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Introduction & Market Context
ADNOC Drilling Company PJSC (ADX:ADNOCDRILL) presented its full-year 2024 results on February 13, 2025, showcasing record financial performance that exceeded guidance that had been raised twice during the year. The Abu Dhabi-based drilling company reported substantial growth across all business segments while expanding its operational footprint both domestically and regionally.
The company’s strong performance comes amid ADNOC’s broader strategy to increase production capacity to 5 million barrels per day and develop unconventional gas resources, positioning ADNOC Drilling as a key enabler of the UAE’s energy ambitions.
Executive Summary
ADNOC Drilling delivered exceptional results in 2024, with revenue surging 32% year-over-year to over $4 billion, driven by fleet expansion and increased operational activity. The company maintained industry-leading profitability with an EBITDA of $2.015 billion and a 50% margin, while net profit increased 26% to $1.304 billion.
As shown in the following comprehensive overview of the company’s performance:
The company’s fleet expanded to 142 rigs after adding 13 new units during the year, with strong rig availability of 96% in Q4 2024. ADNOC Drilling also demonstrated its operational capabilities by drilling 214 wells in Q4 2024, compared to 161 wells in the same period of 2023.
Operational highlights included the expansion of Integrated Drilling Services (IDS) to 57 rigs, up from 41 in Q4 2023, and a 20% overall improvement in IDS drilling efficiency compared to 2023 benchmarks.
Detailed Financial Analysis
ADNOC Drilling’s financial performance in 2024 was characterized by strong growth across all key metrics, with the company exceeding its guidance that had been raised twice during the year.
The following chart illustrates the company’s record financial results:
Revenue growth was robust across all segments, with Onshore operations generating $1.893 billion (up 27%), Offshore Jack-up contributing $1.116 billion (up 40%), Offshore Island adding $212 million (up 1%), and Oilfield Services delivering $813 million (up 47%).
Profitability remained strong, with EBITDA margins varying by segment: Onshore at 49%, Offshore Jack-up at 69%, Offshore Island at 60%, and Oilfield Services at 24%. Overall, the company maintained a 50% EBITDA margin, demonstrating operational efficiency and cost control.
The company’s performance consistently exceeded the updated guidance provided in October 2024, as shown in the following comparison:
ADNOC Drilling’s board proposed a final cash dividend of $394 million (9.05 fils per share), bringing the total dividend for 2024 to $788 million (approximately 18.1 fils per share), representing a 10% year-on-year increase. The company has committed to a minimum 10% annual dividend growth policy for 2024-2028, providing shareholders with visibility on future returns.
Strategic Initiatives
ADNOC Drilling is pursuing growth through three strategic avenues: acquisitions, unconventional resource development, and regional expansion.
The company’s Enersol initiative has acquired four technology-enabled oilfield services companies with a cumulative investment of approximately $0.8 billion, representing about half of the total amount committed. These acquisitions include Gordon Technologies (67.2% stake), NTS Amega Global (51% stake), EV (100% stake), and DWS (95% stake).
In the unconventional resources sector, ADNOC Drilling has formed a joint venture called Turnwell with Schlumberger and Patterson-UTI. This venture has secured a $1.7 billion contract to unlock the UAE’s unconventional energy resources, involving the drilling of 144 oil and gas wells over more than two years using eight land rigs.
Regional expansion efforts include a contract extension in Jordan and ambitions to enter the Kuwait and Oman markets. The company has been pre-qualified by Kuwait Oil Company (KOC) for drilling, rig, and ancillary services, and is also pre-qualified for certain services in Oman with initial tenders ongoing.
ADNOC Drilling is also advancing its ESG agenda through various decarbonization initiatives, including grid connectivity for base camps, hybrid "green rigs" expected to achieve 10-15% emissions abatement, and battery energy storage systems. The company reported a total greenhouse gas abatement of 38.7 KtCO2e in 2024 and an energy intensity of 2,565 GJ/$MM revenue.
Forward-Looking Statements
Looking ahead, ADNOC Drilling provided optimistic guidance for 2025 and the medium term, projecting continued growth across all business segments.
For 2025, the company forecasts:
The guidance indicates revenue growth of approximately 14-19% for 2025, with EBITDA expected to increase by 7-14%. The company anticipates maintaining strong profitability with an EBITDA margin of 46-48% and a net profit margin of 28-30%.
Capital expenditure is projected to decrease significantly to $0.35-0.55 billion in 2025, compared to $761 million in 2024, reflecting the completion of major fleet expansion initiatives. This reduction in CapEx is expected to boost free cash flow to $1.3-1.6 billion.
For the medium term, ADNOC Drilling expects revenue to reach approximately $5 billion by 2026, with an EBITDA margin of around 50%. The company aims to maintain a conservative leverage target of up to 2.0x Net Debt/EBITDA, providing financial flexibility for future growth opportunities.
The company’s commitment to a minimum 10% annual dividend growth through 2028 underscores management’s confidence in sustained financial performance and cash generation capabilities.
With its expanded fleet, growing service offerings, and strategic initiatives, ADNOC Drilling appears well-positioned to capitalize on ADNOC’s production expansion plans and the development of unconventional resources in the UAE, while also pursuing growth opportunities in neighboring markets.
Full presentation:
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