Adnoc Drilling delivers record Q1 revenue, secures $1.7b new contract

ADNOC Drilling Company announced record first-quarter revenue and EBITDA for the period ending 31st March 2024. ADNOC Drilling has exceeded market expectations again this quarter, the third in a row, with revenue increasing to $886 million, up 24 per cent year-on-year.

The Offshore Jack-up and Oilfield Services (OFS) segments drove revenue growth, increasing 51 per cent and 16 per cent respectively year-on-year.

EBITDA grew 31 per cent year-on-year to $437 million, driven by strong operational performance, leading to a year-on-year EBITDA margin expansion of 49 per cent. Net profit for the quarter reached $275 million, up 26 per cent year-on-year.

Meanwhile ADNOC Drilling Company has been awarded, by ADNOC, a $1.7 billion contract to provide drilling and associated services for the recovery of unconventional energy resources. The contract will see Turnwell deliver 144 unconventional oil and gas wells.

To service the contract and explore the considerable future opportunities in unconventional resources, ADNOC Drilling has incorporated a new company, Turnwell Industries OPC.

Commenting on the results, Abdulrahman Abdulla Al Seiari, Chief Executive Officer of ADNOC Drilling, said, “Our strong first quarter performance demonstrates that we have entered a new era for the Company as we go from strength-to-strength, delivering on and beyond the expectations of the market, our customers and our shareholders. Confidence in our growth trajectory and cash flow generation ability going forward, has resulted in our Board of Directors recommending an enhanced progressive dividend policy that will further bolster shareholder returns.

He added, “Our multi-faceted strategy of enabling ADNOC’s conventional and unconventional production capacity growth to meet the world’s growing demand for energy will further transform the business in 2024-onwards. The $1.7 billion contract award represents a transformational opportunity as the UAE’s world-class unconventional energy resources will require many thousands of wells, and we are in a prime position to deliver them. Aligned to this is the investment in and adoption of AI and advanced technologies through our strategic joint venture, Enersol, that has a $1.5 billion mandate to invest in and acquire global energy technologies.”

The Board of Directors has recommended a new, progressive dividend policy with dividends expected to grow by at least 10% per annum on a dividend per share basis over the next five years (2024-2028).

Moreover, the Board of Directors, at its discretion, may consider additional dividends over and above the progressive dividend policy after taking into account growth opportunities while maintaining net debt/EBITDA up to 2x, excluding transformative M&A.

The new dividend policy is subject to shareholder approval at an upcoming General Shareholder Meeting, the date of which will be advised shortly.

As per the policy, dividends are expected to be paid semi-annually, with a final dividend distributed to shareholders in the first half and the payment of the interim dividend in the second half of each fiscal year.

ADNOC Drilling has been awarded a transformational $1.7 billion contract to provide drilling and associated services for recovering unconventional energy resources. The contract will see ADNOC Drilling deliver 144 unconventional oil and gas wells. ADNOC Drilling will leverage the technology pipeline of its strategic joint venture Enersol and ADNOC’s world-leading AI, digitisation, and advanced technologies to contribute to responsible energy delivery.

ADNOC Drilling has signed a term sheet to enter into a strategic partnership with Schlumberger Middle East SA (SLB) and Patterson-UTI International Holdings, (Patterson-UTI) subject to signing definitive agreements and any necessary regulatory approvals. The new company will be primarily engaged in unconventional drilling operations.

Abdulmunim Saif Al Kindy, ADNOC Upstream Executive Director and Vice Chairman of ADNOC Drilling, said, “Our goal at ADNOC is to provide the energy and energy products that people depend on every day to power their lives and ensure a just, orderly and equitable energy transition. This award will accelerate the development of Abu Dhabi’s world-class resources to meet the world’s growing demand for affordable, accessible energy.

ADNOC Drilling is perfectly placed to responsibly develop these resources. Utilising partnerships, innovative AI, digitalisation and advanced technologies, we will unlock Abu Dhabi’s abundant energy resources to drive value for the UAE.” Abdulrahman Abdulla Al Seiari, Chief Executive Officer of ADNOC Drilling, said, “Abu Dhabi’s unconventional energy resources are among the world’s largest.