Seadrill Ltd
NYSE:SDRL
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
35.18
55.34
|
| Price Target |
|
We'll email you a reminder when the closing price reaches USD.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Seadrill Ltd
You don't have any saved screeners yet
Good morning, and welcome to the Seadrill Limited Fourth Quarter 2018 Earnings Conference Call. [Operator Instructions] Please note this event is being recorded.
I would now like to turn the conference over to Mr. John Roche, Vice President of Investor Relations. Please go ahead.
Thank you, and welcome, everyone, to Seadrill Limited's Q4 Earnings Conference Call.
Before we get started, I'd like to remind us all that much of the discussion today will not be based on historical facts but rather consist of forward-looking statements that are subject to uncertainty.
Included on Page 2 of the presentation is a comprehensive list covering these forward-looking statements. For additional information, do review our SEC filings. Please visit our website at www.seadrill.com.
Now moving on to the agenda. On the call with us today, you'll hear from Anton Dibowitz, our CEO; and Mark Morris, our CFO. Anton will cover off the highlights for the quarter and provide you all with our views on the market and the progress of the recovery. Mark will then provide a review of the financial performance for the quarter along with some recent announcements. We'll then open up the line to take some questions.
And with that, I'd like to turn over the call to Anton.
Thanks, John. Before we go into the details for the quarter, I'd like to touch on a few main highlights since we last addressed you.
Operationally, we had a decent quarter at 96% for the overall fleet. I'd like to thank our employees for their professionalism in what continues to be a challenging market and their dedication to delivering [ more ] safely and efficiently for our customers.
Our backlog currently stands at $2 billion. We remain focused not only on the quantity but also the quality of our backlog additions. During 2018, we added about $500 million to our backlog at Seadrill Limited while securing an additional $300 million on rigs in our joint ventures, investment holdings and rigs which we manage on behalf of others.
Against that backdrop, I'd like to give you a bit of color regarding the $89 million of backlog that we added at Seadrill Limited since our last earnings report.
The West Phoenix was awarded a 2 firm plus 6 option wells contract with Equinor in the U.K. and Norway, which is expected to commence in direct continuation from its current contract. 3 of the options have already been exercised, resulting in backlog of approximately $51 million. Based on this award and additional interest in the rig, we're confident that we can secure continuous work until the start of the Nexen contract. This reaffirms our decision to enter into that contract with a 2020 startup more than a year ago.
The West Castor was awarded a contract with Staatsolie in Suriname, commencing in March 2019. The total backlog, including mobilization, is approximately $27 million. The rig is in country and ready to start operations, and we're excited to be reopening the market that has not had a jack-up operating in it for more than 2 years. This is a solid dayrate, and the contract is just under 1 year in term with no option, which positions us perfectly for a tighter market in 2020.
And lastly, the West Callisto was awarded a 6-month extension with Saudi Aramco, keeping the unit employed until July 2019, adding approximately $13 million in backlog. By Saudi Aramco's own metrics, the West Callisto is amongst the absolute top-performing rigs in their fleet. And we therefore remain confident that we will have opportunities to further extend our contract for Callisto and the other 3 jack-ups currently operating in the kingdom.
Money-wise, our liquidity balance is strong at around $2 billion. We recently launched the consent solicitation which will provide us with additional flexibility in refinancing our Senior Secured Notes, but I'll leave it to Mark to give you the details on that a bit later.
Turning to the market. At the time of our last call, Brent had traded in the $60 to $80 band, providing stability, which is one of the factors we look at in a market recovery. While the pullback in prices over the next 2 months did little to change the fundamental outlook amongst operators, especially the large national oil companies and IOCs, it did have the effect of dampening the rising sentiment amongst service company.
Regardless, overall, we continue to see signposts of a recovery, including dayrates and utilization are trending upwards in all of our segments; more tendering activity, including increased bilateral negotiation; and customers increasingly being willing to reimburse mobilization and contributing to CapEx upgrades, especially for the right rig in the right market.
Continued stability in commodity prices is needed for the recovery to take hold, but the fundamentals for our business remain, and we continue to believe that rates will continue to improve over time.
In the last 18 months, there have been a number of material M&A transactions which have effectively consolidated slightly more than 10% of the total fleet. This consolidation has facilitated the removal of circa 30 floaters and 40 jack-ups from supply over that period. We expect consolidation to continue, helping to drive more rational behavior in the market.
