investment perspective to manage revenue volatility.
See More
DME Capital Fully Exits Seadrill Stake
- Share Sale Details: DME Capital has fully exited its position in Seadrill by selling approximately 1.6 million shares, which previously represented about 1.9% of the fund's AUM, indicating a cautious market stance.
- Market Performance Analysis: Although DME Capital sold early, Seadrill's stock rebounded by 21.7% from March 12, 2026, while the S&P 500 index fell by 2.3%, highlighting market volatility and unpredictability.
- Revenue Dependency: Seadrill's contract revenue for the latest quarter was $273 million, down 2.5% from the previous quarter, illustrating the company's high dependence on fluctuating energy sector prices, necessitating a long-term investment perspective from investors.
- Investment Advice: Despite Seadrill's recent stock recovery, it was not included in The Motley Fool's current list of top investment stocks, advising investors to carefully assess its investment potential.
See More
Citi Upgrades Seadrill to Neutral/High Risk with $46 Target
- Rating Upgrade: Citi upgraded Seadrill from Sell/High Risk to Neutral/High Risk, raising the price target from $32 to $46, reflecting positive signals from improving market demand and strengthened backlog coverage.
- Strong Financial Performance: Seadrill's Q4 EBITDA exceeded market expectations by 7%, and while the offshore market remains in a soft patch, ongoing contracting activity and dayrate resilience provide confidence for future recovery.
- Optimistic Medium-Term Outlook: The company reaffirmed its expectation for a more pronounced recovery in H2 2026, with enhanced revenue visibility as tendering activity broadens and contracting backlog improves, laying a foundation for 2027.
- Improved Relative Valuation: Although Seadrill shares have risen approximately 23% year-to-date, they have significantly lagged the broader oilfield services sector and peers, indicating an improvement in relative valuation, according to the analyst.
See More
Seadrill Q4 2025 Earnings Call Highlights
- Financial Performance Exceeds Expectations: Seadrill reported an EBITDA of $353 million for the full year 2025, surpassing the midpoint of original guidance, which enhances investor confidence amid a challenging market environment.
- Safety Record Innovation: The company achieved its best safety performance in history, with a total recordable incident rate 50% better than the IADC offshore industry benchmark, which not only enhances the company's reputation but may also reduce future insurance and operational costs.
- Backlog Growth: Contracted backlog increased to approximately $2.5 billion, with the West Capella's new contract contributing $152 million, indicating a recovery in market demand and the company's competitiveness in the deepwater sector.
- Optimistic Future Outlook: Management expects total operating revenues for 2026 to range between $1.4 billion and $1.45 billion, with EBITDA projected between $350 million and $400 million, reflecting confidence in future market conditions, particularly with rising day rates and utilization.
See More
