Adnoc Drilling accelerates its fleet expansion programme
- 30 May 2022
Adnoc Drilling Company on Monday announced it has signed a Sale and Purchase Agreement (SPA) to acquire an additional two premium offshore jack-up drilling units. The investment is central to the company’s enterprising expansion strategy and forms part of its three-year guidance on capital expenditure.
Adnoc Drilling’s fast-tracked fleet expansion programme keeps the company firmly on its growth trajectory as it enables Adnoc’s ambitious targets to deliver 5 million bpd production capacity and realise gas self-sufficiency for the UAE, while increasing the potential for greater shareholder returns.
Abdulrahman Abdullah Al Seiari, Chief Executive Officer of Adnoc Drilling, commented, “We are extremely pleased to have completed the acquisition of these two premium rigs, which will further bolster our position as a regional drilling leader and complement our already high quality offshore jack-up fleet. This is another important step in our fast-paced expansion and growth programme, ensuring we meet increasing demand as we enable Adnoc’s ambitious oil and gas production capacity growth as well as achieving gas self-sufficiency for the UAE. “
He added that the new drilling units will join the Adnoc Drilling fleet and start operations in the third quarter 2022, enabling considerable revenue for Adnoc Drilling to the benefit of investors and the UAE.
Since listing on the Abu Dhabi Securities Exchange in October 2021, Adnoc Drilling has expanded its fleet from 96 to 104 owned rigs, on 31st March, 2022. This acquisition cements the Company’s position as the largest national drilling company in the Middle East by rig fleet size, with further plans for expansion supported by a significant capital expenditure programme.
The two new drilling units, being acquired from Well Target Five Limited and Well Target Six Limited, are Gusto MSC design, premium independent leg cantilever rigs.
Adnoc Drilling Company earlier announced its financial results for the three-month period ended March 31, 2022, reporting significant revenue growth for the period, increasing to $601 million, up 14.9 per cent on the same period last year.
Year-on-year revenue growth was delivered across all business segments, with the Company firmly on track to deliver on its ambitious plans.
The Company’s revenue increased due to new rigs joining the fleet, with the owned rig fleet reaching 104 as new Helmerich & Payne FlexRigs commenced operations. The first quarter also saw continued growth in the Oilfield Services (OFS) business, with a healthy market share.
Ebitda in Q1 2022 increased to a robust $280 million, a margin of 46.6 per cent, as the company also continued to make solid progress in delivering cost efficiencies. Net profit for the first quarter increased substantially, by 59.1 per cent year-on-year to $175 million.
Abdulrahman Abdullah Al Seiari, Chief Executive Officer of Adnoc Drilling, commented, “I am very pleased with Adnoc Drilling’s performance in the first three months of 2022, where we reported strong and sustained revenue and earnings growth, increased our fleet to 104 owned rigs and were included in ADX’s new FADX 15 Index, underpinning the importance and attractiveness of Adnoc Drilling as a key constituent of Abu Dhabi’s capital market and the region’s drilling leader focused on achieving attractive shareholder returns.”
“As our revenues have grown, our profitability metrics have remained equally strong, with a market-leading Ebitda margin that is almost twice the industry average. At the same time, we continue to leverage our differentiated offering across the entire drilling value chain to further increase our share in the Integrated Drilling Services market, which stood at 45 per cent at the end of the quarter. We look forward with confidence to the year ahead, as we deliver on our rig acquisition programme and our investment in technology to unlock further growth.”
Adnoc Drilling remains a key enabler of Adnoc’s ambitious growth targets, which will deliver 5 million barrels daily production capacity by 2030 and realise gas self-sufficiency for the UAE.
The company continues to focus on delivering the safe and efficient operations to which its customers have become accustomed, resulting in continued improvements in safety performance and fleet utilisation.
In March 2022, it was announced that Adnoc Drilling would become an inaugural member of FADX 15, a new tradable index created by ADX and FTSE Russell, marking another significant milestone in the Company’s history. The index is uniquely designed by ADX and FTSE Russell to track the performance of the most liquid and largest companies on the ADX main market.
WAM