We have and will continue to play our part. There've been several contracts announced recently that we would have not undertaken, taking into account the term of the commitments, the operating costs relative to the dayrate and/or the upfront CapEx required. We will continue to remain disciplined, taking conscious decisions about where, when and especially for how long we will contract our available capacity until the market improves.
And finally, a little bit about our new joint venture in Angola. We're very pleased about this. The JV came about based on our demonstrated track record of bringing newbuilds to market, the strong relationships and operational track record we have established during a decade of continuous operation in Angola.
The JV is effectively a pooling arrangement, with each party providing 2 rigs into the pool. Under a separate agreement, Seadrill managed the delivery and mobilization of the Sonangol newbuild to Angolan waters, at which point they will become part of the JV. We will market the full units jointly. Seadrill has paid a management fee to operate all 4 units. And the profit, after considering our management fee, is split 50-50.
This is an attractive opportunity for us because our capital contributions are limited to necessary working capital. We see significant growth potential in the Angola market, with visible demand for at least 4 incremental floaters with startups between the middle of 2019 and early 2020. And in the longer run, this relationship provides an opportunity for fleet growth, with the 2 high-specification Sonangol units fitting nicely into our standardized modern fleet.
Mark, over to you.
Thank you, Anton, and good morning or good afternoon wherever you are.
So just to remind everyone, this is our first set of quarter-over-quarter comparable results post emergence and after the application of fresh start accounting.
Turning to the financial highlights. Of all 35 rigs, 17 were working on average through the quarter, comprising of 9 floaters and 8 jack-ups. Revenues were up 17%, primarily due to the West Hercules and West Phoenix working on new contracts at higher dayrates and for longer, the West Elara working at a higher dayrate and the Sevan Louisiana returning to service.
Operating costs increased 20%, mainly reflecting additional activity in the quarter from the West Hercules, West Phoenix and Louisiana, with each having more days in operation.
During the quarter, we also collected a $21 million overdue receivable. This originally related to a written-off receivable from a customer before we emerged. And now post-emergence, it has been recognized as other income now that it has been received. Additionally, we have received a further and final $26 million in January this year, which will be recognized in Q1 in the same manner.
EBITDA of $73 million for the quarter increased by 59%, reflecting the movements previously mentioned. Our EBITDA was higher than guidance we gave, primarily due to $21 million overdue receivable, actual repair and maintenance costs being lower than forecast for the quarter and the release of certain accruals.
And finally, you'll note in the press release the depreciation of $111 million was $14 million lower this quarter. Q3 depreciation was a little higher than normal, reflecting cancellations and changes in usable life of certain CapEx projects which accelerated the depreciation charges in Q3.
So moving on to the balance sheet. As always, there are a number of moving parts here, and I'm just going to draw out the main one. In current assets, restricted cash was used as $126 million of West Rigel sales proceed were used to purchase and redeem Senior Secured Notes, which is partially offset by a loan repayment from Seabras Sapura. And the carrying value of Seadrill Partners common units and interest rate cap derivatives saw their market values decrease in the period.
Noncurrent assets decreased mainly due to the normal depreciation of our drilling units and capital expenditures in the quarter, a reduction in related party receivables from the loan repayment received from Seabras Sapura, amortization of favorable contracts and finally, a decrease in investments in associated companies, primarily due to the net loss at Seadrill partners. The main component of this loss was a provision for an uncertain tax position.
Moving on to the liabilities side. Current debt decreased, primarily due to the retirement of $126 million of Senior Secured Notes using the West Rigel's sales proceeds. And finally, noncurrent liabilities, the main movements here relate to a provision for an uncertain tax position, partially offset by some long-term debt becoming current in relation to the 3 consolidated variable interest entities managed and financed by Ship Finance International from whom we lease these rigs under sale and leaseback arrangements.
In addition to owning and operating 35 offshore drilling units, it's just worth reminding everyone that we also have 4 other significant investments that are not consolidated and which are recognized in marketable securities and investment in associated companies. These are Seadrill Partners, in which we effectively own a 65% economic interest through various investment holdings; SeaMex, which is a 50-50 joint venture with our partner FinTech; Seabras Sapura, which is 50-50 joint venture with our partner Sapura Energy; and lastly, Archer, in which we hold a 16% equity interest.
