ADNOC Drilling Delivers Robust Growth in
Third Quarter, with Net Profit Up 36% year-
on-year to $257 million
Strong revenue growth of 16% year-on-year to $776 million, enabled by
new rigs entering the operational fleet
Additional activity and effective cost management initiatives deliver
EBITDA of $381 million, leading to 49% margin
Oilfield Services continues its exceptional growth as integrated drilling
services delivers on customer expectations of high performance, low
cost, lower carbon operations
Company positively updates full year 2023 guidance, driven by
increased earnings visibility
Abu Dhabi, UAE – November 14, 2023: ADNOC Drilling Company PJSC (“ADNOC Drilling” or
“the Company”) (ADX symbol: ADNOCDRILL / ISIN: AEA007301012) today announced its
financial results for the third quarter and first nine months of 2023.
Third quarter revenue increased to $776 million, up 16% year-on-year with growth across all
segments. Third quarter EBITDA increased by an impressive 27% year-on-year to $381 million as
a result of strong top line growth and effective cost management initiatives, delivering an EBITDA
margin of 49%. Net profit for the quarter reached $257 million, up 36% year-on-year.
For the first nine months of 2023, revenue grew 14% year-on-year to $2.2 billion, driven by
increased activity and the expansion of Oilfield Services (OFS). During the same period net profit
grew 24% year-on-year to $704 million and EBITDA grew 20% year-on-year to $1,058 million.
Abdulrahman Abdulla Al Seiari, Chief Executive Officer, ADNOC Drilling, commented: “Our
positive third quarter results clearly demonstrate the effective execution of our comprehensive
strategy to grow earnings by expanding our fleet and our service offering. These results
demonstrate the Company’s ability to continue to deliver profitable growth as we maintain our safe,
efficient and sustainable operations. Long-term shareholder value creation remains central to our
strategy and future development.”
ADNOC Drilling’s sequential growth comes on the back of its two-pronged strategy of expanding
its fleet and service offering. The Company now has a total fleet of 134 operational rigs. The
accelerated fleet expansion since IPO underpins our growth targets, while boosting revenue as
incoming rigs commence operations.At the same time, OFS revenue reached $145 million in the third quarter 2023, up 41% year-on-
year. Through OFS, ADNOC Drilling is delivering improved well delivery times and an associated
emissions reduction, as a result of the adoption of advanced technologies and greater efficiencies.
Strong growth across all segments
• Onshore: Third quarter revenue grew 2% compared to the prior year, the overall increase in
activity more than offset the lower year-on-year recovery of fuel costs.
• Offshore Jack-up: Third quarter revenue increased 39% year-on-year, mainly attributable to
higher activity and lower major maintenance. First nine months revenue stood at $575 million,
up 33% year-on-year.
• Offshore Island: Third quarter revenue grew 4% compared to the prior year, driven by
increased activity. First nine months revenue stood at $157 million, up 3% year-on-year.
• Oilfield Services (OFS): Third quarter revenue grew 41% year-on-year, driven by increased
activity from pressure pumping, drilling fluids, directional drilling, and one-off sale of certain
materials. First nine months revenue stood at $405 million, up 44% year-on-year.
Updated FY 2023 guidance
Driven by increased visibility on earnings and profitability, ADNOC Drilling updated its fiscal year
2023 guidance on EBITDA, Net Profit and CapEx, while it confirms the guidance on other
metrics.The Company now expects total revenue between $3.0 to $3.2 billion, EBITDA of $1.4 -
$1.5 billion (previously $1.35 - $1.5 billion), with a margin range of 47% - 49% (previously 45% -
47%) and Net Profit of $0.9 - $1.0 billion (previously $0.85 - $1.0 billion), with a margin range of
29% - 32% (previously 28% - 31%). Moreover, ADNOC Drilling now expects CapEx to be around
$1.3 billion for 2023 (previously $1.30 - $1.75 billion).
Update on decarbonization initiatives
ADNOC Drilling has also continued its investment in various decarbonization initiatives across its
operations, supporting ADNOC's target to reduce carbon intensity by 25% by 2030.
During the first half of the year the Company announced the acquisition of 16 newbuild hybrid land
rigs that are expected to join the operational fleet in 2024. Each hybrid rig can deliver an emissions
reduction of up to 15%.
Additionally, two of ADNOC Drilling's central camps will be connected to the grid by year-end,
reducing the need for traditional diesel generators and the associated emissions, with two more
connected in early 2024. At the same time, the company is progessively rolling out solar power
across its mobile camps.
Events Subsequent to the Third QuarterADNOC Drilling entered into a joint venture agreement with Alpha Dhabi Holdings to invest up
to $1.5 billion in the acquisition of technology-enabled companies in the OFS and energy
sectors, spurring significant future growth in ADNOC Drilling’s OFS offering.
ADNOC Drilling will embark on its international growth journey, providing integrated drilling
services in Jordan, with economics in line with existing returns achieved in Abu Dhabi.
