reports
- Martin Huseby Karlsen
- Martin Huseby Karlsen
Seadrill (Buy, TP: USD35.00) - Countdown to 2027
Despite a tough deepwater market, on our estimates, Seadrill is trading at a c4x EV/EBITDA for 2025–2026e, falling to 2.8x for 2027e (with our 2026–2027e EBITDA 21–23% below consensus). We see limited cash flow yield potential near-term, rising to c15% for 2027e. Tier-2 rig challenges have been a key investor concern, and while we model only a small contribution from these rigs (7–5% of our 2026–2027e EBITDA). We estimate c50% upside potential on asset values even in a scenario where we assign z...
- Martin Huseby Karlsen
Hornsea 4 cancellation adds to uncertainty
Ørsted today announced it is cancelling development of the 2.4GW Hornsea 4 project off the UK due to increased supply chain costs, higher interest rates, and greater construction and operational risk (FID was expected later in 2025). The cancellation adds to uncertainty for the offshore wind services industry and overall project profitability within offshore wind. No installation contracts for Hornsea 4 had been disclosed yet, but with Cadeler responsible for foundations and half the turbines on...
- Martin Huseby Karlsen
Valaris (Buy, TP: USD40.00) - 2027 confidence building
With ARO Drilling extensions and two West Africa jobs (DS-10 and DS-15), Valaris is progressing well in building visibility for 2027, the first year set to have proper earnings as 2025–2026e will likely be affected by rig market challenges and idle time. On top of the recently announced drillship jobs, Valaris seems well placed to build additional backlog in Nigeria and Egypt, for deepwater opportunities with startup in 2026/27. In sum, we believe its cash flow story remains on the horizon, whil...
- Martin Huseby Karlsen
Nel (Sell, TP: NOK1.50) - In hope they trust
Q1 revenue missed consensus by 29% and our estimate by 38%. Despite industry-wide challenges, Nel remains optimistic on new orders – although it last booked a sizeable order in late-2022. On the positive side, cash of NOK2.1bn provides investors with decent time optionality awaiting a better market (we do not expect a liquidity injection), added to which it has a good technology track record and know-how. We reiterate our SELL and NOK1.5 target price.
- Martin Huseby Karlsen
Subsea 7 (Buy, TP: NOK205.00) - Progressing as planned
Subsea 7 reached Q1 EBITDA 2% above consensus and 20% above our estimate, while FCF was hurt by NWC, which is set to reverse later in 2025e. The guidance was reiterated and we have made limited estimate revisions; the existing backlog covers 86–47% of our 2025–2026e revenue. Management highlighted that tendering activity remains high and that the pipeline is sheltered from short-term oil price volatility, with the current oil price remaining well above break-even for projects in its pipeline. We...
- Martin Huseby Karlsen
Dolphin Drilling (Sell, TP: NOK0.20) - Equity meltdown in action
After its stock was suspended from trading since mid-Monday, Dolphin Drilling released a statement related to what appears to be an unsuccessful refinancing effort. In a scenario with an unfavourable ruling on the UK tax claim, we see a total capital need of cUSD70m–75m through 2026e, of which we believe cUSD50m–55m should be fresh equity, assuming the shareholder loan is converted/extended. For 2027e, further capital is likely to be required for the Blackford 5-year survey. Based on the combina...
- Martin Huseby Karlsen
Transocean (Buy, TP: USD3.00) - Patience, powered by backlog
Transocean remains disciplined in its bidding strategy by leveraging its strong contract coverage, making it less willing to lower dayrates than peers in ongoing tenders, as it can afford to be patient. Short-term, this could limit its near-term backlog growth, as it recently had two rigs replaced in the US Gulf. Long-term, we expect it to keep high-quality rigs working, and benefit from its service offering and client relationships. We reiterate our BUY and USD3 target price.
