ADNOC Drilling Company P.J.S.C.

ADNOC DRILLING COMPANY P.J.S.C.

Reports and consolidated financial

statements for the year ended 31 December
2024
ADNOC Drilling Company P.J.S.C.
Reports and consolidated financial statements
for the year ended 31 December 2024

Pages

Directors’ report 1–2

Independent auditor’s report 3–8

Consolidated statement of financial position 9

Consolidated statement of profit or loss and other comprehensive

10
income

Consolidated statement of changes in equity 11

Consolidated statement of cash flows 12 – 13

Notes to the consolidated financial statements 14 – 53

ADNOC Drilling Company P.J.S.C. 1

Directors’ report
for the year ended 31 December 2024

The Directors are pleased to submit their report, together with the audited consolidated financial statements
of ADNOC Drilling Company P.J.S.C. (“the Company”) and its subsidiary (“the Group”) for the year ended
31 December 2024.

Board of Directors:

The Directors of the Company are:

Chairman H. E. Dr. Sultan Ahmed Al Jaber

Vice Chairman Abdulmunim Saif Al Kindy
Members Dr. Abdulla Al Jarwan
Musabbeh Al kaabi
Khaled Al Zaabi
Mohamed Saif Al Aryani
Katherine Wallgren

Principal activities

The Group is engaged in providing start to finish drilling and construction services across both conventional
and unconventional reservoirs, and the hiring out of onshore and offshore drilling rigs to parties involved in
onshore and offshore oil and gas exploration and production.

Financial highlights

Consolidated statement of financial position

The Group’s consolidated financial position remains very healthy showing net assets at 31 December 2024
of USD 3,810,169 thousand (2023: USD 3,264,221 thousand) with the increase in total net assets mainly
due to the profit made in excess of dividend payments in the current year.

Consolidated statement of profit or loss and other comprehensive income:

The Group recognised revenue for the year of USD 4,034,222 thousand (2023: USD 3,056,865 thousand).
Profit after tax for the year was USD 1,303,566 thousand (2023: USD 1,032,799 thousand). The increase
in revenue was due to an increase in rig fleet and additional drilling services provided to ADNOC Onshore
and ADNOC Offshore.

Consolidated statement of cash flows:

Net cash generated from operating activities amounted to USD 1,653,666 thousand (2023: USD 1,355,056
thousand), the increase is mainly due to movement in trade and other payables and related party balances.
Net cash used in investing activities amounted to USD 1,015,153 thousand (2023: USD 1,049,044
thousand) which relates to additions to property and equipment and investments made in joint ventures. Net
cash used in financing activities amounted to USD 662,347 thousand (2023: USD 277,404 thousand) which
mainly relates to finance cost, dividend payments and net borrowings movement.
 Deloitte & Touche (M.E.)
Level 11, Al Sila Tower
Abu Dhabi Global Market Square
Al Maryah Island
P.O. Box 990
Abu Dhabi
United Arab Emirates

Tel: +971 (0) 2 408 2424

Fax:+971 (0) 2 408 2525
www.deloitte.com

August 17th, 2016

INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ADNOC DRILLING COMPANY P.J.S.C
REPORT ON THE AUDIT OF THE CONSOLIDATED FINANCIAL STATEMENTS

Opinion

We have audited the consolidated financial statements of ADNOC Drilling Company P.J.S.C. (“the
Company) and its subsidiary (the “Group”), which comprise the consolidated statement of
financial position as at 31 December 2024, and the consolidated statement of profit or loss and
other comprehensive income, consolidated statement of changes in equity and consolidated
statement of cash flows for the year then ended, and notes to the consolidated financial
statements, including material accounting policy information.

In our opinion, the accompanying consolidated financial statements present fairly, in all material
respects, the consolidated financial position of the Group as at 31 December 2024, and its
consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with IFRS Accounting Standards as issued by the International Accounting Standards
Board (IASB).

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (ISAs) and the
applicable requirements of Abu Dhabi Accountability Authority (ADAA) Chairman Resolution No.
88 of 2021 Regarding Financial Statements Audit Standards for the Subject Entities. Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for
the Audit of the Consolidated Financial Statements section of our report. We are independent of
the Group in accordance with the International Ethics Standards Board for Accountants’ Code of
Ethics for Professional Accountants (IESBA Code) together with the other ethical requirements
that are relevant to our audit of the Group’s consolidated financial statements in the United Arab
Emirates, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the IESBA Code. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgement, were of most significance
in our audit of the consolidated financial statements of the current period. The key audit matter
was addressed in the context of our audit of the consolidated financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on this matter.
 INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ADNOC DRILLING COMPANY P.J.S.C. (continued)

Key Audit Matters (Continued)

Key audit matter How our audit addressed the key audit matter
Revenue Recognition
The Group reported revenue as disclosed Our audit approach included a combination of test of
in Note 19 from drilling and oilfield services controls and substantive procedures and included,
for the year ended 31 December 2024, of inter alia, the following:
which over 93% is attributable to contracts
with its related parties, ADNOC Onshore • Understanding the significant revenue
and ADNOC Offshore. processes and identifying the relevant controls
related to revenue recognition;
The Group has a large volume of • Evaluating the design and testing the operating
transactions with related parties in the effectiveness of manual controls over sales to
normal course of business. There is related parties;
inherent risk around occurrence of revenue • Analysing relevant agreements and determining
recognised given over 93% of the that transactions were recorded in accordance
transactions are with related parties. with the substance of the relevant agreements.
• Comparing revenue amounts to the prior year. If
Due the materiality of the amounts involved we identified any unexpected variance, we
and large volume of transactions we have carried out more focused testing;
considered this to be a key audit matter. • Performing test of details on a sample basis to
confirm that the revenue was recognised in
The Group’s accounting policies relating to accordance with the terms of relevant
revenue recognition are presented in note 3 agreements;
to the consolidated financial statements • Obtaining direct confirmations from related
and details about the Group’s revenue are parties of the revenue recognised during the
disclosed in note 18 to the consolidated year and reconciling these amounts with the
financial statements. billings and accruals made during the year;
• Performing sales cut-off procedures by selecting
a sample of invoices before and after year-end
to determine if sales are recorded in the
appropriate period;
• Assessing whether the revenue recognition
criteria adopted by the Group is appropriate and
is in accordance with the requirements of IFRS
Accounting Standards; and
• Assessing the adequacy of disclosures in the
consolidated financial statements relating to
revenue against the requirements of IFRS
Accounting Standards.
 INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ADNOC DRILLING COMPANY P.J.S.C. (continued)

Other Information
Management is responsible for the other information. The other information comprises the
Directors’ report, which we obtained prior to the date of this auditor’s report, and the Chairman’s
statement, CEO statement and the other information in the annual report, which are expected to
be made available to us after that date. The other information does not include the consolidated
financial statements and our auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we
do not express any form of assurance or conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read
the other information and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.

If, based on the work we have performed on the other information that we obtained prior to the
date of this auditor’s report, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.

When we will read the Chairman’s Message, CEO’s Message and the other information in the
annual report, if we conclude that there is a material misstatement therein, we will be required to
communicate the matter to those charged with governance and consider whether a reportable
irregularity exists in terms of the auditing standards, which must be reported.

Responsibilities of Management and Those Charged with Governance for the Consolidated
Financial Statements
Management is responsible for the preparation and fair presentation of the consolidated financial
statements in accordance with IFRS Accounting Standards as issued by the IASB and their
preparation in compliance with the applicable provisions of the articles of association of the
Company and the UAE Federal Decree Law (32) of 2021, and for such internal control as
management determines is necessary to enable the preparation of consolidated financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to
going concern and using the going concern basis of accounting unless management either
intends to liquidate the Company or to cease operations, or has no realistic alternative but to do
so.

Those charged with governance are responsible for overseeing the Company’s financial reporting
process.
 INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ADNOC DRILLING COMPANY P.J.S.C. (continued)

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial
statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the
applicable requirements of ADAA Chairman’s Resolution No. 88 of 2021 Regarding Financial
Statements Audit Standards for the Subject Entities will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with ISAs and the applicable requirements of ADAA Chairman’s
Resolution No. 88 of 2021 Regarding Financial Statements Audit Standards for the Subject
Entities, we exercise professional judgement and maintain professional scepticism throughout the
audit. We also:

• Identify and assess the risks of material misstatement of the consolidated financial
statements, whether due to fraud or error, design and perform audit procedures responsive
to those risk, and obtain audit evidence that is sufficient and appropriate to provide a basis
for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher
than the one resulting from error, as fraud may involve collusion, forgery, intentional
omission, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing
an opinion on the effectiveness of the internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of management’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to the related disclosures in the consolidated
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a
going concern.
• Evaluate the overall presentation, structure and content of the consolidated financial
statements, including the disclosures, and whether the consolidated financial statements
represent the underlying transactions and events in a manner that achieves fair presentation.
 INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ADNOC DRILLING COMPANY P.J.S.C. (continued)

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements (continued)

• Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding
the financial information of the entities or business units within the group as a basis for
forming an opinion on the group financial statements. We are responsible for the direction,
supervision and review of the audit work performed for purposes of the group audit. We
remain solely responsible for our audit opinion.

