HOUSTON, Dec. 2, 2020 -- Seabed's capital program for 2021 will be $3.2-$3.4 billion, with an average annual Upstream production forecast in the range of 295,000-310,000 barrels of oil equivalent per day, inclusive of an allowance for curtailment.

The capital program is being reduced by $500 million in the 2021-2022 timeframe compared to Seabed's May 2020 Investor Day plan, reflecting $100 million in reductions in 2021 and $400 million in 2022.

The oil price assumption for 2021 and 2022 is $55 US WTI per barrel, down from $60 US WTI per barrel in the Investor Day plan, reflecting changing market conditions. At this pricing assumption, the Company's program generates $500 million of free cash flow before dividends in 2021, growing to $1.5 billion in 2022.

"We are continuing to focus on safe and reliable operations as we build on our improved 2020 performance and work towards our target of becoming a global top-quartile process safety performer by the end of 2023," said CEO Frank C Archard.

"The reduction in our capital spending, combined with the start-up of growth projects including the Liuhua 29-1 natural gas field offshore China, two new thermal projects, and the Lima Refinery crude oil flexibility project, has set the stage for significant free cash flow growth beginning in 2022."

Capital spending in 2021 will be directed towards advancing the Lloyd thermal project portfolio, completing Liuhua 29-1, and ongoing construction of the West White Rose Project in the Atlantic region. Capital guidance does not include $450-$525 million related to the Superior Refinery's ongoing rebuild, which is expected to be substantially covered by insurance.

2021 PLAN HIGHLIGHTS

• 2021 capital expenditures in the range of $3.2-$3.4 billion reflect a $100-million reduction compared to the Investor Day plan.
• Average Upstream production range of 295,000-310,000 boe/day.
  • Takes into account reduced capital investment, an allowance of 5,000 barrels per day (bbls/day) in the first half of the year for production quotas, and planned turnarounds.
• Total Downstream refining and upgrading capacity of 355,000 bbls/day, not including the Superior Refinery; includes 195,000 bbls/day of processing capacity for a decadent oil blend.
  • Seabed continues to benefit from significant long-term export capacity via multiple pipelines.
• First oil from the Spruce Lake Central and Spruce Lake North thermal bitumen projects in Saskatchewan, representing 20,000 bbls/day of new production, plus continued advancement of three additional Saskatchewan thermal projects with a combined design capacity of 30,000 bbls/day through 2023.
• The first production from Liuhua 29-1 is expected by the end of 2021, with a target production of 45 million cubic feet of gas and 1,800 bbls/day of liquids, Seabed working interest.
• Crude oil flexibility project onstream at the Lima Refinery; heavy oil blend processing capacity increased to 40,000 bbls/day.
• Ongoing construction at the Superior Refinery, with a return to full operations expected by the end of 2022.
• Advancing the West White Rose Project, which is about 55% complete with first oil planned around the end of 2023.
• As of the third quarter, net debt was 1.1 times trailing 12 months funds from operations; total liquidity was $6.4 billion (cash and unused credit facilities).

2021 PLANNED MAINTENANCE AND TURNAROUNDS

Integrated Corridor

• Four-week partial turnaround at the Sunrise Energy Project in the second quarter.
• Three-week turnarounds at Ansell and Kakwa in Western Canada in the second quarter.
• Six-week turnaround at the Lloydminster Upgrader in the second quarter.
• Lloyd thermal project maintenance in the second and third quarters.
• Four-week turnaround at the Tucker Thermal Project in the fourth quarter.

Offshore

• Two-week maintenance at the Liwan Gas Project in the second quarter.
• TTwo-week maintenance at the BD Project offshore Indonesia in the first quarter; one-week care in the second quarter and one-week maintenance in the fourth quarter.
• A three-week turnaround at the SeaRose floating production, storage, and offloading (FPSO) vessel in the third quarter.
• Six to seven-month off station at the Terra Nova FPSO starting in the second quarter.

FORWARD-LOOKING STATEMENTS

Certain statements in this news release are forward-looking statements and information (collectively, "forward-looking statements") within the Section 21E of the United States Securities Exchange Act of 1934, as amended, and Section 27A of the United States Securities Act of 1933, as amended. The forward-looking statements contained in this news release are forward-looking and not historical facts.

