Arabian Drilling Co, one of the largest oil and gas drilling contractors in Saudi Arabia, has announced its intention to proceed with an IPO and listing of its ordinary shares on the Main Market of the Saudi Exchange.
The Saudi oilfield-services firm — partly held by TAQA and Schlumberger NV — will sell 26.7 million shares, or a 30% stake, in IPO, according to a press release. The offer price will be determined following a book-building period from September 28 to 5 October.
About one-third of the IPO will be new shares, and the proceeds will be used to boost onshore and offshore fleet and expand operations in the Gulf Cooperation Council region, the company stated. Arabian Drilling currently operates 45 rigs in Saudi Arabia, both onshore and offshore, and has drilled an annual average of 275 wells over the last three years.
The final offering price of the offering will be determined after the book-building process is complete.
IPO aimed at addressing more oil, gas demand
Increasing energy has positively impacted the Kingdom’s onshore and offshore drilling activity, with the country’s rig count expected to grow significantly to meet the increasing production demand. The Kingdom’s annual contracted onshore and offshore rig count is expected to increase at a CAGR of 14% and 12%7 respectively, from 2021 to 2025.
The IPO is an “opportunity to capitalize on positive market dynamics,” noted Khalid Nouh, chairman of Arabian Drilling‘s board of directors and CEO of TAQA.
“As a key player in the sector and the leading drilling company in the Kingdom, Arabian Drilling is poised to benefit from its long-standing presence in the Kingdom and the positive tailwinds in the onshore and offshore markets, allowing it to strengthen and consolidate its market leading position in the country’s drilling services market.
Nouh added.
According to Ghassan Mirdad, CEO of Arabian Drilling, the IPO is an “important milestone” for the company and reflects its ambition to “grow and maximize” its potential.
“It is an incredibly exciting time to be in the market right now as the Kingdom’s E&P drilling contractor expenditure picks itself up from the bottom of 2021, with spending expected to reach SAR 17.6 billion ($4.7 billion) in 2025, growing at a CAGR of 14%,” Mirdad said.