As you can see, between them, they have a combined backlog in excess of $3.8 billion and EBITDA for Q4 of $276 million, of which we will benefit from our economic share. You can read the details yourselves, but we believe these 4 investments continue to represent material value for us as a company going forward.
Turning to financing liquidity. We continue to have strong liquidity with $3 billion in cash and no near-term debt maturities. Restricted cash stands at $461 million. Our $5.7 billion of bank loans mature between 2022 and 2024, and there is no amortization until 2020, potentially until 2021 if we elect to use the $500 million amortization conversion election facility.
The outstanding balance on the Senior Secured Notes, which mature in 2025, is currently $769 million following the redemption in Q4. We have a limited set of financial covenants to ensure we've got adequate flexibility through the recovery. We have one covenant until 2021, which is the minimum liquidity covenant. Thereafter, we have an additional 2 covenants that come into effect in 2021, being net leverage and debt service coverage ratio.
Since the end of the quarter, we have launched a consent solicitation offer on the senior secured notes. The offer seeks various amendments to improve flexibility for the company to repurchase the notes. A consent fee of 25 basis points will be payable. And the required majority of noteholders, representing more than 50%, have agreed to consent the proposed amendments and to tender their notes in the subsequent planned tender offer. Subject to a successful consent solicitation, a $340 million tender offer will be launched shortly after the 8th of March and priced at 107. On completion, this should result in outstanding Senior Secured Notes, reducing from $769 million to around $460 million, with the majority of cash proceeds used coming from our restricted cash.
And now finally, turning to our guidance for the first quarter. EBITDA is expected to be slightly lower for quarter 1 at around $60 million. This primarily relates to the downtime on the Sevan Louisiana and West Hercules and the receipt for the $26 million overdue receivable that was collected during the quarter.
With that, I'll hand back to John for Q&A.
Thanks, Mark.
[Operator Instructions] The first question comes from Mike Urban with Seaport Global.
So you skew the impacts or perhaps lack thereof from the commodity price volatility that we saw in the quarter. I would agree that we didn't really see much in the way of changes from IOCs in it [indiscernible] you also talked about just taking away a little bit of the bullish sentiment perhaps. Have you seen any project or tender deferrals or anything like that as a result of that volatility we saw in the quarter?
Yes, this is Anton. No, not really. I mean, there is always an ebb and flow of tender activity, even in a mid-cycle, even at top of the cycle where certain tenders get pushed backwards and forwards over time. So I think, simply, I'd say that we haven't seen anything out of the ordinary as a result of the pullback over those couple of months at the end of the quarter.
Got you. And then as it pertains to the global floater market, again, I think we [ have -- there are ] some disparate views out there. There are certainly those in the more bullish side of it, I think, on the pretty significant rate inflection here. I think -- although most people, I think, would say it's kind of more [ lull ] and kind of almost looking like a 2020 event in terms of getting a rate improvement on the floater side. I guess, where you come down on that subject?
Well, rates have improved since where they were 6 months ago and a year ago. And that's what we really look at, is continuum. I'm not going to get -- shape and pace to be determined, but utilization is higher than it was a quarter ago and 2 quarters ago. And rates are higher than they were 6 months ago and a quarter ago. So we have to look at these things over time, and we look at the -- when we look at the signposts and the trends towards a recovery. I mean, in the floater space, yes, there's a broad base everywhere, every market, no, not necessarily. But for the right rig with the right operating track record, with the right customer and the right market, customers are willing to pay more to get the rig they want. They're going out to tender earlier, i.e., increase lead times to get to secure the rig that they want to secure for that program. So I think those are -- they're more willing to pay for mobilization to get the right rig into the right market. They're willing to have discussions about contributing to CapEx and upgrades to get the rigs they want and the driller they want to drill their programs. So I think all of those collectively are positive signs. I'm not going to sit here today and say this is a healthy market, no, not yet. But when you look at those factors in totality and see them all trending in the right direction, I think it gives us a good feeling and good confidence about the future and where we're headed.
The next question comes from Gregory Lewis with BTIG.
I was hoping you could talk a little bit more -- I guess, first, congratulations for the JV with Sonangol. I was kind of wondering, could you provide any more color around how we should be thinking about startup times? What may be the potential? I don't know how you want to think about it. How we should be thinking about it on like an EBITDA basis? Or just sort of any kind of color you can kind of give us on how we should be thinking about this developing?
