Arabian Drilling Co. (ADC), one of the largest national companies for onshore and offshore oil and gas drilling in Saudi Arabia, agreed with Saudi Aramco to suspend contracts for two offshore drilling rigs and not to extend the current contract for the third rig.
ADC stated in a disclosure to the Saudi Stock Exchange (Tadawul) that contracts for two offshore drilling rigs were suspended for up to 12 months, and an agreement was reached not to extend the current contract for a third platform that expires this June.
The reason was attributed to “due to significant capex investments that would have been required to prolong the contract.”
The Company is currently engaged with various parties regarding new commercial opportunities to reposition the rigs, including outside of Saudi Arabia.
According to an announcement on Tadawul, Arabian Drilling expects revenue to grow year-on-year, in line with the previously announced indicative expectations for the year 2024, with a value ranging between SAR 3.6 billion and SAR 3.9 billion, despite the expected revenue impact of approximately SAR 190 million due to decreased offshore rig activity.
The revenue growth is further supported by the early contribution of three Unconventional Gas Land Rigs that commenced their contract ahead of the initially planned start-up date, with the remaining seven rigs set to gradually come online during the third quarter of 2024.
