InsiderInsights Weekly Report: September 14, 2024

InsiderInsights Ratings of Companies with Open-Market Form 4 Purchases; Sales Filed at the SEC on the date above. We separate the real investment intelligence from the noise. Saving you time, and improving your research process

InsiderInsights.com Daily Ratings Report: September 13, 2024

InsiderInsights Ratings of Companies with Open-Market Form 4 Purchases; Sales Filed at the SEC on the date above. We separate the real investment intelligence from the noise. Saving you time, and improving your research process

Transocean Ltd: 1 director

A director at Transocean Ltd bought 1,500,000 shares at 4.130USD and the significance rating of the trade was 67/100. Is that information sufficient for you to make an investment decision? This report gives details of those trades and adds context and analysis to them such that you can judge whether these trading decisions are ones worth following. Included in the report is a detailed share price chart which plots discretionary trades by all the company's directors over the last two years clea...

Supply-side discipline remains key

With uncertainty among investors due to flattish near-term deepwater demand and increasing availability of tier-2 deepwater rigs, we highlight that supply-side discipline has been a key driver this upcycle. As the industry is even more consolidated, we expect the high-end of the deepwater market to remain strong while lower-end units are likely to face greater day-rate volatility. We still see value chain bottlenecks (FPSO, subsea) unfolding, effectively putting a cap on drilling demand, as expl...

Valuation and market update

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

Delivering across the board

ADES building international footprint

ADES announced it has acquired two working premium jackups from Vantage Drilling for USD190m (Soehanah USD85m, Topaz Driller USD105m). Both are on long-term contracts in Southeast Asia, marking a strategic move for ADES in further increasing its presence in the region. Compared to consensus, we find the transaction metrics accretive on asset values and earnings multiples. For international drillers in our coverage, Borr Drilling is trading at USD138m per rig (has a more modern fleet of premium j...

Valuation and market update

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

Petrobras deepwater tenders progressing

Over the next weeks and months, we expect to see more news flow related to Petrobras’ deepwater tenders, as bids on Sepia and Atapu (3-rigs) closed late last week, the Roncador tender (2-rigs) is believed to be nearing conclusion and the rig pool (4-rigs) tender is scheduled to take bids late this month. Although outside rigs are seen participating, we believe rigs already in Brazil are likely to secure most of the jobs. As there currently is some investor uncertainty related to the deepwater ma...

Tier-2 deepwater risk in process of being reflected

As we flagged in an update in May, the risk of idle time or even stacking of tier-2 deepwater rigs was previously likely not reflected in consensus, leaving potential for negative revisions. Although our estimates remain (well) below consensus, we believe investors and valuations now reflect the uncertainty for tier-2 deepwater rigs to a greater extent. As for the investment case for offshore drillers, we continue to believe focus on cycle duration and earnings in the out-years (2026+) is key.

Steady upcycle building in duration

Our 18th annual spending survey lends support to an extended upcycle for offshore-focused oil services, with 2024–2025e offshore spending growth of 5–8%. As value chain bottlenecks (FPSO, subsea) are unfolding, we believe the foundations are in place for a longer and more stable upcycle, supported by oil companies’ discipline. In sum, service companies’ discipline and oil companies’ conservativeness are likely to extend the upcycle, avoiding past ‘boom and bust’ mentality.

Time for the next leg up

Ventura Offshore (Buy, TP: NOK50.00) - Focus on re-pricing opportuniti...

The recent rig acquisition (Catarina, 6G semi) builds scale and should be accretive to earnings and the asset-based valuation. In Brazil, we see a bright outlook for new long-term contracts starting in mid-2026, supported by ongoing tenders and Petrobras’s rig demand comments. In our view, new contracts at leading-edge dayrates (cUSD400k) would be key to the investment case, with the stock trading at a 2027e EV/EBITDA of 1.0x. We reiterate our BUY and NOK50 target price.

More Aramco tactics and uncertainty

Various updates suggest Aramco has requested dayrate discussions from all its drilling contractors and service companies. For jackup contractors, the request to reduce dayrates follows two rounds of suspensions/terminations totalling 28 jackups. When Aramco has asked for dayrate concessions in the past, it has achieved various levels of discounts, typically for a specific period (e.g. 12 months). For drilling contractors and investors, such efforts from Aramco (to manage its rig count and achiev...

Valuation and market update

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

Q2 report as expected

Valuation and market update

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

Borr Drilling (Buy, TP: NOK95.00) - Early look at Q2

Following preliminary Q2 results in line with our forecasts adjusted for one-offs, we consider a neutral share-price reaction warranted. The company also announced a USD150m tap issue to be used for newbuild financing at better terms than available yard financing. With it having navigated the recent jackup market turbulence well, we see good support for our above-consensus 2025e EBITDA. We reiterate our BUY and NOK95 target price.