The Call Odfjell Drilling Bulls Got Right

If you only glanced at Odfjell Drilling’s headlines over the past year, the latest rig contract wins and earnings milestones might feel like the entire story. Investors who held Odfjell Drilling over the past year are up 47.6%, including dividends. If you were weighing an investment back in October 2025, you faced clashing analyst views on fair value and long term oil demand. So what exactly in that record could have justified taking the risk?

On Simply Wall St, a Narrative is an investor's thesis written down: the reasoning, plus the numbers it rests on. Run those numbers and you get an estimated Fair Value.

If the move has made Odfjell Drilling harder to judge, start where the gap is still open and scan 197 high quality undervalued stocks.

The Argument You Would Have Been Weighing Up On Odfjell Drilling

The shares cost NOK77.8 at the start of the period, and you were choosing between two very different stories about Odfjell Drilling.

The bullish narrative put fair value at NOK95.1, 22% above the start price, based on assumptions such as 3.9% annual revenue growth and profit margins rising to 20.7%, supported by a modern fleet and long-term contracts.

The bearish view set fair value at NOK67.3, 13% below the start price, and focused on North Sea concentration risk and shrinking offshore drilling demand as the key threat.

What The Results Changed For Odfjell Drilling

The clearest new fact was Odfjell Drilling securing a US$518m, three year Deepsea Bergen deal with Vår Energi, which extends firm backlog to early 2031 and leans toward the bullish contract story. Reported Q2 2026 revenue of US$330.7m and net income of US$56.5m were higher than Q2 2025, while net margin slipped to 17.1%. The evidence cut both ways.

The episode turned on whether long term contracts could outweigh margin pressure. For another stock built on backlog claims, track contract length, start dates and total value alongside any change in reported profitability.

What Odfjell Drilling's Price Seems To Be Paying For Now

Odfjell Drilling now trades at NOK102, after a 47.6% gain over the past year. The selected Narrative places its Fair Value above that level, based on what it sees in contract cover, balance sheet progress and the rig market.

The key question is whether tight harsh environment supply and disciplined operations really keep translating into reliable cash generation. A buyer today needs to judge if high utilization on contracted rigs can be maintained without meaningfully higher operational setbacks.

"The new three year contract for Deepsea Bergen starting in early 2028 extends firm coverage on that rig to Q1 2031 and adds about US$518 million of revenue visibility, which can create room for Odfjell Drilling to capture higher incremental margins as fixed costs are spread over a longer contracted period."

That disagreement has a full argument behind it. → Uncover the higher Fair Value this Narrative argues for

Where Odfjell Drilling’s World Connects

Looking at Odfjell Drilling, you are really watching contracts turn into capacity decisions.

The rigs need reliable energy, and that depends on steady natural gas flows.

Moving that gas from wellhead to turbines requires compression that can handle changing pressure and volume over many years.

One specialist business focuses almost entirely on providing that compression as a long term service.

As more projects lean on gas for dependable power, that quieter role could matter far beyond any single drilling contractor.

The case is on the record, with the assumptions it rests on. → See the Narrative that values this company 53% above its price

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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