First award confirmed under Petrobras ‘rig pool’ tender

Constellation confirmed the contract award under the Petrobras ‘rig pool’ tender after being the low bidder on Lot 1 with its 6G drillship Amaralina Star (dayrate of cUSD429k including third-party services). Based on the confirmation of Constellation, we believe the remaining two awards in the ‘rig pool’ tender have likely also been concluded, with Etesco’s 6G drillship Etesco Takatsugu J (USD352k) and Seadrill’s 7G drillship West Jupiter (around the USD450k level) as the low bidders. As highlig...

Energy Morning - 17 December 2024

Norway: Best ideas Q4'24

Energy Morning - 16 December 2024

Valuation and market update

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

ExxonMobil update highlights efficiency, no incremental demand for oil...

From an oil services perspective, we consider the key takeaway from ExxonMobil’s corporate update to be continued high and improving capital efficiency, allowing it to do “more with less”. By 2030e, it plans to increase production by c1m barrels per day to 5.4m barrels per day on largely flat upstream capex compared to 2023–2024 levels. This implies further efficiency improvement, which we consider on the downside for the oil services industry as it implies no need for incremental service capaci...

Noble (Buy, TP: USD46.00) - Still waiting for more backlog

Despite collecting an early termination fee, 6G semi Noble Deliverer being released four months early is likely to attract investor attention. For its open capacity in 2025–2026, we still expect gaps and idle time, likely explaining why we remain well below consensus EBITDA (6–11%). Mostly due to the early termination, we have cut our 2025e EBITDA by c2%, largely offset by the termination fee (assumed booked in 2024). The current valuation implies a c9% yield to the market cap for 2025–2026e. We...

Valuation and market update

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

Quality at discount

Paratus Energy (Buy, TP: NOK70.00) - All eyes on Mexico

As expected, no Pemex payments have arrived yet (outstanding receivables equal around five quarters of revenues); the key focus for the stock is payments timing. It has seen similar payment disruptions during its time in Mexico (c10 years), but historically these have ultimately been paid. Management was optimistic due to comments from the new administration in Mexico, also alluding to other avenues of getting cash inflow (e.g. factoring). In a scenario with regular collections, the current 20% ...

Pemex uncertainty should resolve over time

Valuation and market update

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

Energy Morning - 29 November 2024

Dolphin Drilling (Hold, TP: NOK3.00) - Focus on 2025 liquidity need

Following the earlier announced termination of Borgland and few opportunities for new work, we expect the semi to remain stacked, with retirement as a potential outcome. Focus ahead should be on its cash balance as we forecast a cash shortfall and estimate that a new refinancing of around USD40m is required by mid-2025 (including replacement of the shareholder loan). Along with uncertainty related to the UK tax claim, we believe this will keep investors on the sidelines until there are signs of ...

Energy Morning - 27 November 2024

Petrobras rig pool tender appears to have awarded three of four rig sl...

For the Petrobras ‘rig pool’ tender, which had bids due in mid-October, bid evaluation appears to have been completed. The tender was for “up to” four deepwater rigs with 3-year duration across three lots. It seems Petrobras has only progressed with three of the maximum four rigs it could award. Lots 1 and 2 appear to have gone to local contractors Constellation and Etesco, while only Seadrill was selected in Lot 3, making up the three rigs in total (meaning Valaris was not selected in Lot 3). W...

Energy Morning - 26 November 2024

Paratus Energy (Buy, TP: NOK70.00) - Mexico concerns remain

While short-term in nature, Pemex’s 45-day suspension for jackup Courageous adds to investor concerns related to Paratus Energy’s Mexico exposure. We have taken a more conservative approach to our jackup modelling (both day-rates and risk for contract gaps), more than offsetting the short-term positive effect from the raised 2024 guidance (helped by strong PLSV performance). We reiterate our BUY, but have lowered our target price to NOK70 (80).

Energy Morning - 25 November 2024

Brent spot: USD 74.6bbl, flat from last OSE close.OSX: 81.5, down 0.3% since last OSE close.Paratus (B): guides up but also focus on rig in standby and Pemex uncertainty.AKSO (B): goes ex. NOK 21 / per share e.o dividend today.