Adnoc Drilling, the Middle East’s largest national drilling company by rig fleet size, has announced a 26 per cent rise in first-quarter profit, driven by the strengthening of its offshore jack-up and oilfield services divisions.
In a filing with the Abu Dhabi Securities Exchange on Monday, the company revealed that its net profit for the three months ending March reached $275M, up from $219M in the same period a year earlier.
The company’s first-quarter revenue also saw a significant increase of 24 per cent year on year, reaching $886M.
Adnoc Drilling unveiled a new dividend policy alongside its financial results, indicating that its distribution per share is anticipated to grow by a minimum of 10 per cent annually from 2024 to 2028. The company’s board may consider additional dividends based on growth prospects and debt levels.
Chief Executive Abdulrahman Al Seiari expressed confidence in the company’s growth trajectory and cash-flow generation, highlighting the enhanced progressive dividend policy aimed at enhancing shareholder returns.
Moreover, Adnoc Drilling disclosed in a separate filing that it secured a $1.7B contract from its parent company Adnoc for drilling services to extract unconventional oil and gas resources. This includes the establishment of Turnwell Industries to fulfil the contract and explore potential opportunities in unconventional resources.
Additionally, Adnoc Drilling entered into a term sheet agreement with Schlumberger and Patterson-UTI to establish a strategic partnership.
Mr Al Seiari remarked that the contract represents a transformative opportunity for Adnoc Drilling, aligning with the UAE’s ambitions to develop its unconventional reserves.
Adnoc, responsible for the majority of the UAE’s crude production, aims to increase its output capacity to five million barrels per day by 2027, with a focus on developing unconventional resources.
To advance its operations, Adnoc Drilling plans to utilise advanced technology, including artificial intelligence, across various aspects such as smart drilling design and production solutions.
Last year, Adnoc Drilling and Alpha Dhabi Holding formed a joint venture to invest up to $1.5B in technology-enabled companies within the oilfield services and energy sectors.
In terms of revenue, Adnoc Drilling reported a 16 per cent increase in revenue from its onshore business, while revenue from the offshore jack-up segment surged by 51 per cent due to higher activity. Revenue from oilfield services also rose by 16 per cent, supported by increased demand for drilling fluids and directional drilling.
