Still too much UDW exposure
There has been growing optimism among consensus in recent months of a near-term deepwater market recovery, a view we struggle to share. The floating rig count has continued to shrink and is now 127, and we forecast a further decline to c110 by end-2019. With the exception of some high-spec 6G harsh semis in Norway, UDW dayrates are under pressure (USD140k–160k) even for multi-year jobs. We see 30-47% downside share price potential for deepwater-focused Transocean, Diamond Offshore and Noble (we reiterate our SELL recommendations on all three).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.
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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