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Energy Daily20 Nov 2012

Pareto Securities AS

www.paretosec.com

Bloomberg: PASE (go)

Reuters: PARETO

P.O. Box 1411 Vika

N-0115 Oslo, Norway

Tel: +47 22 87 87 00

Fax: +47 22 87 87 10

Video Conf.: +47 22 87 88 45

Trading desk: +47 22 87 87 50

20 Nov 2012

Pareto Securities AS (Pareto) is responsible for the production and dissemination of this recommendation. For

further disclosures on relevant definitions, methods, risks, potential conflicts of interests etc. and disclaimers

please see www.paretosec.com. All investment Recommendation should be reviewed in conjunction with the

information therein.

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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