ADNOC To Offer Drilling Unit Stake In IPO
Abu Dhabi’s giant ADNOC is planning on selling at least a 7.5 percent stake in its drilling company ADNOC Drilling in an initial public offering (IPO).
By fleet size, ADNOC Drilling is the largest national drilling company in the Middle East with currently 96 owned rigs across land, jack-up, and island.
On September 6, 2021, the company said that it would list 7.5 percent of shares in ADNOC Drilling on the Abu Dhabi Securities Exchange (ADX) through an IPO.
With this move, ADNOC Drilling is attempting to raise capital and create a broader investor base. The IPO also marks another key milestone in ADNOC’s ongoing transformation journey. Speculation regarding the listing indicates that it could occur in October.
The offer price per share will be determined through and following a book building process. Retail investors in the UAE retail offering will subscribe for the shares at the offer price.
For the year ended December 31, 2020, ADNOC Drilling had revenue of $2,1 billion, EBITDA of $958 million, and profit of $569 million. For the six months ended June 30, 2021, ADNOC Drilling had revenue of $1,12 billion, EBITDA of $500 million, and profit of $281.6 million.
ADNOC Drilling also includes plans to become a regional leader in unconventional and biogenic drilling, achieve operational efficiency by optimizing well duration, pursue business expansion outside Abu Dhabi for rigs and services, and achieve 100 percent HSE integrity.
“We believe the expansion of our rig fleet will enable us to increase our current scope of rig hire services, drilling and completion services, and associated services, and also provide unconventional drilling and biogenic wells, which we believe will, in turn, lead to increased revenue and profitability,” ADNOC Drilling said.
The company also plans to launch a major rig fleet expansion program to support upstream growth plans. Over the course of the coming 5 to 10 years, the company plans a net addition of 23 rigs by 2030 to its 96 owned rigs.
Days later, on Wednesday, ADNOC, ADNOC Drilling, and Helmerich & Payne jointly announced a strategic alliance that will see ADNOC Drilling acquire eight FlexRig land rigs from H&P for $86.5 million. Following this transaction, H&P will make a $100 million cornerstone investment into ADNOC Drilling’s IPO.
The strategic alliance and rig acquisition will support ADNOC’s target of reaching 5 million barrels per day production capacity and gas self-sufficiency for the UAE by 2030, along with plans to unlock its unconventional oil and gas resources.
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