初步观点：阿联酋以外地区的增长详情

UK|OilServices&Equipment ADNOCDrilling RATINGBUY FirstView:FurtherColouronGrowthOutsidetheUAE Conclusion Followingtoday'sannouncement,mgtcallprovidedmorecolouronADNOCDrilling'sacquisitionofa70%stakeinSLB'slandrigbusinessinOman&Kuwait.Currently,thelanddrillingmarketinOman&Kuwaitcombinedis3xthatofAbuDhabi,UAE,withacombinedrigcountofc.300.ADNOCDrillingaimstogrowitsmarketsharefromlowsingle-digitposttransaction,tohighsingle-digitovertime,alongwithprovidinganintegratedservicesoffering.Thecoexpectsthetransactiontogeneratec.$20m-30minadditionalFCF p.ainthe"firstcoupleofyears",steppinguponceinitialcapexspenddeclines.Thiscashgeneration,coupledwiththerigsinOman&Kuwaithavingbeenpurchasedat"attractive"prices,underpinthehigherIRRofthetransaction,vsthedomesticdrillingIRRof10-13%.WebelievethepartnershipwithSLB'sexistingplatform,&contractsinplacewithstate-ownedentities(PDO&KOC),de-risksthisnewcountryentry,&providesvisibilityonlong-termFCFgeneration. Detail Growthtomidsingle-digitmarketshare.Thecurrentmarketsizeforconventionallanddrillingisc.3xthatofAbuDhabi,UAE,withacombinedrigcountofc.300inOman&Kuwait.Currently,ADNOCDrilling's8rigs(6Oman,2inKuwait)implyalowsingle-digitmarketshare,withthecompanylookingtorampuptoahighsingle-digitmarketshare.Oilfieldservicesisalsodirectionallyin-linewiththedrillingmarketinOman&Kuwait,whereADNOCDrillingwilllooktoprovideanintegratedserviceofferingovertime,helpedbythepartnershipwithSLB. Attractiveeconomics,withEPSaccretion.ManagementstatedthatthisdealwillbeearningsaccretivetoADNOCDrillinguponcompletion(1Q26e).Currentcontractedbacklogofc.$400m,impliesc.$160minEBITDA(c.40%margin),withmaintenance&"upgrade"capexof$15m.Thisgenerates $20m-30mFCFp.a,increasingafteracoupleofyears,ascapexisexpectedtohalve.Netincomep.aisc.$25m,reflectingac.20%margin,vs34%in1Q25domesticonshoredrilling.Sixoftheeightrigshavecontractsto2028,providingastable3-yearrevenuepipeline,&wereacquiredat<4x2025eEV/EBITDA,supportingapremiumIRRvsthedomesticIRR. EquityResearch PRICETARGET|%TOPTAED6.80|+31%52WHIGH-LOWAED6.01-AED3.92FLOAT(%)|ADVMM(USD)16.5%|13.72MARKETCAPAED83.4B|$22.7B TICKERADNOCDRIUH ^Priortradingday'sclosingpriceunlessotherwisenoted. PRICE FIRSTVIEW May29,2025 AED5.21^ RubenDewa,CFA*|EquityAnalyst +44(0)2070298262|rdewa@jefferies.com MarkWilson,CEng*|EquityAnalyst 44(0)2070298691|mark.wilson@jefferies.com LloydByrne^|EquityAnalyst (212)323-7528|lloyd.byrne@jefferies.com Pleaseseeanalystcertifications,importantdisclosureinformation,andinformationregardingthestatusofnon-USanalystsonpages2-7ofthisreport. *JefferiesInternationalLimited^JefferiesLLC/JefferiesResearchServices,LLC CompanyDescription ADNOCDrilling Establishedin1972asADNOC'ssoledrillingprovider,ADNOCDrillingistodaythelargestnationaldrillingcompanyintheMiddleEastbyrigfleetsizewithplanstoexpandfurtherwithinthisdecade.ADNOCDrillinglistedontheAbuDhabiSecuritiesExchange(ADX)on3Oct2021 CompanyValuation/Risks ADNOCDrilling WebaseourvaluationonEV/EBITDA.Risks:slowingofADNOCGroupgrowthplans;slowdownofunconventionaloilandgasgrowthinUAE;competitioninOFS;concentrationrisks;geopoliticalrisks. AnalystCertification: I,RubenDewa,CFA,certifythatalloftheviewsexpressedinthisresearchreportaccuratelyreflectmypersonalviewsaboutthesubjectsecurity(ies)andsubjectcompany(ies).Ialsocertifythatnopartofmycompensationwas,is,orwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewsexpressedinthisresearchreport. I,MarkWilson,CEng,certifythatalloftheviewsexpressedinthisresearchreportaccuratelyreflectmypersonalviewsaboutthesubjectsecurity(ies)andsubjectcompany(ies).Ialsocertifythatnopartofmycompensationwas,is,orwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewsexpressedinthisresearchreport. I,LloydByrne,certifythatalloftheviewsexpressedinthisresearchreportaccuratelyreflectmypersonalviewsaboutthesubjectsecurity(ies)andsubjectcompany(ies).Ialsocertifythatnopartofmycompensationwas,is,orwillbe,directlyorindirectly,relatedtothespecificrecommendationsorviewsexpressedinthisresearchreport. Registrationofnon-USanalysts:RubenDewa,CFAisemployedbyJefferiesInternationalLimited,anon-USaffiliateofJefferiesLLCandisnotregistered/qualifiedasaresearchanalystwithFINRA.Thisanalyst(s)maynotbeanassociatedpersonofJefferiesLLC,aFINRAmemberfirm,andthereforemaynotbesubjecttotheFINRARule2241andrestrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalyst. Registrationofnon-USanalysts:MarkWilson,CEngisemployedbyJefferiesInternationalLimited,anon-USaffiliateofJefferiesLLCandisnotregistered/qualifiedasaresearchanalystwithFINRA.Thisanalyst(s)maynotbeanassociatedpersonofJefferiesLLC,aFINRAmemberfirm,andthereforemaynotbesubjecttotheFINRARule2241andrestrictionsoncommunicationswithasubjectcompany,publicappearancesandtradingsecuritiesheldbyaresearchanalyst. AsisthecasewithallJefferiesemployees,theanalyst(s)responsibleforthecoverageofthefinancialinstrumentsdiscussedinthisreportreceivescompensationbasedinpartontheoverallperformanceofthefirm,including