Circio Holding (No_rec, TP: NOK) - Development continues, financing unclear

We continue to believe Circio’s technology has significant potential and that the company will successfully secure a partnering deal. However, while we estimate it has secured a runway through H1 2025, the funding situation remains unclear to us, and we thus continue to have no recommendation or target price on Circio.

Circio Holding (No_rec, TP: NOK) - Recommendation and target price withdrawn

We continue to like Circio’s focus on the circRNA programme and believe it will be able to secure a partnering deal in 2025. However, the funding situation is unclear. It recently announced an intention to raise cNOK50m–60m in Q2. As we have limited input on the terms of the upcoming capital raise and Atlas Capital Markets’ (the counterparty of the convertible bond facility announced in February 2023) degree of participation and conditions, we have withdrawn our target price and recommendation.

Northern Lights

Edda Wind (Buy, TP: NOK30.00) - Well positioned

While EBITDA was broadly in line with expectations, the Q3 report gave early signs of improved operational reliability, which we believe will be key to narrowing the discount to underlying values (the stock is trading at 0.6x P/NAV). Recent contract awards (including a new 12+12-month contract announced with the results) have made the fleet fully booked until the 2025 summer season, and three of the four 2025 newbuild deliveries are now booked directly following yard delivery. We reiterate our BUY and NOK30 target price.

Valuation and market update

In this note, we show updated valuation and market statistics for the Offshore Drilling sector.

Petrobras FPSO delays may hit service volumes but lengthen cycle

Being the largest global consumer of deepwater oil services, Petrobras’ strategic plans tend to get investor attention. On the positive side, its latest 5-year plan sees 5% higher E&P spending than the previous one, and has a more stable phasing between the years, which is supportive for the cycle duration. However, several FPSOs are facing significant delays, which is on the downside for oil services, leading to delays for deepwater oilfield services (primarily drilling and subsea), likely resulting in lower ‘peak volumes’ and demand being spread over a longer period. The rig count is said to...