This is the most resilient oil & gas stock right now

Its earnings are reliable in these tough times.

Offshore rig builders aren’t in the rosiest spot at the moment, what with the looming spectre of order cancellations, lower charter rates, and vanishing new orders.

However, analysts agree that one stock outshines the rest when it comes to resilience against oil price volatility.

DBS Vickers Securities noted that Ezion is the most resilient oil and gas play at the moment, thanks to its robust operating fleet and the fact that the firm has suffered neither cancellations nor written requests for contract renegotiations.

“Ezion is more resilient to near-term oil price weakness on the back of long-term charter contract of 3-5 years and relatively better outlook for liftboats in Asia Pacific. This underpins its attractive EPS CAGR of 34% over FY15-16,” DBS wrote.

This sentiment is backed by CIMB analyst Yeo Zhi Bin, who stated that Ezion’s fourth quarter results would give investors renewed faith in the company.

“FY14 core net profit met 104% of our full-year forecast. Management shared that liftboat #1, deployed in West Africa; contract expires in Jan 15, has successfully renewed its contract for another two years at the same charter rates,” he noted.

Meanwhile, Maybank Kim Eng stated that while Ezion’s contract wins may slow in 2015, its renewal rates should nonetheless hold up this year with some upside potential.
“We prefer asset owners with opex exposure. Client interest could remain low in this sector until oil prices recover on the back of major production cuts. For sector exposure, buy Ezion. Its earnings should be more resilient, in our view,” noted Maybank Kim Eng.