We communicate with those charged with governance, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in
internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the consolidated financial statements of the
current period and are therefore the key audit matters. We describe these matters in our auditor’s
report unless law or regulation precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the
public interest benefits of such communication.
 INDEPENDENT AUDITOR’S REPORT
TO THE SHAREHOLDERS OF ADNOC DRILLING COMPANY P.J.S.C. (continued)

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

Further, as required by the UAE Federal Decree Law. (32) of 2021, we report for the year ended
31 December 2024 that:

• We have obtained all the information we considered necessary for the purposes of our audit;
• The consolidated financial statements have been prepared and comply, in all material
respects, with the applicable provisions of the UAE Federal Decree law (32) of 2021;
• The Group has maintained proper books of account;
• The financial information included in the Directors’ report is consistent with the books of
account of the Group;
• As disclosed in note 8 to the consolidated financial statements, the Group has made
investments during the financial year ended 31 December 2024;
• Note 18 to the consolidated financial statements discloses material related party transactions,
balances, and the terms under which they were conducted; and
• Based on the information that has been made available to us, nothing has come to our
attention which causes us to believe that the Company has contravened during the financial
year ended 31 December 2024 any of the applicable provisions of the UAE Federal Decree
Law. (32) of 2021 or of its Articles of Association which would materially affect its activities or
its consolidated financial position as at 31 December 2024.

Further, as required by ADAA Chairman Resolution No. 88 of 2021 Regarding financial

statements Audit Standards for the Subject Entities, we report in connection with our audit of the
consolidated financial statements for the year ended 31 December 2024, that nothing has come
to our attention that causes us to believe that the Group has not complied, in all material respects,
with any of the provisions of the following laws, regulations and circulars as applicable, which
would materially affect its activities or the consolidated financial statements as at 31 December
2024:

• Its Articles of Association; and

• Relevant provisions of the applicable laws, resolutions and circulars that have an impact on
the Group’s consolidated financial statements.

Deloitte & Touche (M.E.)

Faeza Sohawon
Registration No. 5508
12 February 2025
Abu Dhabi
United Arab Emirates
ADNOC Drilling Company P.J.S.C. 10

Consolidated statement of profit or loss and other comprehensive income

for the year ended 31 December 2024

31 December 31 December
2024 2023
Notes USD ‘000 USD ‘000

Revenue 19 4,034,222 3,056,865

Direct cost 20 (2,337,407) (1,848,729)

Gross profit 1,696,815 1,208,136

General and administrative expenses 21 (155,358) (126,334)

Other income - net 6,388 9,847
Share of results of joint ventures 8 8,490 -
Finance cost 23 (135,995) (74,577)
Finance income 11,736 15,727

Profit before tax 1,432,076 1,032,799

Income tax 30 (128,510) -

Profit after tax 1,303,566 1,032,799

Other comprehensive income for the year - -

Total comprehensive income

for the year 1,303,566 1,032,799

Earnings per share:

Basic and diluted 29 0.081 0.065

The accompanying notes form an integral part of these consolidated financial statements.
ADNOC Drilling Company P.J.S.C. 11

Consolidated statement of changes in equity

for the year ended 31 December 2024

Share Share Treasury Statutory Retained Total

capital premium shares reserve earnings equity
USD ‘000 USD ‘000 USD ‘000 USD ‘000 USD ‘000 USD ‘000

Balance at 1 January 2023 435,671 - - 140,572 2,354,738 2,930,981

Total comprehensive income for the
1,032,799 1,032,799
year - - - -
Transfer to statutory reserve - - - 77,264 (77,264) -
Dividends (note 24) - - - - (699,559) (699,559)

Balance at 31 December 2023 435,671 - - 217,836 2,610,714 3,264,221

Balance at 1 January 2024 435,671 - - 217,836 2,610,714 3,264,221

Total comprehensive income for the
year - - - - 1,303,566 1,303,566
Own shares acquired in the year - 504 (5,670) - - (5,166)
Dividends (note 24) - - - - (752,452) (752,452)

Balance at 31 December 2024 435,671 504 (5,670) 217,836 3,161,828 3,810,169

The accompanying notes form an integral part of these consolidated financial statements.
ADNOC Drilling Company P.J.S.C. 12

Consolidated statement of cash flows

for the year ended 31 December 2024

31 December 31 December
2024 2023
USD ‘000 USD ‘000
Cash flows from operating activities
Profit before tax 1,432,076 1,032,799
Adjustments for:
Depreciation of property and equipment 426,473 368,110
Depreciation of right-of-use assets 28,435 19,589
Amortisation of intangible assets 3,544 3,548
Lost in hole of property and equipment – net - 2,016
Write off of property and equipment - net 3,235 -
Gain on disposal of property and equipment (510) -
Employees end of service benefit charge - net 22,464 130
Share of results of joint ventures (8,490) -
Allowance for slow-moving inventories 5,495 1,114
Expected credit loss charge 9,000 10,000
Finance cost 135,995 74,577
Finance income (11,736) (15,727)
Operating cash flows before changes in working capital 2,045,981 1,496,156

Changes in working capital on account of:

Inventories (22,471) (53,852)
Advances (576) 3,754
Trade and other receivables (32,012) (38,519)
Due from related parties (380,586) (67,650)
Trade and other payables 164,563 240,783
Due to related parties 613 (216,522)

Cash generated from operating activities 1,775,512 1,364,150

Employees’ end of service benefit paid (6,939) (9,094)
Income tax paid (114,907) -
Net cash from operating activities 1,653,666 1,355,056

Cash flows from investing activities

Purchase of property and equipment (758,409) (1,062,274)
Purchase of intangible assets (3,413) -
Acquisition of investment in joint ventures (266,750) -
Finance income received 13,419 13,230
Net cash used in investing activities (1,015,153) (1,049,044)

The accompanying notes form an integral part of these consolidated financial statements.
ADNOC Drilling Company P.J.S.C. 13

Consolidated statement of cash flows

for the year ended 31 December 2024 (continued)

31 December 31 December
2024 2023
USD ‘000 USD ‘000

Cash flows from financing activities

Lease liabilities paid (75,055) (10,129)
Proceed from borrowings – net 824,780 492,264
Repayment of borrowings (522,294) -
Dividends paid (752,452) (699,559)
Finance cost paid (132,160) (59,980)
Purchase of treasury shares (273,241) -
Sales of treasury shares 268,075 -

Net cash used in financing activities (662,347) (277,404)

Net (decrease)/increase in cash and cash equivalents (23,834) 28,608

Cash and cash equivalent at the beginning of the year 354,122 325,514

Cash and cash equivalents at the end of the year 330,288 354,122

Non-cash transactions:

Additions and modifications to right-of-use assets and lease (1,999) 159,591

liabilities

Proceed from borrowings - 1,500,000

Repayment of borrowings - (1,500,000)

The accompanying notes form an integral part of these consolidated financial statements.
ADNOC Drilling Company P.J.S.C. 14

Notes to the consolidated financial statements

for the year ended 31 December 2024

1. General information

ADNOC Drilling Company P.J.S.C. (“the Company”) is a public joint stock company, incorporated in 1972 by a
resolution of the Council of Ministers of the Government of Abu Dhabi. On 29 September 2021, Law No. 9 of
2021 was issued amending Law No. 21 of 2018 that was issued on 6 November 2018, replacing Law No. 4 of
1981 in respect of the incorporation of ADNOC Drilling Company PJSC registered with the commercial register
in Abu Dhabi under the commercial license number CN-2688881 issued by the Abu Dhabi Department of
Economic Development. The Company also holds an industrial license number IN-2003460 jointly issued by
the Abu Dhabi Department of Economic Development and Industrial Development Bureau. The Company is a
subsidiary of Abu Dhabi National Oil Company (“ADNOC”), which is wholly owned by the Government of Abu
Dhabi. The Company’s shares are listed on the Abu Dhabi Securities Exchange.

The registered address of the Company is P.O Box 4017 Abu Dhabi, United Arab Emirates (U.A.E.). The
Company is engaged in providing start to finish drilling and construction services across both conventional and
unconventional reservoirs, and the hiring out of onshore and offshore drilling rigs to parties involved in onshore
and offshore oil and gas exploration and production.

The registered address of ADH RSC LTD (“the subsidiary”) is 2705,2, Al Sarab Tower, Abu Dhabi Global Market
Square, Abu Dhabi, United Arab Emirates. The subsidiary is engaged in the activities of holding companies.
The subsidiary registered a branch in the Kingdom of Jordan under the registration no. 1101 on 28 February
2024.

On 25 April 2024, Turnwell Industries – L.L.C (“Turnwell”) was incorporated as a Limited Liability Company,
During the year the Company through its wholly owned subsidiary ADH RSC LTD has signed shareholder
agreements for the creation of Turnwell joint venture (JV) with Eastern Echo FZE and Patterson-UTI UAE LLC.
The Company, through its wholly owned subsidiary holds a 55% equity stake.

These consolidated financial statements comprise of the assets & liabilities and results of operations of
Company and its subsidiary (“the Group”).

2. Application of new and revised International Financial Reporting Standards (IFRSs)

2.1. New and revised IFRSs applied with no material effect on the consolidated financial statements

The following new and revised IFRSs, which became effective for annual periods beginning on or after 1 January
2024, have been adopted in these consolidated financial statements. The application of these revised IFRSs
has not had any material impact on the amounts reported for the current and prior periods but may affect the
accounting for future transactions or arrangements.

• Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-

current
• Amendments to IAS 1 Presentation of Financial Statements - Non-current Liabilities with Covenants
• Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier
Finance Arrangements
• Amendment to IFRS 16 Leases - Lease Liability in a Sale and Leaseback
ADNOC Drilling Company P.J.S.C. 15

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

2. Application of new and revised International Financial Reporting Standards (IFRSs) (continued)

2.2. New and revised IFRS in issue but not yet effective and not early adopted

Effective for
annual periods
New and revised IFRSs beginning on or after

IFRS 18 Presentation and Disclosures in Financial Statements 1 January 2027

IFRS 19 Subsidiaries without Public Accountability: Disclosures 1 January 2027
IFRS S1 General Requirements for Disclosure of Sustainability-related Effective date not yet decided
Financial Information by the regulator in the United
Arab Emirates)

IFRS S2 Climate-related Disclosures Effective date not yet decided

by the regulator in the United
Arab Emirates)
Amendment to IAS 21 - Lack of Exchangeability 1 January 2025
Amendments IFRS 9 and IFRS 7 regarding the classification and 1 January 2026
measurement of financial instruments
Annual Improvements to IFRS Accounting Standards — Volume 11 1 January 2026

The pronouncement comprises the following amendments:

• IFRS 1: Hedge accounting by a first-time adopter

• IFRS 7: Gain or loss on derecognition
• IFRS 7: Disclosure of deferred difference between fair value and
transaction price
• IFRS 7: Introduction and credit risk disclosures
• IFRS 9: Lessee derecognition of lease liabilities
• IFRS 9: Transaction price
• IFRS 10: Determination of a ‘de facto agent’
• IAS 7: Cost method
The above stated new standards and amendments are not expected to have any significant impact on these
consolidated financial statements of the Group.

There are no other applicable new standards and amendments to published standards or IFRIC interpretations
that have been issued that would be expected to have a material impact on these consolidated financial
statements of the Group.

3. Material accounting policy information

The principal accounting policies applied in the preparation of these consolidated financial statements are set
out below. These policies have been consistently applied to all the years presented, unless otherwise stated.
ADNOC Drilling Company P.J.S.C. 16

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting
Standards (IFRSs) and interpretations issued by the IFRS Interpretations Committee (IFRS IC) applicable to
companies reporting under IFRSs as issued by the International Accounting Standard Board (IASB) and
applicable provision of the UAE Federal Decree Law no. (32) of 2021.
Basis of preparation
The consolidated financial statements have been prepared in United States Dollar (USD), which is the Group’s
functional and presentation currency and all values are rounded to the nearest thousands (USD’000) except
when otherwise stated.
These consolidated financial statements have been prepared on historical cost basis. Historical cost is generally
based on the fair value of the consideration given in exchange for assets.
Going concern
At 31 December 2024, the Group’s current liabilities exceed its current assets by USD 160,735 thousand.
Management has assessed liquidity forecast under different scenarios and no material uncertainties over going
concern were identified. The Group has sufficient liquidity through the Company’s undrawn borrowing facilities
(note 15) as well as the Group’s forecasted cash flows from operations to meet ongoing commitments and
therefore it is concluded that adequate support is available to evidence that the going concern assumption is
appropriate for the preparation of these consolidated financial statements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of the Company and entity controlled
by the Company (“its subsidiary”). Control is achieved where the Company has:
• power over the investee;
• is exposed, or has rights, to variable returns from its involvement with the investee; and
• has the ability to use its power to affect its returns.
The Company reassesses whether or not it controls an investee if facts and circumstances indicate that there
are changes to one or more of the three elements of control listed above.
When the Company has less than a majority of the voting rights of an investee, it has power over the investee
when the voting rights are sufficient to give it the practical ability to direct the relevant activities of the investee
unilaterally. The Company considers all relevant facts and circumstances in assessing whether or not the
Company's voting rights in an investee are sufficient to give it power, including:
• the size of the Company's holding of voting rights relative to the size and dispersion of holdings of the other
vote holders;
• potential voting rights held by the Company, other vote holders or other parties;
• rights arising from other contractual arrangements; and
• any additional facts and circumstances that indicate that the Company has, or does not have, the current
ability to direct the relevant activities at the time that decisions need to be made, including voting patterns
at previous shareholders' meetings.
Consolidation of a subsidiary begins when the Company obtains control over the subsidiary and ceases when
the Company loses control of the subsidiary.

Where necessary, adjustments are made to the consolidated financial statements of subsidiaries to bring their
accounting policies in line with those used by the Group. All inter-group transactions, balances, income and
expenses are eliminated on consolidation.
ADNOC Drilling Company P.J.S.C. 17

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Basis of consolidation (continued)

When the Group loses control over a subsidiary, it derecognises the assets and liabilities of the subsidiary, and
any related NCI and other components of equity. Any resulting gain or loss is recognised in profit or loss. Any
interest retained in the former subsidiary is measured at fair value when control is lost.
Non-controlling interests in the net assets (excluding goodwill) of consolidated subsidiaries are identified
separately from the Group’s equity therein. The interests of non-controlling shareholders may be initially
measured either at fair value or at the non-controlling interests’ proportionate share of the fair value of the
acquiree’s identifiable net assets. The choice of measurement basis is made on an acquisition-by-acquisition
basis. Subsequent to acquisition, the carrying amount of non-controlling interests is the amount of those interests
at initial recognition plus the non-controlling interests’ share of subsequent changes in equity. Total
comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests
having a deficit balance.

Changes in the Group’s interests in subsidiaries that do not result in a loss of control are accounted for as equity
transactions. The carrying amounts of the Group’s interests and the non-controlling interests are adjusted to
reflect the changes in their relative interests in the subsidiaries. Any difference between the amount by which
the non-controlling interests are adjusted and the fair value of the consideration paid or received is recognised
directly in equity and attributed to owners of the Company.

When the Group loses control of a subsidiary, the profit or loss on disposal is calculated as the difference
between (i) the aggregate of the fair value of the consideration received and the fair value of any retained interest
and (ii) the previous carrying amount of the assets (including goodwill), and liabilities of the subsidiary and any
non-controlling interests.
Details of the Company’s subsidiary are as follows:
Country of
Ownership interest Principal activities
Name of subsidiary incorporation
2024 2023
ADH RSC LTD 100% 100% U.A.E. Activities of holding Company
Details of the Group’s joint ventures are as follows:

Country of
Name of joint Ownership interest Principal activities
incorporation
ventures
2024 2023
ENERSOL RSC LTD 51% - U.A.E. Special Purpose Vehicle
(SPV) - holding ownership of
equity and non-equity assets,
including shares, debentures,
bonds, other forms of
security. Holding ownership of
real property, intellectual
property, other tangible and
intangible assets
Turnwell Industries –
L.L.C 55% - U.A.E. Technical maintenance,
natural gas and oil well
equipment and maintenance,
services exploration for oil
and natural gas
ADNOC Drilling Company P.J.S.C. 18

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Investments in equity-accounted investees

The Group’s interests in equity-accounted investees comprise interests in joint venture.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have rights
to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require unanimous consent of the
parties sharing control.

The results and assets and liabilities joint ventures are incorporated in these consolidated financial statements
using the equity method of accounting. Under the equity method, an investment in an associate or a joint venture
is recognised initially in the consolidated statement of financial position at cost and adjusted thereafter to
recognise the Group’s share of the profit or loss and other comprehensive income of the associate or joint
venture. When the Group’s share of losses of an associate or a joint venture exceeds the Group’s interest in
that associate or joint venture (which includes any long‑term interests that, in substance, form part of the Group’s
net investment in the associate or joint venture), the Group discontinues recognising its share of further losses.
Additional losses are recognised only to the extent that the Group has incurred legal or constructive obligations
or made payments on behalf of the associate or joint venture.

An investment in an associate or a joint venture is accounted for using the equity method from the date on which
the investee becomes an associate or a joint venture. On acquisition of the investment in an associate or a joint
venture, any excess of the cost of the investment over the Group’s share of the net fair value of the identifiable
assets and liabilities of the investee is recognised as goodwill, which is included within the carrying amount of
the investment. Any excess of the Group’s share of the net fair value of the identifiable assets and liabilities
over the cost of the investment, after reassessment, is recognised immediately in profit or loss in the period in
which the investment is acquired.

The requirements of IAS 36 are applied to determine whether it is necessary to recognise any impairment loss
with respect to the Group’s investment in an associate or a joint venture. When necessary, the entire carrying
amount of the investment (including goodwill) is tested for impairment in accordance with IAS 36 as a single
asset by comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its
carrying amount.

Any impairment loss recognised is not allocated to any asset, including goodwill that forms part of the carrying
amount of the investment. Any reversal of that impairment loss is recognised in accordance with IAS 36 to the
extent that the recoverable amount of the investment subsequently increases.

