Seadrill Announces Forbearance Agreement

Hamilton, Bermuda - 30 December 2020

Seadrill Limited ("Seadrill" or the "Company") (OSE:SDRL, OTCQX:SDRLF) announces that it has entered into a forbearance agreement with certain creditors in respect of nine out of the group's twelve senior secured credit facility agreements.

The purpose of the forbearance agreement is to allow the Company and its stakeholders more time to finalise negotiations on the head terms of a comprehensive restructuring of its balance sheet. Such a restructuring may involve the use of a court-supervised process.

The Company continues to evaluate capital structure proposals from its financial stakeholders; whilst no agreement has been reached at this point it is expected that potential solutions will lead to significant equitization of debt which is likely to result in minimal or no recovery for current shareholders.

Pursuant to the forbearance agreement, the consenting creditors have agreed not to exercise any voting rights to, or otherwise take actions, in respect of certain events of default that may arise under those senior secured credit facility agreements as a result of the group not making certain interest payments, until and including the earlier of 29 January 2021 and any termination of the forbearance agreement.

Forbearance has not yet been agreed with respect to certain events of default or termination events that may arise under the three remaining senior secured credit agreements, the Company's New Secured Notes, leasing arrangements for the West Hercules, West Linus and West Taurus and a bilateral guarantee facility with Danske Bank.

Without a forbearance in respect of these arrangements, a non-payment of interest or other amounts due under the senior secured credit agreements, the Company's New Secured Notes and/or the leasing arrangements could result in the creditors under these arrangements having the right to accelerate or otherwise enforce their rights under them.

Seadrill press release