Paratus Energy is now, in substance, a single-asset holding company: a 50% interest in the Seagems joint venture (six specialized pipe-laying support vessels on multi-year Petrobras contracts in Brazil), plus corporate cash and bonds. Following the 23-Mar-2026 agreement to sell the Fontis jack-up business to Borr/CME, Fontis is reported as discontinued operations / held-for-sale, and the Q1 2026 interim restates the group accordingly. Reported in USD under US GAAP; listed on Oslo in NOK. Borsdata mislabels it 'Financials' — it is scored on the operating ROIC/EP frame.
On the rebuilt CONTINUING-OPS basis, operating income is the Seagems equity pickup ($35.5M in Q1) less corporate G&A ($2.5M/q) = $33.0M/q, ~$126M LTM, with zero tax at the Paratus level (Bermuda; all Mexican tax sits in discontinued ops). Adjusted ROIC ~24% on Paratus' look-through share of Seagems book equity ($532.9M) — or ~33% on the enterprise pro-forma capital base ($381.6M) — both comfortably above the 11% WACC; economic profit is +$67M. The prior 22% was on the OLD Fontis-consolidated group and is no longer comparable; the continuing pure-play is, if anything, a higher-return and lower-risk business — out of Mexican payment risk, fully contracted, deleveraged to 1.4x pro-forma. The trade-off is concentration: 100% of earnings now come from one non-controlled JV serving one customer (Petrobras) in one country.
Frame it on the post-Fontis entity: the Seagems JV stake + net cash + the $237M seller-credit receivable. At NOK 45.65 (÷ USDNOK 9.91 ≈ $4.60) the equity is ~$749M; on pro-forma net debt $254M, EV ≈ $1.0bn → EV/IC ~1.9x, NOPAT/EV ~12.6%. The $0.22/q dividend is a ~19% distribution yield, covered by Seagems distributions (~$165M/yr run-rate vs ~$143M paid).
Base NOK 50 (modest upside; value-creative + deleveraged + covered ~19% yield, offset by single-JV concentration); bull NOK 66 if the 2028 Petrobras re-tender lands incremental vessels and dayrates hold; bear NOK 33 on a re-tender miss, an inter-contract idle gap, or a Fontis seller-credit impairment.
The market pays today’s enterprise value for roughly -8.9% NOPAT growth over 5 years. The business earns 24% on capital against a 11% cost of capital (spread +12.6 pp); the no-growth value is NOK 62/share (136% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | NOK 66 | +2% | +45% | 30% | 2028 Petrobras re-tender lands incremental vessels; dayrates hold |
| Base | NOK 50 | -6% | +10% | 45% | Value-creative deleveraged pure-play; single-JV concentration caps upside |
| Bear | NOK 33 | -18% | -28% | 25% | Re-tender miss, inter-contract idle gap, or Fontis seller-credit impairment |
| Prob-weighted | NOK 51 | — | +11% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 9.50% | 78 | 87 | 93 | 103 | 110 | 129 |
| 10.25% | 69 | 77 | 82 | 90 | 96 | 113 |
| 11.00% (base) | 62 | 68 | 73 | 80 | 85 | 99 |
| 11.75% | 56 | 62 | 65 | 72 | 76 | 88 |
| 12.50% | 51 | 56 | 59 | 64 | 68 | 78 |
Green = fair value above the current price of NOK 45.65. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
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~$1.2bn backlog to 2027–28 at improved Petrobras dayrates ($281k/day), 98% utilisation — visible, infrastructure-linked cash flow.
Petrobras tender for 2028 start-up (bids ~mid-2026); Seagems well-positioned for ≥1 vessel — the key forward swing factor.
Pro-forma net debt ~$254M (1.4x); refinanced into $250m 8.125% 2031 bonds, redeeming the 9% 2026 notes.
Seagems JV distributions (~$165M/yr) fund the ~19% dividend yield with headroom.
The full deep-dive resolves the escalation in the company's favour: the Fontis divestiture is value-accretive, not impairing. The continuing pure-play earns ~24–33% ROIC vs an 11% WACC, generates +$67M economic profit, and is deleveraged (1.4x) and de-risked (out of Mexican payment risk) with a covered ~19% distribution yield. HOLD, conviction MEDIUM; base NOK 50.