Well, as far as startup times, I think as I put in my -- as stated in my prepared comments, we see at least 4 programs where both are looking for startup rigs between the middle of '19 and early 2020. So I think that's very positive for the JV. We know that there is a visible demand and a backlog at work with 5 to 7 rigs of demand in Angola going forward the next 5 years. But we need to get what the operators who are looking for programs and market these rigs jointly with Sonangol. But hopefully, when exactly any particular rig is going to start up, it depends on which operator and which program we can secure it on.
Okay. And then just thinking about the fact that Angola is a little bit more of a difficult market to operate in, in some of the other markets that you're in, I mean, should we be thinking about this in terms of, yes, there's utilization. But what about in terms of like positive drilling margin? I mean, is it safe to think that these things -- is it safe to think that these contracts are going to be at least above kind of leading-edge dayrates, which are mid-100s at this point?
I would say that there's a little bit of a general. These rates will work at market. I mean, they need to be competitive, and they will operate at market dayrate. What I would say is we have a demonstrated track record. We've been drilling there for more than 10 years. So we know how to operate in the market. And we have very capable assets. The 2 Sonangol units are high-specification, seventh-gen dual BOP units. And we have units that have a strong track record of demonstrated operations with all of the customers who are operating there now. And I guess you could -- to the previous caller or the question I answered before, for the right rig with the right drilling contractor, we should be able to secure some fair dayrates. And we certainly see the operators who want to get to work, including in Angola, willing to pay for the right rig in the right market.
Okay. And then just one more from me, just following up on this -- on Sonangol JV. You mentioned the potential opportunities. Initially, we're starting with 4 rigs in this JV. Do we think this is -- how much potential do we kind of -- should we be thinking about over the next couple of years and potentially scaling this up beyond the initial 4?
Speaking to me as a former commercial guy, I think the potential is unlimited. We're there. We're very close to Sonangol. It's a growing market, an extremely attractive market. Once you have the relationship, and you develop it and continue to develop it, I'd love to see more rigs added to it. But we'll just have to see how it plays out.
The next question comes from Lukas Daul with ABG.
I was wondering, when you speak about the operators being willing to pay up for the right rig, what in your mind is the right rig these days, looking at the programs that you are bidding for? And what do they do if they can't get the right rig? Do they walk away from the project? Do they start looking at lower spec and push the prices down? What is happening in that -- how is the dynamic of the process?
Well, I'll start with a comment. I have Matt Lyne, our Head of Marketing here. So I'll let him fill in if he wants to afterwards. I think the right rig is very much dependent on the market that you're looking to operate in. You don't need a brand new 1,250-ton dual activity drill ship to drill a number of wells in West Africa, which were originally drilled by third- and fourth-generation semi-submersibles. If you're drilling highly technical sub-salt wells in Brazil and the Gulf of Mexico, but I think what operators are looking for are the right rig specifications for their program that can deliver their wells efficiently. And that's something different in every market. You don't have to have the newest rig for every program.
Now I think one of the major drivers, obviously, is the availability in a small window that has a big impact. But if we take a look at 2 markets that carry different spaces right now, the harsh environment market, you look at the Tier 1 rigs, you get a significant pricing premium for those because they have better motion characteristics, newer technologies. And I think we're all quite familiar with that, and that's indicative of where that market sits in the general rate range. In a benign environment, which is a bit more tricky, I think differentiating factors can be the smaller elements. For example, on our units that we have currently working in Asia, we've been able to beat the market on the dayrates there, collect mobilizations from the operators because those units have MPD units on them. So that's our third-generation MPD system, which seems to be the flavor of the month for most operators. So spending the time and the money to invest in that upfront has resulted in better returns for today. So I think that's where we see where Anton kind of cues into the right market, the right rig at the right time.
Okay. And I mean, you are decently covered on your drill ships. But how do your semis sort of step up in that context? Can you talk a bit more about that?
