19 November 2012 Andreas Stubsrud Head of Research
Vi har vært i et bear marked i lang tid 1. Indeksen var 371 slutten av 2009 og 382 slutten av 2011, mens den er i 429 nå 2. «Bear» markedet startet egentlig sommeren 2007, finansmarkedet fikk første skikkelige smell Januar 2008, mens Lehman gikk ned september 2008 3. Vi tror indeksen er høyere 31 desember i år og høyere slutten av 2013 Mine favoritter nå: 1. Prospector Offshore Drilling 2. Dolphin Group Small cap har hatt et begredelig år 1. Small cap aksjer har hatt et fryktelig år, mens large cap har gått ganske bra 2. Nesten alle selskaper i verden trenger penger (refinansiering) i fremtiden, men i 2012 har man utelukket fokusert på dette 3. Seadrill 2
Spare oil production capacity should remain low OPEC spare capacity relative to world demand 1970 2017e OPEC spare capacity relative to world demand 25% 20% 15% 10% The structural decline in spare capacity continues 5% 0% 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015e Source: IEA; BP; Pareto 3
Example of asymmetry in supply and demand s growth potential: How China and India could wipe out spare capacity by 2016 Consumption per capita: India, China, EU, US Consumption per capita 65-16e: India, China Oil consumption per capita (bbls/year) 25 China and India oil consumption per capita (bbls/capita) 3.5 20 15 3.0 2.5 2.0 Change in growth needed to wipe out spare capacity by 2016 10 5 0 22.0 9.8 1.1 2.6 India China EU US 2011 Zero spare capacity in 2016 (Demand 2.6 mbd higher than base case) 1.5 1.0 0.5 0.0 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015e Zero spare capacity in 2016 China India OPEC spare capacity would be gone in 2016 if annual oil consumption per capita increases from 2.6 to 3.4 bbls in China and from 1.1 to 1.5 bbls in India Although such an increase in consumption per capita over just four years is not very likely, it is not completely unrealistic Supply however, could not be anywhere near those levels, which means that a high oil price is needed to constrain demand growth Source: IEA; IMF; BP; Pareto 4
Chinese oil demand growth is not as extraordinary as most think Oil demand since 75 : China vs. Sum of Algeria, Ecuador, India, Qatar, Saudi Arabia, Singapore, UAE, Vietnam Oil demand (mbd) 12 10 8 6 4 2 0 1975 1980 1985 1990 1995 2000 2005 2010 Aggregate of Algeria, Ecuador, India, Qatar, Saudi Arabia, Singapore, UAE, Vietnam China Source: BP; Pareto 5
Prospector Offshore Drilling: The right jackup exposure at deep discount Company Overview Rig #1 (Dalian 1) 400 ft Total at 185'/day Pareto est. 185'$/day Rig #2 (Dalian 2) 400 ft Pareto est. 185'$/day Rig #3 (Dalian 3) 400 ft Pareto est. 185'$/day Rig #4 (Dalian 4) 400 ft Pareto est. 185'$/day Rig #5 (Shanghai Waigaoqiao 1) 400 ft Pareto est. 185'$/day Rig #6 (Shanghai Waigaoqiao 2) 400 ft Pareto est. 185'$/day 2011 2012 2013 2014 2015 2016 2017 Contract Option Yard Available Rig # 1 Rig # 2 Rig # 3 Rig # 4 Rig # 5 Rig # 6 Yard Dalian Dalian Dalian Dalian SWS SWS Design F&G JU-2000E F&G JU-2000E F&G JU-2000E F&G JU-2000E F&G JU-2000E F&G JU-2000E Turnkey price (USDm) 185 185 199 199 203 203 Delivery Feb-13 Mar-13 Aug-13 Sep-13 Feb-14 May-14 Payment terms 10:90 10:90 10:90 10:90 1:99 1:99 Real options 99% construction financing also 6 months after delivery Source: Pareto Research, Prospector 6
USD 132m to fund for 1x jackup by August 2013 Sources and uses for Prospector (as a two-rig company) USDm 500 Needed financing for 1x jackup by August 2013 450 400 350 300 250 Sources: - Cash on hand - September equity issue - Sale of two rigs - Debt financing secured - Total available: USD 311m 139 132 443 Remaining capex to complete two rigs: - USD 191m on rig # 1 - USD 202m on rig # 3 - USD 50m for working capital - Total: 443m 200 106 150 311 100 57 172 50 0 26 Cash Q2'12-17 SG&A + Capex H2'12 66 Equity issue Sept Sale of rigs Secured debt financing Needed financing Remaining capex: Source: Pareto 7
Solid economics EV/EBITDA of 4.7x at USD 200 /day dayrates USDm per JU 350 300 250 199 200 150 100 231 271 311 EV/EBITDA 10 9 8 7 6 5 4 50 3 0 11 15 20 25 NOK/Share Value per JU EV/EBITDA at USD 200'/day EV/EBITDA at USD 225'/day 2 Source: Pareto Research, Company 8
Dolphin: Seismikk dagrater er på vei opp Historical and estimated dayrate development (10-12 streamer) Contract seismic pricing (high end) 450,000 400,000 350,000 Current fixture range 300,000 250,000 200,000 150,000 Q314e Q1'14e Q313e Q1'13e Q312 Q1'12 Q3'11 Q1'11 Q3'10 Q1'10 Q3'09 Q1'09 Q3'08 Q1'08 Q3'07 Q1'07 Source: Pareto Research 9
Dolphin vil ha sterk inntjeningsvekst fremover - Dagens aksjekurs i DOLP er NOK 5.5 P/E 10x 2012e og P/E 3x med alle båter i vannet på dagens rater EPS (NOK) 2.5 P/E 3x assuming 2013 dayrates and all vessels delivered 2.0 1.5 1.0 0.5 0.0 2012e 2013e 2014e 2013 adj. Source: Pareto Research 10
Seadrill UDW flåte dobler seg fra 2010 to 2014 +100% 22 West Mira West Rigel 20 West Saturn West Neptune 17 West Jupiter West Tellus West Vela 14 West Auriga 13 West Leo West Capricorn 11 West Pegasus West Orion 10 West Gemini West Aquarius West Eminence West Hercules West Taurus West Phoenix West Sirius West Capella West Polaris West Navigator 2010 2011 2012E 2013E 2014E Source: Pareto Research, ODS 11
Seadrill growth fueling increased dividends Dividend per share development SDRL (quarterly basis) Dividend/share 1.20 1.00 0.80 0.60 0.40 0.20? Shareprice 45 40 35 30 25 20 15 10 5 0.00 Q4'07 Q2'08 Q4'08 Q2'09 Q4'09 Q2'10 Q4'10 Q2'11 Q4'11 Q2'12 Q4'12e Extraordinary Ordinary Shareprice (rhs) 0 Source: Seadrill, Pareto Research 12
Anbefalinger Prospector: Dagens kurs NOK 11,3, kursmål NOK 22 1. Mer eller mindre full finansiert 2. Fantastisk avkastning per rigg 3. Kursen under det riggene kostet i 2010 Dolphin: Dagens kurs NOK 5,5, kursmål NOK 11 1. Rater på vei opp 2. Trygg balanse 3. Svært billig Seadrill: Dagens kurs NOK 217, kursmål NOK 285 1. Vi er i et «Winners take it all» marked, SDRL har gjort alt og gjør alt riktig 2. Vår oljeanalyse sier oss at vi trenger mer boring 3. USD 4 dividende er NOK 23 historisk div yield på 8% tilsvarer NOK 289 Source: ODS, Pareto Research 13
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