ESV – ESV is trading at a material discount to Uniform Asset values, but management is confident in their new drillship, customer activity, and Brazilian operations

• Ensco plc (ESV:USA)currently trades near historical lows, and well below asset values, relative to UAFRS-based (Uniform) Assets, with a 0.5x Uniform P/B, implying bearish expectations for the firm. However, management is confident in their new drillship, customer activity, and Brazilian operations
• Specifically, management is confident that their latest newbuild delivery, the ultra-deepwater drillship ENSCO DS-10, recently commenced its maiden contract in offshore Nigeria on a major development for a customer, and that customer activity for programs in shallow water will likely continue to grow, improving utilization for the global jackup fleet. Additionally, they are confident in the attractiveness of offshore investment in the U.S. Gulf, and that over the past year and a half, a total of 34 deepwater exploration blocks have been awarded in Brazil, with the most recent capturing a record $2.4bn in signature bonuses