Key Financial Metrics
USD Millions 3Q23 3Q22 YoY% 2Q23 QoQ% 9M23 9M22 YoY%
Revenue 776 670 16% 724 7% 2,216 1,940 14%
EBITDA 381 299 27% 344 11% 1,058 879 20%
Net Profit 257 189 36% 228 13% 704 568 24%
Earnings per share
0.016 0.012 36% 0.014 13% 0.044 0.036 24%
(USD/share)
Capital Expenditure 592 223 165% 181 227% 849 508 67%
Cash from
337 317 9% 395 -15% 958 1,135 -16%
Operating Activities
-Ends-
About ADNOC Drilling
ADNOC Drilling, listed on the Abu Dhabi Securities Exchange (ADX symbol “ADNOCDRILL”;
ISIN AEA007301012), is the largest drilling and well completions company in the Middle East by
fleet size, owning and operating one of the largest multi-discipline drilling fleets in the world. The
Company is a critical link in ADNOC’s upstream business, as ADNOC responsibly accelerates its
production capacity targets in light of globally increasing demand for energy and enables gas self-
sufficiency for the UAE. ADNOC Drilling incorporated Integrated Drilling Services into its portfolio
in 2018 and now offers a total solution of start-to-finish wells and associated services that
encompass the entire drilling value chain. To find out more, visit: www.adnocdrilling.ae
For media inquiries please contact:
Iain Cracknell
Vice President, Corporate Communications
+971 2 698 3614
For investor inquiries please contact:
Massimiliano Cominelli
Vice President, Investor Relations
+971 2 698 3383117
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Table of Contents
Financial Highlights and Post-Period Developments 3
Operational Highlights 11
Outlook 13
Dividend Policy 14
Earnings Webcast and Conference Call 15
Share Price and Ownership 15
Appendix: Glossary 16
2 | Pa geADNOC Classification: Public
Financial Highlights and Post-Period Developments
Financial Summary
ADNOC Drilling Company P.J.S.C. (“ADNOC Drilling” or the “Company”) delivered strong results in
the third quarter of 2023 with revenue increasing 16% year-on-year and 7% sequentially to $776
million. The strong top-line translated into EBITDA growth of 27% year-on-year and 11% sequentially
to $381 million with a margin of 49%. The 4-percentage points year-on-year EBITDA margin
improvement was supported by the Company’s continuous and effective cost management
initiatives. Net profit also grew 36% year-on-year and 13% sequentially to $257 million.
For the first nine-months of 2023, revenue was $2,216 million, up 14% year-on-year from $1,940
million, driven by increased activity. Revenue growth and strong cost performance led to an EBITDA
of $1,058 million and net profit of $704 million, a year-on-year increase of 20% and 24% respectively,
with improved margins. Free cash flow stood at $119 million, from $630 million in the same period
last year due to the anticipated ramp up of CapEx as the Company continues to expand its fleet.
Driven by increased visibility on earnings and profitability, ADNOC Drilling updated its fiscal year
2023 guidance on EBITDA, Net profit and CapEx (see page 13).
The Company’s strong performance was attributable to the full operational impact of land and jack-
up rigs commissioned in stages over the course of 2022 and partial impact of the rigs commissioned
in the first nine-months of 2023. During the third quarter of 2023, four jack-ups entered the rig fleet
count. The jack-ups are expected to commence operations and start contributing to revenue during
December of this year. Moreover, the Company integrated 4 lease-to-own land rigs with plans to
purchase them in the future. Oilfield Services continued to deliver strong growth on the back of
increased activity. At the end of the third quarter, the fleet consisted of 124 rigs (120 owned plus four
lease-to-own). The overall owned fleet availability was 97% at the end of September 2023.
USD Million 3Q23 3Q22 YoY 2Q23 QoQ 9M23 9M22 YoY
Revenue 776 670 16% 724 7% 2,216 1,940 14%
Opex1 (395) (371) 6% (380) 4% (1,158) (1,061) 9%
EBITDA2 381 299 27% 344 11% 1,058 879 20%
Depreciation and amortization (111) (101) 10% (103) 8% (315) (291) 8%
Finance cost – net (13) (9) 44% (13) 0% (39) (20) 95%
Net profit 257 189 36% 228 13% 704 568 24%
EBITDA margin 49% 45% 4% 48% 1% 48% 45% 3%
Net profit margin 33% 29% 4% 31% 2% 32% 29% 3%
Cash from operating activities 337 317 6% 395 -15% 958 1,135 -16%
Capital expenditure3 (592) (223) 165% (181) 227% (849) (508) 67%
Free cash flow (252) 97 -360% 218 -216% 119 630 -81%
Total equity 3,294 2,697 22% 3,036 8% 3,294 2,697 22%
Net debt4 1,645 1,146 44% 1,217 35% 1,645 1,146 44%
Earnings per share ($) 0.016 0.012 36% 0.014 13% 0.044 0.036 24%
Capital employed 5,621 4,353 29% 4,706 19% 5,621 4,353 29%
Return on capital employed 18% 17% 1% 19% -1% 18% 17% 1%
Net debt to LTM EBITDA 1.2 1.0 20% 0.9 33% 1.2 1.0 20%
Leverage ratio 33% 30% 3% 29% 4% 33% 30% 3%
Return on equity 28% 26% 2% 29% -1% 28% 26% 2%
NM = Meaningful
(1) Opex includes allocation of G&A expenses and other income; (2) EBITDA represents Earnings Before Interest, Tax, Depreciation and
Amortization; (3) Payments for purchase of property and equipment including prepaid delivery payments; (4) Interest bearing liabilities
less cash and cash equivalents
3 | Pa geADNOC Classification: Public
Post-Period Developments - Subsequent to Third Quarter
On October 27, 2023, the Company announced a new syndicated loan in US dollars for $1,500
million and entered into a new Emirati dirham revolving credit facility of AED 1,840 million. The term
loan facility will be used to repay the existing syndicated term loan for an equal amount which expires
in November 2023, while the new revolving credit facility will fund the Company’s growth and the
associated working capital.
