Citigroup is bullish on Aban Offshore and has maintaiend buy rating on the stock with target price of Rs 3830 rising it from 3530.
Aban III, IV, V contracts repriced
Aban has announced the extension of contracts with ONGC for three of its flagship assets – jackups Aban III, IV, and V – for a period of 3 years at an operating day rate of USD 156,600.
Day rate achieved higher than expected
The day rate announced has come in higher than our earlier estimate of USD 150,000. While this does not, on its own, meaningfully impact our estimates, it remains a fairly positive development nonetheless, as (1) it signals that the tightness in the offshore services market continues unabated and (2) the duration of the contract improves earnings visibility, a crucial element given Aban's high gearing.
Aban has announced the extension of contracts with ONGC for three of its flagship assets – jackups Aban III, IV, and V – for a period of 3 years at an operating day rate of USD 156,600.
Day rate achieved higher than expected
The day rate announced has come in higher than our earlier estimate of USD 150,000. While this does not, on its own, meaningfully impact our estimates, it remains a fairly positive development nonetheless, as (1) it signals that the tightness in the offshore services market continues unabated and (2) the duration of the contract improves earnings visibility, a crucial element given Aban's high gearing.
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