ADNOC Drilling (ADNOCDRI UH): Downgrade to Hold: Flight info in Q4 2026

Research evidence excerpt

ADNOC Drilling (ADNOCDRI UH): Downgrade to Hold: Flight info in Q4 2026

Equities ● Energy Equipment & Services

19 June 2026

ADNOC Drilling

◆ UAE’s recent exit from OPEC remains a key mid-term upside risk to

revenues and dividends, with headlines possible in Q4 2026…

◆ … although room for near-term organic revenue growth and dividend

re-base likely limited

◆ Raise TP to AED6.50 (from AED6.30), downgrade to Hold

Company description

ADNOC Drilling is a fast-growing Abu Dhabi-based drilling and oilfield services company. It is an

exclusive provider of onshore, island, and offshore drilling services to its parent, ADNOC Group,

under a long-term framework agreement whereby its drilling rigs are contracted for an initial

15-year base term, with target IRR rates of 11-13% for onshore and 10-12% for offshore rigs.

As of end-2025, the company had 92 land, 36 jack-up, and 11 island rigs (all owned). ADNOC

Drilling entered the oilfield services (integrated drilling services) market in 2018 and has since

consolidated its market share in the UAE. The company recently entered the onshore drilling

markets of Kuwait and Oman, and is consolidating drilling and OFS technology capabilities

through investments via its Enersol JV.

After listing on the Abu Dhabi Securities Exchange in 2021 and a secondary sale of 5.5% of the

shares in Q2 2024, ADNOC Group remains a majority shareholder with a 78.5% stake. ADNOC

Drilling has a progressive dividend policy, with at least 5% annual dividend growth from the base of

USD1bn in 2025.

Investment summary

Growth story. ADNOC Drilling has been growing fast owing to an aggressive oil production

capacity expansion programme at ADNOC Group, which has fuelled its fleet expansion. Its