Building visibility

DOF Group (Buy, TP: NOK130.00) - In line ahead of Q1

We forecast Q1 EBITDA of USD148m, largely in line with consensus. While oil service macro is now more challenging, ongoing tenders with Petrobras have shown positive results, with eight DOF vessels awarded contracts to 2029–2030 and more likely to follow (all pending final approval). Also, recent second-hand transactions for subsea tonnage have been at elevated levels, and we view DOF’s valuation attractive at a P/NAV of 0.7x (before giving any value to the services business) and a 15% run-rate ...

Energy Morning - 7 May 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...

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 ...

Energy Morning - 10 April 2025

E&P spending sensitivity explored

With an oil price at the mid-USD60s/bbl level, focus on the oil major overspending situation, and resulting impact on the outlook for offshore-focused oil services, is set to increase further. While oil companies would likely cut, or even eliminate, buyback programmes first, we expect increased focus on spending reductions and efficiencies, creating a more challenging business environment for oil services. Hence, we see a risk of oil companies taking a more cautious approach, resulting in projec...

Crude Quarterly Q1'25: weaker oil market fundamentals

Energy Morning - 20 March 2025

In a mid-cycle plateau

Following recent updates from E&P companies, we have reduced our 2025 offshore spending estimate to 0.5% (from c3% earlier this year). This is driven by a combination of actual 2024 spending being higher than expected (8% versus 4% previously), creating tougher comparables and a reduction in spending plans from Pemex in 2025. Despite growth flattening out, we still see the cycle building in duration, with execution of deepwater developments remaining on the agenda, albeit with a delayed executio...

Energy Morning - 19 March 2025

Energy Morning - 17 March 2025

DOF Group (Buy, TP: NOK135.00) - Nearing refinancing

Q4 EBITDA was 8% below consensus, while cash flow was solid. Net debt has declined to a level where DOF should reach its target leverage ratio of 1.5–2.0x without further deleveraging needed (current NIBD to 2025e EBITDA is 1.8x), with focus shifting to shareholder returns after the expected refinancing is completed. The stock is trading at 2025–2026 EV/EBITDAs of 4.4–3.3x and an annualised DPS yield of 14% from Q2. We reiterate our BUY and NOK135 target price.

Several moving parts - overall broadly neutral

Energy Morning - 21 February 2025

Cash cow in the making

Energy Morning - 19 February 2025

Offshore spending plateauing

After reviewing major oil companies’ most recent spending plans, we estimate offshore spending growth of c3% YOY in 2025 (down from c5% late last year and c8% six months ago). We believe a combination of supply-chain bottlenecks, efficiency gains, and capital discipline among oil companies are the main reasons for spending growth fading, resulting in a mid-cycle plateau. On the flip side, the cycle keeps building duration, as we see investments being pushed into 2026–2027. Also, activity levels ...

DOF Group (Buy, TP: NOK135.00) - Set for an eventful 2025e

In the maiden quarter including DOF Denmark, we expect a slow start due to mob/demob activity and a soft AHTS spot market. We forecast Q4 EBITDA of USD155m, below consensus of USD165m, while our estimate excluding Denmark is in line with guidance. We have cut our 2025–2026e EBITDA by 7% due to a weaker H1/25 for DOF Denmark and a more conservative view of contract gaps in Brazil. We believe the valuation remains attractive (14% DPS yield), and possible catalysts ahead are debt refinancing, divid...

Energy Morning - 5 February 2025