石油服務與設備的重生

1、Oilfield Services & Equipment Rebirth: Separating the Wheat from the ChaffDecember 2019 Equity Research United StatesJacob Lundberg Senior Research Analyst (212) 325-6785 HYPERLINK mailto:Jacob.Lundberg Radi Sultan, CFA Research Associate (212) 538-8137 HYPERLINK mailto:Radi.Sultan Radi.SultanDISCLO

2、SURE APPENDIX AT THE BACK OF THIS REPORT CONTAINS IMPORTANT DISCLOSURES, ANALYST CERTIFICATIONS, LEGALENTITY DISCLOSURE AND THE STATUS OF NON-US ANALYSTS. US Disclosure: Credit Suisse does and seeks to do business with companies covered in its research reports. As a result, investors should be aware

3、 that the Firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.Executive Summary: N-T Trends Favor Intl & OffshoreWe outline our view on the OFS space and our stock sel

4、ection framework. We roll out refreshed company models and unit economic models for land rigs, pressure pumping, and offshore rigs in addition to an interactive project-level LNG equipment model.US Market Faces Stock The US outlook to by anemic oil US E&P capital and gains. On the strip, it likely t

5、hat and see y/y in US E&P model -10% and -5% (all activity flat Among US OFS, we high-quality and low with tailwinds (WHD, PUMP, SOI with avg YE20 net of we to with FTSI, NINEwith avg YE20 net of ShowSignsofWhile the US intland, showsigns ofThe intl rig count gas rigs) YTD is up 6% y/y with a Intl Y

6、TD growth for is while hesitant to be have mid- single-digitgrowthinintlinexplicitlystatedmid-singledigitorOndata,ofofprojects in relate to led by and are a of potential of is and is For to we BKR and RIG.LNG Cycle Uniquely Benefits BKR Among Our Coverage. expect robust LNG sanctioning activity to c

7、ontinue. After a brief hiatus in 2016/17, which saw 8/3Mtpa of FIDs vs a 2004-15 median of 23Mtpa, FIDs picked up in 2018 (21Mtpa) and have since surged. On Mackenzie data, YTD FIDs represent 63Mtpa. are tracking projects that represent an incremental 70Mtpa of capacity (largest contributors are Rov

8、uma, and Driftwood). In our coverage, this growth trend uniquely benefits BKR, which we estimate to have 85% market share of turbomachinery equipment in the LNG setting.OntheSeeOurworkthatweneedtoseemodestnegative revisions. our our forecasts are consensus. are closest to in the group and our imply

9、the most cuts need to the (mostly DO). Over the past two on a y/y basis, and (used as for the have to y/y in Where Could Be Wrong / What Could Change? are keeping a close eye on US production. The principle pushback that we hear from investors with a more positive outlook is that, in light of the si

10、gnificant decrease in US oilfield activity seen YTD in 2019 and those expected in 2020, there surely must be a production impact that can contribute to balancing global oil markets. A materialization ofthisriskrepresentsupsiderisktocrudeoilandourOilfieldServicesearningsforecasts.Furthermore,wearetra

11、ckingexpectations for 2020 intl/offshore growth. Any negative revision to growth expectations represents downside risk to our forecasts.Executive Summary: N-T Trends Favor Intl & OffshoreRefreshing Ratings, Price and Estimates across OFS. In the industry note, we are updating estimates and price tar

12、gets across our coverage. are downgrading RES and PTEN to Underperform from Neutral. are downgrading NBR and NINE to Neutral from Outperform. Last, we are upgrading RNGR to Outperform from Neutral. are also initiating on NEX with a $6 target price and Neutral rating (Link to Report) following CJs (p

13、reviously covered) merger with FRAC (previously uncovered). Our earnings forecasts and ratings contemplate FY20/21 US spending -10%/-5% and intl spending +5%/+5%. Our 2020/2021 EBITDA forecast is on average 5%/10% below consensus (FactSet) across our coverage. See our note herefor full details.Stock

