H&P to invest $100 million in ADNOC Drilling IPO

U.S.-based rig technologies and drilling solutions provider Helmerich & Payne (H&P) will invest about $100 million in ADNOC Drilling’s recently announced IPO.

Abu Dhabi’s energy giant ADNOC revealed earlier this week it would sell a minimum 7.5 per cent stake in its drilling unit, ADNOC Drilling, in an IPO.

Days later, ADNOC and its subsidiary ADNOC Drilling and H&P announced a strategic alliance that would see ADNOC Drilling acquire eight FlexRig land rigs from H&P for $86.5 million. Following this transaction, H&P will make a $100 million cornerstone investment into ADNOC Drilling’s IPO.

The strategic alliance and rig acquisition will support ADNOC’s target of reaching 5 million barrels per day (mbpd) production capacity and gas self-sufficiency for the UAE by 2030, along with plans to unlock its unconventional oil and gas resources. These agreements will further drive ADNOC Drilling’s growth as well as enhance its rig-based operational performance, ADNOC explained.

In addition, the alliance will support the rig operator in further driving operational excellence through maintenance efficiencies, supplementing supply-chain capabilities, and adding engineering and rig design competencies.

For H&P, these agreements help facilitate its goal of allocating capital internationally, particularly in the MENA region, by accelerating its access into the fast-growing Abu Dhabi market as a key platform for further regional expansion.

Dr. Sultan Ahmed Al Jaber, UAE Minister of Industry and Advanced Technology and ADNOC Managing Director and Group CEO, said: “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”.

Both ADNOC and H&P will remain committed, long-term shareholders in ADNOC Drilling. H&P’s cornerstone investment will be at the IPO price and is subject to a three-year lock-up.

The rigs are expected to be delivered and commissioned in stages over a twelve-month period subject to acceptance upon successful completion of a final inspection on customary terms and conditions.