Latest news with #ShelfDrilling
Business Insider
2 days ago
- Business
- Business Insider
Shelf Drilling (SHLLF) Has a New Rating from Pareto
In a report released today, from Pareto initiated coverage with a Hold rating on Shelf Drilling (SHLLF – Research Report) and a price target of NOK8.00. The company's shares closed today at $0.82. Confident Investing Starts Here: Easily unpack a company's performance with TipRanks' new KPI Data for smart investment decisions Receive undervalued, market resilient stocks right to your inbox with TipRanks' Smart Value Newsletter Shelf Drilling has an analyst consensus of Hold. SHLLF market cap is currently $212.2M and has a P/E ratio of 1.53.
Zawya
12-03-2025
- Business
- Zawya
Arabian Drilling announces resilient FY 2024 financial performance
FY 2024 revenue increased by 4.1%, reaching SAR 3,619 million in line with guidance Strong EBITDA margin of 41.7% maintained Successful deployment of 13 new unconventional land rigs Increased total rig count to 59, reinforcing market leadership AlKhobar, Kingdom of Saudi Arabia – Arabian Drilling, or the 'Company', (Tadawul symbol: 2381), Saudi Arabia's largest onshore and offshore drilling contractor by fleet size, announced today its financial results for the fourth quarter of 2024 ('Q4 2024') and the full year ended 31 December 2024 ('FY 2024'), highlighting growth in annual revenue and a robust EBITDA margin. FY 2024 Revenue recorded SAR 3,619 million, marking a 4.1% year-on-year increase and EBITDA reached SAR 1,508 million with a strong EBITDA margin of 41.7%. Cashflow from operating activities balance recoding SAR 1,750, 28.6% higher than FY 2023. Arabian Drilling ended the year 2024, with a healthy backlog of SAR 10.3 billion with an addition of SAR 795 million in Q4 2024. Backlog growth was driven by contract extensions for two land rigs and one offshore barge, adding 17 active rig years. Arabian Drilling successfully deployed 13 new unconventional land rigs in Saudi Arabia, bringing its land fleet size to 47 rigs and the total fleet to 59 rigs by the end of 2024 reflecting an increase of 20.4% year on year and 31.1% since its listing in Tadawul in November 2022. This focused strategic expansion reinforces the Company's position as the leading drilling company in Saudi Arabia by fleet size, and positions Arabian Drilling's as a national leader in the Kingdom. The newly deployed unconventional land rigs were swiftly constructed and mobilized to support Saudi Arabia's dynamic energy needs as it advances to increase the share of natural gas in the energy mix. A key enabler of this shift is the Jafurah gas field, the largest unconventional gas development in the region. In a post-period event on 17 February 2025, the Company announced signing a Memorandum of Understanding with Shelf Drilling, a leading international shallow water offshore contractor with rig operations across the Middle East, Southeast Asia, India, West Africa, the Mediterranean and the North Sea. This strategic alliance aims to enhance Arabian Drilling's ability to expand its offshore drilling operations globally, facilitating the international deployment, through of premium jack-up rigs utilizing Shelf Drilling's extensive global footprint. The Alliance allows the Company to leverage Shelf Drilling's diverse network of international customers, expanding the reach and capabilities of both companies. Ghassan Mirdad, Chief Executive Officer of Arabian Drilling, commented on FY 2024 results: "We have demonstrated strong and resilient performance in FY 2024, successfully delivering on revenue guidance with a 4.1% increase to reach SAR 3,619 million and an EBITDA of SAR 1,508 which marks a 41.7% margin. Our competitiveness is underscored by the successful penetration of the unconventional gas market with 13 new rigs, which have significantly expanded our ability to drive sustainable future growth of the company. Now that we are witnessing an influx of drilling tenders internationally, the alliance with Shelf Drilling comes at an opportune time as we are currently marketing 3 available rigs with the alliance. This partnership will provide us with a license to operate globally to expand our presence in international regions with high demand for offshore rigs. Hubert Lafeuille, Chief Financial Officer of Arabian Drilling, commented: "We are delighted to report that we have achieved revenue growth for the fiscal year despite the challenges faced in 2024. Our EBITDA remains strong, reflecting solid