Adnoc Drilling reported a record first quarter revenue of $886 million, a 24 per cent increase from the previous quarter, surpassing market expectations for the third consecutive quarter.

 

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 to 49 per cent. Net profit for the quarter reached $275 million, up 26 per cent year-on-year.

 

Abdulrahman Abdulla Al Seiari, Chief Executive Officer, 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.

 

“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 prime position to deliver them. Aligned to this is the investment in, and adoption of, artificial intelligence and advanced technologies through our strategic joint venture, Enersol, that has a $1.5 billion mandate to invest in and acquire global energy technologies.” 

 

HIGHLIGHTS FOR THE FIRST QUARTER ENDING MARCH 31, 2024 

 

Onshore: Revenue for the quarter was $411 million, up 16 per cent year-on-year, mainly due to increased onshore activity, driven by the contribution from new rigs commencing operations. 

 

Offshore Jack-up: Revenue for the quarter was $278 million, a 51 per cent increase compared to 2023, mainly due to higher activity from the additional jack-up rigs contributing revenue.

 

Offshore Island: Revenue for the quarter was in line with first quarter 2023 as activity was broadly stable year-on-year.

 

Oilfield Services (OFS): Revenue for the quarter was $146 million, an increase of 16 per cent year-on-year driven by increased activity in drilling fluids and directional drilling. The overall volume of activity of the segment is expected to increase throughout the year, in line with planned phasing and driven by IDS rigs ramp-up and unconventionals. 

 

NEW DIVIDEND POLICY 2024-28

 

The Board of Directors has recommended a new, progressive dividend policy with dividends expected to grow by at least 10 per cent 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.

 

UNCONVENTIONAL ENERGY RESOURCES CONTRACT

 

Adnoc Drilling has been awarded a transformational $1.7 billion contract to provide drilling and associated services for the recovery of 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, digitization, and advanced technologies to contribute to responsible energy delivery.  

 

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

 

Adnoc Drilling has signed a term sheet with industry leaders SLB and Patterson UTI for potential partnership and support with the latest technology, specialist services and innovations in the unconventional energy drilling space subject to signing definitive agreements and any necessary regulatory approvals.

 

FLEET EXPANSION

 

At the end of the first quarter 2024, Adnoc Drilling’s fleet comprised 137 rigs, 133 owned plus four lease-to-own land rigs, an increase of 22 rigs year-on-year. Thirteen of the rigs included in the rig count are hybrid powered land rigs that utilize battery storage to improve power delivery and reduce emissions by up to 15 per cent per rig. 

 

An additional three hybrid land rigs are expected to enter the fleet this year, for a total of sixteen all of which were ordered in 2023.

 

The Company reported a fleet availability rate of 97 per cent  for the quarter ending March 31, 2024, delivering exceptional revenue and operational efficiency. --OGN/TradeArabia News Service