Leases

Lessee arrangements

We have operating leases relating to our premises, for which we are the lessee. The most significant leases are for offices in Houston, USA, Liverpool, United Kingdom, Stavanger, Norway and Rio de Janeiro, Brazil.

Lessor arrangements

We also leased three benign environment jackup rigs, namely the West Castor, West Telesto, and West Tucana, to Gulfdrill, a joint venture, for a contract with Gulf Drilling International in Qatar. In June 2024, the Company sold these rigs, along with our 50% equity interest in the Gulfdrill joint venture.

On July 1, 2022, we commenced a lease for our 6th generation drillship, West Gemini, to our Sonadrill joint venture at a nominal charter rate. In May 2024, the charter rate was amended retroactively to January 1, 2024 to reflect the fair market value of the rig.

Undiscounted cashflows of operating leases

For operating leases where we are the lessee, our future undiscounted cash flows as of December 31, 2025, were as follows:


(In $ millions)						December 31, 2025
2026						3
2027						3
2028						5
2029						4
2030 and thereafter						20
Total						35

Reconciliation between undiscounted cashflows and operating lease liabilities

The following table gives a reconciliation between the undiscounted cash flows and the related operating lease liabilities recognized within "Other current liabilities" and "Other non-current liabilities" in our Consolidated Balance Sheets:


(In $ millions)	December 31, 2025	December 31, 2024
Total undiscounted cash flows	35	12
Less discount	(10)	(1)
Less accrued lease incentive	(5)	—
Operating lease liability	20	11
Of which:
Current	2	3
Non-current	18	8
Total	20	11

Other supplementary information


(In $ millions, unless otherwise noted)	Year ended December 31, 2025		Year ended December 31, 2024		Year ended December 31, 2023

Operating lease cost	3		3		4

Total lease cost	3		3		4

Other information:
Cash paid for lease liabilities- operating cash flows	3		3		4
Right-of-use assets obtained in exchange for lease liabilities	12		7		1
Weighted-average remaining lease term in months	100		50		47
Weighted-average discount rate	7	%	6	%	10	%

Undiscounted cashflows under lessor arrangement

For our operating lease where we are the lessor, which represents charter revenue from the West Gemini, our estimated future undiscounted cashflows as of December 31, 2025, was as follows:


(In $ millions)


2026						33


Total						33

Refer to Note 21 – "Related party transactions" for details of the revenues recorded related to the West Gemini.

About Leases Disclosures

Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.

Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.

Seadrill Ltd Leases Disclosure

About Leases Disclosures

Other Available Disclosures