Adnoc Drilling quarterly profit rises 26% on offshore business strength
Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has reported a 26 per cent increase in first-quarter profit as its offshore jack-up and oilfield services segments continue to strengthen.
Net profit for the three months to the end of March rose to $275 million, from $219 million in the same period a year earlier, the company said in a filing yesterday to the Abu Dhabi Securities Exchange, where its shares are traded.
The company’s first-quarter revenue surged 24 per cent annually to $886 million.
Adnoc Drilling also announced a new dividend policy and said its distribution per share is expected to increase by at least 10 per cent annually from 2024 to 2028. The company’s board may consider additional dividends depending on growth opportunities and debt levels, it said.
“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,” said Adnoc Drilling chief executive Abdulrahman Al Seiari.
“Our multifaceted 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,” he said.
In a separate bourse filing yesterday, Adnoc Drilling said it had been awarded a $1.7 billion contract by parent company Adnoc to provide drilling services for the recovery of unconventional oil and gas resources.
Adnoc Drilling has also set up a company called Turnwell Industries, which will fulfil the contract and explore potential future opportunities in unconventional resources, the company said.
Turnwell will deliver 144 unconventional wells, with a distribution of 50 per cent gas and 50 per cent oil, Mr Al Seiari told The National yesterday. “There is a requirement for oil [and] there is requirement for gas. Both will work hand in hand,” he added.
Adnoc, responsible for most of the UAE’s crude production, is working to develop its unconventional reserves as it looks to reach an output capacity of five million barrels per day by 2027. It can already produce up to 4.85 million bpd.
Last year, Adnoc Drilling and Alpha Dhabi Holding, a unit of Abu Dhabi’s International Holding Company, set up a joint venture to invest up to $1.5 billion to acquire technology-enabled companies in the oilfield services and energy sectors.
The Adnoc subsidiary, which plans to drill “thousands” of unconventional wells in the second phase of the drilling programme, also signed a term sheet agreement with Schlumberger, the world’s largest oilfield services company, and Patterson-UTI, to form a strategic partnership.
The Adnoc Drilling chief said the partnership with the USbased companies would help “jump-start” the company to where others in the world are with regards to unconventional drilling”.
The Adnoc executive did not rule out a potential listing for Turnwell in the future.
“I don’t see why not … it will be one of those companies which we believe will be quite successful. But, it’s too early to talk about it at this time.”
Adnoc Drilling said its first-quarter revenue from onshore business, the largest, rose by 16 per cent annually to $411 million.
Revenue from the offshore jack-up segment in the period jumped 51 per cent to $278 million, mainly due to higher activity from additional jackup rigs, the company said.
Revenue from oilfield services increased by 16 per cent annually to $146 million, supported by higher demand for drilling fluids and directional drilling.
Net profit for JanuaryMarch period rose to $275 million, from $219 million in the same quarter a year earlier