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...

Energy Morning - 1 April 2025

Energy Morning - 26 March 2025

Securitas (Buy, TP: SEK192.00) - More of the same in Q1e

We expect Q1 to show similar trends to the most recent quarters, but negative FX translation effects (strengthening SEK) still result in cuts to our 2025–2027e EPS of 4–5%. We continue to see a robust transformation case, as the journey towards the 8% profit margin target by end-2025 continues, with our H2 2025e EBITA margin now at 7.8–7.9%. We reiterate our BUY, but have lowered our target price to SEK192 (200).

Pemex seeks national partnerships to accelerate developments

In line with its earlier communication about Pemex looking for partners to re-start drilling activities and fight oil production decline, local news reports suggest that Pemex is seeking partnerships for 17 blocks (11 offshore and six onshore) to secure external capital. It is mostly considering local partners and intends to take the role as operator in most of the blocks. At first glance, the expected volume from the partnerships looks to be small, with only 66kbd to be added by year-end 2025. ...

Valuation and market update

In this note, we show updated valuation and market statistics for the Offshore Drilling sector.

Deepwater fixture activity set to increase

After a slow start to the year for deepwater awards, we see long- and short-term jobs nearing rig selection. On the positive side, we believe the capital markets will appreciate increasing fixture activity and oil companies committing to long-term development jobs, supporting cycle duration. From a dayrate perspective, we see the bifurcation thesis unfolding, as some contractors are more focused on prioritising utilisation, also with counterparty, rig quality and region playing a role. Hence, as...

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...