ADNOC Drilling provides both drilling and oilfield services, with expertise across the entire spectrum of well drilling and completion, covering both conventional and unconventional reservoirs, on land, at sea and on ADNOC’s artificial islands off the Abu Dhabi coastline.

Listed on the Abu Dhabi Securities Exchange, the company has a market capitalisation of around AED86bn or US$23bn.

ADNOC Drilling operates a fleet of 140 rigs and is a key enabler of ADNOC’s ambitious production targets, establishing itself as a cornerstone of the United Arab Emirates’ (UAE’s) energy sector.

There are six key reasons why ADNOC Drilling represents an exciting investment case.

• First, the company has an exclusive contractual framework with ADNOC as the sole provider of drilling services in the UAE, giving it unparalleled visibility on business and financials, with contracts of up to 15 years providing a guaranteed internal rate of return between 10% and 13%.
• Second, ADNOC Drilling demonstrates exceptional profitability with industry-leading margins. Its EBITDA margin of around 50% in 9M24 was significantly higher than global peers, driven by its unique business model in Abu Dhabi.
• Third, as a key enabler of ADNOC’s plans to increase oil production capacity from 4–5mmbbld by 2027 and the UAE’s goal of gas self-sufficiency by 2030, the company has a robust growth trajectory.
• Fourth, ADNOC Drilling exhibits strong financial stability with its recently improved medium-term growth guidance of 14–18% CAGR, alongside new contract wins worth US$1.7bn for unconventional drilling and US$733m for operations on offshore island rigs.
• Fifth, ADNOC Drilling delivers a differentiated offering as it is the only company that provides both drilling and oilfield services. The company’s integrated drilling services rigs are, on average, 15% more efficient, according to the company. Moreover, through its joint venture, Enersol, ADNOC Drilling is acquiring tech-enabled, IP-owning oilfield services companies to further develop its integrated offering and technological ecosystem.
• Finally, the company offers an attractive dividend profile with a new progressive policy guaranteeing a minimum 10% annual dividend growth over the next five years, resulting in an average annualised minimum yield of 4.2%.

ADNOC Drilling is a market leader in the Middle East drilling sector, and is well positioned to benefit from the UAE’s ambitious oil production capacity targets. With its exclusive market position, superior margins and clear growth visibility, alongside a generous dividend policy, the company presents a compelling investment case.

Published 12 December 2024.