ADNOC drilling proposes IPO of $10bn equity valuation

By Arya M Nair, Official Reporter
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The UAE state-owned Abu Dhabi National Oil Company (ADNOC) has set a price for its drilling unit’s initial public offering (IPO), giving it a $10 billion equity valuation.

ADNOC will sell a minimum 7.5 percent stake in ADNOC drilling in its IPO for $0.62 per share, raising at least $750 million. After the 2017 listing of ADNOC Distribution, the largest operator of gas stations and convenience stores in the UAE, this is the second public offering of a company owned by the Abu Dhabi oil major.

The IPO’s subscription period begins on September 13th and ends on September 23rd for UAE retail investors and September 26th for qualified domestic and foreign institutional investors. On October 3rd, ADNOC Drilling shares are expected to begin trading on the Abu Dhabi Securities Exchange.

According to the prospectus, ADNOC will sell a minimum of $1.2 billion shares in the IPO, but it reserves the right to expand the size of the offering at any moment until the end of the subscription period. The equity valuation will be similar to when the company sold a 5 percent stake in ADNOC Drilling to Baker Hughes in 2018. ADNOC will remain the majority shareholder following the IPO.

The proposed IPO is the latest attempt by Gulf oil giants ADNOC and Saudi Aramco to acquire investment from foreign investors as they seek to diversify their economies away from oil. Saudi Aramco went public in late 2019, garnering $29.4 billion in the world’s largest IPO.

ADNOC Drilling established in 1972 is one of the Middle East’s major drilling companies, with 107 onshore, offshore, and island rigs, 11 of which are rented. Since 2010, the company has added 67 rigs to its fleet, keeping pace with ADNOC’s growing oil and gas production capacity.

Related: ADNOC grants exploration rights for Offshore Block 5 oil field to Pakistani consortium