Aker Solutions ASA, an oil services company controlled by billionaire Kjell Inge Roekke, advanced the most in a week in Oslo trading after winning a larger-than-expected contract from Total SA in the Republic of Congo.
Aker Solutions, based in Lysaker near Oslo, rose as much as 2.4 percent, the most since March 18, and traded 2.3 percent higher at 110.10 kroner by 10:07 a.m. local time. That makes it the biggest gainer on the Oslo stock exchange’s OBX index.
Aker said today it won a 4.9 billion kroner ($845 million) deal for subsea equipment from Total for the Moho Nord project.
The value of the deal was “well above our 1.5 billion kroner expectation,” Pareto Securities ASA wrote in a note. “The higher value stems from a larger scope being included in the first phase and additional equipment being included.”
With fields maturing and finds more difficult to develop, demand is rising for drilling and subsea services offered by companies such as Aker, Subsea 7 SA, and Seadrill Ltd.
Aker Solutions, whose shares are up 18 percent in a year, has announced about 15 billion kroner of orders in the first quarter, Pareto said. Assuming 6 billion kroner of unannounced deals, the company has a book-to-bill ratio of about two times, indicating strong demand, said the broker, which has a 140 kroner price estimate and recommends investors buy the stock.
While Aker Solutions plans to expand offshore Norway, where spending is forecast to climb to a record 198.7 billion kroner this year, it’s also aiming to boost its operations around the world in regions including West Africa and South America.
The deal with Total is “one of the largest project’s Aker Solutions has been awarded in West Africa, which is a market the company has been trying to break into for many years,” Bank of America Merrill Lynch analyst Fiona Maclean said in a note.