profitability and operational efficiency. We have made notable improvements in our financial position, demonstrated by improved net working capital and a robust debt profile. Furthermore, our ability to maintain a healthy backlog of SAR 10.3 billion was supported by our ability to secure strategic contract extensions. This highlights our adaptability and strategic foresight in a Saudi Arabia's dynamic market. Our strong balance sheet enables us to pursue geographical expansion, enhancing our ability to swiftly reposition ourselves to capture targeted growth opportunities that require our expertise. " While Arabian Drilling generated a strong EBITDA in 2024, higher net financing expenses and increased depreciation costs that comes expanding in the unconventional market in the Kingdom, impacted the year's adjusted net income, which, after accounting for a one-time non-cash impairment charge of SAR 105 million recognized in Q2, declined by 29.5% year-on-year to SAR 426 million. This decline includes the impact of interest charges on loans, as well as the impact of capitalized interest in 2023. The increase in depreciation and amortization expenses is primarily attributed to the expanded asset base. This includes the addition of three offshore rigs in the latter half of 2023 and thirteen unconventional land rigs in 2024. Rig Contract Renewal Arabian Drilling has a total of 24 rigs, which include 21 land rigs and 3 offshore rigs, with contracts set to expire in 2025. Out of the 21 land rigs, 11 are contracted with SLB for the gas Lumpsum Turnkey (LSTK) project and include a one-year extension option. Considering the significance of gas drilling in supporting Saudi Arabia's transition towards increased usage of gas for electricity generation, it is anticipated that the extension option for all 11 rigs will be exercised. Seven land rigs, primarily gas, are directly contracted with Aramco and are currently under negotiation for renewal. The remaining rigs are bearing extension options, or under negotiation for renewal. For offshore operations, three rigs nearing contract completion, one of which is currently suspended, while one rig is contracted with KJO and is undergoing contract renewal negotiations. The final rig, which is leased, is currently contracted with Aramco and has a one-year extension option as well as a corresponding lease extension option. This arrangement grants flexibility to extend or terminate the lease based on the contract renewal status. Strategic Priorities for 2025 For FY 2025, Arabian Drilling outlines its strategic priorities to drive growth and deliver on its core mission and values. Increase fleet utilization – both in the land and offshore segments, locally and internationally. Supporting KSA's Energy Transition – Arabian Drilling will continue to support Saudi Arabia's energy transition plans by providing advanced gas drilling solutions, mainly in the unconventional gas drilling sector. Global Expansion – With the alliance with Shelf Drilling in place, the Company aims to expand its operations to lucrative international regions with high demand for drilling services at minimal cost. Health, Safety, and Environment (HSE) – the Company continues to significantly enhance Health, Safety, and Environment activities, ensuring the highest standards are upheld while prioritizing employee welfare through comprehensive safety programs and ongoing training. Short-term Guidance In light of the prevailing uncertainty in the oil and gas sector, coupled with current geopolitical and economic factors that may impact operations, management has opted to provide quarterly guidance, rather than on an annual basis. This approach allows the Company to provide more realistic guidance to the market, supporting fair market valuation. For the next quarter, the Company expects its financial performance to continue to reflect the resilience and operational efficiency demonstrated in 2024. For Q1 2025 revenue, we expect to maintain the same level compared to Q4 2024 with a 5% upside. Our guidance reflects a cautious outlook in an unpredictable, but evolving market environment. Dividends The Company's Board has approved a dividend of SAR 1.35 per share for H2'24, to be paid in April 2025, bringing the total dividend for FY'24 to SAR 240.3 million. The Company will continue to assess dividends payments on a semi-annual basis, aiming to maintain a balance between supporting investments for sustainable long-term growth and returning value to shareholders.
