Arabian Drilling generates 54% of revenues from land rigs, has SAR 12.7 bln backlog: CEO

Ghassan Mirdad, CEO of Arabian Drilling Co. (ADC)

Arabian Drilling Co.'s (ADC) land rigs contributed SAR 501 million, or 54% of the company’s total revenues of SAR 919.6 million in the third quarter of this year, compared to SAR 489 million in Q2 2023, while offshore rigs accounted for SAR 419 million, or 46% of revenues, compared to SAR 302 million in Q2 2023, said CEO Ghassan Mirdad.

He told Argaam that the company has a large volume of backlog after being awarded several contracts and extensions, which gives a good vision regarding revenue and margin growth for the next few years.

ADC's total cumulative business volume amounted to SAR 12.7 billion, with the average duration of the remaining contracts for each drilling rig at 2.5 years, as the value of the confirmed contracts already announced is SAR 6 billion. The net addition to the backlog represents SAR 5.1 billion, or SAR 900 million less as a result of revenues achieved in Q3 2023, according to the official.

He pointed out that ADC delivered all five offshore drilling rigs on time according to the contract timetable.

The CEO also indicated that ADC is currently focusing on delivering 10 new unconventional platforms over the next few quarters, as it looks to the next phase of growth through further expansion opportunities, whether organically or through acquisitions.

This includes the announcement of 10 new unconventional land rigs in addition to multiple extensions of Saudi Aramco contracts, including a 10-year extension for an offshore drilling rig that has already begun operating, said Mirdad.

He said that revenue estimates have not changed for the year 2023, as total revenues are expected to range between SAR 3.3-3.5 billion, while capital expenditures are forecast to be between SAR 2.2-2.4 billion.

The company reported a net profit of SAR 422 million in the first nine months of 2023, compared to SAR 421 million in the prior-year period. Q3 profit stood at SAR 140 million, Argaam's data showed.