Peter Lindström retweeted
$BWLP with a massive $164M gross profit in its products services trading division for Q3
Peter Lindström retweeted
Transocean awarded two new contracts
Deepwater Proteus with 700 days at $464k/day Deepwater Conqueror with 450 days at $500k/day
Two drillships, roughly $550m of backlog, both starting directly after current work. The company gives no rates, but on the disclosed backlog and estimated days we calculate about $464,000 a day for the Deepwater Proteus and $500,000 for the Deepwater Conqueror, against a weighted $461,000 on the fixtures added in the second quarter.
The merger looks all the more interesting now against a backdrop with these rates.
$RIG $VAL
Chart shows (at least) 4 things:
1) CN Oil purchases was correlated with Iranian export through Aug
2)very low Iranian export now
3) Oil on water heading for CN is at highest lvl since April
4) Ergo, CN is sourcing that oil elsewhere.
Bullish oil price and crude Tanker rates.
Peter Lindström retweeted
RIG's new amended RCF keeps RP leverage and liquidity thresholds unchanged, but with some looser terms adding shareholder-return flexibility
The key dividend driver is VAL merger accelerates deleveraging at close and over the next 12 months as three 7G drillships return to work
- From 5.5x net leverage at YE24, Transocean has deleveraged to ~3x currently, mostly due to converting backlog into cash for debt reduction. The deleveraging aspect of the all-stock merger is key for Transocean; incorporating Valaris’ balance sheet (currently ~1.3x net leverage) should reduce net leverage to ~2.5x at close, with a visible path to ~2.0x by 2Q27.
- After Transocean delivered Atlas, Titan and Aquila (acquired) in 2022-2023, capex has materially declined to maintenance, modest upgrades and SPS levels, which supports meaningful free cash flow (OCF-Capex) averaging ~$180mm per quarter since 2024. The organic deleveraging is likely to continue, which makes underwriting 2x net leverage (covenant definition) by 2Q27 reasonable.
- Further, Valaris’ TTM EBITDA of $424mm represents a cyclical trough, depressed by idle (warm) rigs in TTM period. Operating leverage turns positive over the next 12 months as 7G drillships DS-10 (June 2026), DS-15 (Sept 2026) and DS-18 (4Q26) return to work. Activations are likely to draw on working capital initially, but EBITDA growth is clear, with cash flow to follow.
Transocean avoided this drag because due to its Norway-eligible harsh-environment semisub fleet, a market in which Valaris has no exposure. Valaris’ 7G drillships were hit by delays in West Africa during 2025 but are now scheduled to recover. The combined company has a more diversified fleet, which should lower its cost of capital, all else equal.
- The Net Leverage calculation in Transocean’s RCF credit agreement excludes the $286mm of Restricted Cash on its 6/30/2026 balance sheet. Restricted cash consists largely of Debt Service Reserve Accounts funding the next 12 months of amortization and interest on Transocean’s secured bonds. These funds are structurally dedicated to secured bondholders, not the bank group on Transocean’s revolver so are excluded from its net leverage calculation.
- Transocean’s repayment of its Poseidon, Titan and now Aquila secured bonds both reduces debt and releases restricted cash, which receives no credit under the revolver’s net leverage covenant. The 2030 secured notes had $822mm outstanding at 6/30/26, falling to ~$763mm after the August paydown. With the call premium stepping down from 104.375 to 102.188 in February 2027, a refinancing into unsecureds is logical; eliminating $117.5mm of annual amortization could fund a larger dividend program, though is subject to Board capital allocation policy...
Peter Lindström retweeted
$GLNG
It’s annoying to see how the market is mispricing this company.
I mean, it’s true the company should be viewed as an infrastructure play—a kind of bond proxy—and its valuation should reflect rising interest rates. But the current valuation is just silly. It has $17bn in contracted EBITDA over the next 20 years with strong counterparties. That EBITDA represents free cash flow before debt service and interest, as the business requires virtually no taxes or maintenance capex, yet the company is trading at around $4.5bn. That’s before adding the fourth FLNG, which has already reached FID and could significantly increase run-rate EBITDA from $800m to $1.1bn–$1.2bn. It’s also before considering the 20-year commodity upside option Golar signed into its contracts, which could generate free cash flow equivalent to the market cap in a year like this one—and multiple times that amount if we look at 2022.
