ADNOC Drilling Receives Shareholder Approval for $358 Million Final 2023 Dividend and Reconfirms its AI-Enabled Accelerated Growth Commitments at Annual General Assembly Meeting

Increased final dividend amounts to $358 million (8.22 fils/share) and brings total 2023 dividend to $717 million (16.45 fils/share) representing a 5% year-on-year increase versus 2022.

Company reaffirms its commitment to deliver highly attractive shareholder returns and progressive dividend policy.

Company sets out robust growth strategy for 2024, embracing AI, digitization, and advanced technologies as it capitalizes on considerable growth opportunities.

Abu Dhabi, UAE – March 14, 2024: ADNOC Drilling Company PJSC (“ADNOC Drilling” or the “Company”) (ADX symbol: ADNOCDRILL / ISIN: AEA007301012) confirms shareholder approval of all agenda items at its Annual General Assembly Meeting, including distribution of its highly attractive final cash dividend for the year ending December 31, 2023.

Commenting on the announcement, Abdulrahman Abdulla Al Seiari, Chief Executive Officer of ADNOC Drilling, said: “In 2023 we made excellent progress towards our strategic priorities, while supporting our customers to achieve theirs. Our industry leading HSE performance supported the delivery of record results in 2023. The company’s performance is testament to the hard work and dedication of our diverse and highly skilled people, and I thank them for their continued committment. 

“2024 will be a landmark year for ADNOC Drilling. Our core integrated drilling services business is complemented by the establishment of Enersol, our strategic partnership with Alpha Dhabi, that will support the adoption of AI, digitization and advanced technology solutions to drive growth, value and efficiency. The year will also see us extend our presence further into the region, building on our entry to the Jordan market last year. We have always been ambitious at ADNOC Drilling and 2024 will be the year when we will realise those ambitions.” 

Final Dividend 2023

The final shareholder-approved dividend for 2023 amounts to $358 million (8.22 fils per share). This brings total dividend for the year to $717 million (16.45 fils per share), representing a 5% year-on-year increase versus 2022. The dividend will be paid on or around April 3, 2024 to all shareholders of record as at March 21, 2024.

ADNOC Drilling reiterates its commitment to a dividend policy that is progressive, reflecting robust underlying cash flow, with an annual distribution that is expected to grow by at least 5% per annum on a dividend per share basis over the next three years (2024-2026). 

Enersol Driving AI and Advanced-Technology Solutions

During 2023, the Company established an innovative strategic partnership with Alpha Dhabi Holding PJSC (Alpha Dhabi). The joint venture (JV), which is known as Enersol, is targeting value-accretive, technology-enabled oilfield and energy service businesses globally that will drive future growth through the adoption of artificial intelligence (AI) and digitization across the OFS and energy value chain. The JV, of which the Company owns 51%, underpins ADNOC Drilling’s investment and expansion strategy by co-investing up to $1.5 billion. 

Enersol is empowered to invest in, multiple businesses and foster a scalable ecosystem that will enhance market value and optimize operational efficiencies.  A major driver of individual investment decisions will be ability to support wider energy transition ambitions, the UAE’s net zero agenda and economic diversification.

Ongoing Fleet Expansion

In 2024 the Company will grow its integrated drilling fleet even further, with total rig count expected to reach 142. Each new advanced specification rig joining the fleet will use leading AI technologies to improve operational efficiency and boost revenues. The oilfield services (‘’OFS’’) segment is expected to experience continued, significant growth as the Company brings operational efficiency, through the deployment of advanced technologies, to its customers and extracts more value from every well delivered.

Growth Beyond the Borders

In 2023, ADNOC Drilling advanced its international growth strategy by mobilizing its first ever rig outside of the UAE. The Company signed its first international contract to deliver an integrated drilling services campaign for the Kingdom of Jordan’s Ministry of Energy and Mineral Resources. The company will be tendering for further contracts in Jordan.

Along with its activities in Jordan, ADNOC Drilling is now targetting other opportunities in the GCC region.  

Unconventional Resources Opportunity

Abu Dhabi holds an estimated 22 billion barrels of recoverable unconventional oil resources, along with 160 trillion standard cubic feet of recoverable unconventional gas resources. This opportunity presents an outstanding transformational opportunity for ADNOC Drilling and the Company will be targeting this sector as a key segment for future growth. 

Full Year 2024 and Medium-Term Guidance

On the back of strong 2023 results, ADNOC Drilling announced full year 2024 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.

The Company expects total revenue between $3.60 to $3.80 billion, EBITDA of $1.70 - $1.90 billion, with a margin range of 48% - 50% and Net Profit of $1.05 - $1.25 billion, with a margin range of 30% - 33%. Moreover, ADNOC Drilling expects CapEx to be between $0.75 - $0.95 billion, while maintaining a leverage ratio “Net debt/EBITDA” below 2x in 2024, excluding material M&A. 

ADNOC Drilling’s medium-term guidance is as follows:

- Revenue CAGR in the 12% - 16% range from 2023 base. 

- EBITDA Margins around 50% with drilling margins exceeding 50% and OFS Margin in a range of 22% - 26% medium term.

- Conservative long-term leverage target of up to 2.0x net debt / EBITDA, excluding material M&A.

- Net working capital as percentage of revenue target of around 12%. 

- Maintenance CapEx post-2024 of $200 - $250 million per annum.