Adnoc Drilling reports 6% jump in third quarter profit on higher revenue

Rig fleet expansion programme paying off as it supports UAE’s long-term targets, says chief executive

Adnoc Drilling, listed on the Abu Dhabi Securities Exchange, has rapidly expanded operations in recent months. Photo: Adnoc Drilling

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, reported a 6 per cent increase in third quarter profit on the back of higher revenue as the company continues to support its parent in boosting production capacity.

Net profit for the three months period to the end of September climbed to $189 million, the company said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue during the period rose 17 per cent year-on-year to $671m, driven primarily by the onshore and oilfield services segments.

The company’s nine-month profit surged 24 per cent year-on-year to $568m as revenue for the period rose 15 per cent to $1.94 billion.

Capital expenditure for the July-September period increased 31 per cent to $224m, while for the nine month period, it rose 12 per cent annually to $508m.

“Our strong nine-month results were underpinned by the consistent execution of our strategic priorities as we continue to prove our value as a reliable and efficient operator and fast-growing drilling leader,” said Abdulrahman Al Seiari, chief executive of Adnoc Drilling.

The company’s rig fleet expansion programme is “paying off” as it supports the UAE’s long-term production capacity targets, he said.

“A significant number of additional rigs are scheduled to come on stream in the fourth quarter, further boosting our financial and operating performance as we head towards 2023 and continued shareholder value creation,” he said.

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

Earlier this month, it was awarded three framework agreements valued at $4bn to support Adnoc’s goal of boosting crude oil production capacity to five million barrels per day by 2030.

It also secured a $980m contract from Adnoc to hire two jack-up offshore rigs, associated manpower and equipment, which will help support the parent company's offshore operations.

In August, it was awarded two contracts worth $1.5bn 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 the company's majority shareholder, with an 84 per cent stake. Baker Hughes holds 5 per cent, while US contract oil and gas driller Helmerich & Payne holds 1 per cent.

“As we celebrate our first anniversary as an ADX-listed company, we are proud of the value we have created for shareholders, with our progressive dividend policy having distributed $666.25m to investors since listing,” Mr Al Seiari said.

“At the same time, we have added more than $13bn of contract backlog, achieved strong top-and bottom-line growth, and expanded our owned rig fleet from 95 to 108.”

The company has accelerated its rig fleet expansion programme during 2022 and in the third quarter signed two sale and purchase agreements to acquire a further three premium jack-up drilling units for $210m, it said on Monday.