Abu Dhabi National Oil Company (ADNOC) and its subsidiary ADNOC Drilling and contract land driller Helmerich & Payne (H&P) have formed a strategic alliance that will see ADNOC Drilling acquire eight FlexRig land rigs from H&P for $86.5 million and an H&P investment of $100 million in ADNOC Drilling’s recently announced Initial Public Offering (IPO).
The strategic alliance and rig acquisition will support ADNOC’s target of reaching 5 million B/D production capacity and gas self-sufficiency for the UAE by 2030, along with plans to unlock its unconventional oil and gas resources. These agreements are intended to further drive ADNOC Drilling’s growth and expansion as well as enhance its rig-based operational performance.
“H&P’s cornerstone investment in our planned ADNOC Drilling IPO further reinforces ADNOC’s continued success as a primary catalyst in attracting leading global investors and industry partners into Abu Dhabi and the UAE,” said His Excellency Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC managing director and group CEO.
In addition, the alliance will support ADNOC Drilling in maintenance efficiencies, supplementing supply-chain capabilities, and adding engineering and rig-design competencies. The alliance will also deliver more competitive well completion times, greater drilling efficiencies, and improved well economics.
For H&P, these agreements help facilitate its goal of allocating capital internationally, particularly in the Middle East North Africa region, by accelerating its access into the Abu Dhabi market as a platform for regional expansion.
On 6 September, ADNOC announced its intention to float a 7.5% minority stake of ADNOC Drilling on the Abu Dhabi Securities Exchange through an IPO. Both ADNOC and H&P will remain committed, long-term shareholders in ADNOC Drilling.
“Our investment in ADNOC Drilling is an additional step in the execution of our international growth strategy to allocate additional capital outside the US,” said John Lindsay, H&P’s president and chief executive.
H&P’s investment will be at the IPO price and is subject to a 3-year lockup. The FlexRig units are expected to be delivered and commissioned in stages over a 12-month period subject to acceptance upon successful completion of a final inspection on customary terms and conditions.
