Awilco Drilling (Sell, TP: NOK1.00) - Being green is not enough
Despite the green credentials of the group’s two newbuilds (in line with its target to cut offshore drilling greenhouse gas emissions), a lack of funding and contracts as well as a demanding valuation mean we remain negative on the stock. Based on peer asset valuations and our dayrate outlook, we struggle to see the group attracting funding unless: 1) it can secure long-term backlog well above the current market; or 2) valuations of other offshore drillers improve significantly. We maintain our SELL and NOK1 target price.Awilco Drilling is engaged in the ownership of offshore drilling rigs for use in offshore drilling operations, and to provide drilling services for oil and gas companies using these rigs. As of Dec 31 2016, Co. owned and operated two semi-submersible drilling rigs, the WilPhoenix and WilHunter, which both rigs used in the drilling of oil and gas wells in the U.K. sector of the North Sea.
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.
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