14、 Selection Important in Light of Macro Headwinds. Given continued headwinds pressuring the US market in 2020 (E&P capital discipline and efficiencies, principally) coupled with continued (albeit modest and declining) growth in international markets against a macro backdrop seemingly fraught with ris

15、ks, we favor high-quality (strong, persistent, and improving returns) and low leverage with an international/offshore bent and a wide margin of Our top picks are: Baker Hughes (Outperform), ProPetro (Outperform), and Diamond Offshore (Underperform).Time to Pay Attention Again. a step back, we levera

16、ge our proprietary market-implied returns data to analyze the current state of OFS in its larger historical context. The long-term CFROI for large-cap Oilfield Services is 8%. the OFS industry is coming off a capex super cycle (global upstream spending grew at a 14% CAGR from 2000 to 2014 vs its lon

17、g-term median of7%)thatdroveoutsizedcorporatereturns(10%)andanover-capitalizationofglobalservicecapacityfromwhichtheindustryisstill recovering. according to our team, large-cap OFS is currently discounting 6% CFROI, a 200bps discount to the long- term median. see this repricing of the sector as a ne

18、cessary, but insufficient clearing event to make the space investable. Given the aforementioned macro headwinds, we are not out of the woods yet. But it is time to pay attention again to a sector that has been strongly out of favor for the better part of the past five years.Ratings & Material Change

19、sUS OFS Market to Remain Challenged Through 2020USUSRigCountY/YGrowthHasBeenSlowingSince2018&Turned Negative in2Q19 With a Similar Trend on Frac SpreadsWe Model Continued Rig Count Declines for the Next Two Yearsas with Horsepower DemandWe Model Continued Rig Count Declines for the Next Two Yearsas

20、with Horsepower DemandDrilling Efficiencies Pressuring the RigMarketbut Rigs Are Drilling Fasterbut Rigs Are Drilling FasterAverage Lateral Lengths Have Continued to Increase020112012201320142015201620172018201920208%6%4%2%0%2011201220132014201520162017201820190%-2%-4%-6%-8%-10%-12%-14%-16%-18%-20%A

21、verageAverageHzLateral Drilling 1,000 Pad Size Is Increasing (at Slowing Rate ofChange)Pad Size Is Increasing (at Slowing Rate ofChange)Aiding in Rigs Drilling Wells Faster & Faster20132014201520162017201820197%6%5%4%3%2%1%0%2011201220132014201520162017201820192020202110%5%0%-5%-10%-15%-20%AverageWe

22、llAverageWellPadSize HzRigperHzAnd We See Similar Trends inCompletions & Stages per Well Continuing to Increase & Stages per Well Continuing to IncreaseDespite Lateral Length Continuing to Grow02011201220132014201520162017201820192020202112%10%358%6%204%152%50%020112012201320142015201620172018201920

23、20202116%14%12%10%8%6%4%2%0%AverageAverageHzLateral Stages perAlongside Increased Proppant Loadings Horsepower Demand Normalized for Well Size Has Been FallingAlongside Increased Proppant Loadings Horsepower Demand Normalized for Well Size Has Been Falling20112012201320142015201620172018201920202021

24、25%20%15%10%5%0%-5%-10%0.1600.1200.1000.0600.0400.0002011201220132014201520162017201820192020202120%15%10%5%0%-5%-10%-15%-20%Frac Frac Gas Underperforming Oil Since 2018, Set to ContinueIndexed to 4Q17 the Oil Rig Count Is -10% vs Gas -26%Indexed to 4Q17 the Oil Rig Count Is -10% vs Gas -26%The Gas

25、Rig Count Has Been Underperforming the Oil Rig Count120001Q182Q183Q184Q181Q192Q193Q194Q19to-6%-13%-15%-29%Date-6%-13%-15%-29%10%5%0%-5%130120110100908070604Q171Q182Q183Q184Q181Q192Q193Q194Q19toDateGasGasGasGasGasWhich We See in E&P Capex DataAnd Looks Set to Continue into 2020Which We See in E&P Cap

