ADNOC Drilling revenue hits $886 million in Q1 2024, introduces new dividends policy

ADNOC Drilling reported 24% year-on-year (Y-o-Y) increase in revenue to US $886 million in the first quarter of 2024 (Q1), according to its latest financial report.

The Offshore Jack-up and Oilfield Services (OFS) segments drove revenue growth, increasing 51% and 16%, compared to the same period last year.

The company's earnings before interest, taxes, depreciation, and amortization (EBITDA) also witnessed a significant surge, climbing by 31% to reach $437 million. This stellar operational performance translated into a remarkable EBITDA margin expansion, reaching an impressive 49%.

Additionally, ADNOC Drilling's net profit for the quarter stood at $275 million, marking a substantial 26% increase compared to the same period last year.

Commenting on the exceptional 2024 first quarter results, 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."

Al Seiari further elaborated on the company's strategic initiatives, emphasizing ADNOC Drilling's commitment to enabling conventional and unconventional production capacity growth to meet the increasing global demand for energy.

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.

New progressive dividend policy

As part of its growth strategy, ADNOC Drilling announced a new progressive dividend policy for the years 2024-2028, with dividends expected to grow by at least 10% per annum.

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.

This decision underscores the company's dedication to enhancing shareholder value while pursuing growth opportunities.

Fleet expansions

In addition to its financial achievements, ADNOC Drilling reported a significant expansion of its fleet, which now comprises 137 rigs -133 owned plus four lease-to-own land rigs – as well as 13 hybrid-powered land rigs designed to improve operational efficiency and reduce emissions by up to 15% 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 an impressive fleet availability rate of 97% for the first quarter of 2024,

Looking ahead, ADNOC Drilling remains poised for continued success, leveraging its advanced technologies, strategic partnerships, and unwavering commitment to innovation to drive sustainable growth and create long-term value for its stakeholders.