Shelf Drilling (Buy, TP: NOK35.00) - Age proves no barrier
Shelf Drilling has announced a jack-up deal adding an estimated cUSD1bn of revenue backlog and cUSD400m of EBITDA backlog on four standard rigs that are c40 years old, which we view as impressive and testament to the quality of the group’s operations. On the back of the 35 rig-year deal with Saudi Aramco and the recent acquisition of a premium jack-up, we have raised our adjusted 2021e EBITDA by USD38m (17%). We maintain our BUY and NOK35 target price on Shelf Drilling, and highlight that the stock is trading at an attractive 2021e EV/EBITDA of 4.6x.
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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