reports
- Aleksander Erstad
DOF Group (Buy, TP: NOK140.00) - Accretive fleet expansion
The proposed acquisition of Maersk Supply Service is set to position DOF as the market leader in CSVs and large AHTS vessels, giving increased scale in an increasingly sold-out subsea market at attractive terms (24% discount to GAV). We have included Maersk in our estimates, and consider the combined valuation attractive at a 2025e EV/EBITDA of 3.9x and annualised dividend yield of 14% from Q2 2025. We reinstate a recommendation with a BUY and NOK140 target price.
- 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.
- ABGSC Oil & Oil Services Research
- Haakon Amundsen
- John Olaisen
- Martin Mauseth
- Oliver Dunvold
- Stian Wibstad
EQNR EQUINOR ASA
AKAST AKASTOR ASA
PGS PGS ASA
KOG KONGSBERG GRUPPEN ASA
SOC SUBSEA 7 S.A.
PEN PANORO ENERGY ASA
ARCHERO ARCHER
AKER AKER ASA CLASS A
DNO DNO ASA CLASS A
TGS TGS-NOPEC GEOPHYSICAL COMPANY ASA
ODL ODFJELL DRILLING
AKSOO AKER SOLUTIONS ASA
BWO BW OFFSHORE LIMITED
PRS PROSAFE
OKEA OKEA
BWE BW ENERGY
BORR BORR DRILLING LTD
VAR VAR ENERGI ASA
SEAPT-NO SEACREST PETROLEO
SDRL-NO SEADRILL
DOFG DOF GROUP ASA
- ABGSC Oil & Oil Services Research
- Haakon Amundsen
- Stian Wibstad
- Aleksander Erstad
DOF Group (No_rec, TP: NOK) - Acquiring Maersk Supply Service
DOF has entered into an agreement to acquire Maersk Supply Service (MSS) for cash and shares. The transaction would add 13 AHTS vessels, eight CSVs and one cable layer, making DOF the largest owner of CSVs and large AHTS vessels. According to DOF’s investor presentation, the transaction EV is cUSD1bn, implying a 0.79x EV/GAV (DOF pre-transaction 1.06x), based on broker values, and a 2.7x–3.2x EV/MtM EBITDA excluding the 11 smaller vessels (DOF pre-transaction 4.8x on 2026e). Due to DNB Markets’ ...
- ABGSC Oil & Oil Services Research
- Haakon Amundsen
- John Olaisen
- Martin Mauseth
- Stian Wibstad
EQNR EQUINOR ASA
AKAST AKASTOR ASA
PGS PGS ASA
KOG KONGSBERG GRUPPEN ASA
SOC SUBSEA 7 S.A.
PEN PANORO ENERGY ASA
ARCHERO ARCHER
AKER AKER ASA CLASS A
DNO DNO ASA CLASS A
TGS TGS-NOPEC GEOPHYSICAL COMPANY ASA
ODL ODFJELL DRILLING
AKSOO AKER SOLUTIONS ASA
BWO BW OFFSHORE LIMITED
PRS PROSAFE
OKEA OKEA
BWE BW ENERGY
BORR BORR DRILLING LTD
VAR VAR ENERGI ASA
SEAPT-NO SEACREST PETROLEO
SDRL-NO SEADRILL
DOFG DOF GROUP ASA
- Aleksander Erstad
DOF Group (Buy, TP: NOK110.00) - Profiting from solid subsea market
DOF continued its strong execution in Q1, with EBITDA 5% above consensus. Net debt was flat QOQ but this was driven by non-cash lease additions for Maersk Installer, which should start contributing to earnings from Q2. The market keeps improving and management highlighted up to 10 long-term charter opportunities and clients already tendering for project work to be executed in 2027. It targets a refinancing in 2025 and said it aims for 1.5x net debt/EBITDA before paying dividends, which we foreca...
- ABGSC Oil & Oil Services Research
- Haakon Amundsen
- Stian Wibstad
- Aleksander Erstad
DOF Group (Buy, TP: NOK110.00) - Building long-term visibility
We expect still-high utilisation in Q1, and adj. EBITDA of USD107m (3% above consensus). Demand for subsea vessels remains firm, and DOF is in the process of securing new contracts for PLSVs and AHTS vessels with Petrobras, which we believe will result in 3.5–4 years’ average backlog coverage for the DOFCON and Norskan silos (together accounting for 40% of our 2025–2026e EBITDA). Peer group 2025e EV/EBITDA and FCFF yield suggest a fair value of NOK106–116. We reiterate our BUY and have raised ou...
