Emkay recommends a `Buy` on Aban Offshore
Emkay recommends a `Buy` on Aban Offshore Emkay Research recommended a `Buy` on Aban Offshore. Price Target Rs 3,355 (CMP Rs 3,045) Bulford Dolphin is a 2nd generation semi-submersible with rated water depth of 1,250 ft and drilling depth of 25,000 ft. The rig was built in 1977 and the same was upgraded during the year 2003. Apart from this acquisition of Bulford, there is some other news flow which could possibly be new positive trigger for Aban stock. 3 more new rigs and 5 old contracts are to be finalized in the near term. (over next 12 months) The company is also looking to list its Singapore offshore subsidiar y. Management is targeting a USD 3 billion valuation for the Singapore subsidiary. There is also news of acquisition of Aban`s Petrojack ASA by Great offshore (or any one else) for USD 500 million. By selling its stake in Petrojack ASA, Aban can realise close to USD 100 million. Aban is currently trading at 9.6 X its FY2009 earnings and 6.9X its FY2010 earnings.
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Aban Offshore entered into memorandum of agreement with Bulford Dolphin for the purchase of its semi - submersible rig `Bulford Dolphin.` Aban would pay a consideration of USD 211 million for the rig, which is expected to join the fleet in Q4CY2007.