Arab News
02-03-2025
- Business
- Arab News
Saudi, UAE drilling giants team up to accelerate international expansion
RIYADH: Saudi-based Arabian Drilling and the UAE-headquartered Shelf Drilling have entered three global tenders as part of their strategic alliance to expand international operations. The partnership, formalized through a memorandum of understanding signed in early February, seeks to leverage Arabian Drilling's fleet of rigs alongside Shelf Drilling's extensive expertise to accelerate global expansion and unlock new market opportunities. Greg O'Brien, CEO of Shelf Drilling, confirmed that the alliance has already begun executing its objectives by bidding for project proposals across different regions. 'We have participated in three different opportunities. We have a longer list of target opportunities,' O'Brien said in an interview with Arab News. He noted that while the alliance is taking an aggressive approach to exploring international prospects, the financial impact of these tenders will likely not be seen until late 2025 or early 2026 due to the time required for rig mobilization and contract execution. Strategic rationale As an international offshore extraction contractor, Shelf Drilling operates in multiple regions and continues to seek expansion opportunities while optimizing costs. O'Brien highlighted that maintaining operational efficiency is a priority, particularly in a competitive market. 'We have 14 rigs right now, all but one of those are contracted, and that one we expect to have contracted really soon, and we see additional opportunities to deploy newer, more capable rigs in other markets where we have a footprint like West Africa and Southeast Asia,' he said. The alliance allows Shelf Drilling to expand its capacity without significant capital expenditure on new assets. 'This alliance with Arabian Drilling gives us access to a few additional rigs that we believe we can deploy in the contract opportunities and markets that we know well without having to buy other assets,' O'Brien stated. For Arabian Drilling, the alliance is a critical step in its broader international growth strategy. The company, which operates 36 rigs, has three currently suspended. O'Brien explained that these three rigs share similarities with those used by Shelf Drilling, making their international deployment more seamless. By leveraging Shelf Drilling's established presence in key markets, Arabian Drilling can re-enter the global scene more efficiently. Talking to Arab News, Ghassan Mirdad, CEO of Arabian Drilling, emphasized that the partnership aligns with the company's long-term ambitions to expand beyond the Kingdom. 'When we go back in time to when we were listed, part of our strategy was to grow outside of Saudi Arabia; it was clearly the intention to grow in the land market, not the offshore,' he said. 'However, with the suspension of rigs, we had to accelerate the expansion out of Saudi Arabia.' The alliance provides Arabian Drilling with the necessary framework to establish a presence in global markets without having to build operations from scratch. 'And this (alliance) is the license to operate outside of Saudi,' Mirdad added. He further underscored the increasing demand for offshore drilling worldwide. 'Today, I can easily name on top of my head four or five countries that are in desired need of offshore jack-ups.' Mirdad noted that while entering these markets independently would require significant investment, partnering with an international player like Shelf Drilling facilitates market access. 'With this alliance, automatically we have the license to operate in all of these rigs, we have the local knowledge that Shelf has, and it gives us access to all the tenders,' he said. Opportunities and plans Several international markets present promising opportunities for new contracts, with West Africa emerging as a key target region. 'India, Southeast Asia, West Africa are markets we know extremely well. West Africa is a place that has a decent number of new projects that are incremental to existing activity in that region, and it's not quite as competitive,' O'Brien said. 'Southeast Asia holds great opportunities as well, but we see a better opportunity margin in West Africa,' he added. Mirdad acknowledged that the alliance's initial three rigs would not be sufficient to meet the growing demand for offshore drilling services. 'When we looked at the opportunities, we, as Arabian Drilling, looked at each other and realized we don't have enough rigs,' he said. He indicated that the company is actively considering further expansion. 'The three rigs are not enough. So, I'm very upbeat to giving the market some good news in the short term,' Mirdad said. When asked about plans for additional rig deployment, he explained that the alliance is a long-term strategic move rather than a short-term fix. 'In the first instance, it might seem like we're doing this alliance to secure these three rigs, which is true, but this alliance is not a short-term fix; it is long-term.' He further highlighted that with a strong balance sheet and growing international demand, Arabian Drilling is well-positioned to explore additional rig deployments beyond the initial three. Financial outlook and growth strategy When asked about the financial impact of the alliance, Mirdad stated that Arabian Drilling's strong balance sheet allows it to focus on growth rather than relying solely on financial maneuvers to expand. 'Our relations with the banks are really good, so access to cash is not a problem for growth, but this is a great avenue for us and Shelf to grow and not to miss out on any international opportunities,' he said. O'Brien added that current oil prices remain at levels that support offshore rig demand, strengthening the alliance's financial rationale. He emphasized that while the primary goal is to establish a broader global footprint, the venture is designed to generate long-term profits for both companies. 'The alliance will definitely aim to generate profit and revenue for both companies, and the approach will be opportunity-specific,' O'Brien said. Global industry trends and long-term demand O'Brien highlighted that the alliance aligns with global trends in the shallow-water drilling market, particularly as demand for offshore rigs remains strong. 'There are about 425 jack-ups around the world, the Middle East is the biggest market, and Saudi Arabia is the largest market for offshore shallow water drilling, but there is stable demand in other parts of the world,' he said. He pointed out that the supply of jack-up rigs in markets outside the Middle East has remained relatively stagnant and is expected to decline in the coming years. This presents an opportunity for drilling contractors to capitalize on increasing demand. 'The supply side in other markets has been flat and would most likely be declining in the years to come, which is a good thing for a drilling contractor,' he added. O'Brien expressed confidence in long-term global oil demand, which will likely drive continued demand for drilling services. 'We believe oil demand will continue to grow around the world for the next five to 10 years, or even more,' he said. Mirdad further explained that new jack-up rigs are rarely built, leading to a gradual phasing out of older rigs and creating a supply gap in the offshore drilling market. 'That means that you'll have demand but not enough rigs available,' he added.
