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.

Energy Morning - 30 April 2025

A waiting game worth joining

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...

Valuation update

In this note, we show updated valuation statistics for the E&P sector.

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...

Cash offer at 33% premium

Energy Morning - 29 April 2025

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).

Energy Morning - 28 April 2025

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...

Weekly news, topics & discussion

This week, Vår Energi reported Q1 results very much in line with expectations. The company also reaffirmed its 2025 guidance and maintained its dividend. Also, OKEA reported a solid Q1, with production and prices slightly above our estimates. While a technical goodwill impairment reduces its dividend basket for 2025, we view this as non-material, as we do not expect any dividends before 2027. Meanwhile, we are 5% below consensus on Q1e EBIT ahead of Equinor’s Q1 results on 30 April (07:00 CET), ...

AUCTUS ON FRIDAY - 25/04/2025

Panoro Energy (PEN NO)C; Target price of NOK49 per share: Reserves addition much larger than expected – YE24 2P reserves were independently estimated at 42.3 mmbbl (+7.6 mmbbl vs YE23, representing a Reserve Replacement Ration of 309%). This figure far exceeds our previous expectation of 34.5 mmbbl for YE24 2P reserves - an estimate that included a 4 mmbbl addition in 1H24 to counterbalance 2024 production. The higher than expected reserves addition is driven by robust reservoir performance in G...

Demand recovery continues to be delayed

Still our top pick of the international drillers

In need of more contracts

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 ...

Solid NCS production in March

The Norwegian Offshore Directorate’s (NOD) preliminary NCS figures for March showed liquids production of 1,972kboed (1.6% above its forecast) and gas production of 351mcm/d (0.4% above its forecast). Overall, production was 4.18mmboed (1.1% above its forecast), flat MOM, but down 4.9% YOY. Company-wise, the February production figures should be well known as most companies have already reported their production figures for Q1.

OKEA (Buy, TP: NOK23.00) - Solid start to the year

A solid Q1 trading update included net production and realised prices just above our estimates. A technical goodwill impairment (due to lower forward prices) effectively reducing OKEA’s dividend basket for 2025; however, we do not consider this material as we do not expect it to pay any dividends until 2027. Still, with the stock trading at an EV/2P of USD3.8/boe, well below recent NCS transactions at ~USD10/boe, we reiterate our BUY and NOK23 target price.