"ADNOC" intends to offer a minority stake in "ADNOC Drilling" shares for an initial public offering on the Abu Dhabi Securities Exchange

The Abu Dhabi National Oil Company "ADNOC" announced today its intention to offer a 7.5% stake in the shares of "ADNOC Drilling" for an initial public offering on the Abu Dhabi Securities Exchange.

The subscription will be open to citizens and residents of the UAE and local and international investment institutions and is expected to start on September 13, 2021.

ADNOC Drilling is one of the most important pillars of the ADNOC Group and a key enabler to sustain the current production rates of crude oil and increase its production capacity by 25% to reach 5 million barrels per day and produce one billion cubic feet per day of unconventional gas by 2030.

The UAE is ranked sixth globally in the list of countries with the highest oil reserves, with conventional oil reserves of 107 billion barrels of recoverable oil, which enhances opportunities for expansion and sustainable growth in drilling in the future.

ADNOC Drilling is also a key element in achieving gas self-sufficiency in the UAE, achieving the goal of producing one billion cubic feet per day of unconventional gas by 2030, and enhancing Abu Dhabi's leading position in the region in developing unconventional gas resources.

The UAE has proven gas reserves of 273 trillion cubic feet of conventional gas, 160 trillion standard cubic feet of unconventional gas resources, and unconventional oil resources estimated at about 22 billion barrels, which requires drilling more new wells to extract them.

Through this proposed offering of a minority stake in ADNOC Drilling, ADNOC provides an attractive investment opportunity that allows investors to benefit from the continued development and strong growth of ADNOC Drilling, a major component of ADNOC's operations and the hydrocarbon value chain in Abu Dhabi.

ADNOC Drilling also has a long-term contractual relationship with the ADNOC Group companies in the field of exploration, production and development, which ensures the continuity and stability of its operations in various circumstances.

ADNOC Drilling is the largest national drilling company in the Middle East in terms of the size of the rig fleet and equipment, with a total of 96 rigs, onshore, offshore and dedicated to artificial islands. Thanks to its strategic partnership with Baker Hughes in 2018, ADNOC Drilling became the first national company in the region to provide integrated services for drilling and preparing wells and a full range of drilling and drilling services, providing it with opportunities to grow and expand its business outside the UAE.

On this occasion, Dr. Sultan bin Ahmed Al Jaber, Minister of Industry and Advanced Technology, Managing Director and CEO of ADNOC and its group of companies, said: “In line with the vision of the wise leadership to work to achieve the maximum possible value from oil and gas resources, we are pleased to announce our intention to offer a minority stake in ADNOC Drilling in Abu Dhabi Securities Exchange through an initial public offering. This offering provides investors with an important opportunity to invest in a company characterized by strong and stable performance, promising opportunities for long-term growth, and an attractive dividend policy, knowing that it will be available to citizens and residents of the UAE and investors from international and local institutions.” .

He added: "This step comes after the successful listing of ADNOC Distribution's shares in 2017, which represents an important step in ADNOC's approach to improving performance and creating and enhancing value from its world-class assets. We are confident that ADNOC Drilling's plans to create and enhance value and expand its fleet and services will ensure benefit of new opportunities in the value chain in various aspects of the sector.

The ADNOC Group will remain the majority shareholder, and a long-term committed shareholder in ADNOC Drilling, because we are confident that its strong position and presence in the market will ensure further growth that will positively reflect on the UAE, Abu Dhabi and future shareholders in the company.”

ADNOC Drilling's strategy includes contributing to ADNOC's plans to increase its production capacity of crude oil, enhance its leading position in the region in developing unconventional gas fields, and expand and develop the size of its rig fleet to support ADNOC's plans to develop and expand its exploration, development and production business, as well as enhance the efficiency of Its operational operations by shortening the time of drilling wells, with a focus on developing and expanding its business in providing rigs and providing integrated drilling services. ADNOC Drilling focuses on taking advantage of the latest technologies by continuously investing in new and innovative technology applications, including real-time tracking applications, and artificial intelligence to ensure the security and safety of its work, raise operational efficiency and enhance sustainability.