Arab News
02-03-2025
- Business
- Arab News
Saudi-UAE drilling giants team up to accelerate international expansion
RIYADH: Saudi-based Arabian Drilling and the UAE-headquartered Shelf Drilling have entered three global tenders as part of their strategic alliance to expand international operations. The partnership, formalized through a memorandum of understanding signed in early February, seeks to leverage Arabian Drilling's fleet of rigs alongside Shelf Drilling's extensive expertise to accelerate global expansion and unlock new market opportunities. Greg O'Brien, CEO of Shelf Drilling, confirmed that the alliance has already begun executing its objectives by bidding for project proposals across different regions. 'We have participated in three different opportunities. We have a longer list of target opportunities,' O'Brien said in an interview with Arab News. He noted that while the alliance is taking an aggressive approach to exploring international prospects, the financial impact of these tenders will likely not be seen until late 2025 or early 2026 due to the time required for rig mobilization and contract execution. Strategic rationale As an international offshore extraction contractor, Shelf Drilling operates in multiple regions and continues to seek expansion opportunities while optimizing costs. O'Brien highlighted that maintaining operational efficiency is a priority, particularly in a competitive market. 'We have 14 rigs right now, all but one of those are contracted, and that one we expect to have contracted really soon, and we see additional opportunities to deploy newer, more capable rigs in other markets where we have a footprint like West Africa and Southeast Asia,' he said. The alliance allows Shelf Drilling to expand its capacity without significant capital expenditure on new assets. 'This alliance with Arabian Drilling gives us access to a few additional rigs that we believe we can deploy in the contract opportunities and markets that we know well without having to buy other assets,' O'Brien stated. For Arabian Drilling, the alliance is a critical step in its broader international growth strategy. The company, which operates 36 rigs, has three currently suspended. O'Brien explained that these three rigs share similarities with those used by Shelf Drilling, making their international deployment more seamless. By leveraging Shelf Drilling's established presence in key markets, Arabian Drilling can re-enter the global scene more efficiently. Talking to Arab News, Ghassan Mirdad, CEO of Arabian Drilling, emphasized that the partnership aligns with the company's long-term ambitions to expand beyond the Kingdom. 'When we go back in time to when we were listed, part of our strategy was to grow outside of Saudi Arabia; it was clearly the intention to grow in the land market, not the offshore,' he said. 'However, with the suspension of rigs, we had to accelerate the expansion out of Saudi Arabia.' The alliance provides Arabian Drilling with the necessary framework to establish a presence in global markets without having to build operations from scratch. 'And this (alliance) is the license to operate outside of Saudi,' Mirdad added. He further underscored the increasing demand for offshore drilling worldwide. 'Today, I can easily name on top of my head four or five countries that are in desired need of offshore jack-ups.' Mirdad noted that while entering these markets independently would require significant investment, partnering with an international player like Shelf Drilling facilitates market access. 'With this alliance, automatically we have the license to operate in all of these rigs, we have the local knowledge that Shelf has, and it gives us access to all the tenders,' he said. Opportunities and plans Several international markets present promising opportunities for new contracts, with West Africa emerging as a key target region. 'India, Southeast Asia, West Africa are markets we know extremely well. West Africa is a place that has a decent number of new projects that are incremental to existing activity in that region, and it's not quite as competitive,' O'Brien said. 'Southeast Asia holds great opportunities as well, but we see a better opportunity margin in West Africa,' he added. Mirdad acknowledged that the alliance's initial three rigs would not be sufficient to meet the growing demand for offshore drilling services. 'When we looked at the opportunities, we, as Arabian Drilling, looked at each other and realized we don't have enough rigs,' he said. He indicated that the company is actively considering further expansion. 