Adnoc Drilling forecasts 2026 revenue of $5 billion, up from 2025

Investing.com -- Adnoc Drilling Company PJSC expects to generate approximately $5 billion in revenue for 2026, up from the anticipated $4.8 billion in 2025, according to management statements from the company’s third-quarter 2025 earnings call.

The projected revenue growth includes several positive contributors, including approximately $100 million from regional expansion, which represents an annualized benefit of around $125 million assuming nine months of operations in 2026. An additional $100 million is expected to come from jack-up rigs that were not fully operational during 2025.

Island rigs are forecast to add approximately $25 million to the 2026 revenue, with one rig starting operations in the second quarter, another in the third quarter, and a third in the fourth quarter. The company’s Oilfield Services (OFS) segment is expected to contribute an additional $100 million.

These revenue gains will be partially offset by a reduction of $75-100 million due to rig repurposing activities.

Regarding dividend prospects, management indicated limited potential for a special dividend in 2026, citing higher capital expenditure compared to the $550 million expected for 2025.

However, the outlook improves for 2027, with management noting greater headroom supported by stronger free cash flow generation and reduced capital expenditure requirements. The company’s balance sheet leverage capacity could be utilized for both dividends and potential acquisitions.

When discussing the decision-making process between repurposing or selling rigs, management explained that these decisions are based on potential returns on incremental capital expenditure, with a targeted return on invested capital of 25%.

Management also clarified that a recent rig sale will have no material impact on financial results, with no contribution expected from this rig in the fourth quarter of 2025.

Regarding the company’s Oilfield Services segment, two-thirds of the business comes from Integrated Drilling Services (IDS), while one-third derives from discrete services. Adnoc Drilling plans to implement IDS on 50% of its rigs next year. The discrete services business was described as more volatile due to its dependence on client requirements.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.