Energy Expert

Thierry Bros, PhD

Thierrybros.com

Thematic (Sector/Industry)

Brexit negotiations are likely to start soon. Everyone is looking at the consequences on forex and on the UK financial sector. But who could benefit from decorrelation of energy prices between the UK and the EU?Following the policy paper " <a href="https://www.oxfordenergy.org/publications/brexits-impact-gas-markets-brext-security-supply-uk-ireland/" target="_blank">Brexit's impact on gas markets: Brexit and security of supply for the UK and Ireland</a>" just published by Oxford Institute for Energy Studies, this insight looks at the Brexit's impact on energy stocks.As the outcome of Brexit is still unknown, we can only draft…

Brexit negotiations are likely to start soon. Everyone is looking at the consequences on forex and on the UK financial sector. But who could benefit from decorrelation of energy prices between the UK and the EU?Following the policy paper " Brexit's impact on gas markets: Brexit and security of supply for the UK and Ireland" just published by Oxford Institute for Energy Studies, this insight looks at the Brexit's impact on energy stocks.As the outcome of Brexit is still unknown, we can only draft…

Frontier and emerging markets (Vietnam)

Dylan Waller

Nomadic Equity

Norway, Colombia, and Nigeria Amid Low Oil Prices The low oil price environment since late 2014 has put varying levels of strain on oil exporting countries and has also provided a benchmark of which countries have some of the most resilient oil producing companies.  As outlined in previous insights, I am bullish on several Vietnamese oil &amp; gas companies which have been able to fare well in this low oil price environment and could experience a strong rebound if oil prices rebound.  The World Bank…

Norway, Colombia, and Nigeria Amid Low Oil Prices  The low oil price environment since late 2014 has put varying levels of strain on oil exporting countries and has also provided a benchmark of which countries have some of the most resilient oil producing companies.  As outlined in previous insights, I am bullish on several Vietnamese oil &amp; gas companies which have been able to fare well in this low oil price environment and could experience a strong rebound if oil prices rebound.  The World Bank…

Overview of Opportunities in Asia, Africa, Latin America and Norway

European Event-Driven Analyst

Jesus Rodriguez Aguilar

Event-Driven

On 13 September 2021, <a href="https://www.smartkarma.com/entities/ocean-yield-asa" target="_blank" data-smartkarma-citation="entities:22243:1" rel="noopener">Ocean Yield ASA (OCY NO)</a> announced that it had reached an agreement with Octopus Bidco (owned by funds advised by <a href="https://www.smartkarma.com/entities/kkr-co-inc" target="_blank" data-smartkarma-citation="entities:27333:1" rel="noopener">KKR &amp; Co Inc (KKR US)</a>) on the terms of a recommended voluntary offer for all outstanding shares. KKR intends to expand the sale-and-leaseback specialist.
Consideration is NOK 41/share, cum dividend, for an implied equity value (deal value) of NOK 7,186.75 mn (NOK 7,200 mn as reported) and implied EV of 18,789.38 mn. This represents 12.4x EV/Fwd Revenue, 13.2x EV/Fwd EBITDA, 10.9x Fwd P/E and 125.8x deal value/Consensus NAV.
Consideration will be increased with any incremental sales price received for the FPSO Dhirubhai above $19 mn if sold prior to settlement of the offer. If Aker Energy declares the purchase option at $35m, the offer price will rise to NOK 41.74/share.
Irrevocable undertakings from Aker Capital ASA (61.65% stake), and Board members and management holding approximately 2.02%.
Ocean Yield's financial situation continues to be stressed, and gearing is high. Book equity, $668.1 million vs. total assets of $2,132 billion, for an equity ratio of 31.3% at end of Q2. Leverage is 8.4x net debt/EBITDA and EBIT/interest is 7.2x.
In terms of tangible book value for its assets, the offer price represents 1.25x. Comparable companies are trading at a median 1.0x P/TBV, on this basis the offer seems fair.
The market is betting on Aker Energy declaring the purchase option at $35m, thus the offer price will rise to NOK 41.74/share, and the adjusted gross spread is then c. 1.8% (completion expected in Q4).
Although not a terribly exciting spread, it is a done deal. Long OCY OB, TP 41.74.
Some bonds look interesting, more specifically the Ocean Yield ASA - FRN SNR 12/2024, with a 5.32% YTW, but only $87 mn outstanding.

On 13 September 2021, Ocean Yield ASA (OCY NO) announced that it had reached an agreement with Octopus Bidco (owned by funds advised by KKR &amp; Co Inc (KKR US)) on the terms of a recommended voluntary offer for all outstanding shares. KKR intends to expand the sale-and-leaseback specialist.
Consideration is NOK 41/share, cum dividend, for an implied equity value (deal value) of NOK 7,186.75 mn (NOK 7,200 mn as reported) and implied EV of 18,789.38 mn. This represents 12.4x EV/Fwd Revenue, 13.2x EV/Fwd EBITDA, 10.9x Fwd P/E and 125.8x deal value/Consensus NAV.
Consideration will be increased with any incremental sales price received for the FPSO Dhirubhai above $19 mn if sold prior to settlement of the offer. If Aker Energy declares the purchase option at $35m, the offer price will rise to NOK 41.74/share.
Irrevocable undertakings from Aker Capital ASA (61.65% stake), and Board members and management holding approximately 2.02%.
Ocean Yield's financial situation continues to be stressed, and gearing is high. Book equity, $668.1 million vs. total assets of $2,132 billion, for an equity ratio of 31.3% at end of Q2. Leverage is 8.4x net debt/EBITDA and EBIT/interest is 7.2x.
In terms of tangible book value for its assets, the offer price represents 1.25x. Comparable companies are trading at a median 1.0x P/TBV, on this basis the offer seems fair.
The market is betting on Aker Energy declaring the purchase option at $35m, thus the offer price will rise to NOK 41.74/share, and the adjusted gross spread is then c. 1.8% (completion expected in Q4).
Although not a terribly exciting spread, it is a done deal. Long OCY OB, TP 41.74.
Some bonds look interesting, more specifically the Ocean Yield ASA - FRN SNR 12/2024, with a 5.32% YTW, but only $87 mn outstanding.

Norway

Ocean Yield ASA provides investments in vessels with the oil-service and industrial shipping industry. The Company charters all vessels out on long term contracts.

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Ocean Yield ASA (OCY NO)

Energy: Who Could Benefit from Brexit?

Brexit negotiations are likely to start soon. Everyone is looking at the consequences on forex and on the UK financial sector. But who could...

Thierry Bros, PhD

Overview of Opportunities in Asia, Africa, Latin America and Norway

Norway, Colombia, and Nigeria Amid Low Oil PricesThe low oil price environment since late 2014 has put varying levels of strain on oil exporting...

Nomadic Equity

KKR/Ocean Yield: Recommended Offer

A done deal. The market is betting on Aker Energy declaring the purchase option at $35m, thus offer rising to NOK 41.74/share, for a 1.8% adjusted...

Jesus Rodriguez Aguilar

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