- Martin Huseby Karlsen
Noble (Buy, TP: USD30.00) - A more balanced portfolio
Noble secured key contract wins for four deepwater rigs with Shell (US Gulf) and Total (Suriname) with a meaningful bonus component. Having incorporated these contracts and expected idle time and contract preparation, our 2026–2027e are largely unchanged, despite the contracts being considered solid. Also, the jobs provide it with better backlog visibility and a more diversified backlog with respect to clients and pricing (fixed versus market-linked), which we believe investors will like. We rei...
- Martin Huseby Karlsen
Valaris (Buy, TP: USD40.00) - All roads lead to 2027
With recent energy markets uncertainty and 2025–2026 rig market challenges remaining, idle time and gaps between contracts have left near-term earnings looking uninspiring. On the positive side, we see the company as well placed for several deepwater jobs with startup in 2026e, which could help build visibility for 2027. Hence, its cash flow story remains on the horizon, while we consider earnings improvements key to closing the NAV gap and for intrinsic values to crystallise. We reiterate our B...
- Martin Huseby Karlsen
Edda Wind (No_rec, TP: NOK) - Recommendation and target price withdraw...
Geveran Trading, Wilhelmsen New Energy and EPS Ventures today announced they will make an unconditional mandatory cash offer to acquire all outstanding shares in Edda Wind that they do not already own. The offer price of NOK23/share equals a 33% premium to yesterday’s close, and implies a 2026–2027e EV/EBITDA of 7.2–6.1x on our estimates before the announcement and P/NAV of 0.7x. The three shareholders currently own 82% of shares outstanding in Edda Wind, and through BidCo Electric AS have alrea...
- Martin Huseby Karlsen
Another round of Aramco suspensions expected
Market sources suggest Saudi Aramco will further reduce its rig count in the coming months through early contract terminations and potentially more suspensions, which would mark the ‘fourth round’ of rig reductions. This follows last month’s request for dayrate discussions (historically, such requests have preceded it suspending rigs). We believe this round could be extensive, affecting c10 jackups out of its current rig count of c57 rigs. At the peak, Aramco had 92 jackups (22% of global demand...
- Martin Huseby Karlsen
Subsea 7 (Buy, TP: NOK205.00) - Saipem uncertainties reflected
We expect that seasonality and planned maintenance days will affect Q1, and are thus 15% below consensus (our full-year estimates are in line). We believe investor concerns around the Saipem merger are well reflected in the share price, as combined company multiples have come to Saipem stand-alone levels (prior to deal announcement). With cNOK40/share in shareholder returns (c26% of share price) over the next ~18 months, we consider the valuation attractive and have upgraded to BUY (HOLD). We re...
- Martin Huseby Karlsen
Transocean (Buy, TP: USD3.00) - Navigating with a strong backlog
We expect Q1 EBITDA of USD219m, in line with the guidance and consensus. With strong backlog coverage for 2025–2026e, we believe Transocean is less likely to lower dayrates than peers in ongoing tenders, although that could limit near-term backlog growth. We also expect an update on cost-saving initiatives with the results, with upside risk to our 2026–2027 estimates, but are 11–25% below consensus on EBITDA. We reiterate our BUY, but have cut our target price to USD3 (4).
- Martin Huseby Karlsen
Noble (Buy, TP: USD30.00) - Sailing ahead, but wind is shifting
Despite general uncertainty in the energy markets and dayrates under pressure, our Q1e adj. EBITDA is 7% above consensus and we expect the 2025 guidance to be reiterated. We find Noble well placed to add deepwater backlog, leading to a more balanced portfolio of priced and market-linked contracts. We reiterate our BUY but have cut our target price to USD30 (35), supported by NAV, while we find it fully valued on cash flow metrics.
