Seadrill has been ordered to pay approximately $55m to SFL Corporation after Norway’s Borgarting Court of Appeal unanimously ruled against the offshore drilling contractor in a dispute over the condition of the semi-submersible drilling rig Hercules when it was returned to its owner in December 2022.
The court sided with SFL’s rig-owning subsidiary, ordering Seadrill subsidiaries to pay NOK525m ($55m) in damages, late payment interest and legal expenses. SFL announced the decision on 13 October, confirming that the judgment largely upholds an earlier ruling issued by Oslo District Court in February 2025.
The initial judgment awarded SFL approximately $48m, including damages, interest and legal costs. The latest award has increased to around $55m because of interest accumulated since the original decision, according to SFL. The company has also been granted full recovery of its legal costs for proceedings before both courts.
A debate about the state of the rig
This follows the cancelation of a long term charter by Seadrill for the harsh environment drilling rig formerly known as West Hercules. SFL got the vessel back in December 2022, but the rig owner later disputed the condition of the asset upon handover.
SFL’s claim, filed in March 2023, alleged that the rig had not been redelivered in accordance with the terms of the charter agreement.
In February 2025, Oslo District Court ruled in favor of SFL, awarding damages of approximately $37m, plus interest and legal costs of $11m. Seadrill appealed the decision in March 2025 and in April 2026 proceedings before the Court of Appeal commenced.
Seadrill had stated in its financial filings that it would “vigorously contest” the district court’s ruling. The company also said in August 2025 it had given a NOK574m guaranty to Norway’s enforcement authorities as security for the judgment.
But even with the latest ruling, the legal process may not be over. SFL said both parties have one month from the service of the judgment to appeal to the Supreme Court of Norway. Such a challenge would have to be approved by the Appeals Selection Committee of the court.
It said it would consider the judgment carefully before deciding what to do next.
Hercules came back and sealed a few contracts
Despite the legal battle, Hercules continued to win drilling jobs after its redelivery, including in Canada and Namibia. But the rig sat idle in Norway much of 2025, while its owner searched for extra work.
The rig began a contract with ExxonMobil offshore Canada in July of that year following a special periodic survey and upgrade work in June 2023. The campaign ended in September 2023 and was worth around $50m.
The rig then repositioned to Namibia for a drilling campaign for Galp Energia. Operations began in November 2023 and the contract was completed in May 2024. The assignment was also estimated at $50m.
Hercules’s campaign was completed at the end of October and the rig headed back into Canadian waters in July 2024 on a contract with Equinor. The deal was announced by SFL in August 2023, with the value put at $100m. At the time, the contract built the rig’s contracted revenue backlog to about $200 million.
Following the Equinor assignment, Hercules returned to Norway in November 2024 and was placed in warm-stacked status while SFL searched for new work.
Market conditions delayed new employment
The prolonged period without a contract affected SFL’s financial performance in 2025. In its second-quarter results that year, the company pointed to difficult conditions in the offshore drilling market and volatility in oil prices as factors delaying new employment opportunities for the rig.
A new agreement was announced in March 2026, when SFL secured a $170m drilling contract for Hercules offshore eastern Canada. The customer was described as an unnamed, investment-grade multinational oil and gas company.
The contract covers a minimum of 400 days, with operations scheduled to begin in the first quarter of 2027. During 2026, the rig is due to undergo preparations for mobilisation from Norway to Canada. Odfjell Drilling will once again manage its operations.
When the agreement was announced, SFL chief executive Ole B. Hjertaker said the company expected significant demand towards the end of the decade for semi-submersible drilling rigs capable of operating in harsh environments and deepwater conditions.
The new contract provides Hercules with a further employment opportunity as SFL continues to pursue work for the rig, while the financial and legal consequences of its previous redelivery remain subject to the Norwegian court proceedings.