On November 10, 2023, ADNOC Drilling and Alpha Dhabi have agreed to establish a strategic
investment joint venture to invest up to $1.5 billion to acquire technology-enabled companies in the
oilfield services (“OFS”) and energy sectors.
During the fourth quarter, ADNOC Drilling has embarked on its international growth journey,
providing integrated drilling services in Jordan, with economics in line with existing returns achieved
in Abu Dhabi.
The authorities have provided guidance that a 9% income tax will be applicable to ADNOC Drilling
effective from 1st January 2024. In light of our existing contractual framework agreement, ADNOC
Drilling is already working with the clients on the implementation of a reimbursement mechanism to
recover the financial impact.
Segmental Results
Onshore
USD Million 3Q23 3Q22 YoY 2Q23 QoQ 9M23 9M22 YoY
Revenue 378 372 2% 346 9% 1,079 1,074 0%
OPEX1 (188) (195) -4% (188) 0% (557) (557) 0%
EBITDA2 190 177 7% 158 20% 522 517 1%
Net profit 136 130 5% 111 23% 377 392 -4%
(1) Opex includes allocation of G&A expenses and other income
(2) Underlying EBITDA includes other income
First Nine-Months (Year-on-Year Performance)
Onshore revenue slightly increased year-on-year amounting to $1,079 million in the nine-month
period ended September 2023. The positive revenue impact from the full contribution of eight H&P
rigs acquired and put into operations over the course of 2022, along with an additional rig entering
operations in the second quarter of this year and 4 lease-to-own rigs entering operations in the third
quarter was mostly offset by lower year-on-year reimbursement of cost escalation claims, particularly
due to a reduction of diesel prices.
Operating expenses were stable year-on-year at $557 million for the first nine-months of this year.
The combination of slightly higher revenue and stable operating expenses led to a 1% year-on-year
increase in EBITDA to $522 million. The Company continues to seek out and identify areas to realize
efficiencies and offset increasing costs, mainly through initiatives aimed at optimizing the number of
crew on each rig, diesel consumption, and equipment rentals.
4 | Pa geADNOC Classification: Public
Third Quarter (Year-on-Year Performance)
Third quarter revenue increased 2% year-on-year to $378 million from $372 million, mainly due to
increased onshore activity which was supported by the contribution from four lease-to-own land rigs.
The overall increase in activity more than offset the lower year-on-year recovery of fuel costs.
Operating expenses decreased to $188 million from $195 million in the same quarter last year driven
by decreasing diesel costs and realized cost efficiency measures. The combination of higher
revenue and lower operating expenses led to a 7% year-on-year increase in EBITDA to $190 million
from $177 million. This translated into an EBITDA margin of 50% in the third quarter of 2023, a
margin expansion of almost 2 percentage points year-on-year.
Third Quarter (Sequential Performance)
Third quarter revenue increased 9% sequentially to $378 million from $346 million due to the
contribution from the new lease-to-own rigs integrated into operations.
Despite the sequential revenue growth, operating expenses were stable due to successful cost
management performance, ending the third quarter at $188 million. As a result, EBITDA increased
20% quarter-on-quarter to $190 million from $158 million, with over 4 percentage points in margin
expansion.
Offshore Jack-up
USD Million 3Q23 3Q22 YoY 2Q23 QoQ 9M23 9M22 YoY
Revenue 199 143 39% 192 4% 575 431 33%
OPEX1 (68) (73) -7% (66) 3% (215) (210) 2%
EBITDA2 131 70 87% 126 4% 360 221 63%
Net profit 86 32 169% 83 4% 228 108 111%
(1) Opex includes allocation of G&A expenses and other income
(2) Underlying EBITDA includes other income
First Nine-Months (Year-on-Year Performance)
The Offshore Jack-up segment delivered strong revenue growth of 33% to $575 million in the nine-
month period ended September 2023 from $431 million in the same period of last year, driven by
the full contribution of five new jack-up rigs that went into operations over the course of 2022.
Moreover, the Offshore Jack-up fleet benefitted from 100% rig availability for the first nine-month of
this year as opposed to 91% in the same period last year which was impacted by major maintenance.
Operating expenses amounted to $215 million for the nine-month period ended September 2023, a
modest increase of 2% from $210 million a year-ago, driven by the increased rig fleet size, with last
year impacted by the above-mentioned major maintenance and its associated costs. Moreover, in
the first nine-months of 2023, the segment was also impacted by higher allocation of overhead costs,
following our revised policy.
Driven by the significant revenue growth, EBITDA increased 63% year-on-year to $360 million from
$221 million, with net income more than doubling to $228 million compared to $108 million in the
same period of last year.
5 | Pa geADNOC Classification: Public
Third Quarter (Year-on-Year Performance)
Third quarter revenue increased 39% year-on-year to $199 million from $143 million. The increase
in revenue was mainly attributable to higher activity and lower major maintenance activity in third
quarter of this year compared to the same period last year.
The increase in overhead costs associated with the fleet expansion, particularly manpower, repair
and maintenance, were more than offset by lower maintenance costs. This led to a 7% decrease in
operating expenses to $68 million in the third quarter of 2023. As a result, EBITDA grew by 87%
year-on-year to $131 million, with a margin of approximately 66%, a year-on-year expansion of over
17 percentage points.
