Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, has reported an annual 41 per cent rise in fourth-quarter net profit, as the addition of a number of operational rigs into the fleet boosted revenue.
Net profit for the three months to the end of December rose to $329 million, the company said in a filing on Monday to the Abu Dhabi Securities Exchange, where its shares are traded.
Revenue during the reporting period rose by 15 per cent to $841 million.
Net profit for the fourth quarter was “positively impacted by around $55 million reduction in depreciation”, the company said.
“Our ambitious fleet expansion strategy coupled with the accelerated growth of oilfield services has delivered exceptional bottom-line performance, beyond the expectations of the market,” said chief executive Abdulrahman Al Seiari.
Adnoc Drilling provides integrated drilling services to sister companies Adnoc Onshore and Adnoc Offshore. It has been expanding operations as parent company Adnoc looks to boost its production capacity to 5 million barrels per day by 2027.
In November, Adnoc Drilling and Alpha Dhabi Holding, a unit of Abu Dhabi's International Holding Company, set up a joint venture that aims to invest up to $1.5 billion to acquire technology-enabled companies in the oilfield services and energy sectors.
The company said it achieved “record revenue, earnings before interest, tax, amortisation and depreciation (Ebitda) and net profit during the fourth quarter”, driven by the “highest-ever number of operational rigs”.
The company said all its business lines posted strong growth in the fourth quarter. Revenue from onshore, offshore jack-up, offshore Island and oilfield services businesses rose 10 per cent, 25 per cent, 2 per cent, and 20 per cent, respectively.
Adnoc Drilling added five hybrid land rigs during the fourth quarter, of which two started operations in the last few days of the year, while the remaining three are expected to start operations gradually during the first half of this year. The company had a fleet of 129 rigs (125 owned plus four lease-to-own) at the end of 2023.
Adnoc Drilling's net profit for the full year rose 29 per cent annually to $1.03 billion. Revenue during the same period climbed 14 per cent to $3.06 billion.
“Revenue growth was driven primarily by the offshore jack-up and oilfield services segments, increasing 31 per cent and 37 per cent respectively,” the company said.
“All segments grew year-on-year as the company continues to execute on its fleet and OFS expansion strategy in support of the delivery of Adnoc’s production capacity target.”
On the back of strong results, Adnoc Drilling announced its full year and medium-term guidance, reaffirming growth. The company continues to expect its owned rig count to total 142, including the four new lease-to-own land rigs, by the end of 2024.