- Martin Huseby Karlsen
Aker Solutions (Hold, TP: NOK30.00) - Downside risk from 2026e
While being above consensus for Q1 and 2025, due to the estimated margin contribution from lucrative Aker BP projects, we believe consensus overestimates revenue capacity from 2026e as oil & gas projects taper off, being replaced by higher-risk renewables projects, in our view. We also see limited cash flow generation ahead due to working capital unwind. We reiterate our NOK30 target price, but have upgraded to HOLD (SELL).
- Martin Huseby Karlsen
Nel (Sell, TP: NOK1.50) - No signs of life on the horizon
With no meaningful orders secured since late 2022, weak backlog coverage for 2025e, production facility shut-ins, an uncertain market outlook, and further uncertainties related to its US expansion plans, challenging times are set to remain. While we are in line with consensus ahead of the Q1 report, our 2025e revenues and EBTIDA are 30% and 52% below consensus, respectively, with weak backlog coverage even on our estimates. Focus ahead should be on maintaining the liquidity runway and any equity...
- Martin Huseby Karlsen
Muted 2025 growth expectations
Following Q1 earnings calls by some of the oil service companies, 2025 outlooks appear more challenging than previously. Baker Hughes expects international upstream spending to decline by mid- to high-single digits, while Halliburton sees its international revenues flat to slightly down. Furthermore, Weatherford expects 2025 international revenue to decline by low double- to mid-double digits. Precision Drilling flagged additional rig suspensions by Saudi Aramco, and SLB highlighted a slow start...
SDRL SEADRILL LTD
ARCHERO ARCHER
TGS TGS-NOPEC GEOPHYSICAL COMPANY ASA
ODL ODFJELL DRILLING
AKSOO AKER SOLUTIONS ASA
DO DIAMOND OFFSHORE DRILLING INC.
RIGN TRANSOCEAN LTD.
BWO BW OFFSHORE LIMITED
BORR BORR DRILLING
SHLF SHELF DRILLING LTD.
VAL VALARIS LTD
NE NOBLE CORP NEW
OTL ODFJELL TECHNOLOGY LTD
SDNS SHELF DRILLING NORTH SEA
DDRIL DOLPHIN DRILLING
DOFG DOF GROUP ASA
VTURA VENTURA OFFSHORE
PLSV PARATUS ENERGY SERVICES LTD.
- Martin Huseby Karlsen
ENI capex cut but maintains shareholder returns
Driven by macro headwinds and uncertainty around trade tariffs, ENI was the first large oil company to introduce capex cuts for 2025, contributing to a more challenging business environment for oil services. Over the past five years, we estimate ENI to have been the oil major with strongest offshore spending growth, and it has been considered active and opportunistic while others have been more conservative. Hence, we see its reduction as a soft datapoint for oil services. ENI has optimised its ...
SDRL SEADRILL LTD
ARCHERO ARCHER
TGS TGS-NOPEC GEOPHYSICAL COMPANY ASA
ODL ODFJELL DRILLING
AKSOO AKER SOLUTIONS ASA
DO DIAMOND OFFSHORE DRILLING INC.
RIGN TRANSOCEAN LTD.
BWO BW OFFSHORE LIMITED
BORR BORR DRILLING
SHLF SHELF DRILLING LTD.
VAL VALARIS LTD
NE NOBLE CORP NEW
OTL ODFJELL TECHNOLOGY LTD
SDNS SHELF DRILLING NORTH SEA
DDRIL DOLPHIN DRILLING
DOFG DOF GROUP ASA
VTURA VENTURA OFFSHORE
PLSV PARATUS ENERGY SERVICES LTD.
- Martin Huseby Karlsen
Welcomed tender from Petrobras
Updates suggest Petrobras yesterday launched a new tender for “one or more” deepwater rigs for the Buzios field starting late-2026/early-2027. As it has been a while since the last Petrobras tender, and there has been uncertainty related to the timing of upcoming tenders, we believe a new Petrobras tender would offer relief for investors. As we count nine rigs already contracted with Petrobras to match the start-up window, we expect the requirement would be filled by rigs already in the country,...
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.