Third Quarter (Sequential Performance)
Third quarter revenue increased 4% sequentially to $199 million from $192 million, driven by one
additional rig integrated into operations. Noteworthy, the four jack-ups added to the rig fleet count
during the third quarter of this year are expected to commence operations and start contributing
revenue during December 2023.
Operating expenses remained broadly stable quarter-on-quarter at $68 million. The revenue
increase coupled with stable operating expenses led to a 4% sequential EBITDA growth to $131
million from $126 million.
Offshore Island
USD Million 3Q23 3Q22 YoY 2Q23 QoQ 9M23 9M22 YoY
Revenue 54 52 4% 52 4% 157 153 3%
OPEX1 (17) (17) 0% (20) -15% (56) (60) -7%
EBITDA2 37 35 6% 32 16% 101 93 9%
Net profit 26 23 13% 20 30% 66 58 14%
(1) Opex includes allocation of G&A expenses and other income
(2) Underlying EBITDA includes other income
First Nine-Months (Year-on-Year Performance)
Offshore Island revenue increased 3% year-on-year to $157 million from $153 million, mainly driven
by mobilization revenue for the re-activated island rig which has been allocated to the Hail and
Ghasha Project.
Operating expenses decreased by 7% year-on-year to $56 million due to the phasing of major
maintenance, a decrease in overhead costs allocated to the segment following our revised policy,
and cost efficiency measures. These measures included manpower optimization initiatives, as well
as price negotiations on consumables and spare parts. As a result, EBITDA increased 9% year-on-
year from $93 million to $101 million.
Third Quarter (Year-on-Year Performance)
Third quarter revenue increased 4% year-on-year reaching $54 million, driven by increased activity.
Operating expenses remained stable year-on-year at $17 million for the third quarter of 2023, as
cost efficiency measures offset costs associated with increased activity. As a result, EBITDA
increased 6% to $37 million in the quarter.
6 | Pa geADNOC Classification: Public
Third Quarter (Sequential Performance)
Third quarter revenue increased 4% sequentially to $54 million, driven by increased activity and an
additional day in the third quarter. Operating expenses decreased to $17 million from $20 million
mainly due to the phasing of major maintenance.
The combination of higher revenue and lower operating expenses led to a 16% sequential EBITDA
growth to $37 million from $32 million in the second quarter of this year.
Oilfield Services
USD Million 3Q23 3Q22 YoY 2Q23 QoQ 9M23 9M22 YoY
Revenue 145 103 41% 134 8% 405 282 44%
OPEX1 (122) (86) 42% (106) 15% (330) (234) 41%
EBITDA2 23 17 35% 28 -18% 75 48 56%
Net profit 9 4 125% 14 -36% 33 10 230%
(1) Opex includes allocation of G&A expenses and other income
(2) Underlying EBITDA includes other income
First Nine-Months (Year-on-Year Performance)
The Oilfield Services segment continues to deliver strong top-line growth posting $405 million
revenue in the first nine-months of 2023, a 44% year-on-year increase, on the back of increased
activity volume across the entire portfolio.
Operating expenses increased 41% year-on-year to $330 million from $234 million, mainly due to
increased activity levels, along with an inflationary trend on cost of materials, equipment and
associated logistical costs. Moreover, part of the increase was due to equipment hire tied to frac
activity. The segment was allocated overhead costs for the first time in the first quarter of 2023, as
previously the segment was in an early phase of its lifecycle.
EBITDA increased 56% to $75 million in the current period from $48 million a year ago, reflecting
increased activity across the segment.
Third Quarter (Year-on-Year Performance)
Third quarter revenue increased 41% to $145 million from $103 million in the same period last year,
driven by increased activity from pressure pumping, drilling fluids, and directional drilling. Excluding
one-off sales of certain materials in the third quarter of 2023, activity characterized by lower margin,
revenue would have increased by around 30%.
Operating expenses increased to $122 million due to increased activity. Driven by the growth in top-
line, EBITDA increased 35% year-to-year to $23 million from $17 million with lower EBITDA margin
due to the planned phasing of certain activities (e.g., workover activity) and the sale of certain
materials, both characterized by relatively lower margins.
Third Quarter (Sequential Performance)
Third quarter revenue increased 8% sequentially to $145 million from $134 million, driven by the
one-off sales mentioned above, characterized by lower margin.
Operating expenses increased in the period to $122 million from $106 million, driven by inflationary
pressures on various material costs.
7 | Pa geADNOC Classification: Public
Overall, EBITDA decreased 18% sequentially to $23 million in the third quarter of 2023 from $28
million in the second quarter of this year due to inflationary pressures and the relatively lower margin
activities described above. The segment is further developing its Integrated Drilling Services (“IDS”)
offering, currently at 41 rigs and has started the intake of 7 additional IDS rigs.
Moreover, OFS margins are expected to improve sequentially in the fourth quarter.
Operating Working Capital
USD Million 30 Sep 23 30 Sep 22 YoY 30 Jun 23 QoQ
Current Assets1 1,254 1,351 -7% 1,141 10%
Inventories 203 169 20% 188 8%
Trade & other receivables 119 112 6% 145 -18%
Due from related parties 932 1,070 -13% 808 15%
Current Liabilities2 800 966 -17% 750 7%
Trade & other payables 505 365 38% 445 13%
Due to related parties 295 601 -51% 305 -3%
Operating Working Capital 454 385 18% 391 16%
(1) Excludes cash and bank balances
(2) Excludes lease liabilities
See Appendix 1 (Glossary) for the calculation of certain metrics referred to above.