- Martin Huseby Karlsen
Limited change in EP spending
After reviewing oil companies’ most recent spending plans, we estimate offshore spending growth of c7% YOY for 2024, in line with our November update. Growth is concentrated, with Petrobras being the key driver, favouring service companies with Brazil exposure. Looking ahead, further spending growth is likely to be partly limited by total spending already being on a par with operating cash flow. Delayed energy transition spending is seen as positive for oil services, while recent E&P consolidati...
SOC SUBSEA 7 S.A.
SDRL SEADRILL LTD
ARCHERO ARCHER
AKER AKER ASA CLASS A
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
CGG CGG
BORR BORR DRILLING
MSEIS MAGSEIS FAIRFIELD
PRS PROSAFE
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
- Aleksander Erstad
DOF Group (Buy, TP: NOK85.00) - Supportive 2024 outlook
DOF’s strong performance continued in Q4, with EBITDA 7% above consensus. The 2024 guidance is supportive of continued deleveraging and provides a line of sight to a refinanced capital structure that we believe should enable the company to pay dividends. Our EBITDA estimates are broadly unchanged; our 2024e EBITDA of USD504m is in the upper half of the USD470m–520m guidance, supported by management comments at the earnings call. The stock is trading at a 2025e EV/EBITDA of 3.2x. We reiterate our...
- Aleksander Erstad
DOF Group (Buy, TP: NOK85.00) - Set for continued growth
We have turned increasingly positive on the subsea market outlook for DOF, backed by recent contracts for it and peers. Our 2025e EBITDA is 5% above consensus and we believe net debt/EBITDA of 1.2x at end-2025e should make the next refinancing smooth sailing and leave it well placed to pay dividends. We have updated our valuation of the PLSVs, as we expect their contracts with Petrobras to be extended at solid rates, giving long-term visibility. We reiterate our BUY and have raised our target pr...
- Martin Huseby Karlsen
Large-cap commentary supports long-term offshore upcycle
Key takeaways from SLB, Halliburton and Baker Hughes Q4 earning calls include positive commentary on the ongoing offshore upcycle. They see continued growth in global EP spending in 2024 (high-single to low-doble digits), driven by offshore and international markets, while North America onshore outlook are less favourable. Lastly, SLB sees potential for more than USD100bn in global offshore FIDs in 2024 and 2025, while Baker Hughes expects over 300 subsea tree awards annually for the next 2–3 ye...
SOC SUBSEA 7 S.A.
SDRL SEADRILL LTD
ARCHERO ARCHER
AKER AKER ASA CLASS A
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
CGG CGG
AWDR AWILCO DRILLING
DRLCO DRILLING COMPANY OF 1972
BORR BORR DRILLING
MSEIS MAGSEIS FAIRFIELD
PRS PROSAFE
NODL NORTHERN 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
- Martin Huseby Karlsen
Solid medium-term, but mixed long-term signals from Petrobras
As the largest global consumer of deepwater oil services, Petrobras’ strategic plans tend to attract investor attention. We consider its new 5-year plan mixed, but with solid support for near- to medium-term offshore activity from increased and high spending in 2024–2026. On the other hand, 2027–2028 spending looks set to trend down c20% sequentially, despite having been revised higher compared to its previous plan. Total spending is seen up 31% compared to the previous plan, driven by downstrea...
SOC SUBSEA 7 S.A.
SDRL SEADRILL LTD
ARCHERO ARCHER
AKER AKER ASA CLASS A
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
CGG CGG
AWDR AWILCO DRILLING
DRLCO DRILLING COMPANY OF 1972
BORR BORR DRILLING
MSEIS MAGSEIS FAIRFIELD
PRS PROSAFE
NODL NORTHERN 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
- Martin Huseby Karlsen
High dayrates in Petrobras PLSV tender
Bids have been opened for the large Petrobras PLSV tender, with the key takeaway the solid dayrates offered, supporting our view that PLSVs likely will be key earnings contributors in the coming years for companies active in Brazil, namely Subsea7, DOF (via its 50% of DOFCON) and Paratus (via its 50% of Seabras). While it is unclear how many vessels Petrobras will award under this tender, we believe the high dayrates and solid industry discipline are key. For high-spec PLSVs that are mostly offe...
