Arabian Drilling CEO sees topline of SAR 0.9-1B in Q4 2023

One of Arabian Drilling's onshore rigs

Ghassan Mirdad, CEO of Arabian Drilling Co., expects the company’s gross revenues for the fourth quarter of 2023 to range between SAR 900 million and SAR 1 billion.

In a call with Argaam, Mirdad added that revenues for Q3 2023 rose by SAR 129 million, or 16% quarter on quarter (QoQ), to SAR 920 million, from SAR 791 million. This surge mostly stemmed from the startup of three offshore rigs in Q3 2023, which contributed SAR 110 million.

Arabian Drilling posted robust financial results in the first nine months of 2023. However, the year-on-year (YoY) profit decline in Q3 2023 was due to the recognition of a one-off tax adjustment of SAR 64 million as the ownership of partner SLB (formerly Schlumberger) fell from 49% to 34.3% after floating shares in the Saudi Exchange (Tadawul). Post-adjustment income for the three-month period totaled SAR 140 million, compared to SAR 149 million in the same period last year, according to the top executive.

On the nine-month revenues, the CEO said that the land segment contributed SAR 1.47 billion, an increase of 5% YoY. Meanwhile, the offshore segment generated SAR 1 billion, higher 82% YoY after the uptick in the number of offshore rigs.

Mirdad pointed out that the company's rigs count is constantly growing. It currently owns 12 offshore rigs and 38 land rigs, running at a utilization rate of 100% and 92% for offshore and land rigs, respectively.

He added that Arabian Drilling won several contracts from Saudi Aramco for 10 additional onshore rigs assigned to the oil giant’s unconventional gas program in the Kingdom, which are expected to commence work in Q3 2024, bringing the total number of rigs to 60 by the end of the quarter.

Arabian Drilling’s contracts backlog, according to the CEO, rose to a record of SAR 12.7 billion at the end of Q3 2023, compared to SAR 9.5 billion in the same period last year. This was driven by the addition of 10 new rigs to the unconventional gas program, along with the extension of some existing onshore and offshore contracts.

A shift towards ramping up offshore rigs across Saudi Arabia was evident following the Kingdom’s announcement of raising its daily oil production capacity to 13 million barrels per day. Saudi Aramco already contracted several companies last year, including Arabian Drilling, whose rigs arrived in due time in late 2022 and through 2023, said the CEO.

He further indicated that future increases in the number of rigs will be largely from onshore contracts under Saudi Aramco’s unconventional gas program.