Adnoc Drilling's H1 revenue surges 30% to $2.37b

31/07/2025 02:04 AST

Adnoc Drilling has reported its strongest-ever financial performance for the first half of 2025, with revenue surging 30 per cent year-on-year to $2.37 billion (Dh8.7 billion), supported by robust operational activity, fleet expansion, and growing demand for oilfield services.

The Abu Dhabi-headquartered company also saw Ebitda climb 19 per cent to $1.08 billion and net profit rise 21 per cent to $692 million, driven by strong execution across onshore, offshore, and unconventional operations.

The record results come as Adnoc Drilling strengthens its position as the largest integrated drilling services company in the Middle East, benefiting from the UAE's accelerated hydrocarbon production goals and the global upturn in energy demand.

The company also upgraded its full-year guidance and reaffirmed its long-term growth trajectory, including revenue projections of $5 billion by 2026 and a planned fleet of 151-plus rigs by 2028.

The first-half performance reflects both volume and value growth. Revenues from the onshore segment rose 18 per cent to $1 billion, boosted by the deployment of new rigs and a $79 million contribution from unconventional drilling.

Offshore operations, including jack-ups and island rigs, generated $671 million in revenue, while oilfield services revenue more than doubled-up 127 per cent to $689 million-driven by a $265 million contribution from unconventional projects and higher demand for integrated drilling services.

Adnoc Drilling's unconventional business is gaining momentum, with over 40 per cent of its targeted 144 wells drilled in the first half and more than 20 wells fractured. The company's subsidiary, Turnwell, has implemented autonomous drilling techniques that have improved safety metrics and significantly reduced cycle times.The company's growing technological sophistication is further reflected in its adoption of AI-powered tools, such as MEERAi, which supports executive decision-making by leveraging predictive analytics and operational data across drilling assets. AI and automation are now embedded throughout the organisation-from well planning and execution to asset maintenance-enhancing operational efficiency and reliability. Capital expenditure for the period totalled $335 million, and the company generated $727 million in free cash flow, a 67 per cent increase over the same period last year. The company also reported $1.17 billion in cash from operations, up 35 per cent year-on-year.

Dividend returns remain a core part of the company's investor proposition. The board approved a second quarterly dividend of $217 million (approximately 5 fils per share), reaffirming its progressive dividend policy. The payout will be distributed in August to shareholders of record as of August 8, with a third dividend scheduled for later this year.

Regional expansion is a key strategic pillar for Adnoc Drilling. In the first half of the year, the company added $4.8 billion in new contracts-its strongest-ever period for backlog growth-spanning integrated drilling and rig services with long-term visibility extending into 2040. Notably, the company entered into an agreement to acquire a 70 per cent stake in SLB's land drilling business in Kuwait and Oman. Upon completion, Adnoc Drilling will operate two rigs in Kuwait and six in Oman, giving it immediate earnings and cash flow benefits from two of the region's most active upstream markets.

In parallel, the company's technology investment arm, Enersol, continued to build its UAE presence through four acquisitions and the development of its Abu Dhabi hub. Enersol also launched the Enersol Energy Challenge, a platform designed to identify and support emerging Emirati entrepreneurs in the clean tech and energy innovation space. Despite a slight dip in Ebitda and net profit margins-down to 46 per cent and 29 per cent respectively-the company maintained solid profitability, with conventional drilling Ebitda margins holding above 50 per cent.

These margins are expected to remain robust over the medium term, especially as the company continues to scale its oilfield services business, where margins are targeted between 22 per cent and 26 per cent.

According to CEO Abdulla Ateya Al Messabi, the results validate Adnoc Drilling's ability to thrive across market cycles. "With high and visible cash flows, growing earnings and strong visibility of future returns, we remain confident in our ability to continue delivering long-term value to our shareholders," he said. "Our disciplined expansion, dependable shareholder returns and integration of AI technologies position us well to achieve our full-year and medium-term growth targets."

The company's forward-looking metrics are closely watched by investors and analysts alike. With coverage from 20 global equity research firms and most maintaining a "Buy" rating, Adnoc Drilling is currently one of the most followed stocks in the Mena region.

Listed on the Abu Dhabi Securities Exchange, Adnoc Drilling remains a vital part of the UAE's energy ecosystem, supporting Adnoc Group's strategy to increase oil production capacity and unlock the country's vast unconventional gas reserves. Its integrated service model and rapid digital transformation are setting new benchmarks for operational excellence and sustainable growth in the regional energy services landscape.

Khaleej Times