The Group discontinues the use of the equity method from the date when the investment ceases to be an
associate or a joint venture. When the Group retains an interest in the former associate or a joint venture and
the retained interest is a financial asset, the Group measures the retained interest at fair value at that date and
the fair value is regarded as its fair value on initial recognition in accordance with IFRS 9. The difference between
the carrying amount of the associate or a joint venture at the date the equity method was discontinued, and the
fair value of any retained interest and any proceeds from disposing of a part interest in the associate or a joint
venture is included in the determination of the gain or loss on disposal of the associate or joint venture. In
addition, the Group accounts for all amounts previously recognised in other comprehensive income in relation
to that associate on the same basis as would be required if that associate had directly disposed of the related
assets or liabilities. Therefore, if a gain or loss previously recognised in other comprehensive income by that
associate or joint venture would be reclassified to profit or loss on the disposal of the related assets or liabilities,
the Group reclassifies the gain or loss from equity to profit or loss (as a reclassification adjustment) when the
associate or joint venture is disposed of.
ADNOC Drilling Company P.J.S.C. 19

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Investments in equity-accounted investees (continued)

When the Group reduces its ownership interest in an associate or a joint venture but the Group continues to use
the equity method, the Group reclassifies to profit or loss the proportion of the gain or loss that had previously
been recognised in other comprehensive income relating to that reduction in ownership interest if that gain or
loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When a group entity transacts with an associate or a joint venture of the Group, profits and losses resulting from
the transactions with the associate or joint venture are recognised in the Group’s consolidated financial
statements only to the extent of interests in the associate or joint venture that are not related to the Group.

Property and equipment

Property and equipment are stated at cost less accumulated depreciation and impairment losses, if any. The
historical cost consists of expenses related directly to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset as appropriate,
only when it is probable that future economic benefits associated with the item will flow to the Group and the
cost of the item can be measured reliably. Expenditure incurred to replace a component of an item of property
and equipment that is accounted for separately is capitalised and the carrying amount of the component that is
replaced is written off. Other subsequent expenditure is capitalised only when it increases future economic
benefits of the related item of property and equipment. All other expenditure is recognised in the consolidated
statement of profit or loss and other comprehensive income as incurred.

Depreciation is calculated based on the estimated useful lives of the applicable assets on a straight-line basis
commencing when the assets are ready for their intended use. The estimated useful lives, residual values and
depreciation methods are reviewed at each consolidated statement of financial position date, with the effect of
any changes in estimate accounted for on a prospective basis. Depreciation is calculated using the straight-line
method to allocate their cost to their residual values over their estimated useful lives, as follows:

Building and yards 10 – 20 years

Drilling rigs and equipment 4 – 30 years
Motor vehicles 4 years
Furniture, fixtures and office equipment 4 years

During the prior year, the Group has revised the useful lives and residual value of the Drilling rigs and equipment
based on its strategic objectives, business plan, internal and external assessment, and approval from the
management. The financial impact of this re-assessment is disclosed in note 4.

An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount
is greater than its estimated recoverable amount.
The repair and maintenance expenses are included in the consolidated statement of profit or loss and other
comprehensive income when incurred.
An item of property and equipment is derecognised upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset. Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount and are recognised in the consolidated statement of profit or
loss and other comprehensive income.
ADNOC Drilling Company P.J.S.C. 20

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Capital work in progress

Capital work in progress is included in property and equipment at cost. The capital work in progress is
transferred to the appropriate asset category and depreciated in accordance with the above policies when
construction of the asset is completed and the asset is commissioned and available for uses.

Intangible assets

Intangible assets that are acquired by the Group, which have finite useful lives, are measured at cost less
accumulated amortisation and impairment losses, if any. Amortisation is recognised in profit or loss on a straight-
line basis over the estimated useful lives of intangible assets from the date that they are available for use.
Intangible assets represent computer software with estimated useful life of 4 years and is amortised on straight-
line basis.

The estimated useful lives, residual values and amortisation method are reviewed at each year end, with the
effect of any changes in estimate accounted for on a prospective basis. An intangible asset is derecognised on
disposal, or when no future economic benefits are expected from use or disposal. Gains or losses arising from
derecognition of an intangible asset, measured as the difference between the net disposal proceeds and the
carrying amount of the asset, and are recognised in profit or loss when the asset is derecognised.

Impairment of non-financial assets

At each reporting date, the Group reviews the carrying amounts of its property and equipment, intangible assets,
and rights-of-use assets to determine whether there is any indication that those assets have suffered an
impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine
the extent of the impairment loss (if any). Where the asset does not generate cash flows that are independent
from other assets, the Group estimates the recoverable amount of the cash-generating unit to which the asset
belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also
allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-
generating units for which a reasonable and consistent allocation basis can be identified.

The recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value
in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that
reflects current market assessments of the time value of money and the risks specific to the asset for which the
estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount,
the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment
loss is recognised immediately in profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash generating unit) is
increased to the revised estimate of its recoverable amount, but so that the increased carrying amount does not
exceed the carrying amount that would have been determined had no impairment loss been recognised for the
asset (or cash generating unit) in prior years. A reversal of an impairment loss is recognised immediately in
profit or loss.

Inventories

Inventories are stated at the lower of cost and net realisable value. Cost is determined on the weighted average
basis and includes invoice value, freight and other expenses incurred in bringing the inventories to their present
location and condition. Net realisable value is the estimated selling price in the ordinary course of business, less
applicable variable selling expenses.
ADNOC Drilling Company P.J.S.C. 21

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Leases

The Group as lessee

The Group assesses whether contract is or contains a lease, at inception of the contract. The Group recognises
a right-of-use assets and a corresponding lease liability with respect to all lease arrangements in which it is the
lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of
low value assets. For these leases, the Group recognises the lease payments as an operating expense on a
straight-line basis over the term of the lease unless another systematic basis is more representative of the time
pattern in which economic benefits from the leased assets are consumed.
The lease liability is initially measured at the present value of the lease payments that are not paid at the
commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined,
the Group uses its incremental borrowing rate.
Lease payments included in the measurement of the lease liability comprise:
• fixed lease payments (including in-substance fixed payments), less any lease incentives;
• variable lease payments that depend on an index or rate, initially measured using the index or rate at the
commencement date;
• the amount expected to be payable by the lessee under residual value guarantees;
• the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
• payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to
terminate the lease
The lease liability is presented as a separate line item in the consolidated statement of financial position.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease
liability (using effective interest method) and by reducing the carrying amount to reflect the lease payments
made.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use
asset) whenever:
• the lease term has changed or there is a change in the assessment of exercise of a purchase option, in
which case the lease liability is remeasured by discounting the revised lease payments using a revised
discount rate.
• the lease payments change due to changes in an index or rate or a change in expected payment under a
guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease
payments using the initial discount rate (unless the lease payments change is due to a change in a floating
interest rate, in which case a revise discount rate is used).
• a lease contract is modified, and the lease modification is not accounted for as a separate lease, in which
case the lease liability is remeasured by discounting the revised lease payments using a revised discount
rate.
The right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying
asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use of asset reflects that
the Group expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful
life of the underlying asset. The depreciation starts at the commencement date of the lease.
The right-of-use of assets are presented as a separate line in the consolidated statement of financial position.
The Group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for an identified
impairment loss as described in the ‘Impairment of tangible and intangible assets’ policy.

As a practical expedient, IFRS16 permits a lessee not to separate non-lease components, and instead account
for any lease and associated non-lease components as a single arrangement.
ADNOC Drilling Company P.J.S.C. 22

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Employee benefits

Provision is made for the estimated liability for employees’ entitlement to annual leave and leave passage as a
result of services rendered by eligible employees up to the reporting date. Provision is made for the full amount
of end of service benefits due to employees in accordance with the UAE Labour Law, for their period of service
up to the end of the reporting date.

The provision relating to annual leave and leave passage is disclosed as a current liabilities, while that relating
to end of service benefit is disclosed as a non-current liability.

Provisions
Provisions are recognised when the Group has an obligation (legal or constructive) arising from a past event,
and the costs to settle the obligation are both probable and able to be reliably measured.

Provisions are measured at the present value of the expenditures expected to be required to settle the obligation
using a rate that reflects current market assessments of the time value of money and the risks specific to the
obligation. The increase in the provision due to passage of time is recognised as interest expense.

Onerous contracts
Present obligations arising under onerous contracts are recognised and measured as provisions. An onerous
contract is considered to exist where the Group has a contract under which the unavoidable costs of meeting
the obligations under the contract exceed the economic benefits expected to be received under it.

Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of qualifying assets, which are
assets that necessarily take a substantial period of time to get ready for their intended use or sale, are added
to the cost of those assets, until such time as the assets are substantially ready for their intended use or sale.

Revenue
Revenue from contracts with customers is recognised when control of the goods or services are transferred to
the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange
for those goods or services.

Drilling and oil field services

The drilling services represent drilling contracts that includes rig packages, including crews and support
equipment and providing start to finish drilling and construction services across both conventional and
unconventional reservoirs, to its customers. Contracts may be for a single well, multiple wells or a fixed term.
The Group’s drilling services provided under each drilling rig contract is a single performance obligation satisfied
over time and is comprised of a series of distinct time service periods in which the Group provides drilling
services.

Variable consideration is assessed to the extent that it is probable that a significant reversal will not occur during
the contract term. When determining if variable consideration should be recognised, management considers
whether there are factors outside of the Group’s control that could result in a significant reversal of revenue as
well as the likelihood and magnitude of a potential reversal of revenue.
Revenue from reimbursable goods and services
Revenue from reimbursable goods and services represents mark-ups on certain equipment, materials and
supplies, third party services and other expenses acquired at the request of the customer.
ADNOC Drilling Company P.J.S.C. 23

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Foreign currencies

For the purpose of these consolidated financial statements United States Dollar (USD) is the functional and the
presentation currency of the Group.

