ADNOC Drilling Company has announced shareholder approval of a new progressive dividend policy at its Annual General Meeting. The policy commits to increasing dividends by a minimum of 10% annually on a per-share basis over the next five years (2024-2028).
The expected total minimum yield from this policy during 2024-2028 is more than 27%.
Moreover, the Board of Directors retains discretion to approve additional dividends beyond the progressive policy, taking into account opportunities for growth that enhance free cash flow. Dividends are scheduled to be paid semi-annually, with a final dividend in the first half and an interim dividend in the second half of each fiscal year.
Abdulmunim Saif Al Kindy, ADNOC Upstream Executive Director and Vice Chairman of ADNOC Drilling, commented on the new dividend policy, stating, “The approval of this enhanced dividend policy reflects ADNOC Drilling’s commitment to delivering increasing value to shareholders, driven by an accelerated and multi-faceted growth strategy incorporating artificial intelligence, digitisation, and advanced technologies both domestically and globally.”
Following ADNOC’s recent placement of an additional 5.5% of ADNOC Drilling’s share capital, a larger number of shareholders now stand to benefit from these improved returns.
On 23rd May 2024, ADNOC concluded a $935M institutional placement of ADNOC Drilling shares, representing 5.5% of the company’s total issued and outstanding share capital. This transaction marked the largest ever Accelerated Book Building (ABB) in the MENA region to date, underscoring robust market demand.
The increased free float has elevated ADNOC Drilling’s weighting in FTSE indices and is anticipated to facilitate potential inclusion in the Morgan Stanley Capital International (MSCI) Emerging Market Index, subject to meeting relevant criteria. Inclusion in MSCI would diversify the company’s investor base and significantly enhance awareness of its distinctive value proposition.
ADNOC Drilling’s strategy centres on expanding its fleet and developing integrated drilling services to support ADNOC’s production capacity growth, with a particular focus on exploiting the UAE’s high-quality unconventional energy resources.
The company has launched Turnwell, a new entity dedicated to seizing opportunities in unconventional resources. This initiative includes an initial contract for 144 wells, with potential for thousands more in the future, supplementing current growth forecasts.
Additionally, ADNOC Drilling is actively pursuing regional expansion through operational growth and potential acquisitions.
Through a strategic joint venture with Alpha Dhabi, known as Enersol, ADNOC Drilling Company aims to acquire and invest in global energy technologies, building a scalable technology ecosystem to enhance market value and operational efficiency. Enersol recently acquired a 67.2% controlling interest in Gordon Technologies, pending customary regulatory approval, and is finalising two additional transactions. These efforts are aligned with supporting the UAE’s energy security goals, net-zero ambitions, and economic diversification initiatives.
