ADNOC Drilling, listed on the Abu Dhabi Securities Exchange, announced today, Tuesday, that its shareholders have approved a new progressive dividend policy with an annual increase of no less than 10 percent in the dividend distribution ratio per share for the next five years from 2024 to 2028.
According to a statement from the company, the new policy is expected to achieve a cumulative return of more than 27 percent as a minimum over a five-year period.
In addition, the Board of Directors may, at its discretion, approve additional dividends over and above those approved by the new policy after assessing opportunities to increase free cash flow. Dividends are expected to be distributed semi-annually, with a final dividend to shareholders in the first half and interim dividends to be paid in the second half of each financial year.
On this occasion, Mr. Abdulmunim Saif Al Kindy, Executive Director of Exploration, Development and Production, and Vice Chairman of ADNOC Drilling, said: “ADNOC Drilling’s adoption of a new progressive dividend policy underscores the company’s unwavering commitment to maximizing value for its shareholders through the implementation of its strategy to accelerate growth and enhance development, which is based on well-thought-out plans and a multi-disciplinary work methodology that employs the latest technologies, artificial intelligence tools and solutions, and digital technology.”
On May 23, 2024, ADNOC completed a $935 million institutional placement of ADNOC Drilling shares. The offering represents 5.5 percent of ADNOC Drilling’s total share capital and will increase the free float of the company’s shares by 16.5 percent and increase the number of shareholders who can benefit from the enhanced returns of the new policy.
The transaction, which is the largest accelerated bookbuilding exercise in the MENA region to date, has been met with strong shareholder demand. The free float of the Company’s shares in an index of the size of FTSE will pave the way for inclusion in the MSCI Emerging Markets Index (MSCI), subject to meeting the relevant inclusion criteria. This will increase and diversify the Company’s shareholder base and highlight the high value that investing in its shares provides.
ADNOC Drilling’s strategy focuses on expanding its fleet and developing its integrated drilling services offering, while capitalizing on the opportunities offered by the UAE’s rich unconventional energy resources to help ADNOC deliver on its plans to increase its production capacity. ADNOC Drilling has established a new company, TurnwelI, specifically to explore the UAE’s promising unconventional energy resources.
The new company has started its activities in the field by signing a contract to drill and complete 144 wells for unconventional oil and gas resources, with the possibility of signing more contracts to deliver thousands of wells in the future, which supports the company’s current growth plans and enhances its revenues. ADNOC Drilling also plans, as part of its growth strategy, to expand regionally through the implementation of projects and planned acquisitions.
Through Enersol, its strategic joint venture with Alpha Dhabi, ADNOC Drilling seeks to acquire and invest in companies that provide technologies and solutions for the global energy sector, with the aim of building an integrated technology ecosystem that contributes to enhancing the company’s market value and raising the efficiency of its operational processes.
Enersol recently increased its stake in Gordon Technologies to 67.2 percent, a company specializing in providing measurement-while-drilling technology to the US oil and gas sector. The completion of the deal is subject to obtaining the necessary official approvals. Enersol is also close to completing two additional acquisitions, as part of its approach to implementing investments that are in line with the UAE’s vision to ensure energy security, achieve climate neutrality and enhance ongoing efforts towards economic diversification.