No, I think, along with -- you see the utilization levels in the drill activity ship market picking up substantially and amongst the market of supply, ticking up in the 70s towards 80%. 1.5 activity semis are extremely capable units, and I definitely see a future for them there [ and ] effective tooling. And I can tell you today, we're having significantly more discussions about those units than we were 6 months ago. They also have a place. If you look at our Sevan design units with those of the round units, they have extremely good motion characteristics and ability to operate in high current areas. They can operate at significantly shallow water depths than traditional semis in high current areas. So we see a particular niche for those units going forward. Again, it comes back to the question of having the right rig in the right market. There are certain applications on a long-term development where the dual activity rig, if one properly by the operator, can give significant benefit. But as an exploration asset especially, the semi-submersible with offline capability is a fantastic tool. You also have the ability -- the last thing I was going to say, you also have the ability in that market, and we are looking with a bit of an underserved market because it's scrapping -- it's scrapping in that market for rigs that can do a full range of activities, go all the way from ultra-deepwater operations in DP mode down to [ mold ] mode, and we made announcements, I guess, almost a year ago about putting more in system on at least one of the units in our fleet to better take advantage of that market.
Okay. And I agree sort of with your strategy of staying disciplined on the bidding side. But obviously, there are others being willing to take on work at, let's say, discounted rates. My question is, when you look at the competitive environment now, do you see that moving in the right direction in terms of bidding, in terms of sentiment, in terms of people maybe starting to demand a little bit more than just purely looking for keeping the rig warm?
Yes. I think it is moving in the right direction, where -- not everybody for every job, but there does seem to be a little more discipline amongst the industry, amongst our peer group. I will say that I did mention consolidation, and I think that's one of the key reasons why we've always said that we welcome consolidation, whether it's done by us or others. Having 10% of the existing fleet, essentially, we distribute it into pure hand creates pure more rational players who are more likely to make rational and disciplined decisions in that market. So we welcome that. And we fully expect that, that consolidation story will continue as you go forward. You need to have a certain critical mass in order to be a player in this market and in order to effectively be able to provide an asset in all of the major basins and for synergies in your operations by clustering units in particular markets. So fully expect that the consolidation we've seen over the last 18 months is going to continue, and we welcome that because I think it will add to the discipline and make a better market for all of us.
The next question comes from Stian Malterudbakken with Arctic Securities.
Just a quick one. Can you just please add some comments on the cash flow for SeaMex in the quarter? Asset cash dropped somewhat and debt increased. And also, when do you expect a step-up in dayrates for SeaMex?
I can start with the dayrates. So obviously, we did make public that we had agreed to extend our dayrate discounts in Mexico in the SeaMex JV. Mexico is an important market for us, and we expect it to be an important market going forward. And part of our decision-making has to be working with our customers. I would say that those -- the 5 rigs that are operating there at 130 and 160 are still attractive rates by market standards. So we will continue to work with our customers going forward because we see potential in that market and the Pemex to continue to operate that.
Yes, I'm not sure I quite picked your first question up on SeaMex cash flow. We lost it...
Yes. I just saw that the bank that in Q3 was $318 million cash of $109 million. As of Q4, the bank debt is $333 million and cash of $99 million. So is the multiple cash flow in the quarter for SeaMex mainly due to [ SOS ] or other items?
Yes, I think that you're referring to the bank revolver.
The next question comes from Piotr Ossowicz with Ironshield Capital.
So just maybe the first, following up on SeaMex. If I remember correctly, you had previously disclosed the EBITDA of about $123 million for 2017. Now looking at the last 2 quarters, it seems like the level is much higher on the annualized basis so more to the tune of $150 million. So is there something that makes the SeaMex EBITDA lower in the first half of the year and whether we should -- whether it would be fair to annualize the last 2 quarters? Or we should expect a lower number going forward?
Nothing intuitive off the top of my head that should be making it higher. I mean, [ it's not a number ] I brought to the front of my forehead when you're comparing last year's to this year's...
'17.
'17. And obviously, you're aware we've had a number of dayrate changes, so I don't think it's really going to move the EBITDA as a function of operating uptime and what the dayrates are. But we can look at it and come back to you if it's something specific. But I -- there's nothing off the top of my head that makes me think that there's any one-offs or anything other than that.
No, [ pick at -- ] look, you've seen the extension of the dayrates at their current levels going out for another 12 months. So I think as you roll forward your projections for SeaMex, it's best to reflect that, use the fleet status to reflect that -- in your most recent data point is best to use versus prior periods.
Okay, this is helpful. And moving on, on the joint ventures on SeaMex end. And SeaMex, of course, you have been talking for quite a while about opportunities of monetizing those assets either on the equity side or the vendor alone. Has there been any progress in this regard?
We obviously continue to look at it, but it's a question of value and timing. I mean, as Mark said in his comments, these are joint ventures and investments that hold considerable value for us, and we will continue to accrue value in them. Obviously, like anything else, if there is a transaction which can create significant value and makes sense for us, then we'll take a look at it, but there's no need to -- no rush to do anything.
