O&M

O&M: OffShore Specialist DNB Nor has sector report. Tip activity momentum to continue, with activity level +15% QoQ in 4Q10, with stable margins. Expect this momentum to carry forward into the 1Q11 results, as more O&G projects (driven by E&P spending) are in execution phase. Reiterate that 2011 will be a year of inflection, with activity level gaining momentum in 2H11, absorbing the excess tonnage in the mkt…..

Expect OSV rates and utilization to increase notably in 2012 and believe that asset prices (vessels and share prices) should develop ahead of the rate cycle, but do not believe that the market has discounted this in today’s valuations. House has Buy Calls on STX OSV (TP $1.80), Ezion Holdings (TP $0.90), Jaya Holdings (TP $1.00), KS Energy (TP $1.40), Swiber (TP $1.30), CH Offshore (TP $0.70), ASL Marine (TP $1.00) and Kreuz (TP $0.50)