Awilco Drilling (Sell, TP: NOK5.00) - In a challenging spot
With Q4 EBITDA as expected, the key focus point is the need for capital. We believe Awilco Drilling will need new equity regardless of contracting success, but that its above-peer valuation will make it hard to attract new capital. While Equinor’s Breidablikk tender is a key opportunity to gain bankable backlog, we expect strong competition. We keep our SELL and NOK5 target price, and see a risk current equity could be marginalised.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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