Okay, that's understood. And moving on to your comments that you're seeing grades being higher now than 6 months ago. I know that it's commercially sensitive to disclose the exact level of the rates. But can you give us a bit of a sense, what kind of value bit of the increase you are talking quarter [ as per annual, ] say, mid-100s 6 months ago, and now this is moving towards the high 100s or 200s. Just to get a sense like how -- what are the tangible indications of the rates moving?
Look, I mean, it's different rigs, different markets, and I can't speak to what everybody is doing. But I think broad-based, 6 months or a year ago, deepwater floater fixtures for high-specification assets were in the kind of 120 to 150 range. And recently, we fixed rigs closer in that market to 200 than they were to 150. And when you look at the bidding activity, not only from us and amongst our competitors, I think you'll continue to see those rates increase over time.
Okay. And then just specifically, there was a question about the semis before, about looking more specifically at Sevan vessels. Do you see any opportunities in this market for them?
I think the Sevan units, as I said before, based on their design, are attractive in particular markets, in current areas and traditionally shallower water depths and have traditionally been served by semis. So we certainly see them as a part of our future going forward.
And lastly, on the notes tender announced recently. What is the rationale for [ coming to ] the little discount there now? I mean, obviously you're giving up a bit of liquidity...
Yes. Okay. Let me just -- so this is in relation to the tender, yes. So look, this is all really about building flexibility for us to be able to repurchase and retire the notes. When you think about the cash that we've got, you certainly could think about it in twofolds. There's an unrestricted block of cash, which only sits in what we call RigCo or -- which is a sort of main operating entity. And then we've got restricted cash, which predominantly a large chunk of it sits with new FinanceCo, which is where the -- which provides effectively part of the security package to the Senior Secured Notes. And what we're really doing is taking something that's closing up the balance sheet, which is liabilities on one side and cash that we can't really use in operations on the other. And that tender offer would obviously bring that down and net them down. So it's obviously reducing interest, it's retiring some of the notes, which are expensive for us, and using cash that we can't really use in our day-to-day operations. So it's just making use of being more efficient and letting down part of the balance sheet on assets and liability.
[Operator Instructions] The next question comes from Patrick Fitzgerald with Baird.
Could you provide an update on what's going on with the newbuild jack-ups in Dalian?
So the newbuild jack-ups, as you recall, those are units that were purchased, were committed to in special corpus entities for us. So there is no recourse back to parent or parent company going [ through ] associated with them. I would -- the way we view them is as options and optionality on the future of the market. We continue to have a good dialogue with Dalian about their future. And if the right opportunity were there, then we would look at maybe taking some of those to put them into the opportunity. But for us, again, provides us optionality on future fleet growth with the right opportunity.
Is there any way to monetize that optionality?
Not really at the moment. And I think, also, with the additional uncertainty around them -- having them being in administration, I think, sort of makes it more complicated. But obviously, the extent -- we represent our position as a creditor, and obviously, the discussions continue with [ Dalian ] in respect of those units.
All right. On Seabras Sapura, the contracts conclude between '19 and '24. And obviously, you have a very healthy backlog there. Is it safe to assume the EBITDA levels that you're currently generating are likely to continue into the early '20s, 2020s, that is?
Yes, for the bulk. I mean, we have a couple of units to come off in '19 that are actively being marketed at the moment. I mean, obviously, to the extent they come off, that will have some bearing on EBITDA. But the others are working, and like I said, it's a bit of a cash-generating machine at the moment. So it's a business we like. And it's not a core business, but it's a business they're doing well at the moment, so...
Yes. Is the tender going to be pro rata?
Is the tender going to be pro rata?
Yes, for...
Oh sorry, the NSN, sorry, you jumped subjects. Okay. Are you on the NSN? Yes, it will be pro rata, yes.
Okay. And then how many idle jack-ups and floaters are warm stacked, such that they could work pretty quickly if you wanted them to?
Are you referring to the difference between the amount of contracted rigs versus marketed supply? And if you are, you've got about 100 rigs that are jack-ups that are across the entire fleet.
Our fleet or total fleet?
Our fleet or total fleet?
Yes. I'm sorry, I should specify, your fleet. How many of your fleet is actively marketed, I guess, I should say?
