Shelf Drilling (Buy, TP: NOK40.00) - Riding the upcycle
Shelf Drilling is benefiting from a mix of operating and financial leverage in the wake of a steadily improving jackup market. Standard jackups have repriced higher in most regions, and its ‘fit for purpose’ strategy has brought record-high utilisation and backlogs for those rigs; in our view they still have ample repricing prospects in 2024 and beyond. Its recent equity raise removed near-term liquidity concerns after a reactivation-intense period, and provides further comfort on a 2024–2025e refinancing. We reiterate our BUY and have raised our target price to NOK40 (20).
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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