ADNOC Drilling announces record results, cross-segment growth for Q3 2024
ADNOC Drilling announced record financial results for the third quarter and first nine months of 2024.
鈥淎DNOC Drilling has once again delivered record-breaking quarterly results, driven by our commitment to strong, sustained strategic growth,鈥 commented Abdulrahman Abdulla Al Seiari, CEO of听ADNOC Drilling. 鈥淭his exceptional performance, alongside our pursuit of operational excellence, is reshaping our earnings potential. Key milestones, such as the positive progress of Enersol and the successful launch of Turnwell,听demonstrate听our ability to execute on multiple fronts.
鈥淥ur results reflect a committed focus on efficiency and expansion, thanks to the dedication of our team whose efforts ensure we consistently provide exceptional service to our customers. We听remain听well on-track to deliver continued accelerated growth and maximize shareholder returns.鈥
ADNOC听Drilling鈥檚听third quarter revenue increased significantly to $1.026 billion, rising by 32% year-on-year. ADNOC has expanded its onshore and offshore fleets and continued to expand its oilfield services (OFS) segment. This momentum has听been further bolstered听by the initial contributions from Turnwell and Enersol joint ventures.
At the end of the third quarter, the fleet consisted of 140 owned rigs, including four lease-to-own land rigs. In 2024, ADNOC has operationalized 21 rigs, including reactivations, with a further two jack-up rigs scheduled to join the fleet in the fourth quarter. ADNOC expects the owned fleet to be 142 by year end.
Strong cross-segment growth
- Onshore: Revenue in the third quarter increased 29% year-on-year to $487 million,听mainly due听to new rigs听commencing
- Offshore Jack-up: Revenue for the quarter grew 46% year-on-year to $290 million, due to higher activity from jack-ups compared to last year, as the offshore operations expanded.
- Offshore Island:听Revenue stood at $52 million during the quarter, with EBITDA at $32 million and net profit at $22 million.
- Oilfield Services (OFS):听Revenue increased 36% year-on-year to $197 million, mainly driven by increased activity in directional drilling and drilling fluids. The overall volume of activity of the segment is expected to increase in the final part of the year, in-line with planned phasing and driven by a ramp-up in IDS rigs and the unconventional business.
Notable third-quarter activity
Three AI-enabled island rig contract award
In July, ADNOC Drilling听was awarded听a $733 million contract for 3 new artificial intelligence-enabled island rigs, in support of growing operations at the offshore Zakum field. The award follows existing agreements with revenue underpinned by long-term contract durations and guaranteed returns. The delivery of rigs and the commencement of operations听is expected听during 2026.
Enersol strategic acquisitions
In the quarter, Enersol, the technology-focused investment joint venture between ADNOC Drilling and Alpha Dhabi signed an agreement to听acquire听a 51% stake in NTS Amega, subject to regulatory approval. NTS Amega is a leading global provider of advanced manufacturing, complex tool repair and rental solutions for the oil and gas sector. Its range of solutions for technically challenging processes have听a track record听of improving efficiency and reducing costs.
During the quarter, Enersol also signed an agreement to听acquire听100% of EV Holdings, a leading downhole visualization company. EV Holdings is a global provider of vision-based diagnostics and analytical services in the global oil and gas sector, with 116 patents. Its technology supports well operators to make听timely听and informed decisions that increase operational efficiency, maximize production, and reduce costs. This third acquisition by Enersol, subject to regulatory approvals, will bring the total capital commitments to circa $550 million since听inception听in January 2024.
A transaction to听acquire听an听additional听42.2% equity stake of Gordon Technologies听was closed听in early September 2024, bringing Enersol鈥檚 total equity stake to 67.2%.听Gordon Technologies, a leading provider of measurement while drilling technology, completed the set-up of its Abu Dhabi business and started field operations in the MENA region during the quarter.
ADNOC Drilling added to MSCI鈥檚 flagship indexes
In September, following an announcement in mid-August by MSCI, ADNOC Drilling听was added听to MSCI鈥檚 flagship indexes including MSCI EM, and MSCI UAE, becoming the 12th听member of the MSCI UAE index.
Inclusion in MSCI indexes provides greater visibility among global investors in financial markets. Inclusion听is expected听to boost liquidity, given the expected passive inflows as well as potential appetite from active institutional investors tracking MSCI indexes.
Turnwell agreements signed and unconventionals program accelerated
ADNOC Drilling also announced during the quarter the signing of the Turnwell joint venture with SLB and Patterson-UTI, as well as the acceleration of the previously awarded $1.7 billion 144-well, unconventional oil and gas program. ADNOC Drilling through its wholly owned subsidiary ADH RSC LTD holds a 55% majority equity stake in Turnwell, SLB holds 30% and Patterson-UTI holds the remaining 15%.
Following the successful establishment of Turnwell and the completion of the听initial听wells, ADNOC has accelerated the campaign鈥檚 completion timeline. The economic impact of the acceleration will positively support ADNOC Drilling鈥檚 full year 2025 earnings as well as its long-term growth through the potential acceleration of phase two with thousands of听additional听wells.
听