Adnoc Drilling to float 7.5% stake on Abu Dhabi Stock Exchange

Adnoc Drilling Co, the largest national drilling company in the Middle East by rig fleet size, plans to sell a 7.5 per cent stake through an initial public offering (IPO) and list its shares on the Abu Dhabi Securities Exchange.

The offering is open to institutional and individuals investors, Adnoc group companies’ employees and Adnoc group UAE national retirees.

This is the second public flotation of a company owned by the Adnoc Group after it listed Adnoc Distribution in 2017.

Adnoc Drilling owns 107 rigs, of which 96 are owned and 11 are rented, as of June 30, 2021. It is also the sole provider of drilling rig hire services and certain associated rig-related services to the Adnoc Group on agreed contractual terms.

For the year ended December 31, 2020, Adnoc Drilling had revenue of $2.09 billion and a profit of $569 million. For the six months ended June 30, 2021, Adno Drilling revenue reached $1.12 billion and profit of $281.6 million

From its inception to December 31, 2020, the company had drilled over 9,600 wells with a total distance drilled of over 70 million feet. In the first half of 2021, it drilled 286 additional wells.

Adnoc group owns a 95 per cent stake in Adnoc Drilling and five per cent is owned by Baker Hughes. Its 2018 purchase of stake valued Adnoc Drilling at $11 billion.

Bloomberg estimated that a sale of that size could raise about $750 million for Adnoc Drilling.

Adnoc Drilling has retained the right to increase the size of the offering at any time before pricing, it said in a statement.

“I am delighted to announce our intention to float a minority stake in Adnoc Drilling on the Abu Dhabi Securities Exchange through an IPO. This highly compelling offering, in a company with a robust growth trajectory and attractive dividend policy, is open to all citizens and residents of the UAE in addition to international and local institutional investors,” said Dr Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and Adnoc Managing Director and Group CEO.

Abdulrahman Abdulla Al Seiari, CEO of Adnoc Drilling, said: “We will continue to play a critical role in enabling Adnoc to deliver on its 2030 crude oil production capacity target of five million barrels per day and achieving gas self-sufficiency for the UAE.”

The completion of the IPO is expected to take place in October 2021, subject to regulatory approvals in the UAE, including listing and trading on the Abu Dhabi bourse.

First Abu Dhabi Bank, Goldman Sachs, HSBC Bank Middle East and JP Morgan Securities have been appointed as joint global coordinators. EFG-Hermes UAE Limited, Emirates NBD Capital, International Securities, Merrill Lynch International and Société Générale have been appointed as joint book-runners.

First Abu Dhabi Bank has been appointed as the lead receiving bank.

Abu Dhabi Commercial Bank, Abu Dhabi Islamic Bank and Emirates NBD Bank have been appointed as receiving banks. Moelis & Company UK LLP DIFC Branch has been appointed as independent financial adviser.

— waheedabbas@khaleejtimes.com