Shelf Drilling (Buy, TP: NOK40.00) - Refinancing key to unlock potential
With several yard projects behind and new contracts commencing, the company’s performance looks set to improve significantly in H2. We see age restriction concerns in India as overdone, and believe this could be a key market for EBITDA growth. In our view, improved financial conditions for offshore drillers have de-risked the required refinancing, and a successful outcome could help unlock the 37% upside potential to our maintained NOK40 target price. We reiterate our BUY.
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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