PHOTO
Citi Research has raised the target share price of ADNOC Drilling following the $733 million contract from ADNOC Offshore for three island drilling rigs at the offshore Zakum field.
The target price was raised to 4.80 UAE dirhams ($1.30) from AED 4.70 previously. The stock closed at AED 4.15 on Wednesday.
"We expect the $733M contract to be closer to 10 years in duration, offering accretive island dayrates – +4% on a weighted average basis – and underpinned by the 11-13% IRR framework," said analyst Oliver Connor in a note on Thursday.
Citi, which has a Buy rating on ADNOC Drilling, said the company's "137 strong rig fleet positions it as the largest drilling company in MENA, with near term activity set to bring this to 142 by end 2024".
It expects the driller to realise a net income of $1.12 billion in 2024.
(Writing by Brinda Darasha; editing by Seban Scaria)
