ADNOC Drilling receives shareholder approval for $358 million final 2023 dividend

ADNOC Drilling Company confirmed shareholder approval of all agenda items at its Annual General Assembly Meeting, including the distribution of its highly attractive final cash dividend for the year ending 31st December 2023, with $358 million.

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 a testament to the hard work and dedication of our diverse and highly skilled people, and I thank them for their continued commitment.

"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, which will support the adoption of AI, digitisation, and advanced technology solutions to drive growth, value, and efficiency."

He added that ADNOC Drilling will extend its presence further into the region this year, building on its entry to the Jordan market last year.

The final shareholder-approved dividend for 2023 amounts to $358 million (8.22 fils per share). This brings the 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 3rd April 2024 to all record shareholders as of 21st March 2024.

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

In 2023, the company established an innovative strategic partnership with Alpha Dhabi Holding (Alpha Dhabi). The joint venture (JV), known as Enersol, targets value-accretive, technology-enabled oilfield and energy service businesses globally that will drive future growth through the adoption of artificial intelligence (AI) and digitisation 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 to enhance market value and optimise operational efficiencies. A major driver of individual investment decisions will be the ability to support wider energy transition ambitions, the UAE's net-zero agenda and economic diversification.

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.

In 2023, ADNOC Drilling advanced its international growth strategy by mobilising its first-ever rig outside 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 tender for further contracts in Jordan. In addition to its activities in Jordan, ADNOC Drilling is now targeting other opportunities in the GCC region.

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

On the back of strong 2023 results, ADNOC Drilling announced full-year 2024 and medium-term guidance, reaffirming growth. The company expects 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 and $3.80 billion, EBITDA of $1.70 - $1.90 billion, with a margin range of 48—50 percent, and Net Profit of $1.05 - $1.25 billion, with a margin range of 30—33 percent.

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.