26、ex DataAnd Looks Set to Continue into 20200Gas WeightedGas Gas WeightedGas Oil Weighted Q/Q30%20%10%0%-10%-20%-30%-40%-50%20192020 GasNear-Term Trends Favor Intl Which We See in HAL + SLB Intl Revenues Which We See in HAL + SLB Intl RevenuesThe Intl Rig Count Continues to Grind Higher020142015201620

27、172018201910%5%0%(5%)020142015201620172018201910%5%0%-5%-10%-15%-20%-25%AfricaMiddleAfricaMiddleEastEastHAL + FIDsShowingFIDsShowingPositiveMomentum(EvenifSomeProjectActivity Slips into2020)Potential Future FIDs Look Strong As Well-$120B of 19 FIDs$120B of 19 FIDs44,36947,69274,93487,301157,383265,9

28、25151,33894,53721,6635,9972,860-202020212022202320242025IntlIntlExpected 19NorthIntl80010080010070090600805007040060.Translating into Strong Utilization Gains in Core Offshore Submarkets (High-Spec Jackups and Drillships)Offshore Rig Activity Has Been Grinding Higher by All Measures.3002013201420152

29、016201720182019502013201420152016201720182019TotalTotalTotal RigsPremiumJU7G UDWJackup Fixture Activity Continues to Look Strong.While Floater Fixtures Have Been Better, but Slow to MoveJackup Fixture Activity Continues to Look StrongWhile Floater Fixtures Have Been Better, but Slow to Move0JackupJa

30、ckup(Years)3392882722072172511480169Floater Fixtures (Years)99100846949499910084694949LNG Offers Secular GrowthYTD 2019 LNG FIDs Are Strongest Year in Our Dataset YTD 2019 LNG FIDs Are Strongest Year in Our Dataset and Set to Continue to Robust Levels706050Mtpa40Mtpa302010-2004 2005 2006 2007 2008 2

31、009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019LNG FIDsLNG FIDsCS Forecasts 180Mtpa Demand Growth (5% CAGR) 2018-28AsiaCS Forecasts 180Mtpa Demand Growth (5% CAGR) 2018-28AsiaDrivesOutsizedDemandGrowth&ChinaRepresents40%of AsiaDemand90080070060050040030020010002MTPAMtpaMtpa0(10)(20)Speculative

32、411714976641(10)Asia Incremental 2018-28 LNG Demand by CountryAsia Incremental 2018-28 LNG Demand by CountryStrongCorrelationBetweenEarningsRevisionsandPrice PerformanceSLBSLBY/YSharePricePerformanceExhibitsa0.6CorrelationChanges in EBITDAConsensus and HAL Shows a 0.7 Correlation-8070605040302010-Ja

33、n-18-605040302010-Jan-18Jan-19We Expect Continued Negative Earnings Revisions Across Most Groups20We Expect Continued Negative Earnings Revisions Across Most Groups20EBITDA HAL 20 2%(2%)2%(2%)(5%)(12%)(16%)2%0%(1%)(1%)(1%)(1%)(2%)(4%)(6%)(8%)(10%)(12%)(14%)(16%)PressureLandDrillingOffshoreDrillingOt

34、herOur E&P Team Models US Production Growth Continuing to Moderate After Having Peaked in Late 2018Rate of US Production GrowthSlowingOur E&P Team Models US Production Growth Continuing to Moderate After Having Peaked in Late 201816,0002,50014,0002,0001,5001,0005000-50001Q163Q161Q173Q171Q183Q181Q193

35、Q191Q203Q201Q213Q211Q22-1,000US Top Picks: Baker Hughes, ProPetro, Diamond OffshoreTickerNameRatingPricePrice Target/ Elevator PitchBKRBaker HughesOutperform$22.4$28.025%BKROFSname&awhichagrowthcycle.OFSaswellasgrowthtimewithC3.aiand(C3-BKR-Microsft)asvstailworkwithstockwithHALandatoSLB2021 EBITDA.P

36、UMPProPetroOutperform$8.6$14.062%PUMPavsmarket),andata vsEBITDAvsatEBITDA/spreadvs at In stark we much PUMPs toy/yvsaty/y,whichvsDODiamond OffshoreUnderperform$5.7$4.5-20%DOaDRvs CSeavgwithtomidwaterwhich and rate to (CSe and a (atFY19/20toEBITDA,whichasworstdraws,andUDWcontractwins(towhichDOtermtoD

