Standard Drilling

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Summary: Standard Drilling is a $127mm market cap company that trades only $150k per day on the Norwegian stock exchange, has no earnings, and is only covered by Norwegian sell-side. The company was set up 2 years ago by a successful Norwegian investor to acquire oil supply vessels from distressed sellers who had taken on debt to order vessels at peak cycle. Extensive primary research reveals that these vessels are worth double Standard’s market cap, that the cycle bottomed a few months ago and is turning, which could quickly act as the catalyst to close this valuation discount. There is only 27% downside even if bottom of the cycle vessel values persist forever.