Shelf Drilling (SHLF) Q1 2025 earnings summary

Executive summary

• Q1 2025 delivered strong operational execution with 99.4% fleet uptime, a total recordable incident rate of 0.24, and high operational efficiency, supported by a new HSE action plan.

• Adjusted EBITDA rose 13% sequentially to $96.2 million (40% margin), driven by new contracts in Norway and Nigeria, with net income of $13.7 million.

• Capital expenditures and deferred costs dropped to $15.5 million, supporting strong cash flow and liquidity, with quarter-end cash at $206.6 million, up $54.3 million from Q4 2024.

• Fleet repositioning included successful rig relocations from the Middle East to West Africa, ongoing asset disposals, and a focus on operational excellence and proactive marketing amid macroeconomic uncertainty.

• Backlog stood at $1.63 billion as of March 31, 2025, with 29 of 33 rigs contracted at an average dayrate of ~$100,200.

Financial highlights

• Adjusted revenues for Q1 2025 were $242.7 million, up 8% sequentially from $225.4 million in Q4 2024.

• Adjusted EBITDA margin improved to 40% from 38% in the previous quarter.

• Net income for Q1 2025 was $13.7 million.

• Quarter-end cash and equivalents were $206.6 million, with total liquidity at $332 million including undrawn RCF.

• CapEx and deferred costs were $15.5 million, down from $31 million in Q4 2024 and $48.5 million in Q1 2024.

Outlook and guidance

• Full-year 2025 Adjusted EBITDA guidance revised to $310–$360 million, down $20 million due to early contract termination in Denmark.

• CapEx guidance for 2025 lowered to $85–$115 million, reflecting reduced spending and expected to improve year-end cash position.

• Over $100 million cash expected at year-end 2025, even at the low end of EBITDA guidance.

• Utilization and revenues are anticipated to improve in H2 2025 as redeployed rigs return to service, with a solid pipeline of near-term contract opportunities.

• Management expects continued market volatility due to oil price fluctuations and global economic uncertainty.