37、espiteNear-TermHeadwinds,StructuralRepricingLarge-Cap OFS Appears LargelyCompleteIn a Nutshell, while we believe a painful reset of expectations for large-cap OFS equities has largely been complete, macro risks persist, making stock selection important. favor a defensive (and intl) bent. BKR remains

38、 our top pick (less O&G exposure 60% upstream vs peers and dominant niche in LNG secular growth trend).30,000 Foot ViewPainfulExpectationsResetLargelyOverFollowing the 2014 oilprice crash, OFS has struggled to properly calibrateexpectations. Usingourproprietarymarket-impliedreturnsframework,weshowth

39、at,inthe2016miniupcycle(OIHwentfrom$21to$35) price-impliedexpectationsreturnedtothe10%return(CFROI)levelthegroupearnedover2000-14(boomtime).Sincelate-2016, therehasbeenapainfulexpectationsresetastheOIHfellto$11andprice-impliedreturnshavefallento6%,belowthelong-term median of 8%. see this as a necess

40、ary, but insufficient clearing event to make the space investable.But Key Downside Risks Persist arent out of the woods yet. Global crude markets remain oversupplied (Credit Suisse estimates a 0.5MMbbld inventory build in 2020) and macro economic concerns appear to persist. The back end of the WTI f

41、utures strip has declined from $53/bbl to $50/bbl over the past 2019 crude demand forecasts have fallen over the course of the year by40% from 1.4MMbld to 0.9MMbld). US E&Ps remain under pressure to show improved FCF yields which keeps pressure on their capex budgets and, thus, on the OFS revenue op

42、portunity.Which Begets a Defensive & Intl Stance. In light of macro (crude specific as well as broad economic) risks, we favor a defensive and intl stance (high-quality, clean balance sheets, intl/offshore exposure, and a margin of safety). would look to get more aggressive on (1) dissipation of cur

43、rent crude oil / broad economic risks; (2) a fundamental, real (not achieved via withholding production) rebalancing of global oil markets; and/or (3) US prodn coming in well below expectations. Furthermore, given relative valuation headwinds (large-cap OFS 2020E FCF yield of 7% (8% on Bloomberg con

44、sensus) vs European Majors/Refiners at 10%), we favor companies with competitive FCF yields.PainfulExpectationsPainfulExpectationsResetLargelyOverFollowing the 2014 oilprice crash, OFS has struggled to properly calibrateexpectations. Using our proprietary market-implied returns (CFROI) framework, we

45、 show that, in the 2016 mini upcycle (OIH went from $21 to$35) price-implied expectations returned to the 10% return level the group earned over 2000-14 (boom time). Since late-2016, there has been a painful expectations reset as the OIH fell to $11 and price-implied returns have fallen to 6%, below

46、 the long-term median of 8%. We see this as a necessary, but insufficient clearing event to make the space investable.AfterPricinginaReturntoBoomTimeReturnsthroughthe2016Rally,Market-ImpliedExpectationsAreNowBelowLong-TermMedianLevels14%Market-ImpliedMarket-ImpliedCashReturn10%8%6%4%2%0%Large-Cap La

47、rge-Cap Median But Key Downside Risks Persist arent out of the woods yet. Global crude markets remain oversupplied (Credit Suisse estimates a 0.5MMbbld inventory build in 2020) and macro economic concerns appear to persist. The back end of the WTI futures strip has But Key Downside Risks Persist are

48、nt out of the woods yet. Global crude markets remain oversupplied (Credit Suisse estimates a 0.5MMbbld inventory build in 2020) and macro economic concerns appear to persist. The back end of the WTI futures strip has declined from $53/bbl to $50/bbl over the past 2019 crude demand forecasts have fal

