ADNOC Drilling Company P.J.S.C. (ADX: ADNOCDRILL) has experienced a surge in investor confidence this week, with shares rising 6.3% after the release of their latest quarterly results. The largest national drilling company in the Middle East by rig fleet size reported a 30% increase in third-quarter profit, largely driven by fleet expansion and a thriving oilfield services segment.

The company’s net profit for the three months ending September reached $334.8 million, while revenue soared by 32% year-on-year to surpass $1 billion. The substantial growth was underpinned by ADNOC Drilling’s strategic expansion of both onshore and offshore fleets and strengthened by its Turnwell and Enersol joint ventures. "We remain well on track to deliver continued accelerated growth," stated Abdulrahman Al Seiari, CEO of ADNOC Drilling.

ADNOC Drilling’s onshore segment, the company's largest revenue driver, reported a 29% increase in revenue, totaling $487 million. Meanwhile, the offshore jack-up segment witnessed an even more significant uptick, with revenue climbing 46% to $290 million, fueled by heightened operational activity. Notably, the oilfield services division achieved a 36% rise in revenue, hitting $197 million as integrated drilling services rigs became more active and the unconventional oil and gas business expanded.

Strategic Joint Ventures Fueling Growth

ADNOC Drilling has proactively bolstered its oilfield services business, aligning with the broader increase in drilling activities across the Middle East. The company recently formed Turnwell Industries, a joint venture with Schlumberger and Patterson-UTI, aimed at supporting the UAE's unconventional oil and gas programme. ADNOC Drilling holds a 55% stake in this venture, reflecting its dominant role in the partnership.

In January, ADNOC Drilling and Alpha Dhabi Holding launched Enersol, a technology-focused joint venture poised to invest $1.5 billion in oilfield services technology by the end of next year. This strategic move underlines ADNOC Drilling's commitment to leveraging cutting-edge innovations to support its operations and maintain a competitive edge.

Upgraded Forecasts Reflect Optimism

Looking forward, ADNOC Drilling has raised its full-year profit and revenue forecasts. The company now expects annual net profit between $1.2 billion and $1.3 billion, up from the previous range of $1.15 billion to $1.3 billion. Revenue projections have also been upgraded, with estimates between $3.8 billion and $3.9 billion for 2024, surpassing the prior forecast of $3.7 billion to $3.85 billion.

The optimism extends to analysts' consensus, which predicts revenues of $4.28 billion in 2025, a 16% increase from the previous year, and an 11% rise in statutory earnings per share to $0.086. Despite these positive revisions, the consensus price target remains steady at 5.33 Dirham reflecting a cautious yet balanced outlook on the company’s valuation.

Industry-Leading Growth

ADNOC Drilling’s projected 13% annualized revenue growth to 2025 aligns with its historical performance and outpaces the 8.3% average growth forecast for industry peers. This continued acceleration demonstrates the company’s robust market position and ability to capitalize on the increasing demand for drilling services in the Middle East.

The results highlight a pivotal moment for ADNOC Drilling, as the company builds on its successes and sets the stage for future expansion. With strategic partnerships and a well-diversified operational portfolio, ADNOC Drilling remains a key player to watch in the regional and global oilfield services market.