Is the market so silly? I think so… As I’ve argued, I don’t expect Goldman Sachs’ strategic review to end in a sale, and that’s likely been weighing on Golar’s share price recently. I can see Goldman bringing in a strategic partner to develop and accelerate the strong pipeline, but I don’t think any capable external player could both fund and execute that growth pipeline.
After meeting Tor Olav Troim at my office this week, I’m even more confident that Golar has four or five highly credible projects it could sign soon. Recent reports from TradeWinds and Africa Intelligence confirm that these projects are moving ahead—and that only Golar can deliver.
1) TradeWinds reported that Eni and Repsol are moving ahead with Venezuela’s FLNG project. Golar LNG, BW LNG, Bumi Armada, SBM Offshore, Samsung Heavy Industries, Hanwha Ocean, and Saipem have reportedly submitted EOIs, with a full invitation to tender expected later this year.
2) Africa Intelligence reported that Trident Energy is looking to monetize its 1 trillion cubic feet of gas reserves in Congo, with Golar and Exmar currently competing for the contract.
With all due respect to the companies mentioned in the news, nobody can really compete with Golar. Only Samsung and Exmar have ever built an FLNG vessel. That’s no simple undertaking, so I don’t expect any of them to take on more than $2bn in risk to get started. As for Exmar, it built a very small liquefaction vessel called Tango, which performed so-so for a while before Eni bought it in 2022. Exmar’s accounts are public, and it’s well known that the company doesn’t have the funding capacity to carry out a project of this size. I know Exmar very well, as we recently funded $12m out of a $150m bond. Finally, Samsung has experience, but it’s a shipyard, and financing a customer over 20 years isn’t its business. I don’t expect it to change its business model now.
Gas is hot right now, and demand is expected to grow considerably. After the conflicts involving Russia and the Middle East, every country realized it needs to diversify its supply; it can’t rely only on the US, Russia, or Qatar. This is a great time for Golar to capitalize on the current environment, which is why it’s building a $2.5bn FLNG on spec. I expect we’ll have a contract within the next six months, and thereafter, Golar will find another compelling project for the fifth.
I may be overthinking this, and the current weakness could simply be driven by its association with shipping—which seems silly nowadays, given its legacy as a shipping company. Or even some HF exiting as they are forced to cut leverage because interest rates are rising… But to be fair, I just struggle to understand why Golar is so cheap, even without factoring in growth or commodity upside.
The Transocean/Valaris merger has received final regulatory approval, with Brazil's competition authority clearing the transaction without restrictions following US approval earlier this month. Closing is expected in Q4 2026, subject to shareholder approval.
The merger is another important step in the consolidation of the offshore drilling industry. The combined company will control approximately 40% of the global seventh generation drillship fleet. Together with Noble and Seadrill, the three contractors will control around 80% of seventh and eighth generation drillship capacity, compared with just 40% held by the three largest contractors in 2017.
Importantly, Valaris has been particularly aggressive on pricing, while Transocean has been one of the most restraintful.
Bringing the two fleets under one roof should remove some of that competitive pressure and shift pricing power back towards the drillers. The combined company will also control much of the sidelined high specification capacity, which should help maintain discipline around reactivations.
$VAL $RIG
Peter Lindström retweeted
There's an energy crisis, Transocean $RIG is the leader of an offshore oil services oligopoly, the company is trading at a fraction of replacement value, the stock has broken out from a two decade trend line on rising volume and, as of today, management can return capital to shareholders. It just flipped from a credit to equity story. And it's a must own within the energy sector.
Peter Lindström retweeted
Zelenskyy simply and accurately explains why giving up the Donbas won’t end the war:
"Putin says he wants the Donbas, but why, at the start of the full-scale invasion, was he trying to occupy Kyiv?
Is that the east of our country? Is that the Donbas? No, that’s the capital. Without a capital, there is no state.
Putin wants to destroy Ukraine. For us, the question is not about withdrawing from the Donbas.
The real question is the survival of our state. We stand and fight, because what is the alternative? To be destroyed.
Simply put, not everyone feels this because Ukraine is still standing. We have stabilized the battlefield.
We are grateful to our partners in Europe, America, and other countries, Japan is helping, Canada is helping, Australia, New Zealand, whoever can.
Ukraine stands against such a powerful enemy as Russia. We stand, otherwise we will be destroyed.
It’s always difficult, you know, in communications with partners, to find the right words, the warnings that they will truly understand.
Putin wants to destroy us. He doesn't respect us, our sovereignty, or our territorial integrity.