So our focus for '19 is keeping the existing jack-ups working that you see active in the market today. So we've got 6 idle units. And I think the key is you've got the Castor that's just starting a contract with Staatsolie and then the Callisto coming off contract. So the focus is those, and I think the remainder of the 6 that remain idle right now, we'll need the right contract at the right rate for us to put those back into market.
I think -- this is Anton. It's [ much -- versus a ] question of discipline versus the ability to reactivate and would also differentiate between floaters and jack-up where jack-ups are relatively, I'll say, more simple pieces of machinery and the ability to get them back working and start them up is relatively easier, so in the order of 3 months. But it very much depends on the particular unit, where it is, whether it's with a classing activity, whether there's any deferred maintenance. But as an overall, I think that the bigger story for us, and the bigger point is our capital discipline and our market discipline in selecting what units we want to work because it's cost-effective, given the cost to bring it back to market versus what is available in the market and being disciplined with our -- with the capital and the cash that we have in the balance sheet.
Okay. I mean, so you don't have a number of -- I know how many are currently working. And you have the -- any -- how many more are you looking to put to work in the near term, I guess is the question. Or is it just data-oriented?
I think we'll -- I mean, it's -- that's a long conversation, maybe not enough for the call, but we could put them all to work at the right rate at the right contract at the right contract conditions. So without that, we're not going to put any of them to work. On the jack-up side, it's a relatively easier decision to make because the capital investment is lower in order to get them to work. On the floater fleet, I think we're pretty comfortable with the rigs that we have working right now.
Okay. The next question comes from [ Anup Goswami ] with Cantor.
Just a quick question on maintenance CapEx. What's the annual expense for that? And would that include any specific periodic surveys?
Maintenance CapEx? I mean, it depends -- obviously, it depends on the rig where you are in the rig cycle. But I think you can look at about $1 million a year just for general maintenance CapEx. And then your 5 years' surveys, if you go look at some of the materials we've put out while we're doing the restructuring, probably talking about $20 million for a floater on the 5-year cycle and $30 million at the ten and $5 million to $7 million net for a jack-up.
Okay. And then just a quick -- and just a quick question on the $1.5 billion of unrestricted cash on the balance sheet. There's going to be $460 million remaining of the 12% notes. Would the company consider just tendering for the remaining notes or just over the long-term looking to take out that high-cost debt?
The [ sure ] answer is yes, if we could. It's not quite that simple. So the unrestricted cash that we use in our operations have some restrictions about what we can use it on. So really the only way that we can retire those notes is by a number of mechanisms. And again, part of the amendment process looks to increase the flexibility around this to the extent, obviously, it gets completed and a successful go-through. But basically, the only way we can really retire those notes -- so 1 of 3 ways. One -- and I'm sort of ignoring -- sort of using the make-whole and a broader Big Bang sort of refinancing. But either through selling parts of the security packages provided and both proceeds being used to retire it down. Obviously, distributions that come in can be used to pay down or any form of capital raise at Seadrill Limited, the holding company, can be used. So we'll continue to monitor the situation. And obviously, our -- of course, our high priority is to take out expensive debt when we can, but we can't just use the unrestricted cash to retire the remaining $460 million.
I think I'd take it up a little. Yes, we are focused on high-cost debt and taking it out when it's rationally reasonable. But we built the runway that we did to a market recovery for a reason. So for us, the previous questions that we've have about spending capital to bring rigs back out into the markets and get them working again, so for us, it's a balance between managing the liability side of the balance sheet but also having sufficient cash available and capital that we can deploy on bringing rigs back into the market when it makes sense. So it's a constant balance, and that's...
I mean, the one thing to remember about the NSN is -- I mean, there's no amortization, and there's very little cash interest. So there's a leverage debate, I totally agree with you, it's expensive debt in pure economic terms. But in terms of affordability, the impact it has is relatively marginal on the affordability in terms of cash flow going through while we think about other deployments of cash that can generate revenue and EBITDA in order to be able to pay it off. So that's the sort of thought process we have to go through, but also, there's just some basic limitations on what cash we can use where. And part of this amendment process will simplify some of that.
Okay. This concludes our question-and-answer session. I would like to turn the conference back over to Mr. John Roche for any closing remarks.
Thank you. And thanks, everyone, online today for joining us. This concludes Seadrill Limited's Fourth Quarter 2018 Conference Call. Thanks again. Bye.
The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.