Adnoc Drilling Company has announced shareholder approval of new progressive dividend policy at its General Shareholder Meeting. The policy will see dividends grow by at least 10 per cent per annum on a dividend per share basis over the next five years (2024-2028).

The expected cumulative minimum yield from the new policy in the period 2024-2028 is more than 27 per cent.

Furthermore, the Board of Directors, at its discretion, may approve additional dividends over and above the progressive dividend policy after considering free cash flow accretive growth opportunities. Dividends are expected to be paid semi-annually, with a final dividend distributed to shareholders in the first half and the payment of the interim dividend in the second half of each fiscal year.

Commenting on the new dividend policy, Abdulmunim Saif Al Kindy, Adnoc Upstream Executive Director and Vice Chairman of Adnoc Drilling, said, “The approval of this enhanced dividend policy reflects Adnoc Drilling’s commitment to delivering increasing value to shareholders, enabled by an accelerated and multi-faceted growth strategy that embraces artificial intelligence, digitisation, and advanced technologies both in the UAE and internationally. Adnoc’s recent placement of an additional 5.5 per cent of Adnoc Drilling’s share capital means there is now a greater number of shareholders to benefit from these enhanced returns.”

On 23rd May, 2024, Adnoc completed a $935 million institutional placement of Adnoc Drilling shares. This placement represented 5.5 per cent of Adnoc Drilling’s total issued and outstanding share capital and increased the Company’s free float to 16.5 per cent.

This transaction represents the largest ever ABB (Accelerated Book Building) done in the Mena region so far, reflecting the strong demand from the market.

The higher free float resulted in a higher weight in FTSE indices and is expected to provide a pathway towards inclusion in the Morgan Stanley Capital International (MSCI) Emerging Market Index, subject to the Company meeting the relevant inclusion criteria.

MSCI inclusion will contribute to diversifying the Company’s investor base and significantly broaden awareness of the unique value proposition.

Adnoc Drilling’s strategy is focused on expanding its fleet and developing integrated drilling services to enable Adnoc’s production capacity growth, which includes leveraging the transformational opportunities presented by the UAE’s world-class unconventional energy resources.

Adnoc Drilling has established a new company - Turnwell - to focus on the considerable opportunities in unconventional resources, including an initial contract to deliver 144 wells and the potential for thousands more over time, which are incremental to the current growth guidance.