Editor’s note: This is the latest edition in the “Company Notes Series”, where we periodically share our notes on companies we’ve studied in the recent past but currently have no vested interest in (we may invest in or sell shares in the companies mentioned at any time). The notes are raw and not updated, and the “as of” date for the data is given at the start of the notes. The previous edition in the series can be found here. Please share your thoughts on the series through the “Contact Us” page; your feedback will determine if we continue with it. Thanks in advance!
Start of notes for Northern Ocean
Data as of 2025-11-19
- Northern Ocean is listed in Norway’s Oslo Stock Exchange, with the ticker symbol NOL
- Northern Ocean is the owner of 2 oil rigs as of 16 November 2025, namely, Deepsea Bollsta and Deepsea Mira:
- Both Deepsea Bollsta and Deepsea Mira were acquired by Northern Ocean in 2017. Deepsea Bollsta was acquired for US$400 million while Deepsea Mira was acquired for US$365 million; it’s interesting to note that Deepsea Mira’s construction cost was around US$720 million. Both Deepsea Bollsta and Deepsea Mira are managed by Odfjell Drilling and have similar specifications and ages, as shown in Figure 1
- On 17 November 2025, Northern Ocean announced the sale of Deepsea Bollsta to Odfjell Drilling for US$480 million; management intends to return capital to shareholders when the sale is complete.
- On 18 November 2025, Northern Ocean’s stock price was NOK 8.13. The company has 303.2154 million shares outstanding as of 30 June 2025, and 9.5 million outstanding and unvested options, given a fully-diluted share count of 312.7154 million. Northern Ocean’s market capitalisation is thus NOK 2.542 billion, or US$251.7 million.
- As of 30 June 2025, Northern Ocean has US$28.1 million in cash, US$299.3 million in debt, and US$248.7 million in related-party debt. This gives Northern Ocean an enterprise value of US$771.6 million. After selling Deepsea Bollsta, Northern Ocean’s enterprise value would become US$291.6 million. And now that Northern Ocean has only one asset left, if management has no ambition to buy more assets, it makes sense for the company to sell Deepsea Mira. It’s likely Deepsea Mira fetches a price that is around US$365 million or higher. Assuming a sale price of US$365 million, Northern Ocean would thus have a negative enterprise value of US$73.4 million, and this compares with a market capitalization of US$251.7 million, which equates to an upside of around 30%.
- Northern Ocean has positive operating cash flow of US$4.3 million in 2025 H1, with capex of US$35.8 million, and interest expense of US$30.3 million. With the cash inflow from the sale of Deepsea Bollsta, Northern Ocean can pay down significant amounts of its debt, reducing interest expense by, say, two-thirds; the sale of Deepsea Bollsta will also reduce capex. All in, Northern Ocean’s pro-forma financials for 2025 H1 could look something like this: positive operating cash flow of US$22 million, with capex of US$18 million, and interest expense of US$10 million. This means Northern Ocean’s enterprise value, post sale of Deepsea Bollsta, will be reducing over time (a good thing for equity holders in terms of the bargain they are getting), while waiting for the sale of Deepsea Mira.
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