Mermaid: -1.1% at $0.460 after annoucing US based charterer of MTR-1 tender rig has ceased accommodation barge contract (supposed to run to at least end-Jan11). However, very thin volume suggests selling pressure light, as contract (won in July) worth just US$3.2 and cessation was no fault of Mermaid. Co. expects positive outcome from ongoing settlement talks….
CIMB, which keeps stock at Outperform, lowers TP to $0.52 from $0.57, erasing all contributions from MTR-1, also refines MTR-2 assumptions, shaves FY10-12 earnings estimates by 2-28%. Notes target still based on 10X CY12 P/E (20% discount to 5-yr peer average on poorer earnings visibility)….
Continues to see value in its assets and believe the upturn in the subsea market can pick up the slack in drilling and see catalysts from further asset acquisitions and higher-than-expected subsea utilisation. Order book tips support at $0.455.
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