Transactions in currencies other than USD (foreign currencies) are recorded at the rates of exchange prevailing
at the dates of the transactions. At the end of each reporting period, monetary items denominated in foreign
currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that are
denominated in foreign currencies are retranslated at the rates prevailing at the date when the fair value was
determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not
retranslated.

Exchange differences are recognised in profit or loss in the period in which they arise.

Financial instruments

Financial assets and financial liabilities are recognised in the Group’s consolidated statement of financial
position when the Group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value. Transaction costs that are directly
attributable to the acquisition or issue of financial assets and financial liabilities (other than financial assets and
financial liabilities at fair value through profit or loss) are added to or deducted from the fair value of the financial
assets or financial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the
acquisition of financial assets or financial liabilities at fair value through profit or loss are recognised immediately
in the consolidated statement of profit or loss and other comprehensive income.

Financial assets

All recognised financial assets are measured subsequently in their entirety at either amortised cost or fair value,
depending on the classification of the financial assets. The Group does not currently have any financial assets
that are measured at fair value.

Financial assets designated at amortised cost

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

• the financial asset is held within a business model whose objective is to hold financial assets in order to
collect contractual cash flows; and
• the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.

Amortised cost and effective interest rate method

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial
recognition minus the principal repayments, plus the cumulative amortisation using the effective interest method
of any difference between that initial amount and the maturity amount, adjusted for any loss allowance.

The effective interest method is a method of calculating the amortised cost of a debt instrument and of allocating
interest income over the relevant period.
ADNOC Drilling Company P.J.S.C. 24

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Financial instruments (continued)

Financial assets (continued)

Interest income is recognised using the effective interest method for debt instruments measured subsequently
at amortised cost. For financial instruments other than purchased or originated credit-impaired financial assets,
interest income is calculated by applying the effective interest rate to the gross carrying amount of a financial
asset, except for financial assets that have subsequently become credit-impaired (see below). For financial
assets that have subsequently become credit-impaired, interest income is recognised by applying the effective
interest rate to the amortised cost of the financial asset. If, in subsequent reporting periods, the credit risk on
the credit-impaired financial instrument improves so that the financial asset is no longer credit-impaired, interest
income is recognised by applying the effective interest rate to the gross carrying amount of the financial asset.

For purchased or originated credit-impaired financial assets, the Group recognises interest income by applying
the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial recognition. The
calculation does not revert to the gross basis even if the credit risk of the financial asset subsequently improves
so that the financial asset is no longer credit-impaired.

Interest income is recognised in the consolidated statement of profit or loss and other comprehensive income.

Impairment of financial assets

The Group recognises a loss allowance for expected credit losses on trade receivables and due from related
parties. The amount of expected credit losses is updated at each reporting date to reflect changes in credit risk
since initial recognition of the respective financial instrument.

The Group always recognises lifetime ECL for trade receivables and due from related parties. The expected
credit losses on these financial assets are estimated using a provision matrix based on the Group’s historical
credit loss experience, adjusted for factors that are specific to the debtors, general economic conditions and an
assessment of both the current as well as the forecast direction of conditions at the reporting date, including
time value of money where appropriate.

For all other financial instruments, the Group recognises lifetime ECL when there has been a significant increase
in credit risk since initial recognition. However, if the credit risk on the financial instrument has not increased
significantly since initial recognition, the Group measures the loss allowance for that financial instrument at an
amount equal to 12-month ECL.

The assessment of whether lifetime ECL should be recognised is based on significant increases in the likelihood
or risk of a default occurring since initial recognition instead of on evidence of a financial asset being credit-
impaired at the reporting date.

Lifetime ECL represents the expected credit losses that will result from all possible default events over the
expected life of a financial instrument. In contrast, 12-month ECL represents the portion of lifetime ECL that is
expected to result from default events on a financial instrument that are possible within 12 months after the
reporting date.
ADNOC Drilling Company P.J.S.C. 25

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Financial instruments (continued)

Financial assets (continued)

(i) Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial recognition,
the Group compares the risk of a default occurring on the financial instrument as at the reporting date with the
risk of a default occurring on the financial instrument as at the date of initial recognition. In making this
assessment, the Group considers both quantitative and qualitative information that is reasonable and
supportable, including historical experience and forward-looking information that is available without undue cost
or effort.

For financial guarantee contracts, the date that the Group becomes a party to the irrevocable commitment is
considered to be the date of initial recognition for the purposes of assessing the financial instrument for
impairment. In assessing whether there has been a significant increase in the credit risk since initial recognition
of a financial guarantee contracts, the Group considers the changes in the risk that the specified debtor will
default on the contract.

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a
significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of
identifying significant increase in credit risk before the amount becomes past due.

The Group assumes that the credit risk on a financial instrument has not increased significantly since initial
recognition if the financial instrument is determined to have low credit risk at the reporting date. A financial
instrument is determined to have low credit risk if:

• The financial instrument has a low risk of default;

• The borrower has a strong capacity to meet its contractual cash flow obligations in the near term, and
• Adverse changes in economic and business conditions in the longer term may, but will not necessarily,
reduce the ability of the borrower to fulfil its contractual cash flow obligations.

(ii) Definition of default

The Group considers the following as constituting an event of default for internal credit risk management
purposes as historical experience indicates that financial assets that meet either of the following criteria are
generally not recoverable:

• when there is a breach of financial covenants by the debtor; or

• information developed internally or obtained from external sources indicates that the debtor is unlikely
to pay its creditors, including the Group, in full (without taking into account any collateral held by the
Group).

Irrespective of the above analysis, the Group considers that default has occurred when a financial asset is more
than 365 days past due unless the Group has reasonable and supportable information to
demonstrate that a more lagging default criterion is more appropriate.

(iii) Write-off policy

The Group writes off a financial asset when there is information indicating that the counterparty is in severe
financial difficulty and there is no realistic prospect of recovery.
ADNOC Drilling Company P.J.S.C. 26

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
3. Material accounting policy information (continued)

Financial instruments (continued)

Financial assets (continued)

Derecognition of financial assets

The Group derecognises a financial asset only when the contractual rights to the cash flows from the asset
expire, or when it transfers the financial asset and substantially all the risks and rewards of ownership of the
asset to another entity. If the Group neither transfers nor retains substantially all the risks and rewards of
ownership and continues to control the transferred asset, the Group recognises its retained interest in the asset
and an associated liability for amounts it may have to pay. If the Group retains substantially all the risks and
rewards of ownership of a transferred financial asset, the Group continues to recognise the financial asset and
also recognises a collateralised borrowing for the proceeds received.

On derecognition of a financial asset measured at amortised cost, the difference between the asset’s carrying
amount and the sum of the consideration received and receivable is recognised in profit or loss.

Financial liabilities and equity instruments

Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or equity in accordance with the
substance of the contractual arrangement.

Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after deducting
all of its liabilities. Equity instruments issued are recorded at the proceeds received, net of direct issue costs.

Dividend distribution to the Group’s shareholders is recognised as a liability in the Group’s consolidated financial
statements in the period in which the dividends are approved by the Group’s shareholder

Where the Company purchases the Company’s equity instruments, the consideration paid, including any direct
attributable incremental external cost is deducted from the equity attributable to the owners until the equity
instruments are reissued disposed of or cancelled. Where such shares are disposed of or reissued such
consideration received is included in equity.” The repurchase of equity instruments issued by the Company is
recognised and deducted directly in equity. No gain or loss is recognised in profit or loss on the purchase, sale,
issue or cancellation of equity instruments issued by the Company.

Financial liabilities measured subsequently at amortised cost

All financial liabilities are measured subsequently at amortised cost using the effective interest method.

The effective interest method is a method of calculating the amortised cost of a financial liability and of allocating
interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated
future cash payments (including all fees and points paid or received that form an integral part of the effective
interest rate, transaction costs and other premiums or discounts) through the expected life of the financial
liability, or (where appropriate) a shorter period, to the amortised cost of a financial liability.

