Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has recommended a dividend of $341.25 million, or 7.83 fils per share, for the second half of 2022.
This represents a 5 per cent annual increase and comes after the company posted a sharp rise in net profit for the year.
Following shareholder approval, this would bring the total dividend for 2022 to $682.5 million, the company said on Tuesday.
“The attractive value proposition that we offer is backed by our recently published record 2022 results, stable and predictable cash flow, and a progressive dividend policy that reaffirms our ongoing commitment to shareholders,” said chief executive Abdulrahman Al Seiari.
The annual distribution is expected to grow by at least 5 per cent annually on a dividend per share basis from 2023 to 2026, the company said.
The dividend increase comes after the company reported a growth of 61 per cent in its fourth-quarter net income on increased drilling activity as parent company Adnoc looks to boost its production capacity to five million barrels per day by 2027.
Adnoc Drilling has provided integrated drilling services to sister companies Adnoc Onshore and Adnoc Offshore since 2019.
In November, the company was awarded three framework agreements valued at $4 billion.
It also secured a $980 million contract from parent company Adnoc to hire two jack-up offshore rigs, associated manpower and equipment.
In August, it was awarded two contracts worth $1.5 billion and $1.9 billion by Adnoc Offshore to boost production capacity.
It also received two contracts worth $2 billion linked to Adnoc's Hail and Ghasha development project in July.
The use of hybrid power solutions comes at a time when Adnoc is seeking to reduce greenhouse gas intensity by 25 per cent by 2030.
Adnoc Drilling said last year that was considering expanding within the GCC as drilling activity increased after a surge in crude oil prices.
Rig activity in the GCC — comprising Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the UAE — is a “huge” area in which Adnoc Drilling can “easily perform”, Mr Al Seiari told The National in an interview in November.
Oil and gas companies worldwide have benefitted from a surge in crude prices since Russia invaded Ukraine last year.
Brent, the benchmark for two thirds of the world’s oil, surged to about $140 a barrel in March 2022.
It has since given up most of its gains and was last trading at about $86 on Tuesday.