reports
- Patrik Ling
Alvotech (Buy, TP: USD21.00) - Yet another strong quarter
Despite another profitable quarter, the YTD performance and Q4 outlook comments, Alvotech reiterated its full-year sales guidance with the Q3 results, which seems slightly conservative to us. The pipeline is evolving as expected, and we believe several new products should reach the market in the coming years, with the biosimilar to Stelara slated for a US launch in late February. We reiterate our BUY and USD21 target price.
- Martin Huseby Karlsen
- Martin Huseby Karlsen
- Martin Huseby Karlsen
- Martin Huseby Karlsen
Pemex effect looks to be limited for now
Following uncertainty yesterday related to Pemex’s 2024 budget cuts and potential reduction in rig count, we understand that the initial effect looks to be limited to a handful of rigs (potentially four) for a short period only. Affected rigs look to be locally owned units, which suggest that international contractors (Borr Drilling and Paratus Energy) are not affected. Hence, we now see a scenario with less-direct effect for international contractors than feared by the capital market yesterday....
- Martin Huseby Karlsen
Jackup uncertainty building
With reports of Pemex budget cuts and potential rig suspensions, additional uncertainty is added to the jackup market. The overhang from two rounds of Saudi Aramco suspensions (totalling 28 rigs, c6% of global supply) have been slow to absorb, and are likely to persist through 2025. With looming risk of even more Aramco suspensions, and rigs possibly being released in Mexico, we see a continued high competitive environment on new tenders. Dayrates for most premium jobs are cUSD120k–130k (a tad b...
- Martin Huseby Karlsen
Pemex saving plans add to jackup uncertainty
Several news reports suggest Pemex plans to cut USD1.4bn from its E&P budget this year. As the budget reduction is aimed at drilling, among others, we see a risk of jackup suspension. Pemex has 26 jackups chartered from contractors, with Borr Drilling and Paratus (through Fontis Energy) having most exposure with five rigs each, and such rigs representing 18% and 41% of 2025e EBITDA. The duration of suspensions appears unclear for now; while savings are limited to this year’s budget, reports sugg...
- Martin Huseby Karlsen
- Martin Huseby Karlsen
Petrobras rig pool tender saw limited competition and likely supportiv...
Today, the Petrobras ‘rig pool’ tender for up to four deepwater rigs with 3-year duration across three lots closed. Initially, it appears that seven contractors with nine rigs participated, split between four locals (Constellation, Etesco, Foresea and Ventura) and three international contractors (Seadrill, Valaris and Transocean). Hence, the participation would be less than at the recent Petrobras tender for Sepia/Atapu, which saw nine contractors taking part with 15 rigs. With different technic...
- Martin Huseby Karlsen
Petrobras set to reduce 2025 capex
Petrobras is expected to reduce 2025 capex from USD21bn to around USD17bn, according to a Reuters article today. Petrobras has a 5-year capex plan, but there are usually changes to its plans, and “current year” / “near-term” spending has a track-record of being revised lower (2024 capex was recently cut c24% to USD13.5bn–14.5bn), as Petrobras has struggled with value-chain delays. The updated spending represents YOY growth in 2025 of c21% (versus c50% earlier). The article mentions equipment pri...
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
- Martin Huseby Karlsen
Limited excitement for oil services from TotalEnergies’ Strategy & Out...
With total capex set to be flattish through this decade (organic capex lower in the out-years), TotalEnergies’ Strategy & Outlook presentation provided limited excitement for oil services. Strong capital discipline and allocation was maintained, with targeted oil production growth (3%) on flattish capex and shareholder returns being a top priority. With several large-scale developments for the next few years already defined (oil services mostly contracted), we consider its plan supportive for cy...
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
Petrobras deepwater awards at decent dayrates
Following a lengthy tender process, Constellation announced it has been awarded contracts for two rigs for the Roncador development with Petrobras for 2.5 years starting in mid-2025. One of the awards is for a stranded newbuild (Tidal Action), while the second award is for an incumbent 2012-built 6G drillship (Laguna Star). With current uncertainty among investors related to deepwater, we consider the dayrate levels (around USD450k) solid, in particular for the incumbent 6G rig. For companies u...
- Martin Huseby Karlsen
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...
- Martin Huseby Karlsen
- Martin Huseby Karlsen
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...
- Martin Huseby Karlsen
- Martin Huseby Karlsen
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...
- Martin Huseby Karlsen
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.
- Martin Huseby Karlsen
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.
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
VTURA VENTURA OFFSHORE
PLSV PARATUS ENERGY SERVICES LTD.
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