Operating working capital ended the period at $454 million, increasing 18% year-on-year driven by
the increased net balance with related parties, which last year benefitted from meaningful
collections.
Net working capital as a percentage of revenue stood at 15% at the end of the third quarter on the
back of increasing rig activity and related receivables as well as inventories, the latter also impacted
by inflationary pressures.
As part of the increase in receivables is due for collection in the fourth quarter of this year, the
Company expects to reach a level around the upper end of the 10% - 11% of revenue by the end of
the year.
As the Company growth plans materialize, the evolving business mix leads to structural increases
in working capital.
Free Cash Flow
USD Million 3Q23 3Q22 YoY 2Q23 QoQ 9M23 9M22 YoY
Cash from operating activities 337 317 6% 395 -15% 958 1,135 -16%
Cash used in investing activities (589) (220) 168% (177) 233% (839) (505) 66%
Free Cash Flow (252) 97 -360% 218 -216% 119 630 -81%
NM = Not Meaningful
See Appendix 1 (Glossary) for the calculation of certain metrics referred to above.
Free cash flow stood at $119 million in the 9-month period ended September 2023, an 81% decrease
from $630 million in the same period of prior year. This was mainly attributable to the planned
increase in CapEx, as the Company continues to execute on its rig acquisition program, along with
the above-mentioned trend in working capital.
Free cash flow decreased from $97 million in the second quarter of 2023 to a negative $252 million
in the third quarter mainly due to increased CapEx, in-line with our fleet expansion program.
8 | Pa geADNOC Classification: Public
Balance Sheet
USD Million 30 Sep 23 30 Sep 22 YoY 30 Jun 23 QoQ
Total Assets 6,421 5,320 21% 5,456 18%
Non-current assets 4,605 3,586 28% 3,988 15%
Current Assets1 1,254 1,351 -7% 1,141 10%
Assets Held for sale 11 - 100% 11 100%
Cash and cash equivalents 551 383 44% 316 74%
Total Liabilities 3,127 2,623 19% 2,420 29%
Non-current liabilities 808 1,639 -51% 144 461%
Current liabilities 2,319 984 136% 2,276 2%
Total Equity 3,294 2,697 22% 3,036 8%
Share capital 436 436 0% 436 0%
Statutory reserve 141 60 135% 140 1%
Retained earnings 2,717 2,201 23% 2,460 10%
Total Equity and Liabilities 6,421 5,320 21% 5,456 18%
(1) Excludes cash and bank balances
Total Assets for the period ending September 30, 2023 increased 21% year-on-year to $6,421 million
from $5,320 million in period ending September 30, 2022. This was mainly due to an increase in
non-current assets by 28% to $4,605 million from $3,586 million on the back of the new rig
acquisitions associated with the fleet expansion program.
Cash and cash equivalents balance increased to $551 million from $383 million in the year-ago
period due to the draw-down of $500 million syndicated term loan to support CapEx for rig fleet
expansion. As of September 30, 2023, the Company’s liquidity headroom (including unutilized
syndicated term and revolving facilities) amounted to $1,301 million.
Total liabilities increased 19% to $3,127 million at the end of the third quarter from $2,623 million in
the prior year period. The change was mainly attributable to the draw-down of the syndicated term
loan mentioned above, accounted for in non-current liabilities.
The increase in current liabilities from $984 million a year-ago to $2,319 million in the current period
was partly offset by decrease in non-current liabilities from $1,639 million to $808 million in the same
periods respectively.
As disclosed in the prior reporting periods, the utilized syndicated loan of $1,500 million has been
reclassified since the fourth quarter of 2022 from a non-current liability to a current liability, as the
facility would have matured in less than 12 months. Excluding the reclassification of the loan facility,
current liabilities would have decreased due to lower related party balances.
On October 27, 2023, the Company announced a new syndicated loan in US dollars for $1,500
million and entered into a new Emirati dirham revolving credit facility of AED 1,840 million. The term
loan facility will be used to repay the existing syndicated term loan for an equal amount which expires
in November 2023, while the new revolving credit facility will fund the Company’s growth and the
associated working capital.
Total Assets for the period ending September 30, 2023, increased to $6,421 million from $5,456
million in period ending 30 June 2023. This was mainly due to increase in non-current assets to
$4,605 million from $3,988 million on the back of rig acquisitions. Furthermore, cash and cash
equivalents balance increased to $551 million from $316 million, driven by to the above-mentioned
draw-down of the $500 million syndicated term loan.
Total liabilities increased 29% to $3,127 million at the end of the third quarter from $2,420 million
at the end of the second quarter, also driven by the draw-down of the syndicated term loan.
9 | Pa geADNOC Classification: Public
Capital Expenditure
Capital expenditure (CapEx), including prepayments, totaled $592 million for the quarter ending
September 30, 2023, in line with the expected ramp-up in rig acquisitions.
Pre-payments in the period were mostly associated with the purchase of onshore and offshore jack-
up rigs.
Rig purchases are usually spread out over at least two milestones with the first payment at signing
of the sale and purchase agreement, whereas the final payment is then made on transfer of the title
of the rig to the Company.
