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...

Outlook for continued high rates

Although we continue to expect some margin headwind, the outlook for postponed rate cuts – leaving interest rates at continued high levels – should bode well for sector earnings, further supported by a strong profitability focus and modest loan losses. With the sector trading at an average 2026e P/E of c11.0x, and solid dividend potential, we find the valuation undemanding. We reiterate our positive sector view but highlight a larger share of HOLD recommendations than 12 months ago.

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...

Avance Gas Minor model adjustments

We have updated our target price due to the stock trading ex-rights (as of 5 March) for the USD0.75 DPS announced following the closing of the sale of its MGC fleet to the Exmar LPG BV subsidiaries on 28 February. According to the company, it is set to receive a final milestone payment of USD34.2m from Exmar once the steel cutting of the fourth and final MGC is completed (expected in April), and will distribute the remaining cash to its shareholders prior to liquidation. We do not consider these...

‘The times they are a-changin’

The recurring theme at our 18th Energy & Shipping Conference was geopolitical uncertainty and a potential trade war, warranting a wait-and-see approach, particularly on the Trump 2.0 effect. The consensus view pointed to high asset values, with no rush to the yards, aligning with below-NAV valuations across most of our coverage. However, panellists generally saw less downside risk than the 25% average discount to steel for our Tanker, Dry Bulk and Gas coverage. Overall, the day highlighted uncer...

Target price adjusted after distributions

Avance Gas Minor model adjustments

We have updated our target price due to the stock trading ex-rights (as of 18 February) for the USD2.0 DPS and the distribution of the 19.282m BW LPG shares received by Avance Gas in relation to its sale of 12 VLGCs to BW LPG in summer 2024. We do not consider this change to be material, and we have not changed our SELL recommendation. We have lowered our target price to NOK17 (76), reflecting the value of the DPS, the BW LPG shares, and a c1% negative USDNOK movement since our most recent updat...

Avance Gas (Sell, TP: NOK76.00) - Wind-down in progress

We calculate a NAV of NOK76/share based on the current BW LPG share price and USDNOK exchange rate. The winding-down process of Avance Gas is expected to be completed in H1, and with material fluctuations likely only to occur in the BW LPG share price and USDNOK, we find a direct investment in BW LPG more appealing, trading at a >20% discount to steel values and c40% below our NOK200 target price. We reiterate our SELL on Avance Gas and have reduced our target price to NOK76 (77).

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 ...

Sparebanken Sor: 1 director

A director at Sparebanken Sor bought 2,000 shares at 203.312NOK and the significance rating of the trade was 69/100. 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 clear...