ADNOC Drilling will obtain eight advanced H&P FlexRig land rigs, which will delivered and commissioned in stages over a period of twelve months
Abu Dhabi National Oil Company (ADNOC), through its subsidiary ADNOC Drilling, has entered into collaboration with drilling solutions provider Helmerich & Payne (H&P) for the acquisition of rigs.
The alliance follows ADNOC’s recent decision to float 7.5% minority stake of ADNOC Drilling on the Abu Dhabi Securities Exchange, through an initial public offering (IPO).
Under the terms of the agreement, ADNOC Drilling will obtain eight advanced FlexRig land rigs from H&P for a purchase price of $86.5m.
The company is expected to deliver the rigs and commission them in stages over a year, subject to completion of a final inspection.
Following the rig acquisition, H&P is expected to make a $100m cornerstone investment into ADNOC Drilling’s IPO.
ADNOC said that the rig acquisition and IPO investment would support reaching its target of 5 million barrels per day (mbpd) production capacity and gas self-sufficiency for the UAE by 2030.
Also, the partnership would allow the company to further drive growth, and enhance its rig-based operational performance, leveraging H&P’s expertise and technologies.
ADNOC Managing Director and Group CEO Sultan Ahmed Al Jaber said: “I am pleased to announce a strategic alliance with Helmerich & Payne, a globally renowned drilling solutions provider.
“This exciting alliance and value creation opportunity will provide ADNOC Drilling with access to new world-class rigs and services, enabling it to continue to support ADNOC in our ambitious production capacity expansion plans.
“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.”
Through the alliance, H&P is expected to support its goal of allocating capital worldwide, with special focus in the MENA region, for further regional expansion.
Its investment is planned to be at the IPO price, with a three-year lock-up.
Moelis & Company served as exclusive financial advisor to ADNOC in connection with the transaction, while Morgan Stanley served as exclusive financial advisor to H&P.
H&P president and CEO John Lindsay said: “We are excited to enter into this strategic alliance with ADNOC Drilling and the value this alliance can create for both companies and stakeholders.
“Our investment in ADNOC Drilling is an additional step in the execution of our international growth strategy to allocate additional capital outside the U.S. and serves as a testament of our belief in what ADNOC Drilling and H&P can achieve together.
“We look forward to partnering with ADNOC and ADNOC Drilling to help create a similar value proposition that we have for customers in the U.S. and other international locations.”