PTEN Signs Partnership with ADNOC Drilling

By Bobby Samwell • Monday, May 13 15:24 • Permanent Link

Patterson-UTI Energy, Inc. has announced a significant development in its operations, with the signing of a non-binding term sheet with ADNOC Drilling, the largest national drilling contractor in the Middle East. The agreement involves Patterson-UTI holding a minority equity interest in Turnwell Industries LLC OPC, a company formed by ADNOC Drilling, which has been awarded a $1.7 billion contract to drill and complete 144 unconventional wells for Abu Dhabi National Oil Company (ADNOC).

In exchange for the minority equity interest, Patterson-UTI expects to primarily provide drilling, completion, and other oilfield service expertise to Turnwell, as well as a limited cash contribution. Although the company does not plan to initially contribute or provide drilling and completion equipment, it may do so in the future depending on the long-term capital return opportunity.

Patterson-UTI's CEO, Andy Hendricks, expressed excitement about the partnership, emphasizing the potential for substantial growth prospects over the course of many years. He also highlighted that the agreement is not expected to change the company's previously announced capital expenditure budget or impact its expectation to return at least $400 million to shareholders in 2024 through dividends and share repurchases.

This development comes as Patterson-UTI continues to position itself as a premier drilling and completions company and technology leader, aiming to leverage its expertise and knowledge from experience in the United States to deliver U.S. shale type efficiencies to the drilling and completions process in the United Arab Emirates.

As a leading provider of drilling and completion services to oil and natural gas exploration and production companies, Patterson-UTI's strategic move to partner with ADNOC Drilling presents an opportunity for the company to grow its presence in the Middle East in a capital-efficient manner, while also creating significant value for its partners, the customer, and its shareholders. Today the company's shares have moved 0.5% to a price of $10.95. If you want to know more, read the company's complete 8-K report here.

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