Adnoc Drilling's first-quarter net income surges 59% on revenue growth

Strong performance from all business segments helped profit to climb to $175m during the reporting period

An Adnoc drilling rig. The company has reported a sharp rise in its first-quarter net profit. Photo: Adnoc

Adnoc Drilling, the largest national drilling company in the Middle East by rig fleet size, reported a more than 59 per cent jump in its first-quarter net income, as its fleet grew and revenue climbed on the back of strong performance from all business segments.

Net profit for the three-month period to the end of March rose to $175 million, Adnoc Drilling, a unit of Abu Dhabi National Oil Company (Adnoc), said in a bourse filing on Tuesday to the Abu Dhabi Securities Exchange, where its shares are traded.

Revenue for the reporting period rose almost 15 per cent to $601m as the company continued to support Adnoc’s efforts to boost its production capacity.

“As our revenues have grown, our profitability metrics have remained equally strong, with a market-leading Ebitda margin that is almost twice the industry average,” Abdulrahman Al Seiari, chief executive at Adnoc Drilling, said.

“At the same time, we are continuing to leverage our differentiated offering across the entire drilling value chain to further increase our share in the integrated drilling services market, which stood at 45 per cent at the end of the quarter.”

Growth was delivered across all business segments and the company firmly remains on track to deliver on its ambitious growth plans, he added.

Adnoc Drilling raised more than $1.1 billion in September last year from its initial public offering, which was oversubscribed more than 31 times.

The state-owned oil and gas major Adnoc remains the company's majority shareholder, with an 84 per cent stake. US energy services company Baker Hughes, which entered into a partnership with Adnoc Drilling in October 2018, has 5 per cent and US contract oil and gas driller Helmerich & Payne holds 1 per cent in the company.

The company's revenue from onshore operations climbed more 14 per cent to $319m in the first three months of the year as two more rigs started operations. Offshore Jackup operations revenue rose 4.3 per cent to $144m, offshore island revenue surged almost 39 per cent to $50m, and oilfield services revenue for the reporting period rose about 26 per cent to $88m.

Adnoc Drilling's overall quarterly revenue was boosted by new rigs joining the fleet in the first quarter.

The company's owned rig fleet reached 104 at the end of the reporting period. Its fleet utilisation rate has reached 96 per cent, with a total of 145 wells drilled in the year to date, totalling close to a million feet.

"We look forward with confidence to the year ahead, as we deliver on our rig acquisition programme and our investment in technology to unlock further growth.”

In December, Adnoc Drilling signed a deal with Helmerich & Payne to improve its land rig operational performance. The Rig Enablement Framework Agreement will also support Adnoc Drilling’s growth and expansion plans.

Also in December, Adnoc Drilling agreed a five-year $3.8bn contract with Adnoc Onshore to continue providing drilling, workover and other well services that will drive efficiency in work crews, rig move time and maintenance scheduling.

"Adnoc Drilling remains a key enabler of Adnoc's ambitious growth targets, which will deliver 5 million barrels daily production capacity by 2030 and realise gas self-sufficiency for the UAE," Mr Al Seiari said. "The company continues to focus on delivering the safe and efficient operations."