During the third quarter of this year, four jack-ups entered the rig fleet count. These jack-ups are
expected to commence operations and start contributing to revenue during December 2023.
ADNOC Drilling now expects CapEx to be around $1,300 million for 2023, due to some phasing in
the payments for rig acquisitions and the continued delivery of an efficient acquisition program. The
CapEx guidance of $2.0 - $2.5 billion over the two-year period ending 2024 is unchanged.
Q uarterly and Annual Capital Expenditure
USD, Million
942
583 592
434
135 147 172 129 78 207 223 76 181
1Q'21 2Q'21 3Q'21 4Q'21 FY'21 1Q'22 2Q'22 3Q'22 4Q'22 FY'22 1Q'23 2Q'23 3Q'23
10 | P ageADNOC Classification: Public
Operational Highlights
Drilling Services
USD Million 3Q23 3Q22 YoY 2Q23 QoQ 9M23 9M22 YoY
Fleet 1241 108 15% 116 7% 1241 108 15%
Onshore 791 73 8% 75 5% 791 73 8%
Offshore Jack-up 35 25 40% 31 13% 35 25 40%
Offshore Island 10 10 0% 10 0% 10 10 0%
Rented rigs 10 8 25% 7 43% 10 8 25%
Rigs Availability* 97% 92% 5% 96% 1% 97% 92% 5%
Onshore 95% 91% 4% 94% 1% 95% 91% 4%
Offshore Jack-up 100% 91% 10% 100% 0% 100% 91% 10%
Offshore Island 99% 100% -1% 100% -1% 99% 100% -1%
Number of Wells
159 152 5% 159 0% 452 441 2%
Drilled*
Onshore 129 130 -1% 133 -3% 375 376 0%
Offshore Jack-up 23 15 53% 18 28% 55 46 20%
Offshore Island 7 7 0% 8 -13% 22 19 16%
(1) Includes 4 lease-to-own land rigs.
* See Appendix 1 (Glossary) for the calculation of certain metrics referred to above.
The Company had a fleet of 124 rigs (120 owned plus four lease-to-own) at the end of third quarter.
The overall owned fleet availability was 97% at the end of September 2023.
Operational highlights of note during the period are as follows:
• Four jack-ups entered the rig fleet count. The jack-ups are expected to commence operations
and start contributing to revenue during December 2023.
• The Company integrated 4 lease-to-own land rigs with plans to purchase them in the future.
• Achieved TRIR frequency of 0.45 against a target of 0.70 for the first nine-months of 2023.
• Average rig move performance was 3.34 days for the first nine-months of 2023.
3Q23 Highlights:
• AD118 and AD116 completed 7 years without LTI.
• Delivered fastest 12 and ¼ inch section in Diyab Project in 8.4 days against 15.5 planned and
an average on all offset wells of 11.3 days.
• AD-34 delivered the field record ROP of 61.25 feet/hour in 22-inch section.
• AD-117 delivered well using first 3 ½ inch smart mono-bore completion in BAB.
• Qarnin and Marawwah completed 9 years and 6 years without LTI respectively.
• Al Hudairiyat delivered the longest conductor sharing well in the UAE with a combined depth of
54,500 feet.
• Al Lulu well delivered ahead of plan, utilizing IDS services, reached new milestone in the field by
delivering a combined drilled and completed footage of 45,563 feet.
• Al Hudairiyat drilled 8½ inch hole with average ROP of 67 feet/hour, the longest lateral section
with 8 ½ inch section footage of 15,570 feet.
11 | P ageADNOC Classification: Public
Oilfield Services (OFS)
• OFS performed IDS on 41 rigs in the second quarter and started the intake of 7 additional rigs.
• Achieved a TRIR of 0.48 versus a target of 0.7 in first nine-month of 2023.
• 16.4% improvement in 3Q23 IDS drilling efficiency versus the 2022 benchmark.
• 59 wells delivered in 3Q23. Of the 19 benchmarked wells, 16 were delivered ahead of budget
and schedule.
• AD-109 completed the second successful 5 ½ inch frac string cement job. The second gas well
delivery from PAD-2 Batch. Well completed 55.04 days without skid time and 56.92 days with
skid time.
• Drilled the Longest IDS well in NASR Field offshore Abu Dhabi, drilling 27,500 feet.
12 | P ageADNOC Classification: Public
Outlook
To enable ADNOC’s strategic imperative of expanding production capacity from four to five million
barrels per day by 2027, ADNOC Drilling accelerated its own growth plans.
The Company continues to expect its owned rig count to total 142, including the 4 new lease-to-own
land rigs, by the end of 2024.
Driven by increased visibility on earnings and profitability, ADNOC Drilling updates its fiscal year
2023 guidance on EBITDA, Net Profit and CapEx. The Company now expects EBITDA of $1,400 -
$1,500, with a margin range of 47% - 49% and Net Profit of $900 - $1,000 million, with a margin
range of 29% - 32%.
Moreover, ADNOC Drilling now expects CapEx to be around $1,300 million for 2023, due to some
phasing in the payments for rig acquisitions and the continued delivery of an efficient acquisition
program. The CapEx of $2.0 - $2.5 billion over the two-year period ending 2024 is unchanged.