He genuinely believes that we are not a country, not a nation.
So do you really trust that he only needs the eastern part of our country? Of course that will never be enough for him.
And what will happen if we fall? How many people, I don’t know, maybe twenty million Ukrainians, will come to Europe?
Because Putin will destroy our homes and force us out. For me, this is absolutely clear.
That’s why we are standing strong, defending our country. Yes, with pain, with huge losses.
That’s why we are asking: stop the killing. And as I have heard so many times from POTUS, 'they have to stop the killing.'
Russia is killing us on our own territory. They came onto our land and keep pushing further.
They do not want to stop. They do not even want to freeze the war, as you can see.
So, do you think what Putin really wants is just the eastern part of our country? No. It will never be enough for a person like him."
Bloomberg explains the ripping oil prices with fresh doubts over Trump's Russian Diesel Deal
Brent at 109.56 and WTI at 100.41 as we speak.
#OOTT
Brent and WTI is ripping.
Brent at 109.24, WTI at 100.66.
Not sure why as of now...
#OOTT
This has been presented as a bipartisan group of US lawmakers trying to block Trump’s Russian diesel deal.
But it seems only one Republican has actually signed on so far, so it is not an immediate threat.
Having said that, the entire energy complex is reacting to something.
#oott
$RIG is my highest conviction position. A position I plan to hold for many years.
Transocean has just released a new SEC filing that brings very good news.
1. Banks are ready to finance the new $RIG / $VAL
The new credit facility increases from $510 million to $750 million, and its maturity is extended from 2028 to 2031, provided the merger is completed.
2. Banks offered more money than Transocean asked for.
This is particularly interesting to me. The credit facility was oversubscribed, meaning banks were willing to provide more financing than Transocean requested. Heavily indebted offshore companies don't get this, but my readers have known for a long time that RIG can handle its debt relatively easily. This is just further proof.
3. Less debt.
Transocean has repaid $165 million of debt carrying an 8% interest rate, reducing future interest expenses.
4. And here is something particularly interesting. Shareholder returns.
Section 6.25 of the credit agreement contains provisions allowing future dividend payments and share buybacks.
Think about that for a moment.
A company that spent years struggling with debt now has banks offering more money than it requested, is repaying expensive debt, and has a credit agreement that allows for future returns of capital to shareholders.
Debt goes down, moat goes up, and future cash goes to shareholders.
Cheers, Sandro
Peter Lindström retweeted
In 2008, the last time rates went through the roof, an oil company that needed a deepwater rig could call a dozen drillers, and behind them sat more than a hundred rigs on order in Korea and Singapore. Tonight the hard wells get drilled by seventh generation drillships, and four of every ten of them belong to one company in a small town in Switzerland ( $RIG ) .
$NE and $SDRL own most of the rest.
When the cycle arrives it will find a market it has never seen.
Full write-up:
open.substack.com/pub/cannib…
Peter Lindström retweeted
Yesterday, I had the chance to meet Tor Olav Trøim again. His approach to investing and business is truly inspiring.
He believes in the jackup thesis and has invested $40m of his own money in $BORR over the past two weeks. When was the last time you saw insider buying on that scale?
What makes it even more remarkable is that, despite the attractive long-term outlook, the short-term picture remains relatively weak.
But if you know something will be worth twice as much in three years, how much time should you spend worrying about next quarter? Are you really willing to risk missing a $6 move just to get a $1 lower entry price?
I share his conviction in offshore. Supply is constrained, demand is growing, and the next few years could bring a further acceleration as oil companies convert additional cash flows into exploration budgets. When the Iran conflict eventually ends, deferred demand could rebound like a compressed spring, adding further pressure to an already tight market.
Meanwhile, much of the market is chasing whatever is hottest: AI, datacenters, momentum, even tankers. In doing so, investors may be overlooking a rare opportunity to allocate capital to irreplaceable, essential assets in a sector where the supply response doesn´t exist.
I was also struck by the respect he has for Cobas and Azvalor, two Spanish investment funds that share this long-term, business-owner mentality.
We live in a world where most of us, myself included, are too focused on the immediate future: getting the next quarter right, timing entries perfectly, and avoiding volatility.
Yet great fortunes are often built by playing a different game.
Being able to learn from people of this calibre is something I’m extremely grateful for. 🙏



