'The three rigs are not enough. So, I'm very upbeat to giving the market some good news in the short term,' Mirdad said. When asked about plans for additional rig deployment, he explained that the alliance is a long-term strategic move rather than a short-term fix. 'In the first instance, it might seem like we're doing this alliance to secure these three rigs, which is true, but this alliance is not a short-term fix; it is long-term.' He further highlighted that with a strong balance sheet and growing international demand, Arabian Drilling is well-positioned to explore additional rig deployments beyond the initial three. Financial outlook and growth strategy When asked about the financial impact of the alliance, Mirdad stated that Arabian Drilling's strong balance sheet allows it to focus on growth rather than relying solely on financial maneuvers to expand. 'Our relations with the banks are really good, so access to cash is not a problem for growth, but this is a great avenue for us and Shelf to grow and not to miss out on any international opportunities,' he said. O'Brien added that current oil prices remain at levels that support offshore rig demand, strengthening the alliance's financial rationale. He emphasized that while the primary goal is to establish a broader global footprint, the venture is designed to generate long-term profits for both companies. 'The alliance will definitely aim to generate profit and revenue for both companies, and the approach will be opportunity-specific,' O'Brien said. Global industry trends and long-term demand O'Brien highlighted that the alliance aligns with global trends in the shallow-water drilling market, particularly as demand for offshore rigs remains strong. 'There are about 425 jack-ups around the world, the Middle East is the biggest market, and Saudi Arabia is the largest market for offshore shallow water drilling, but there is stable demand in other parts of the world,' he said. He pointed out that the supply of jack-up rigs in markets outside the Middle East has remained relatively stagnant and is expected to decline in the coming years. This presents an opportunity for drilling contractors to capitalize on increasing demand. 'The supply side in other markets has been flat and would most likely be declining in the years to come, which is a good thing for a drilling contractor,' he added. O'Brien expressed confidence in long-term global oil demand, which will likely drive continued demand for drilling services. 'We believe oil demand will continue to grow around the world for the next five to 10 years, or even more,' he said. Mirdad further explained that new jack-up rigs are rarely built, leading to a gradual phasing out of older rigs and creating a supply gap in the offshore drilling market. 'That means that you'll have demand but not enough rigs available,' he added.
Arabian Business
19-02-2025
- Business
- Arabian Business
Arabian Drilling, Shelf Drilling sign MoU for global jack-up rig expansion
Arabian Drilling and Shelf Drilling announced the signing of a Memorandum of Understanding (MOU) for a strategic alliance to deploy some of the former's premium jack-up rigs internationally. The collaboration is also aimed at expanding the reach and capabilities of both companies. Under the alliance, Arabian Drilling, the largest onshore and offshore drilling company in Saudi Arabia by fleet size, will gain access to Shelf Drilling's extensive international operating platform and diverse customer relationships. Shelf Drilling, on the other hand, will seek to use some of Arabian Drilling's high-specification jack-up rigs to meet specific contract requirements. By combining resources, technical expertise and operational excellence, the alliance will be positioned to deliver outstanding services to customers and increase the competitiveness of both companies, they said. Ghassan Mirdad, CEO of Arabian Drilling, said the alliance provides the company a clear path to execute its strategy to develop an international footprint. 'Shelf Drilling's expertise and international presence will bring our advanced, high-specification rigs to new markets,' he said. Greg O'Brien, CEO of Shelf Drilling, said the alliance marks a significant step in the company's commitment to delivering operational excellence and best-in-class services to its customers. 'By leveraging Shelf Drilling's extensive international presence, unique focus on safety, and fit-for-purpose business strategy with Arabian Drilling's premium jack-up rigs, we are well-positioned to unlock new opportunities in our core markets and drive value for our stakeholders,' he said. The Oslo Stock Exchange-listed Shelf Drilling is a leading international shallow water offshore drilling contractor with rig operations across the Middle East, Southeast Asia, India, West Africa, the Mediterranean and the North Sea.
