A director at Prosafe Se bought 6,000 shares at 157.000NOK and the significance rating of the trade was 73/100. 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 clearly sh...
Ahead of the white paper on Friday, the government provided more details on offshore wind development in Norway. The bottom-fixed areas will be developed without state-aid, and awards will follow an auction in early 2022. Floating areas will be awarded on qualitative criteria and receive government support (level not yet decided). Both areas will be split into 2–3 licences, which will allow multiple consortiums to be awarded. While we believe the planned sizes (in GW) allow for critical mass, th...
The initial licensing rounds for offshore wind acreage in Norway are lining up to be competitive, with several high-profile local companies/consortiums already having announced their intention to participate. In addition, we would expect traditional renewables producers and international E&P companies to take part. Currently there is limited clarity on how the licensing process will work, but more details are expected in a government white paper (‘Stortingsmelding’) on 11 June. Although the winn...
Our initial impression from the detailed 5-year plan from Petrobras is that there is no aid for the oil services sector in the coming years. Overall spending is seen down 28%. Capital discipline appears high, with focus on pre-salt production (Buzios), resulting in among others exploration spending down c50%, likely to hurt both seismic and drilling. Compared to what was already known, no new FPSOs were introduced, which we consider negative for subsea and drilling demand.
Over the past few days, US large-caps Schlumberger and Halliburton have reported Q3 numbers, with both reporting decent margins. However, it is clear that a recovery is still quite far out in time, especially with the global resurgence of Covid-19. We consider their offshore-related market commentary to be fairly realistic, seeing subdued international activity over the next 12 months. That said, we remain concerned about the offshore fundamentals even beyond this, with key clients continuing to...
Overweight Subsea 7 relative to TGS is in our view clearly supported by both structural E&P spending trends and valuation. Subsea 7 is leveraged towards the development cycle and has also built up a renewable business that the capital markets are likely to embrace and value at a higher multiple than its oil & gas business. It is also trading at an average c12% FCF yield for the next two years and consensus now appears sober. TGS is a pure-play on the exploration cycle, which is set to face furth...
Petrobras provided an updated E&P spending outlook following Covid-19; for 2021–2025e, it sees total E&P spending at USD40bn–50bn, down 30% from the previous 5-year plan (2020–2024). While providing no guidance by year, the plan suggests annual spending in the range of USD8bn–10bn on average, implying limited upside potential to forward spending versus recent years. While exploration guidance also has been lowered versus last year, Petrobras still plans to spend a decent amount on exploration in...
Huge Petrobras development, but limited services need Petrobras has again highlighted the bright future of the Buzios field, part of the ‘transfer of rights area’, looking to add eight new FPSOs. From an oil service perspective, we welcome new developments but at the same time, we consider the oil service intensity for this development to be low. Wells are highly productive (40k–50k barrels/d per well), resulting in a need for few wells, which is the main demand driver for rig and subsea ...
Following the large negative capex revisions so far this year, offshore E&P spending is set to take another leg down in 2020, representing a sixth (out of seven) years of decline since 2014. So far the oil companies have shown impressive flexibility in their budgets, and we calculate that 29 of those that have offshore exposure have on aggregate cut their spending for 2020 by 26%. Given the now even lower oil prices, we would not be surprised to see further cuts. As highlighted before, we are su...
In this report we summarise the capex cuts for 2020 and delays to activity announced so far by oil companies with offshore exposure. Since our last update on 24 March, another 14 companies have confirmed cuts to their 2020 guidance, with all majors including Exxon (today) having lowered their guidance. In aggregate, spending for 2020e has been lowered by 25%. While we are seeing large cutbacks to US shale spending, as expected (given its flexibility), offshore spending is also being lowered mean...
At the start of a week likely to see news about oil production cuts and high oil price volatility, offshore-focused oil services stocks are likely to fluctuate with the oil price. Regardless of the outcome of production cuts, we believe the fundamental situation remains very challenging for offshore-focused oil service stocks, with an oil price of at least USD50/bbl needed to see improved fundamentals. That said, we see some nuances in the outcome for the service sector based on what OPEC+ concl...
Petrobras has announced a c30% cut to its 2020 capex level, implying E&P spending is back to pre-2005 levels, and down 77% from the 2013 peak. Local updates suggest that it will approach contractors to renegotiate service contracts. Among our coverage, we highlight the subsea sector’s exposure to Petrobras and in particular Subsea 7, having c40% of its 2020e ‘cash EBITDA’ coming from four high-dayrate PLSV contracts. Seismic companies have larger ongoing surveys, while it is mostly local c...
Petrobras has announced a c30% cut to its 2020 capex level, implying E&P spending is back to pre-2005 levels, and down 77% from the 2013 peak. Local updates suggest that it will approach contractors to renegotiate service contracts. Among our coverage, we highlight the subsea sector’s exposure to Petrobras and in particular Subsea 7, having c40% of its 2020e ‘cash EBITDA’ coming from four high-dayrate PLSV contracts. Seismic companies have larger ongoing surveys, while it is mostly local c...
Petrobras has announced a c30% cut to its 2020 capex level, implying E&P spending is back to pre-2005 levels, and down 77% from the 2013 peak. Local updates suggest that it will approach contractors to renegotiate service contracts. Among our coverage, we highlight the subsea sector’s exposure to Petrobras and in particular Subsea 7, having c40% of its 2020e ‘cash EBITDA’ coming from four high-dayrate PLSV contracts. Seismic companies have larger ongoing surveys, while it is mostly local c...
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