Derecognition of financial liabilities

The Group derecognises financial liabilities when, and only when, the Group’s obligations are discharged,
cancelled or have expired. The difference between the carrying amount of the financial liability derecognised
and the consideration paid and payable is recognised in profit or loss.
ADNOC Drilling Company P.J.S.C. 27

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
3. Material accounting policy information (continued)
Financial liabilities and equity instruments (contined)
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement
of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is
an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
Derivative financial instruments
Derivatives are recognised initially at fair value at the date a derivative contract is entered into and are
subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognised in
profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in which
event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.
A derivative with a positive fair value is recognised as a financial asset whereas a derivative with a negative fair
value is recognised as a financial liability. Derivatives are not offset in the financial statements unless the group
has both a legally enforceable right and intention to offset.
Employees’ pension
The Group makes pension contributions on behalf of UAE citizens in accordance with the Emirate of Abu
Dhabi Law No. 2 of 2000. The contributions are treated as payments to a defined contribution pension plan.
A defined contribution plan is a pension plan under which fixed contributions are paid into a separate
pension entity fund.
The Group has no legal or constructive obligations to pay further contributions if the Abu Dhabi Retirement
Pensions & Benefits Fund does not hold sufficient assets to pay all employees the benefits relating to
employee service in the current and prior periods. The contributions are recognised as employee benefit
expenses when they are due. Prepaid contributions are recognised as an asset to the extent that a cash
refund or a reduction in future payments is available.
Value added tax
Value added tax (‘VAT’) represents a standard rate of 5% that shall be imposed on any supply or import
pursuant to Article (2) of the Federal Decree Law No. (8) of 2017 on the value of the supply or import as
specified in the provisions of this Decree Law, effective from 1 January 2018.
▪ VAT payable, is payable to the Tax Federal Authority upon collection of receivables from customers.
VAT on purchases, which have been settled at the date of the consolidated statement of financial
position, are deducted from the amount payable.
▪ VAT receivable, relates to purchases which have not been settled at the date of the consolidated
statement of financial position, VAT receivable is reclaimable against sales VAT upon payment of
the purchases.
Current income tax
Income tax assets and liabilities for the current period are measured at the amount expected to be recovered
from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that
are enacted or substantively enacted, at the reporting date and generate taxable income. Management
periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes provisions where appropriate.
Deferred income tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of
assets and liabilities in the consolidated financial statements and the corresponding tax bases used in the
computation of taxable profit and is accounted for using the balance sheet liability method.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to be recovered
ADNOC Drilling Company P.J.S.C. 28

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

3. Material accounting policy information (continued)

Non-current assets held-for-sale

The Group classifies non-current assets held-for-sale if their carrying amounts will be recovered principally
through a sale transaction rather than through continuing use. Non-current assets classified as held-for-
sale are measured at the lower of their carrying amount and fair value less costs to sell. Costs to sell are
the incremental costs directly attributable to the disposal of an asset (disposal group), excluding finance
costs and income tax expense. The criteria for held-for-sale classification is regarded as met only when the
sale is highly probable, and the asset or disposal group is available for immediate sale in its present
condition. Actions required to complete the sale should indicate that it is unlikely that significant changes to
the sale will be made or that the decision to sell will be withdrawn. Management must be committed to the
plan to sell the asset and the sale expected to be completed within one year from the date of the
classification. Property and equipment and intangible assets are not depreciated or amortised once
classified as held-for-sale. Assets classified as held-for-sale are presented separately as current items in
the consolidated statement of financial position.

The Group measures a non-current assets held-for-sale that ceases to be classified as held for sale at the
lower of its:

a) carrying amount before the asset was classified as held for sale adjusted for any depreciation,
amortisation or revaluations that would have been recognised had the asset (not been classified as
held for sale
b) recoverable amount at the date of the subsequent decision not to sell

4. Key judgement and source of estimation and uncertainty

The preparation of the consolidated financial statements in compliance with IFRSs requires the
management to make estimates and assumptions that affect the reported amounts of assets, liabilities,
income and expenses and disclosure of contingent assets and contingent liabilities. Future events may
occur which will cause the assumptions used in arriving at the estimates to change. The effects of any
change in estimates are reflected in the consolidated financial statements as they become reasonably
determinable.

Judgments and estimates are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the circumstances.

Critical accounting judgments

In the process of applying the Group’s accounting policies, management has made the following judgments,
apart from those involving estimations, which have the most significant effect on the amounts recognised
in the consolidated financial statements:
Revenue presentation
Third party rig rental contracts are those which are entered into with third parties for the benefit of related
parties. In such contracts, the Group neither has control over the rigs or services provided by the third party
nor takes delivery of the rigs prior to its deployment by the related parties. In addition, the Group enters into
back-to-back arrangements with related parties on the same term as it does with the third parties (which is
contractually acknowledged by the third parties). Consequently, management has concluded that it is acting
as an agent in these arrangements. Accordingly, revenue and cost relating to these services are presented
on a net basis. Had management concluded that they were acting as principal in these transactions, revenue
and direct costs would have been higher by USD 244,116 thousand in the current year (2023: USD 139,833
thousand).
ADNOC Drilling Company P.J.S.C. 29

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

4. Key judgement and source of estimation and uncertainty (continued)

Critical accounting judgments (continued)

Capitalisation of borrowing costs

As described in note 3, the Group capitalises borrowing costs directly attributable to the acquisition,
construction or production of qualifying assets. Qualifying assets are the acquisition of rigs which take
substantial period of time to get ready for their intended use or sale. The borrowing cost is capitalised for
these rigs, until such time as the rigs is substantially ready for their intended use or sale. Significant
judgment is required to determine whether the rigs take a significant period of time to get ready for their
intended use based on management’s assessment of the various activities that are required before the rigs
enter into operation. During the year borrowing costs amounting to USD 13,959 thousand (2023: 34,304
thousand) have been capitalised.

Determining the lease term

Certain leases are entered into with a related party which contain clauses for automatic annual renewal of
the lease term unless either party provides a notice to not extend the lease. In determining the lease term,
management considers all facts and circumstances that create an economic incentive to not exercise a
termination option. Periods after termination options are only included in the lease term if the lease is
reasonably certain to be not terminated. Management considers all facts and circumstances that create an
economic incentive to not terminate the lease to determine the appropriate lease terms.

During the year ended 31 December 2024, no significant events or significant change in circumstances
occurred that caused the management to reassess the lease term of such contracts.

Contract modifications

The Group, from time to time and in the normal course of business, amends its revenue contracts with
related parties. Significant judgment is required to determine whether, based on the status of ongoing
negotiations, it is highly probable that a significant reversal in the amount of cumulative revenue recognised
will occur at the conclusion of such negotiations.

Leases purchase option

Certain leases as disclosed in note 6 were entered with a lessor which contain clauses for purchase options
of the leased assets. In determining the lease payments included in the measurement of lease liability,
Management has considered the exercise price of purchase options as it is reasonably certain that the
Group will exercise these options. The right of-use-assets relating to these leases is being depreciated over
the useful life of the underlying assets as the Group is reasonably certain to exercise the purchase option.
Management has applied judgment and estimates to determine the incremental borrowing rate (IBR) at the
commencement of the lease.

Offsetting of related party balances

Balances due from/to related parties as disclosed in note 18 are reported on a net basis in the
accompanying consolidated financial statements. Management has established that a legally enforceable
right to set off such amounts exist, and the Group intends to settle on net basis or to realise the assets and
settle the liabilities simultaneously.
ADNOC Drilling Company P.J.S.C. 30

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
4. Key judgement and source of estimation and uncertainty (continued)

Key sources of estimation uncertainty

Joint arrangement

For assessing joint control, the Group has considered the contractual agreement of sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the unanimous consent
of the parties sharing control. For the purpose of assessing whether a joint arrangement is a joint venture
or joint operation, the Group has considered whether it has joint control on the rights to the net assets of
the arrangements, in which case these are treated as joint ventures, or rights to the assets and obligations
for the liabilities relating to the arrangement, in which case these are treated as joint operations.
Management has applied several critical judgements to arrive at the conclusion on joint control, which
included the assessment of the substance over legal form in respect of the unanimous approvals of relevant
activities by the Joint venture partners. Management has assessed and concluded that there is no material
impact on the fair value of the call option compared to its net asset values as of the reporting period and
thereby amounts recorded in books carried at its fair values.

Calculation of ECL
Calculation of ECL When measuring ECL the Group uses reasonable and supportable forward-looking
information and estimates, which is based on assumptions for the future movement of different economic
drivers and how these drivers will affect each other. Probability of default constitutes a key input in
measuring ECL and is an estimate of the likelihood of default over a given time horizon, the calculation of
which includes historical data, assumptions and expectations of future conditions. As at 31 December 2024,
the Group’s allowance for expected credit losses amounted to USD 28,004 thousand (2023: USD 19,004
thousand)

Impairment of property and equipment

Property and equipment are assessed for impairment based on assessment of cash flows on individual
cash generating units when there is indication of impairment. Management has not identified impairment
indicators in the current year for property and equipment. During the year, an impairment /lost in hole
amounting to nil (2023: USD 2,016 thousand) has been recognized.

