ADNOC Drilling: Fireside chat feedback: OFS opportunity a key differentiator

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ADNOC Drilling: Fireside chat feedback: OFS opportunity a key differentiator

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ADNOC Drilling

Fireside chat feedback: OFS opportunity a

key differentiator

Reiterate Rating: BUY | PO: 6.90 AED | Price: 5.91 AED

Capacity expansion and rig demand outlook 20 May 2026

We hosted a management fireside chat with ADNOC Drilling CFO, Mr. Youssef Samy Equity

Salem, on 19th May 2026. Management highlighted that offshore island rigs remain a

major growth area driven by conventional offshore oil and sour gas developments. Abhishek Kumar >> Research Analyst

Unconventional drilling is also expected to expand across both oil and gas, with Phase 2 Merrill Lynch (DIFC)

gas FID potentially happening before the end of year. ADNOC Drilling believes UAE +971abhishek.kumar29@bofa.com4 425 8227

production capacity growth will continue alongside >30% gas expansion, particularly in Sashank Lanka >>

sour and unconventional gas, which are more drilling intensive. While unconventional rigs Research Analyst

Merrill Lynch (DIFC)

are easier to source globally, island rigs require 18–24 months of lead time, implying +971 4 425 8231

that any 2028 requirements may need orders before end-2026. We reiterate Buy. sashank.lanka@bofa.com

Framework Economics, International expansion & Enersol

Management reiterated that the 2018 framework agreement structure remains Stock Data

unchanged, with the business to continue to operate on a fixed-IRR/cost-plus basis.

Although land-rig margins decline after the initial 15-year period, lower depreciation Price 5.91 AED

offsets this impact, keeping net income per rig broadly stable. International expansion is Price Objective 6.90 AED

being pursued to offset slower UAE rig growth, with focus on markets offering long- Date Established 12-May-2026