Adnoc Drilling, a key player in the oil and drilling sector, has announced its medium-term financial expectations, projecting substantial growth in revenue, earnings, and operational expansion. The company anticipates its total revenue to reach between $3.60 billion and $3.80 billion in the coming years, signifying a promising future for the organization.
The expected Earnings Before Interest, Taxes, Amortization, and Depreciation (Ebitda) range between $1.70 billion and $1.90 billion, corresponding to an Ebitda margin of 48-50 percent. Additionally, Adnoc Drilling projects a net profit of $1.05 billion to $1.25 billion, maintaining a profit margin range of 30-33 percent. To sustain these targets, the company plans to keep its Capital Expenditure (CapEx) between $0.75 billion and $0.95 billion while ensuring a leverage ratio net debt/Ebitda below 2x in 2024, excluding major mergers and acquisitions.
The company’s compound annual growth rate (CAGR) is expected to range from 12-16 percent over the medium term from the 2023 base. Drilling margins are anticipated to exceed 50 percent, and oilfield services margin is estimated to be in the range of 22-26 percent. Post-2024, maintenance CapEx is forecasted to be $200 – $250 million annually.
Adnoc Drilling also plans to increase its owned rig count to a total of 142, including four new lease-to-own land rigs, by the end of 2024. This expansion highlights the company’s focus on unconventional resources, tapping into Abu Dhabi’s estimated 22 billion barrels of recoverable unconventional oil resources and 160 trillion standard cubic feet of recoverable unconventional gas resources.
The company recently received shareholder approval for all agenda items at its Annual General Assembly Meeting, including the distribution of a significant final cash dividend for the year ending December 31, 2023. The approved dividend totals $358 million (8.22 fils per share), bringing the total dividend for the year to $717 million (16.45 fils per share), a 5 percent increase from 2022. This dividend is scheduled to be paid around April 3, 2024, to shareholders of record as of March 21, 2024.
In addition, Adnoc Drilling’s strategic partnership with Alpha Dhabi, through the joint venture Enersol, is set to drive growth by leveraging artificial intelligence (AI) and digitization across the energy value chain. The JV, which Adnoc Drilling owns 51 percent of, plans to co-invest up to $1.5 billion in technology-enabled oilfield and energy service businesses globally. This investment aligns with the wider energy transition ambitions, the UAE’s net zero agenda, and economic diversification.
With its fleet expansion and entry into the international market, particularly in Jordan, Adnoc Drilling is poised for substantial growth beyond UAE borders. The company’s first international contract to deliver an integrated drilling services campaign for Jordan’s Ministry of Energy and Mineral Resources marks the beginning of its expansion into new markets in the GCC region. This strategic move underlines Adnoc Drilling’s ambition to become a global leader in integrated drilling services.