USD Million FY2023 Guidance FY2023 Updated Guidance
Revenue 3,000 - 3,200 3,000 - 3,200
Onshore Revenue 1,500 - 1,600 1,500 - 1,600
Offshore Jack-up Revenue 800 - 900 800 - 900
Offshore Island Revenue 200 - 250 200 - 250
Oilfield Services Revenue 500 - 550 500 - 550
EBITDA 1,350 - 1,500 1,400 - 1,500
EBITDA Margin 45% - 47% 47% - 49%
Net Profit 850 - 1,000 900 - 1,000
Net Profit Margin 28% - 31% 29% - 32%
CapEx 1,300 - 1,750 ~1,300
Leverage Target < 2.0x < 2.0x
ADNOC Drilling’s medium-term guidance remains as follows:
• Revenue CAGR in the 12% - 16% range.
• EBITDA Margins around 50% with drilling margins exceeding 50% and OFS Margin in a
range of 22% - 26% medium term versus 2021.
• Conservative long-term leverage target of up to 2.0x net debt / EBITDA, excluding material
M&A.
• Net working capital as percentage of revenue target of 10% - 11%.
• Maintenance CapEx post-2024 of $200 - $250 million per annum.
The Company’s longer-term growth remains supported by the maintenance of production capacity,
the UAE’s goal to achieve gas self-sufficiency and the development of its vast unconventional
resources, continued expansion of the OFS segment’s Integrated Drilling Solutions and the pursuit
of both regional expansion opportunities and new revenue streams such as complimentary services,
manufacturing opportunities and technology, including entry to renewables technology and
solutions. ADNOC Drilling continues to strive to make strong progress on delivering growth and
maximizing returns for its shareholders. The immediate focus remains on meeting robust financial
targets, whilst maintaining operational excellence.
13 | P ageADNOC Classification: Public
Dividend Policy
The Company’s ability to pay dividends is dependent on several factors, including the availability of
distributable reserves, capital expenditure plans and other cash requirements in future periods. Any
level or payment of dividends will depend on, among other things, future profits and the business
plan of the Company, at the discretion of the Board of Directors and ultimately shareholder
approvals.
As per the Company’s announced policy, dividends are to be paid semi-annually with a final annual
dividend distributed to shareholders in the first half and the payment of the interim dividend in the
second half of each fiscal year. The dividend policy is progressive, reflecting robust underlying cash
flow, and the annual distribution is expected to grow by at least 5% per annum on a dividend per
share basis over the next four years (2023-2026).
This policy is designed to reflect our strong and visible long-term cash flow and our expected long-
term earnings potential, while allowing us to retain sufficient cash to fund ongoing operating
requirements and continued investment for long-term growth. The policy is subject to consideration
by our Board of Directors and will cover the cash management requirements of our business for
operating expenses, interest expense, anticipated capital expenditures and market conditions. In
line with the progressive policy, the Board considers dividend a capital allocation priority alongside
investment in profitable growth and is committed to returning a competitive and growing cash
dividend to our shareholders.
Subject to the foregoing, shareholders at the Annual General Meeting in April of 2023 approved a
final dividend payment for the second half of 2022 totaling $341.25 million, or 7.83 fils per share,
which was distributed to shareholders on April 25, 2023.
Furthermore, the Board of Directors announced an interim cash dividend for fiscal year 2023 totaling
$358.3 million, or 8.22 fils per share, which was distributed to shareholders on October 27, 2023.
The interim dividend payment was 5% higher than the interim dividend payment of fiscal year 2022,
in-line with the Company’s dividend policy.
14 | P ageADNOC Classification: Public
Earnings Webcast and Conference Call
ADNOC Drilling will host the earnings webcast and conference call followed by a Q&A session for
investors and analysts on Tuesday, November 14, 2023, at 12:00 pm UAE time / 08:00 am UK time.
The call will be hosted by Abdulrahman Alseiari (CEO), Youssef Salem (CFO) and Christopher
McDonald (Chief Operating Officer). Interested parties are invited to join the call by clicking here.
A replay and transcript will be made available following the event, accessible from the Investor
Relations section of ADNOC Drilling’s website.
Share Price and Ownership
Our shares are traded on the Abu Dhabi Securities Exchange (ADX) under the symbol
ADNOCDRILL. The closing share price as of September 30, 2023, was AED 4.02. In the period from
July 1, 2023, through September 30, 2023, the share price traded in a range between AED 3.54 and
AED 4.29. Market capitalization was AED 64.3 billion as of September 30, 2023, and an average of
3.6 million shares traded daily during the third quarter of 2023.
As of June 30, 2023, the Abu Dhabi National Oil Company (“ADNOC”) owned a majority 84% stake
in the Company and Baker Hughes Holding SPV Ltd. (“Baker Hughes”) owned 5% stake in the
Company, while 11% of our outstanding shares were publicly owned by other institutional and retail
investors.
ADNOC Drilling is included in three of FTSE Russell’s globally recognized indices including the
FTSE Emerging Index, FTSE Global Large Cap Index and FTSE All-World Index. Furthermore, in
the first quarter of 2022, ADNOC Drilling was also included as an inaugural member of the FADX 15
Index. The index is uniquely designed by ADX and FTSE Russell to track the performance of the
most liquid and largest companies on the ADX main market.
Fourth Quarter 2023 Results
We expect to announce our fourth quarter 2023 results on or around February 13, 2024.
Contacts
Massimiliano Cominelli Adham Kamel
Vice President, Investor Relations Senior Analyst, Investor Relations
mcominelli@adnoc.ae akamel@adnoc.ae
November 14, 2023
ADNOC Drilling Company P.J.S.C.
