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ADNOC Drilling post strong numbers due to rig fleet, service expansion

CEO Al Seiari says company “firmly on track to deliver 2023 guidance” after Q1 revenue rises to $716 million and net profit to $219 million

ADNOC Drilling
Image: ADNOC

ADNOC Drilling Company announced its first-quarter results with strong growth across all segments. Revenue was up 19 percent year-on-year to $716 million, led by performances in Offshore Jack-up and Oilfield Services (OFS), which grew 28 percent and 43 percent respectively.

EBITDA growth, tracked the uptick in revenue, increasing 19 percent to $333 million, while net profit for the quarter reached $219 million, up 25 percent year-on-year.

The revenue was two percent lower than the fourth quarter 2022, due to fewer calendar days and lower impact from reimbursement of cost escalation claims.

Abdulrahman Abdullah Al Seiari, Chief Executive Officer, commented: “Our first quarter results are particularly pleasing as they clearly demonstrate the effective execution of our strategy, to grow earnings by expanding our fleet and our offering, for the benefit of our customers and our shareholders.

“To maximise value for shareholders now and into the future, we will continue to secure high-quality, long-term contracts that offer future earnings visibility, as well as protection against market volatility. At the same time, we will maintain our focus on operational excellence and sustainable operations, as we remain firmly on track to deliver our 2023 guidance.”

OFS revenue grew to $126 million, up 43 percent year-on-year, due to increased activity volume across the entire portfolio. Offshore jack-up revenue increased 28 percent to $184 million with the introduction of five new jack-ups into the operational fleet in the second half of 2022. Revenue increased sequentially by 2 percent against fourth quarter of 2022 in both segments.

With eight new land rigs entering the operational fleet in the second half of 2022, onshore revenue was also significantly higher than in the prior year, up 11 percent to $355 million. Offshore island revenue remained steady at $51 million.

The company reiterated its fiscal year 2023 guidance communicated in February 2023, to deliver revenue of between $3-$3.2 billion for the full-year period, with EBITDA of $1.35-$1.5 billion at an industry-leading EBITDA margin of 45-47%, and net income in the range of $850 million to $1 billion. Capital expenditure1 is forecast to be in the range of $1.3-$1.75 billion.

ADNOC Drilling said it remains committed to annual growth in its dividend per share of at least 5 percent per annum over the next four years.

Environmental efforts by ADNOC Drilling

In the first quarter of 2023, ADNOC Drilling announced the signing of an agreement to purchase ten newly-built hybrid power land drilling units in direct response to ADNOC’s accelerated production capacity targets and sustainability plans. The new hybrid rigs utilise high-capacity batteries to improve power delivery while reducing greenhouse gas emissions by up to 15 percent.

During the quarter, the company also announced signing an MoU with Masdar to explore geothermal energy opportunities, supporting the responsible advancement of the energy transition in the UAE and globally.

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