Seadrill Ltd. and Seadrill Partners secure approval of settlement

By Sarah Lizee

Olympia, Wash., April 16 – Seadrill Ltd. and Seadrill Partners LLC secured approval of a settlement between the companies, according to an order filed Friday with the U.S. Bankruptcy Court for the Southern District of Texas.

As previously reported, the companies jointly requested approval of a global settlement of disputes relating to the existing management services agreements under which certain Seadrill Ltd. debtors manage Seadrill Partners’ and its subsidiaries’ business operations.

The companies said the settlement will resolve disputes regarding pre-petition claims between the parties, post-petition charges under the management and administrative services agreements between the parties, and go-forward transition services.

“Approval of the settlement will maximize the value of both sets of estates and permit both groups of debtors to focus on their respective operations and restructuring transactions,” the companies said in their motion.

The settlement provides for the following terms:

• Seadrill Partners will pay a total fixed amount of $11.25 million within three days of the settlement order on account of management services provided, consisting of $2.25 million per month from Dec. 1 through April 30. The fixed fee covers all rigs, regardless of operating status, and access to the capital spares pool through April 30;

• Seadrill Partners will pay Seadrill Ltd. operating fees of $25,000 per day for each of the West Vela and West Capella rigs, effective May 1 through the date that any third-party MSA provider is then in control of any respective rig;

• Seadrill Partners will pay Seadrill Ltd. for unpaid pass-through costs accrued in December, January and February in the amount of $6.48 million within three days of the settlement order;

• Seadrill Partners will directly pay restructuring and transition fees to Seadrill Ltd. in a total amount of $3 million;

• Seadrill Ltd. will waive all claims it may hold with respect to the Seadrill Partners estates, whether administrative, general unsecured or otherwise; and

• Seadrill Partners will waive all claims against Seadrill Ltd.’s estates, including those related to the $19.4 million cash sweep from November.

London-based Seadrill owns, operates and acquires offshore drilling rigs. Seadrill Partners and Seadrill Ltd. made their Chapter 11 bankruptcy filings on Dec. 1 under case number 20-35740 and Feb. 7 under case number 21-30427, respectively.

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