The qualitative leap witnessed by ADNOC Drilling contributed to its development into a company that provides integrated drilling services, which raised the efficiency of its operations in the field of drilling wells in the onshore and offshore areas. During the period between 2018 and May 2021, the company was able to deliver more than 180 wells and increase efficiency by about 50%. And savings amounting to more than 767 million UAE dirhams (210 million US dollars).

ADNOC Drilling continues to make significant achievements in the field of drilling and is on its way to achieving long-term success thanks to a high-performance team with diverse competencies, in-depth knowledge of the sector and significant engineering expertise.

ADNOC Drilling currently has a team of 8,000 employees, and is primarily committed to achieving diversification and balance in all parts of the company and enhancing safety, health and security management systems through continuous improvement with the aim of achieving a 100% health, safety and environment charter.

ADNOC Drilling plays an important role in supporting the achievement of ADNOC's ambitious objectives in the area of ​​environmental, social and corporate governance, as it continues to focus on reducing emissions intensity by 25% by 2030 by enhancing operational efficiency and energy efficiency, and is a key contributor to enhancing the value of Murban crude. It is one of the least carbon-intensive ores in the world.

Over the past five years, ADNOC has worked to enhance the management of its business portfolio and capital, in addition to developing a model of smart partnerships that are characterized by openness, flexibility and innovation in various areas and aspects of its integrated business.

This strategy, which focuses on creating and maximizing value, is enabled by a capital investment program of AED 447.7 billion (US$ 122 billion) for the period between 2021 and 2025.

By listing minority stakes in some of its companies operating in the stock markets, ADNOC has been able to achieve better access to capital and a broader investor base in many aspects of its business portfolio, while supporting the growth and expansion of the private sector and capital markets in the UAE.

This approach provides local and international investors with the opportunity to invest alongside ADNOC and participate in the ownership and growth of these world-class assets in the energy sector.

About the subtraction process.

timetable :

Announcing the intention to list in the Abu Dhabi Securities Exchange.

- The size of the offering will be 7.5% of the capital of ADNOC Drilling.

- All offered shares will be sold from the existing shares owned by ADNOC.

It is expected that shares will start trading on the Abu Dhabi Securities Exchange in October 2021.

The offered shares will be made available to individuals and other investors in the framework of the offering to individuals in the UAE, as well as to qualified investors within the framework of the offering to qualified investors.

5% of the offered shares will be reserved for the Emirates Investment Authority.

- Details of the offering process:

ADNOC Drilling is currently working on fulfilling the terms and requirements related to the offering process, then obtaining regulatory approvals from the Securities and Commodities Authority and the Abu Dhabi Securities Exchange to proceed with the offering process and accept listing and trading in the Abu Dhabi Securities Exchange.

ADNOC expects to sell 7.5% of its shares in the company in this offering.

The offering is to consist of (1) a public offering to individual investors in the UAE, and (2) an offering to qualified investors in a number of countries, including the UAE.

The offering price for the share will be determined through the process of building the subscription order book.

Individual investors in the offering allocated to the individual segment in the UAE will subscribe to the shares at the offering price.

All shares will be offered by ADNOC, which owns 95% of the capital of ADNOC Drilling, prior to the offering.

ADNOC will receive the net proceeds from the offering.

The offering process allows ADNOC to reduce part of its share in order to manage and improve its asset portfolio more effectively, create new investment opportunities in various aspects of its business, increase the liquidity of trading in shares and enhance its position in the international investment community.

ADNOC will continue to own the majority of ADNOC Drilling's capital after the offering.

Baker Hughes Holdings, which owns 5% of the capital of ADNOC Drilling prior to the offering, will not offer any shares in the public offering.

The offering and acceptance of the shares is expected to be completed in October 2021, subject to market conditions and relevant regulatory approvals in the UAE, including from the Securities and Commodities Authority.

The details of the Offering will be included in an Arabic language prospectus (“Individual Offering Memorandum”) and an IPO announcement (“Public Announcement”) for the individual offering in the UAE, and an international offering memorandum in English (“International Offering Memorandum”) for the Qualified Investor Offering .

The individual prospectus and public announcement will be published today, and the international offering memorandum is expected to be published in due course.

More information can be found at: adnoc.ae/DrillingIPO

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