Ezra

Ezra: announced that it has been awarded 2 contracts from Statoil, for mooring chain and riser replacements in the North Sea on the Norwegian Continental Shelf. The combined contract value is ~ NOK 425m (~US$71m) and up to NOK 600 m (US$100 m), assuming contract options are exercised.

The scope for the mooring chain replacement contract includes replacement work on part of the mooring system for several floating platforms. Engineering and planning will commence immediately, and the offshore operations will take place in 3Q12.
The scope for the riser replacement contract includes riser recovery and installation work for several floating platforms.
Engineering and planning will commence immediately, and the offshore replacement works will be performed from 2012 onwards.

Following Ezra's acquisition of AMC, their ability to win subsea contracts has significantly improved. The group's order backlog as at end-Aug 2011 was US$745 m. Having realigned AMC's third-party services back in-house and after some restructuring, Ezra appears confident
on its prospects and expects AMC to stage a strong turnaround in FY12E.

As Ezra ramps up its subsea operations, Deutsche expects the group to see a backend- loaded FY12E. The house models FY12E and FY13E new order wins of US$600m and US$700m, respectively. Says, as the subsea industry consolidates with fewer competitors, believes Ezra-AMC is well positioned to provide oil companies (subsea customers) with an experienced viable alternative. Keeps the stock at Buy with TP $1.70.