Adnoc Drilling acquires two jack-up rigs for $140m to support production growth

The acquisition is the fourth announced by the company in recent months, in line with its three-year guidance on capital expenditure and revenue growth

Adnoc Drilling, which now has 32 offshore jack-up rigs, has plans for further fleet growth. Photo: Adnoc

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has signed a deal to acquire two more offshore jack-up rigs for $140 million as it seeks to boost production capacity.

The acquisition is the fourth announced by the company in recent months, following agreements signed in May, June and August for a total of four rigs.

Adnoc Drilling owned 105 rigs as of July 31 and expects the two new rigs to commence operations by the end of 2022, it said in a statement on Monday to the Abu Dhabi Securities Exchange, where its shares are traded.

The latest acquisition falls under the company’s three-year guidance on capital expenditure and revenue growth, it said.

The move underpins the company's "accelerated growth strategy as a key enabler of Adnoc’s production capacity", said Abdulrahman Al Seiari, chief executive of Adnoc Drilling.

"The acquisition of these new jack-up rigs consolidates our position as the owner of one of the largest operating jack-up fleets in the world and will significantly boost company revenues, cash flow and shareholder returns over the coming years.”

Adnoc Drilling, which listed on the ADX last October, has rapidly expanded operations in recent months.

In August, it was awarded two contracts worth $1.5 billion and $1.9bn by Adnoc Offshore to boost production capacity.

It also received two contracts worth $2bn linked to Adnoc's Hail and Ghasha development project in July.

Adnoc is investing heavily in expanding its production capacity as it seeks to raise its output to five million barrels per day by 2030.

Its board approved plans last year to spend Dh466bn ($126.88bn) between 2022 and 2026 to expand upstream production capacity and downstream portfolio, as well as its low-carbon fuels business and clean energy ambitions.

In August, Adnoc Drilling reported a more than 19 per cent rise in second-quarter net income amid continued expansion.

Net profit for the three-month period to the end of June rose to $204.85m, while revenue for the quarter increased by 11 per cent to $669m.

The company, which now has 32 offshore jack-up rigs, has plans for further fleet growth, it said on Monday.

Capital investment for the latest acquisition will be recorded in 2022 and 2023, with the financial benefits included thereafter, it added.