Arabian Drilling expects to pause dividends for 2025 only, upbeat on 2026: CEO

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

Arabian Drilling Co.’s (ADC) suspension of cash dividends is expected to be limited to the current year, as it seeks liquidity to support offshore expansion beyond Saudi Arabia, CEO Ghassan Mirdad said.

In an interview with Al Arabiya, he said improved rig utilization will lead to higher revenues and future distributions to shareholders.

Despite the challenges faced this year, Mirdad expressed optimism for 2026, driven by an expected increase in drilling activity.

The CEO emphasized ADC’s commitment to resuming dividend payouts. However, in light of current market challenges and low utilization rates, the company is prioritizing cash preservation and reinvestment into international operations — the main reason for the dividend suspension.

He clarified that the suspension of offshore rigs was not temporary and redeploying them in the Saudi market proved challenging. Consequently, the company successfully redeployed these rigs outside the Kingdom for the first time, entering the Gulf region. He outlined two strategies for operating abroad: direct contracts with clients and an alliance with Shelf Drilling Co.

Through this partnership, ADC has entered 8 to 10 tenders. Currently, two offshore rigs remain idle, though one has been awarded a new contract. If the company secures another tender in H2 2025, offshore rig utilization could reach 100%, significantly boosting revenues.

On the onshore front, Mirdad said rig suspensions were temporary and operations in Saudi Arabia are expected to resume. He pointed to newly signed contracts worth nearly SAR 2 billion as a sign of recovery.

ADC is taking a cautious approach until rig activity stabilizes, with more clarity anticipated by year-end, the CEO added.

He also highlighted ADC’s strong presence in gas drilling, having secured 13 out of 24 awarded rigs. These began operations in late 2024 and have generated SAR 395 million in revenue to date.

Mirdad expects additional gas drilling tenders in 2026, which will be strategically important for the company.

Mirdad said that the company’s total debt stands at SAR 3 billion, comprising SAR 2 billion in sukuk and SAR 1 billion in bank loans. The funds were used to acquire an offshore services platform in Q1 2025.

ADC’s net profit declined to SAR 83 million in H1 2025, compared to SAR 166 million in H1 2024. Net profit stood at SAR 7 million in Q2 2025, according to data available with Argaam.

The company’s board recently recommended suspending cash dividends for 2025.