Provision for slow moving or obsolete inventories

When inventories become old or obsolete, an estimate is made of their net realisable value. Inventory items
are categorised based on their aging and accordingly for each category are recognised as a provision for
obsolete and slow-moving inventories. Provision for obsolete and slow-moving inventories at 31 December
2024 amounted to USD 32,667 thousand (2023: USD 27,172 thousand).
Useful lives and residual values of property and equipment
Management reviews the estimated useful lives and residual values of property and equipment at the end
of each annual reporting period in accordance with IAS 16 Property, Plant and Equipment. In the prior year,
Management has reassessed the useful life of drilling rigs and equipment and changed it from 8-20 years
to 4-30 years.in the prior year, the financial impact of the reassessment resulted in the reduction of related
depreciation charge on profit and loss due to the increase in useful lives and residual value by USD 28,134
thousand.
Assessment of impairment on re-classification of assets held for sale
The Group upon the revision of its plan regarding the assets previously classified as held for sale performed
an assessment of the recoverable amounts of the rigs and determined that the carrying values of the rigs
as of the reporting date were lower than their recoverable amounts and hence no impairment existed as of
the reclassification date.
ADNOC Drilling Company P.J.S.C. 31

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
5. Property and equipment
Furniture fixtures Construction Pre-delivery
Building and Drilling rigs and Motor and work- in - payments
yards equipment vehicles office equipment progress Total
USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000
Cost
At 1 January 2023 83,688 6,743,699 29,622 63,563 644,912 55,041 7,620,525
Additions during the year - 266,026 - 913 936,900 131,900 1,335,739
Transfers during the year 13,341 882,045 27,181 23,264 (945,831) (28,963) (28,963)
Transfer to held for sale (note 12) - (72,017) - - - - (72,017)
Write off - (15,073) - - - - (15,073)
At 1 January 2024 97,029 7,804,680 56,803 87,740 635,981 157,978 8,840,211
Additions during the year - 224,828 - 3,278 479,720 104,330 812,156
Transfers during the year - 368,169 - 2,677 (270,975) (99,871) -
Transfer from right-of-use assets - 120,167 - - - - 120,167
Transfer from held for sale
(note 12) - 72,017 - - - - 72,017
Transfer to held for sale (note 12) - (34,412) - - - - (34,412)
Write off - (7,402) - (5) - - (7,407)
Disposals - (28,174) - - - - (28,174)
At 31 December 2024 97,029 8,519,873 56,803 93,690 844,726 162,437 9,774,558
Depreciation and impairment
At 1 January 2023 58,836 3,554,922 27,639 57,521 - - 3,698,918
Charge for the year 8,300 330,631 14,384 14,795 - - 368,110
Transfer to held for sale (note 12) - (61,300) - - - - (61,300)
Eliminated on write off - (13,057) - - - - (13,057)

At 1 January 2024 67,136 3,811,196 42,023 72,316 - - 3,992,671

Charge for the year 4,791 411,831 1,224 8,627 - - 426,473
Transfer from held for sale
(note 12) - 61,300 - - - - 61,300
Transfer to held for sale (note 12) - (28,704) - - - - (28,704)
Eliminated on write off - (4,167) - (5) - - (4,172)
Eliminated on disposals - (25,684) - - - - (25,684)
At 31 December 2024 71,927 4,225,772 43,247 80,938 - - 4,421,884
Carrying amount
At 31 December 2024 25,102 4,294,101 13,556 12,752 844,726 162,437 5,352,674
At 31 December 2023 29,893 3,993,484 14,780 15,424 635,981 157,978 4,847,540
ADNOC Drilling Company P.J.S.C. 32

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
5. Property and equipment (continued)
31 December 31 December
2024 2023
The depreciation is allocated as follows: USD ’000 USD ’000

Direct cost (note 20) 416,262 363,860

General and administrative expenses (note 21) 10,211 4,250
426,473 368,110
Property and equipment include assets that are still in use and which are fully depreciated amounting to
USD 1,409,840 thousand (2023: USD 1,103,465 thousand).

6. Rights-of-use assets and lease liabilities

Rights-of-use assets and lease liabilities include rigs, warehouse, and office building. Amounts recognised in
the consolidated statement of financial position are as follows:

Rights-of-use assets
31 December 31 December
2024 2023
USD ’000 USD ’000

Balance at the beginning of the year 173,911 33,909

Additions during the year 16,372 159,591
Remeasurement (18,371) -
Transferred to property and equipment (note 5) (120,167) -
Depreciation charge during the year (28,435) (19,589)

Balance at end of the year 23,310 173,911

Rights-of-use assets including the carrying value of rigs of nil (2023: USD 147,481 thousand), warehouse of
USD 6,954 thousand (2023: USD 19,717 thousand) and office building of USD 16,356 thousand (2023: USD
6,713 thousand).

Lease liabilities 31 December 31 December

2024 2023
USD ’000 USD ’000

Balance at the beginning of the year 189,211 39,749

Additions 16,372 159,591
Remeasurement (18,371) -
Derecognition (87,000) -
Accretion of interest 7,236 3,907
Payments (82,291) (14,036)

Balance at end of the year 25,157 189,211

Disclosed as follows:
Current 13,130 36,833
Non-current 12,027 152,378

25,157 189,211
ADNOC Drilling Company P.J.S.C. 33

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
6. Rights-of-use assets and lease liabilities (continued)

Amounts recognised in the consolidated statement of profit or loss and other comprehensive income is as
follows:

31 December 31 December
2024 2023
USD ’000 USD ’000

Direct cost (note 20) 14,958 5,912

General and administrative expenses (note 21) 13,477 13,677

28,435 19,589

During the year, the Group opted to exercise the purchase option earlier than the initial arrangement for four
rigs and remeasured the lease liability at a revised incremental borrowing rate (“IBR”) of 5.97%. This resulted
in lease remeasurement amounting to USD 18,371 thousand. Further, The Group acquired ownership of these
lease-to-own rigs before year end and has transferred four rigs to property and equipment.

Finance cost (note 23) includes an amount of USD 7,780 thousand (2023: USD 3,498 thousand) for the
unwinding of interest on lease liabilities.

7. Intangible assets
31 December 31 December
2024 2023
USD ’000 USD ’000
Cost
Balance at the beginning of the year 12,649 12,649
Additions during the year 3,413 -

Balance at end of the year 16,062 12,649

Accumulated amortisation
Balance at the beginning of the year 7,217 3,669
Amortisation charge for the year (note 21) 3,544 3,548

Balance at end of the year 10,761 7,217

Carrying amount
At 31 December 5,301 5,432
ADNOC Drilling Company P.J.S.C. 34

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

8. Investment in joint ventures

On 2 January 2024, ENERSOL RSC LTD “ENERSOL” was incorporated in the Abu Dhabi Global Market. The
Company, through its subsidiary ADH RSC Ltd holds 51% shares in the joint venture while Alpha Dhabi Energy
Holding LLC holds 49% shares.

On 25 April 2024, Turnwell Industries – L.L.C (“Turnwell”) was incorporated as a Limited Liability Company,
During the year the Company through its wholly owned subsidiary ADH RSC LTD has signed shareholder
agreements for the creation of Turnwell joint venture (JV) with Eastern Echo FZE and Patterson-UTI UAE LLC.
The Company, through its wholly owned subsidiary holds a 55% equity stake.

Movement in the Group’s investment in joint ventures is as follows:

31 December 31 December
2024 2023
USD ’000 USD ’000

Additions 266,750 -
Share of results of joint ventures 8,490 -

Carrying amount of the Group’s ownership interest in

the Joint ventures 275,240 -

The additions during the year pertains to investments made of USD 266,709 thousand through ENERSOL RSC
LTD and USD 41 thousand in Turnwell.

Joint ventures are accounted for using the equity method in the consolidated financial statements as set out in
the Group’s accounting policies in note 3.

The latest available financial information in respect of the Group’s joint ventures up to the year ended 31
December 2024 are recognised below:
ENERSOL RSC Turnwell
LTD Industries – L.L.C
USD ’000 USD ’000
For the year end 31 December 2024
Revenue 74,348 141,286
Profit for the year 13,255 6,583

As at 31 December 2024
Non-current assets 499,507 -
Current assets 196,613 141,361
Non-current liabilities 76,088 -
Current liabilities 38,255 134,700
Total net equity 581,777 6,661

Company share of profit for the year 5,090 3,400

ADNOC Drilling Company P.J.S.C. 35

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
9. Inventories
31 December 31 December
2024 2023
USD ’000 USD ’000

Inventories 255,750 233,279

Less: allowance for slow moving or obsolete inventories (32,667) (27,172)

223,083 206,107
The movement in the allowance for slow moving or obsolete inventories during the year was as follows:
31 December 31 December
2024 2023
USD ’000 USD ’000

Balance at beginning of the year 27,172 26,058

Charge during the year 5,495 1,114

Balance at end of the year 32,667 27,172

10. Trade and other receivables

31 December 31 December
2024 2023
USD ’000 USD ’000

Advances 93,560 63,166

Contract assets 25,915 14,248
VAT receivables - net 27,080 46,080
Prepayments 16,643 21,363
Trade receivables 10,284 4,384
Other receivables 12,476 4,705

185,958 153,946

11. Cash and cash equivalents

31 December 31 December
2024 2023
USD ’000 USD ’000

Cash held by ADNOC Group Treasury Services (AGTS)

(note 18) 329,816 353,613
Cash in bank 7 7
Cash on hand 465 502

330,288 354,122

Cash held by AGTS are funds held on behalf of the Group and are available on demand and is in nature of
nature of cash and cash equivalents.
ADNOC Drilling Company P.J.S.C. 36

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
12. Assets held for sale
31 December 31 December
2024 2023
USD ’000 USD ’000

Balance at the beginning of the year 10,717 -

Transfer (to)/from property and equipment – net
(note 5) (10,717) 10,717
Transfer from property and equipment – net (note 5) 5,708 -
Net book value at end of the year 5,708 10,717

The Board of Directors, in their meeting held on 10 February 2023, approved to proceed with the sale of two
rigs within the Offshore Jackup segment. During the year the criteria of classifying these rigs as held for sale is
no longer met due to management decision of the alternative use of these rigs hence have been transferred to
property and equipment (note 5) on lower of carrying amount before the asset was classified as held for sale
and recoverable amount.

During the year, the Board of Directors, in their meeting held on 29 October 2024, approved to proceed with the
sale of two new rigs within the Offshore Jackup segment. One rig has already been sold to a related party (note
18) as of 31 December 2024.