What keeps it a HOLD rather than a BUY is quality, not value: ~100% of earnings now depend on a single non-controlled JV (Petrobras/Brazil) and the 2028 re-tender, with a $237M seller credit still on the books. Re-rate to BUY if the re-tender lands incremental contracts; watch the seller credit and Seagems distribution policy.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Total operating revenues (consolidated) | 153 | Consolidated Statements of Operations / Note 5 | Total operating revenues line, FY2025 column = 153.2 (FY2024 213.9). This is Fontis/Mexico only and is net of $33.8m amortization of favorable contracts (segment table p.30: contract revenue 187.0 less amortization 33.8 = 153.2). Seagems revenue is NOT here (equity method). |
| Operating income (EBIT, reported) | 163 | Consolidated Statements of Operations | Operating income = 162.7 (FY2024 166.9). Build: revenue 153.2 - total opex 117.2 + share in results from joint ventures 121.8 + other operating income 4.9 = 162.7. Includes the Seagems equity income, hence the matching equity-method asset is kept in IC. |
| Share in results from joint ventures (Seagems) | 122 | Consolidated Statements of Operations / Note 18 | Equity income from the 50% Seagems JV = 121.8 (FY2024 85.2), comprising Paratus' 50% share of Seagems net income 105.3 plus amortization of basis differences 16.5 (Note 18). Sits inside reported operating income. |
| Amortization of favorable contracts (add-back) | 33.8 | Note 4 Segment Information / Note 5 | Non-cash, PPA-type contra-revenue (Seadrill fresh-start accounting): segment Fontis line shows contract revenue 187.0 less amortization of favorable contracts (33.8). Added back to reported EBIT to derive economic adjusted EBIT 196.5; the company also adds it back in its Adjusted EBITDA reconciliation (p.48). |
| Income tax expense | -4.7 | Note 12 Taxation | Income tax expense 4.7 on income before taxes 79.5 = 5.91% effective rate. Bermuda statutory rate is 0% (exempt to March 2035); tax is essentially all Mexican (Fontis). The 5.91% effective rate is used for NOPAT as the genuine economic tax reality. |
| Net income | 74.8 | Consolidated Statements of Operations | Net income FY2025 = 74.8 (FY2024 31.6); basic EPS $0.46. Used for context, not directly for NOPAT (NOPAT is built bottom-up from adjusted EBIT x (1-tax)). |
| Interest-bearing debt (carrying) | 685 | Consolidated Balance Sheets / Note 11 | Short-term interest-bearing debt 193.8 + long-term 491.3 = 685.1 carrying. Notional 697.9 (2026 Notes 197.9 at 9.00% due Jul-2026 + 2029 Bonds 500.0 at 9.50%) less 12.8 unamortized discount/issue costs (Note 11). Used in invested capital and net debt. |
| Cash and cash equivalents | 178 | Consolidated Balance Sheets / Note 6 | Consolidated cash 178.3 at 31 Dec 2025 (FY2024 86.4). Treated entirely as operating (zero excess) given the July-2026 note maturity and lumpy Mexican receivables. Combined-segment cash incl. 50% Seagems was $203.7m. |
| Equity-method investments (Seagems) | 300 | Consolidated Balance Sheets / Note 18 | Equity-method investments 299.9 at YE2025 (FY2024 358.2, which then still included Archer 45.7). At YE2025 this is the 50% Seagems stake, carried after a negative basis difference of -242.7 vs Paratus' 541.7 share of Seagems book equity. KEPT in invested capital as the core operating asset behind the JV equity income. |
| Drilling units and equipment, net | 250 | Note 10 Drilling Units and Equipment | Net carrying value of the Fontis jack-up fleet 249.8 (gross 319.9 less accumulated depreciation 70.1). 30-year useful life, nil residual, straight-line; no impairment in FY2025 or FY2024. The asset-heavy core of the consolidated business (the one being sold). |
| Total equity | 156 | Consolidated Balance Sheets / Statement of Changes in Equity (p.27) | Total shareholders' equity 155.7 at 31 Dec 2025 (FY2024 256.9). Built from additional paid-in capital 1,192.2 + AOCI 1.2 LESS accumulated deficit 1,037.7. The large deficit is Seadrill-legacy; it depresses the equity base and flatters ROIC. |
| Accumulated other comprehensive income (AOCI) | 1.2 | Consolidated Statement of Changes in Equity | AOCI balance +1.2 at 31 Dec 2025 (FY2024 +8.7), moved by -7.5 OCI loss in 2025 (incl. -8.5 reclassification on the Archer sale). Removed from equity to get equity_ex_oci 154.5 for invested capital. |
| Shares outstanding (net of treasury) | 163 | Note 13 Share Capital | 169,550,049 Class A ordinary shares less 6,815,000 treasury shares = 162,735,049 outstanding at 31 Dec 2025. Used for market cap with the verified NOK 46.40 price converted at USDNOK 9.4383. |
| Operating cash flow & capex (FCF build) | 167 | Consolidated Statements of Cash Flows | Net cash from operating activities 166.6 (FY2024 -27.6), boosted by a +147.8 accounts-receivable working-capital release (Mexican collections). Additions to drilling units 5.9. FCF = 166.6 - 5.9 = 160.7; flagged as non-recurring-inflated. |
| Combined-segment net debt & adj EBITDA (APM) | 581 | Alternative Performance Measures | Company management-reporting net debt 581.2 (notional debt 697.9 - consolidated cash 178.3 = 519.6 consolidated, plus 50% Seagems net debt 61.6). Combined-segment adjusted EBITDA 261.2 (consolidated 91.6 + 50% Seagems 169.6); net leverage 2.2x. Noted for context; consolidated net debt (506.8 carrying / 519.6 notional) used for the balance-sheet identity. |
How the mttssn view has evolved — each prior dated note is preserved.