Shelf Drilling North Sea (Buy, TP: NOK45.00) - Hidden value further de-risked
We believe SDNS offers the most possible upside on asset valuation in our offshore drilling coverage. To close the gap to peers, we see c100% upside potential, boosted by its new contracts. With two premium jackups idle in the UK, putting one of them back to work with near-term start-up (September) was key for the investment case. The company also recently secured 2024 work for its CJ70 (Barsk) with Equinor, which de-risked its position in Norway. We believe this rig is well placed for additional work in 2025 with Equinor, which could be concluded near-term. We reiterate our BUY and NOK45 target price, reflecting a 23% discount to our NAV.
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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