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Energy Daily20 Nov 2012
Pareto Securities AS
www.paretosec.com
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Reuters: PARETO
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20 Nov 2012
Pareto Securities AS (Pareto) is responsible for the production and dissemination of this recommendation. For
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please see www.paretosec.com. All investment Recommendation should be reviewed in conjunction with the
information therein.
1(1)
Oil prices increase further
Brent climbed USD 2.8/bbl to USD 111.6/bbl yesterdayHigher equities, supported by increased confidence around a
solution of the US fiscal cliff, and unrest in Israel were supportive for
oil prices.
Chinese refinery runs look to increase further in November. Refineryplans indicate runs could potentially climb as high as 10.2 mbd, up
from 9.4 mbd in Sept-Oct and +1.0 mbd y/y
BWO new cost overrun on Papa Terra
BW Offshore has made another USD 75m provision on the PapaTerra contract for increased costs until delivery, expected mid-2013
This comes in addition to USD 60m of provisions taken previouslyThe unit is expected to arrive in February and we expect the yard
stay to be for about three months
The overruns are mainly related to increased engineering,construction, procurement and commissioning cost and increased
yard costs associated with the delayed schedule
Potential liquidated damages (LDs) comes in addition to theannounced cost overruns and could potentially total USD ~100m
BWO will now be in breach with the equity covenant of minimum30% on our numbers as of Q3
The company has however obtained a waiver for this covenant aswell as the leverage covenant and the interest cover ratio
Subsea 7 awarded USD 70m contract
Subsea 7 has been awarded a USD 70m contract for pipelinereplacements off the Shetlands
Offshore work is scheduled to commence in 3Q 2013TTS awarded NOK 130m crane contract
TTS has been awarded a NOK 130m contract for four offshore cranesand equipment for riser handling by the STX yard in Korea
The equipment will be installed on a drillship ordered by SigmaDrilling where the majority-owner in TTS has a separate interest
TTS also announced that it is investing USD 5m in Sigma inconnection with the drillship order
Delivery will take place during Q3 and Q4 2014, and the contractincludes options for four identical equipment installations
BP finds more gas offshore Trinidad
BP has discovered an estimated 1 Tcf of natural gas in the Savonettefield off Trinidad
The find doubles the estimated gas in place on the field to 2 TcfThe well was drilled by jackup Rowan EXL II at ~300ft, which is
contracted until late February 2014
BP propose to drill a further two wells into the reservoir
Sector Energy
Oil price, Brent front month
International Oil Services
T icker 1D % 1M % 6M % 12M %
OSX 3.2 (5.6) 8.2 (4.2)
BHI 3.5 (7.0) 2.9 (23.0)
CA M 2.1 (3.3) 19.4 8.2
CGG 3.0 (9.5) 35.4 49.9
DO 2.6 (5.3) 12.9 6.3
FTI 2.9 (6.8) 0.0 (15.3)
FUR (14.2) (21.5) (9.8) 7.8
HA L 4.1 (9.3) 5.9 (11.8)
NB R 4.0 (8.1) 4.8 (26.4)
NE 2.5 (13.7) 6.5 (2.1)
NOV 3.8 (9.2) 15.6 8.6
ORIG 3.6 (6.9) (1.6) 12.3
OII 2.9 3.9 17.7 21.8
PA CD 0.3 (1.6) 16.2 -
RDC 3.5 (4.4) 8.5 (1.8)
RIG 2.4 (6.3) 7.2 (4.2)
SB M O (1.7) (25.9) (30.2) (46.0)
SLB 3.6 (4.5) 10.3 (0.9)
TDW 2.3 (7.2) (3.1) (8.1)
TEC 2.3 (8.2) 17.5 29.2
VTG 2.4 (10.1) 18.2 40.8
WFT 3.4 (22.4) (23.3) (35.8)
45.5
32.8
10.0
54.8
1.7
84.2
44.0
70.7
8.0
Close (local)
15.2
73.3
34.3
13.7
31.7
42.1
41.4
66.8
22.7
53.4
41.6
216.8
9.5
V a lu at io n S h ar e M c a p
T ic k er pric e US D m 2 012 2 0 13 2 0 12 2 0 13
SUBC 126.3 8,104 6.9x 5.5x 16.9x 13.1x
AKSO 105.1 5,021 7.2x 7.0x 14.1x 11.1x
SDRL 222.8 18,269 11.5x 11.1x 13.5x 11.7x
FOE 255.1 2,948 5.7x 6.2x 7.9x 7.7x
SONG 5.3 188 10.3x 4.3x 7.0x 2.7x
OCRG 87.3 2,004 15.0x 9.9x - 12.5x
ARCHER 7.0 410 4.9x 3.8x 28.0x 7.2x
PRS 46.4 1,804 9.2x 8.1x 11.2x 9.1x
PGS 96.7 3,666 5.0x 4.5x 17.1x 9.9x
TGS 180.6 3,199 3.7x 3.1x 11.3x 9.5x
PLCS 5.7 504 6.6x 3.3x 22.8x 3.8x
BWO 3.0 361 8.0x 5.2x - 13.7x
FAR 132.0 898 8.4x 7.6x 16.3x 9.3x
SOFF 87.0 588 7.9x 5.9x 7.3x 3.5x
DOF 23.3 451 8.9x 7.8x 8.2x 3.1x
SIOFF 6.9 476 8.7x 7.2x 17.3x 6.2x
DESSC 9.1 203 13.2x 6.2x - 5.1x
HAVI 29.0 108 10.7x 7.4x 27.4x 2.6x
A v e ra ge 8 .4 x 6 .3 x 15 .1x 7 .9 x
E V / E B IT D A P / E
100
105
110
115
26-Oct 1-Nov 7-Nov 13-Nov 19-Nov
USD/bbl