SOC SUBSEA 7 S.A.
SDRL SEADRILL LTD
ARCHERO ARCHER
AKER AKER ASA CLASS A
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
CGG CGG
AWDR AWILCO DRILLING
DRLCO DRILLING COMPANY OF 1972
BORR BORR DRILLING
MSEIS MAGSEIS FAIRFIELD
PRS PROSAFE
NODL NORTHERN 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
- Aleksander Erstad
DOF Group (Buy, TP: NOK70.00) - Deleveraging underway
The main highlights from its Q3 report were its improved cashflow (c80% FCF conversion) and EBITDA beat due to continued strong performance in subsea. No guidance was given for 2024, while it reiterated its view on contract coverage, implying ~NOK14bn revenues next year (management reporting). The ongoing PLSV tender in Brazil will be key to watch as it could provide attractive repricing opportunities and visibility to 2025 and beyond. The shares are trading at a 2024e EV/EBITDA of 4.0x. We reit...
- Martin Huseby Karlsen
Offshore spending shifts to 2024
After reviewing oil majors’ and Petrobras’s Q3 reports and spending plans, we see a shift in offshore spending from 2023 to 2024. We now estimate offshore spending growth of c7% YOY for 2024 (c5% in our August update), mainly on delayed Petrobras spending. We expect further growth to be partly limited by total spending already being on a par with operating cash flow. Delayed energy transition spending is seen as positive for oil services, while recent E&P consolidation underpins the oil companie...
SOC SUBSEA 7 S.A.
SDRL SEADRILL LTD
ARCHERO ARCHER
AKER AKER ASA CLASS A
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
CGG CGG
AWDR AWILCO DRILLING
DRLCO DRILLING COMPANY OF 1972
BORR BORR DRILLING
MSEIS MAGSEIS FAIRFIELD
PRS PROSAFE
NODL NORTHERN 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
- Aleksander Erstad
DOF Group (Buy, TP: NOK70.00) - More to go
We forecast Q3 EBITDA of NOK1.19bn, just below consensus of NOK1.22bn, and are in line on 2023 EBITDA, which we expect to reach the high end of the guided range. We expect cash flow to improve QOQ following working capital headwinds in Q2, a key focus among investors. DOF’s recent contract wins offer solid visibility into next year with 76% of our 2024e revenues covered by backlog. The stock is trading at a 2024e EV/EBITDA of 4.1x, below asset-heavy peers’ 6.1x. We reiterate our BUY and NOK70 ta...
- Martin Huseby Karlsen
Total shows capital discipline and boosts shareholder return
Today, Total announced its strategic update. The main takeaways are no changes to its long-term spending versus 2023 and increased focus on shareholder returns as it boosts its payout ratio. From an oil service perspective, we find it surprising that Namibia was not featured more in the strategic update, as Total has had significant exploration success there. From a development perspective, Suriname is highlighted to see FID in 2024 and first oil in 2028, and we believe this region will be impor...
SOC SUBSEA 7 S.A.
SDRL SEADRILL LTD
ARCHERO ARCHER
AKER AKER ASA CLASS A
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
CGG CGG
AWDR AWILCO DRILLING
DRLCO DRILLING COMPANY OF 1972
BORR BORR DRILLING
MSEIS MAGSEIS FAIRFIELD
PRS PROSAFE
NODL NORTHERN 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
- Martin Huseby Karlsen
Focus remains on the out years
Longevity of upcycle is key Our 17th annual spending survey suggests an extended upcycle for offshore-focused oil services. High utilisation, long lead times, and growing backlogs indicate oil service capacity could be tested in subsea and offshore drilling segments. Meanwhile, oil companies are less able to boost spending, with cash flow and capital priorities key. We expect investor focus to shift to 2025. Our top picks are Subsea7, Noble, Seadrill, Odfjell Drilling and Borr Drilling.
SOC SUBSEA 7 S.A.
SDRL SEADRILL LTD
ARCHERO ARCHER
AKER AKER ASA CLASS A
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
CGG CGG
AWDR AWILCO DRILLING
DRLCO DRILLING COMPANY OF 1972
BORR BORR DRILLING
MSEIS MAGSEIS FAIRFIELD
PRS PROSAFE
NODL NORTHERN 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
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.