49、len over the course of the year by40% (from 1.4MMbld to 0.9MMbld). US E&Ps remain under pressure to show improved FCF yields which keeps pressure on their capex budgets & thus on the OFS revenue opportunity.Crude Demand Growth (Y/Y) Forecast, Jan 2019-Nov 2019 (MMbld) Driving a Downward Shift in the

50、 Futures StripCrude Demand Growth (Y/Y) Forecast, Jan 2019-Nov 2019 (MMbld) Driving a Downward Shift in the Futures StripJan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 Nov-196462605856545250MAY19JUL1919NOV19JAN20MAR20MAY20JUL2020NOV20JAN21MAR21MAY21JUL2121NOV2111/27/20194/1/20

51、19Which Begets a Defensive & Intl Stance. In light of macro (crude specific as well as broad economic) risks, we favor a defensive and intl stance (high-quality, clean balance sheets, intl/offshore exposure, and a margin of safety). would look to get more aggressive on (1) dissipation of current cru

52、de oil / broad economic risks; (2) a fundamental, real (not achieved via withholding production) rebalancing of global oil markets; and/or (3) US prodn coming in well below expectations. Furthermore, given relative valuation headwinds (large-cap OFS 2020E FCF yield of 7% (8% on Bloomberg consensus)

53、vs European Majors/Refiners at 10%), weWhich Begets a Defensive & Intl Stance. In light of macro (crude specific as well as broad economic) risks, we favor a defensive and intl stance (high-quality, clean balance sheets, intl/offshore exposure, and a margin of safety). would look to get more aggress

54、ive on (1) dissipation of current crude oil / broad economic risks; (2) a fundamental, real (not achieved via withholding production) rebalancing of global oil markets; and/or (3) US prodn coming in well below expectations. Furthermore, given relative valuation headwinds (large-cap OFS 2020E FCF yie

55、ld of 7% (8% on Bloomberg consensus) vs European Majors/Refiners at 10%), we favor companies with competitive FCF yields. (Refer to slides 40-43 for the methodology to derive these forced rankings.)Credit Suisse Oilfield Services Stock Heat MapTickerRatingCredit Suisse Oilfield Services Stock Heat M

56、apTickerRatingValuationReturnsLeverageNCSMOUTPERFORM95%95%82%WHDOUTPERFORM86%95%86%SOIOUTPERFORM82%68%86%BKROUTPERFORM73%86%55%NEXNEUTRAL91%23%73%PUMPOUTPERFORM100%23%59%NOVNEUTRAL27%86%50%VALOUTPERFORM77%68%9%WTTROUTPERFORM64%5%86%FTSINEUTRAL68%50%32%SLBNEUTRAL32%82%32%HPNEUTRAL41%36%64%HALOUTPERFO

57、RM36%73%27%RIGOUTPERFORM59%45%18%RNGROUTPERFORM45%9%59%RES9%9%77%NENEUTRAL55%23%14%NINENEUTRAL50%14%27%TUSKNEUTRAL14%18%45%NBRNEUTRAL23%18%23%PTEN5%14%41%DO18%18%5%appearinexpensive (with market-implied expectationsbelowforecast of normalized CFROI);are high quality (have high and persistent ROIC ab

58、ovetheircostofcapital);have low leveragedebt/NTM EBITDA).Subsector OutlooksLarge-Cap OFS BKR (OP), HAL (OP), SLB (N)see the large integrated service companies as the most likely to adapt and survive in a quickly changing landscape, given the breadth of their geographic exposure and product offerings

59、, and ability to fund significant R&D budgets to participate in the disruptive forces rippling through the oilfield (artificial intelligence, et al).BKRisourpreferredlarge-capOFSstockandouroveralltoppickinourcoverage;welikeitsmorediversifiedexposure(only60% upstreamandNAMbusinessmoreleveredtoproduct

60、ion-drivenmarketsvscoreD&C),dominantpositioninLNGequipment,and Digital efforts. The pushback we tend to hear on BKR is concerns of capitalizing peakish LNG earnings in 2021 with a mid-cycle multiple.wouldpointoutthat(1)giventheservicecycleourLNGmodelimpliespeakBKRLNGcashflowsarereachedin2028 and (2)