15 | P ageADNOC Classification: Public
Appendix: Glossary
Financial Terms
EBITDA represents Earnings Before Interest, Tax, Depreciation and Amortization
Net debt is calculated as total interest-bearing debt less cash and bank balances (including term
deposits with banks) adjusted for lease liabilities.
Net debt to EBITDA ratio is calculated as interest-bearing net debt as of the end of the period
presented, divided by EBITDA for the twelve months ended on the last day of the period
presented.
Capital employed is calculated as the sum of total assets minus non-interest-bearing current
liabilities.
Return on capital employed is calculated as operating profit for the twelve months ended on
the last day of the period presented divided by capital employed on the last day of the period
presented. Operating Profit is defined as profit excluding financing, tax and income and
expenses from investments.
Leverage ratio is calculated as (a) interest-bearing net debt, divided by (b) the sum of interest-
bearing net debt plus total equity.
Return on equity is calculated as profit for the period for the twelve months ended on the last
day of the period presented divided by total equity on the last day of the period presented.
Operating Working capital is calculated as current assets excluding cash and bank balances
minus current liabilities excluding lease liabilities.
Operating Cashflows are Net cash generated from operating activities as stated in the cash
flow statement.
Free cash flow is calculated as net cash generated from operating activities less payments for
purchase of property & equipment and advances to contractors and finance income received.
Opex represents Operating expenditure that includes direct cost and general and administrative
expenses excluding depreciation, amortization and impairment as stated in the statement of
profit or loss and other comprehensive income.
Capital expenditure is total cash capital expenditure for payments made for purchase of
property and equipment including prepaid delivery payments as stated in the cash flow
statement.
All financial terms have meaning as defined in the International Financial Reporting Standards
(“IFRS”) unless otherwise stated.
IFRS are accounting standards issued by the IFRS Foundation and the International Accounting
Standards Board (IASB). They constitute a standardized way of describing the company’s
financial performance and position so that company financial statements are understandable
and comparable across international boundaries.
16 | P ageADNOC Classification: Public
Industry Terms
Rig means a drilling unit and equipment package and is an integrated system that drills Oil and
gas wells, in the earths subsurface.
Standby is period when the works are unable to proceed and when the rig is put on standby for
various reasons, waiting-on-weather or inspection, or any other reason based on the mutual
understanding between the Company and the customer and as defined in the contract.
Planned Maintenance is a scheduled Turnaround maintenance. And it varies based on built
year, class and design. Usually drilling rigs undergo major maintenance every five years subject
to HSE and Asset Integrity Protocols. However, jack-up rigs may require outages during the
intermediate two and half years for class renewal surveys.
Owned Rig includes rigs acquired through rig-built project or purchased from market, the title of
which is transferred to ADNOC Drilling. The rig count also includes lease-to-own rigs.
Rented Rigs are rigs rented from 3rd party rig providers on the basis of back-to-back contracts
with customers with minimal mark-up to cover for administrative overheads.
Rig availability is Cumulative of (Rig days less actual maintenance days less rig related non-
productive time less actual rig move days) divided by Cumulative of (Rig days less planned
maintenance days less planned rig move days).
17 | P ageADNOC Classification: Public
Cautionary Statement Regarding Forward-Looking Statements
This communication includes forward-looking statements which relate to, among other things, our
plans, objectives, goals, strategies, future operational performance, and anticipated developments
in markets in which we operate and in which we may operate in the future. These forward-looking
statements involve known and unknown risks and uncertainties, many of which are beyond our
control and all of which are based on management’s current beliefs and expectations about future
events. Forward-looking statements are sometimes identified by the use of forward-looking
terminology such as “believes”, “expects”, “may”, “will”, “could”, “should”, “would”, “intends”,
“estimates”, “plans”, “targets”, or “anticipates” or the negative thereof, or other comparable
terminology. These forward-looking statements and other statements contained in this
communication regarding matters that are not historical facts involve predictions and are based on
the beliefs of our management, as well as the assumptions made by, and information currently
available to, our management. Although we consider that the expectations reflected in such forward-
looking statements are reasonable at this time, we cannot assure you that such expectations will
prove to be correct. Given these uncertainties, you are cautioned not to place undue reliance on
such forward-looking statements. Important factors that could cause actual results to differ materially
from our expectations include, but are not limited to: our reliance on ADNOC Onshore and ADNOC
Offshore for deploying rigs as per existing terms and conditions; failure to successfully implement
our operating initiatives and growth plans, including our cost savings initiatives, due to general
economic conditions, our reliance on information technology to manage our business; laws and
regulations pertaining to environmental protection, operational safety, the extent of our related party
transactions with ADNOC Group; the introduction of new taxes in the UAE; failure to successfully
implement new policies, practices, systems and controls that we implemented in connection with or
following our IPO; any inadequacy of our insurance to cover losses that we may suffer; general
economic, financial and political conditions in Abu Dhabi and elsewhere in the UAE; instability and
unrest in regions in which we operate; the introduction of new laws and regulations in Abu Dhabi
and the UAE; and other risks and uncertainties detailed in our International Offering Memorandum
dated September 6, 2021 relating to our initial public offering and the listing of our shares on the Abu
Dhabi Securities Exchange, and from time to time in our other investor communications. Except as
expressly required by law, we disclaim any intent or obligation to update or revise these forward-
looking statements.
18 | P age

Sentiment: neutral