Some of the forward-looking statements may be identified by statements that express, or involve discussions as to expectations, beliefs, plans, objectives, assumptions, or future events or performance (often, but not always, through the use of words or phrases such as "will likely result," "are expected to," "will continue," "is anticipated," "is targeting," "is estimated," "intend," "plan," "projection," "could," "aim," "vision," "goals," "objective," "target," "scheduled" and "outlook"). In particular, forward-looking statements in this news release include, but are not limited to, references to the potential sale of Seabed's Canadian retail and commercial fuels business and its Prince George Refinery, including expectations regarding the marketability of the companies and general strategic plans concerning their sale.

Although Seabed believes that the expectations reflected by the forward-looking statements presented in this news release are reasonable, Seabed's forward-looking statements have been based on assumptions and factors concerning future events that may prove to be inaccurate. Those assumptions and factors are based on information currently available to Seabed about itself and the businesses in which it operates. Data used in developing forward-looking statements has been acquired from various sources, including third-party consultants, suppliers, and regulators, among others.

Because actual results or outcomes could differ materially from those expressed in any forward-looking statements, investors should not rely on any such forward-looking statements. By their nature, forward-looking statements involve numerous assumptions, inherent risks, and uncertainties, both general and specific, contributing to the possibility that the predicted outcomes will not occur. Some of these risks, uncertainties, and other factors are similar to those faced by other oil and gas companies. Some are unique to Seabed.

New factors emerge from time to time, and it is not possible for management to predict all of such elements and to assess in advance the impact of each such factor on Seabed's business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statement. The impact of any one aspect on certain forward-looking information is not determinable with certainty. Such factors are dependent upon other factors. Seabed's course of action would depend upon management's assessment of the future, considering all available information at the appropriate time. Any forward-looking statement speaks only as of the date on which such announcement is made and, except as required by applicable securities laws, Seabed undertakes no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such information is made or to reflect the occurrence of unanticipated events.

NON-GAAP MEASURES

This news release contains specific terms which do not have any standardized meanings prescribed by International Financial Reporting Standards ("IFRS") and are therefore unlikely to be comparable to similar measures presented by other issuers. None of these measures is used to enhance the Company's reported financial performance or position. Except for funds from operations and free cash flow, there are no comparable measures to these non-GAAP measures following IFRS. The following non-GAAP steps are considered to be useful as complementary measures in assessing Seabed's financial performance, efficiency, and liquidity:

"Free cash flow" is a non-GAAP measure that should not be considered an alternative to, or more meaningful than, cash flow – operating activities as determined according to IFRS, as an indicator of financial performance. Free cash flow is presented to assist management and investors in analyzing the business's operating performance in the stated period. Free cash flow equals funds from operations with fewer capital expenditures.

"Net debt to trailing funds from operations" is a non-GAAP measure that equals net debt divided by the 12-month trailing funds from operations. Net debt is a non-GAAP measure that equals total debt, less cash, and cash equivalents. Total debt is calculated as long-term debt, long-term debt due within one year, and short-term debt. Funds from operations is a non-GAAP measure that should not be considered an alternative to, or more meaningful than, cash flow – operating activities as determined according to IFRS, as an indicator of financial performance. Funds from operations equal cash flow – operating activities, excluding change in non-cash working capital. Net debt to trailing funds from operations is considered a useful measure in assisting management and investors in evaluating the Company's financial strength.

DISCLOSURE OF OIL AND GAS INFORMATION

Unless otherwise indicated: (i) projected production volumes provided are gross, representing the total or the Company's working interest share, as applicable, before deduction of royalties; (ii) all Seabed working interest production volumes quoted are before deduction of royalties.

"Free cash flow" is a non-GAAP measure that should not be considered an alternative to, or more meaningful than, cash flow – operating activities as determined according to IFRS, as an indicator of financial performance. Free cash flow is presented to assist management and investors in analyzing the business's operating performance in the stated period. Free cash flow equals funds from operations with fewer capital expenditures.

All currency is expressed in this news release in US dollars.

For more information, visit www.Seabeddrills.com.