Report
Martin Huseby Karlsen

Another stranded harsh semi sold

The widely expected sale of the harsh-environment semi Stena Mid-max from Samsung was confirmed by the yard today at USD505m to a “European buyer”. Media reports from Q3 2017 suggested the Aker group had reserved the rig at a price of USD450m and that AkerBP was likely to contract the rig with Odfjell Drilling as a potential manager. Among others we believe the difference in price relates to buyer-requested upgrades and modifications to improve its drilling efficiency. On top of the USD505m we expect a small investment to make the rig ready-to-drill. We consider the asset value of USD505m supportive for valuations of Odfjell Drilling Northern Drilling.
Underlyings
Borr Drilling

Diamond Offshore Drilling Inc.

Diamond Offshore Drilling provides contract drilling services to the energy industry around the globe. The company's fleet enables it to provide services in the floater market on a worldwide basis. The company's contracts to provide offshore drilling services vary in their terms and provisions. The principal markets for the company's offshore contract drilling services are: the Gulf of Mexico, including the U.S., and Mexico; South America, principally offshore Brazil, and Trinidad and Tobago; Australia and Southeast Asia, including Malaysia, Indonesia, Myanmar and Vietnam; Europe, principally offshore the U.K., and Norway; East and West Africa; and the Mediterranean.

Dolphin Drilling ASA

Fred Olsen Energy is engaged in offshore drilling as well as engineering and fabrication services. Co. provides services and operates within the two segments; offshore drilling and engineering and fabrication. The Offshore Drilling segment provides services to the offshore oil and gas industry. The Engineering and Fabrication segment provides engineering, fabrication, ship building and repair services for various offshore and onshore industries.

Noble Corporation plc

Ocean Rig UDW Inc

Odfjell Drilling

Odfjell Drilling Ltd. (Odfjell Drilling) is an integrated offshore drilling and oil service company. The Company operates through three segments: Mobile Offshore Drilling Units (MODU), Drilling & Technology, and Well Services. The Mobile Offshore Drilling Units is responsible for operations of mobile drilling units fully or partly owned by the Company and units owned by other companies. It operates mobile drilling units in Norway, United Kingdom, Angola, Vietnam and Brazil. The Drilling & Technology segment is providing platform drilling, project management and engineering services. Drilling & Technology operates from offices in Bergen, Stavanger and Aberdeen. The Well Services segment is a provider of casing and tubing running services (TRS), drill tool rental and well intervention services to the onshore and offshore oil and gas industry. The Well Services are provided to onshore and offshore drilling operations in the North Sea, mainland Europe and Black Sea, among others.

Pacific Drilling S.A.

Pacific Drilling is an international offshore drilling company committed to providing drilling services to the oil and natural gas industry through the use of high-specification rigs. Co.'s primary business is to contract its high-specification rigs, related equipment and work crews, primarily on a dayrate basis, to drill wells for Co.'s customers. Co. operates five drillships under client contract and has three drillships available. All of Co.'s drillships are self-propelled and dynamically positioned and have large carrying capacity. Co.'s five existing drillships are committed to work in the deepwater regions of the Gulf of Mexico, Brazil and Nigeria.

Rowan Companies plc

SeaDrill Ltd

Songa Offshore

Transocean Ltd.

Valaris PLC Class A

Ensco is an offshore contract drilling company engaged in providing offshore contract drilling services to the international oil and gas industry. As of Dec 31 2017, Co. owned and operated an offshore drilling rig fleet of 62 rigs. Co.'s rig fleet includes 12 drillships, 11 semisubmersible rigs, four moored semisubmersible rigs and 38 jackup rigs, including rigs under construction. Co.'s business consists of three operating segments: floaters, which includes its drillships and semisubmersible rigs; jackups; and other, which consists of management services on rigs owned by third-parties. Co.'s two reportable segments, floaters and jackups, provide one service, contract drilling.

Provider
DnB Markets
DnB Markets

DNB Markets is the investment banking arm of DNB Bank ASA and is focused primarily on the Nordic region, as well as internationally on niches such as global shipping, energy and related services, and seafood. DNB Markets offers services in FICC, Equities and Investment Banking advisory from offices in Oslo, Stockholm, London, Singapore and New York. Equity research coverage is offered on c250 Nordic companies. DNB was ranked no.2 in Extel Nordic Research 2017. The DNB Markets’ Credit and FICC Macro & FX Research teams are repeatedly highly rated by Prospera Nordic Institutional Investor Surveys.

 

Analysts
Martin Huseby Karlsen

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