Category Archives: Oil services
We initiate coverage of Noble Corporation with a BUY recommendation and target price of USD 12
The company has a large fleet of attractive assets, a balanced contract backlog and a decent liquidity position. We believe the company is well positioned to take advantage of the looming expansionary phase of the cycle.
We initiate coverage of Rowan Companies with a BUY recommendation and target price of USD 20
The company has a fleet of four UDWs and 25 jackups of which only two are currently stacked. The company's earnings visibility is strong based on the current contract backlog, further supported by the recently announced JV with Saudi Aramco. Add to this a coffer of USD 1.3bn and improving earnings ahead, we deem the company a defensive investment at the trough, but with the a free option on a cyclical recovery.
We initiate coverage of Atwood Oceanics with a BUY recommendation and target price of USD 19
The company has four modern UDWs/Drillships and five modern Jackups on the water, in addition to an aging Deepwater rig and two UDW newbuildings stacked at DSME until 2019/20 but deliverable at Atwood's option.
We initiate coverage of Ensco with a BUY recommendation and target price of USD 17
The company has 59 rigs on the water in addition to two deferred newbuildings, a market cap of USD 2.5bn and is on of the most liquid names in the industry. Despite this, we estimate the company is trading at a discount to NAV and an implied 3% discount per rig at current trough levels.
We initiate coverage of Northern Drilling with a BUY recommendation and target price of NOK 90
All the time Seadrill remains in disarray, Northern Drilling has emerged as the new investment vehicle for Fredriksen ahead of the next cyclical upturn in the rig space. The company currently has two more or less complete semi-sub newbuildings warehoused at HHI, and the main assumption is for delivery in Jan/19.