ADNOC Drilling continues to expand in the Gulf with a new acquisition

ADNOC Drilling announced on Wednesday that it will buy 80% of regional drilling and oilfield service provider MB Petroleum Services, for a total enterprise value worth $204 million (749 millions dirhams). This marks a new expansion in the Gulf.

ADNOC Drilling has acquired SLB's offshore rig business in Oman, Kuwait and Oman. This is its second major regional acquisition.

Youssef Salm, ADNOC Drilling’s Chief Financial officer, said that such deals are a blueprint for future growth.

ADNOC Drilling will be able to expand its footprint in Oman and Kuwait as well as Saudi Arabia, Bahrain, and Saudi Arabia with the acquisition of MBPS.

The purchase of 21 rigs - 13 in Oman and Kuwait and four in Bahrain - is expected to increase earnings, cash flow, and returns.

Salem stated that the rigs were operational and had a backlog of $270 million, which was significantly more than their acquisition cost. The rigs are operated under long-term agreements that go as far as the year 2033.

Salem, during an interview at the ADIPEC Conference in Abu Dhabi, said that "from an oil price standpoint, there is some pressure." But the drilling activity in the UAE and Oman, as well as Kuwait, is at a record high. And Saudi Arabia, he added, is "on the rebound."

Salem said that the deal was valued less than four core earnings (EBITDA), had a free cashflow yield of more than 10%, and a rate of internal return of above 15%.

The transaction is expected close in the first quarter of 2026, pending regulatory approval. Yousef SABA (Reporting) Mark Potter edited the article.

(source: Reuters)