SA Transcripts • Mon, Nov. 10
There are 2 articles on this stock available only to PRO subscribers.
- Songa Offshore has the largest and longest order backlog per rig in the drilling industry (more than $6B).
- Songa's vision is to build NCS's (Norwegian Continental Shelf) largest semi-submersible drilling company (with a total of 7 units).
- Significant restructuring of the company has taken place in the last two years, which handsomely positions the company for a nice growth path going forward.
- Solid contracts with Statoil, which bears the brunt of risk for oil price declines (not Songa Offshore).
Songa Offshore: Re-Organizing Towards A Better Future
- After crashing by 65% in 2013, Songa Offshore (a mid-water driller) stock is well positioned for a strong recovery in 2014 and 2015.
- Strong order backlog of $6.6 billion with highest backlog per rig among peers, provides robust revenue visibility.
- Four new rigs to be delivered in 2014 and 2015 are contracted with Statoil for long-term and will provide revenue and EBITDA bump-up.
- Current and forward EV/EBITDA valuation compared to peers points to a valuation gap making Songa Offshore a Strong Buy.
- Debt amendment provides for relatively long maturity schedule and financing of new rigs certain on back of strong backlog and Statoil support.
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