ADES IPO valuation calculates to solid upside potential for Borr Drilling and Shelf Drilling
The IPO of local Middle East-based jackup contractor ADES is reportedly priced at the top end of the range (13.5 riyals per share), which we calculate implies a post-money market cap of cUSD4.1bn and a fully invested EV of cUSD6.5bn. The offering is primary (cUSD850m) and secondary (cUSD365m), and books are reported by Bloomberg to be significantly oversubscribed. From a read-across perspective to international contractors, this IPO represents another datapoint where Middle East-listed contractors benefit from a premium valuation. In the long term, we believe this could allow such contractors to take advantage of accretive growth opportunities. For international contractors to be valued similarly to ADES on 2024 EV/EBITDA and backlog-adjusted rig values, this would calculate to 55–74% upside potential for Borr Drilling and 100%+ for Shelf Drilling.
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.
Maersk Drilling A/S is a Denmark-based company, which provides integrated offshore drilling rig services to oil and gas companies around the world in support of their exploration and production of oil and gas. The Company's owns more than 20 rigs including environment jack-up rigs, as well as deepwater drillships and deepwater semi-submersible rigs. The Company operates in Africa and Middle East, the Americas, Asia-Pacific, Norway and the North Sea.
Northern Drilling Ltd is a Bermuda-based drilling contractor, which owns a semi-submersible rig, HHI HE Semi 1, previously known as West Mira. HHI HE Semi 1 possesses water depth capacity of 10,000 foot and drilling depth equipped for 40,000 foot. The Company's shareholders comprise Hemen Holding Ltd, Morgan Stanley & Co. Int. Plc and State Street Bank and Trust Comp.
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.
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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