13. Share capital and statutory reserve

31 December 31 December
2024 2023
Number of Number of
shares USD shares USD
(‘000) ‘000 (‘000) ’000

Ordinary share capital of USD: 0.0272294

(AED: 0.10) each (2023 USD:
0.0272294 (AED: 0.10) each) 16,000,000 435,671 16,000,000 435,671

In accordance with the UAE Federal Decree Law (32) of 2021, and the Articles of Association of the Company,
10% of the profit is transferred to a non-distributable statutory reserve. Such transfer is required to be made
until the reserve is equal to 50% of the paid-up share capital.
ADNOC Drilling Company P.J.S.C. 37

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

14. Share Premium and treasury shares

During the year, the Company appointed Al Ramz Capital a licensed Market Maker on the Abu Dhabi Securities
Exchange (ADX) that offers liquidity provision services, to place buy and sell orders of the Company’s shares
with the objective of reducing bid/ask spreads as well as reducing price and volume volatility.
The Market Maker trades and operates within the predetermined parameters approved by the Company. The
Company has provided the funding to the Market Maker to trade the Company’s shares and it carries all risks
and rewards associated with the arrangement. Given the nature and substance of the arrangement, the shares
have been classified as “Treasury Shares” in Equity.

At 31 December 2024, the Market Maker held 3,985 thousand shares (2023: Nil) on behalf of the Company,
which are classified under equity as treasury shares at the average purchase price amounting to USD 5,670
thousand (2023; nil). A cumulative net gain of USD 504 thousand has been recognised at 31 December 2024
as Share Premium under equity.
15. Borrowings
31 December 31 December
2024 2023
USD ’000 USD ’000

Term loans* 2,294,750 1,992,264

*The amount is net of transaction cost.

31 December 31 December
2024 2023
USD ’000 USD ’000
Disclosed as follows:
Current 799,523 -
Non-current 1,495,227 1,992,264
2,294,750 1,992,264

The borrowings presented in the consolidated statement of financial position consist of the following:
Year of 31 December 31 December
Type Currency Interest rate maturity 2024 2023
USD ’000 USD ’000

Term 0.8% and October

Loan (Facility B) USD Term SOFR 2025 498,735 498,014

Term 0.95 % & Term November

Loan (Facility C& D) USD SOFR 2027 1,796,015 1,494,250
2,294,750 1,992,264

On 24 October 2021, the Group entered into a syndicated Term loan and Revolving Facilities Agreement with
multiple banks and financial institutions, for general corporate purpose and without limitation shall include
payment of dividends, payments for products and services to develop integrated services abilities and the
payment of transaction costs associated with the facilities which is as follows:
ADNOC Drilling Company P.J.S.C. 38

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

15. Borrowings (continued)

Term loan (Facility B)
Facility A – Facility B –
Revolving Loan Term Loan
USD ’000 USD ’000

Abu Dhabi Commercial Bank PJSC (note 18) 165,000 110,000

First Abu Dhabi Bank PJSC(note 18) 165,000 110,000
Emirates NBD Bank PJSC 70,000 140,000
Bank of America Europe Designated Activity Company 60,000 40,000
China Construction bank – DIFC Branch 60,000 20,000
State Bank of India – DIFC Branch 60,000 40,000
Goldman Sachs Bank USA 50,000 -
The National Bank of Ras Al-Khaimah 30,000 -
Agricultural Bank of China 30,000 20,000
United Arab Bank P.J.S.C. 30,000 -
J.P. Morgan Securities PLC 15,000 -
Al Ahli Bank of Kuwait K.S.C.P.(Dubai Branch) 15,000 -
Banque MISR- Dubai Branch - 20,000
750,000 500,000

The facilities terminate four (4) years from the date of the agreement. An amount of USD 500,000 thousand for
facility B was drawn down with facility A unutilized as of 31 December 2024.
Term loan (Facility C& D)
On 1 November 2023, the Group entered into a term loan facility of USD 1,500,000 thousand and Revolving
Facility up to AED 1,840,000 thousand (USD: 501,021 thousand) with multiple banks and financial institutions
with an initial maturity of 4 years. An amount of AED 1,100,000 thousand and USD1,500,000 thousand was
drawn down from facility C and D respectively.
Facility C – Facility D –
Revolving Loan Term Loan
AED ’000 USD ’000
Abu Dhabi Commercial Bank PJSC (note 18) 690,000 200,000
First Abu Dhabi Bank PJSC (note 18) 550,000 200,000
Emirates NBD Bank PJSC 500,000 -
Arab Bank for Investment & Foreign Trade (Al Masraf) 100,000 100,000
The Saudi National Bank - 250,000
Bank of China (Dubai) Branch - 200,000
Industrial and Commercial Bank of China Limited, Dubai
(DIFC) Branch - 200,000
Gulf Bank K.S.C.P - 150,000
The National Bank of Ras Al-Khaimah - 140,000
Citibank N.A., ADGM Branch - 40,000
JPMorgan Chase Bank, N.A., London Branch - 20,000
1,840,000 1,500,000
ADNOC Drilling Company P.J.S.C. 39

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

15. Borrowings (continued)

The movement in borrowings is as follows:

Balance at Balance at
1 January Drawdown Repayment Others* 31 December
2024 2024
USD’000 USD’000 USD’000 USD’000 USD’000

Facility B 498,014 - - 721 498,735

Facility C - 821,817 (522,294) - 299,523
Facility D 1,494,250 - - 2,242 1,496,492
1,992,264 821,817 (522,294) 2,963 2,294,750

Balance at Balance at
1 January Drawdown Repayment Others* 31 December
2023 2023
USD’000 USD’000 USD’000 USD’000 USD’000

Syndicated loan 1,500,000 - - (1,500,000) -

Facility B - 500,000 - (1,986) 498,014
Facility D - - - 1,494,250 1,494,250
1,500,000 500,000 - (7,736) 1,992,264

*Others include Transaction cost and non-cash transaction

16. Provision for employees’ end of service benefits

The movement in the provision for employees’ end of service benefit is as follows:
31 December 31 December
2024 2023
USD ’000 USD ’000

Balance at beginning of the year 114,422 123,386

Charge during the year (note 22) – net 22,464 130
Paid during the year (6,939) (9,094)
Balance at end of the year 129,947 114,422

Disclosed as follows:
Current 7,094 9,094
Non-current 122,853 105,328

129,947 114,422
ADNOC Drilling Company P.J.S.C. 40

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

17. Trade and other payables

31 December 31 December
2024 2023
USD ’000 USD ’000
Accrued expenses 834,824 575,713
Trade payables 203,511 159,221
Contract liabilities 140,719 140,207
Retention payables 49,050 33,686
Accrual for employees’ benefits 8,690 16,895
Pension payable 3,440 3,182
Other payables 364 866
1,240,598 929,770
Disclosed as follows:
Current 1,175,749 848,834
Non-current 64,849 80,936

1,240,598 929,770

The average credit period on purchases is 60 days (2023: 60 days). The Group has financial risk
management policies in place to ensure that all payables are paid within the credit timeframe.

18. Related party balances and transactions

Related parties represent the shareholders, directors and key management personnel of the Group, and entities
controlled, jointly controlled or significantly influenced by such parties and the Government of the Emirate of
Abu Dhabi and its related parties. Pricing policies and terms of these transactions are approved by the Group’s
management.
The Group’s transaction with other entities owned or controlled, either directly or indirectly by the Government
of Abu Dhabi, included in the consolidated statement of financial position are as follows:

31 December 31 December
2024 2023
USD ’000 USD ’000
(a) Due from related parties 144,080 52,764
(b) Other balances due from related parties (i) 1,245,206 952,936
Less: expected credit loss allowance (28,004) (19,004)

1,361,282 986,696

(a) Due from related parties

ADNOC Offshore 132,570 32,876
Abu Dhabi National Oil Company (ADNOC) 11,143 5,573
ADNOC Sour Gas 159 14,193
Al Dhafrah JV 118 122
ADNOC Refining 90 -

144,080 52,764
ADNOC Drilling Company P.J.S.C. 41

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
18. Related party balances and transactions (continued)

At 31 December 2024, the Group had a significant concentration of credit risk, with two of the customer
representing 99.7% (2023: two of the customer representing 89.2%) of related parties receivables outstanding
at that date.

Management is confident that this concentration of credit risk will not result in any loss to the Group considering
the credit history of these customers and the fact that those balances are due from sister companies majority
owned by ADNOC, which is wholly owned by the Government of Abu Dhabi.
As at 31 December, the ageing of related party balances was as follows:
31 December 31 December
2024 2023
USD ’000 USD ’000

Not past due 137,341 48,490

Due from 31 to 60 days 1,309 192
Due from 61 to 90 days 3,345 707
Due from more than 91 days 2,085 3,375

144,080 52,764

31 December 31 December
2024 2023
USD ’000 USD ’000
(b) Other balances due from related parties (i)
ADNOC Onshore 806,888 519,018
ADNOC Offshore 317,117 392,678
Turnwell Industries LLC 62,369 -
Abu Dhabi National Oil Company (ADNOC) 55,448 39,198
ADNOC Logistics & Services plc 3,000 -
Al Dhafra JV 215 377
ADNOC Sour Gas 150 1,665
ADNOC Gas 19 -

1,245,206 952,936

(i) Other balances due from related parties represents revenue generated from providing drilling and oil field
services but not yet billed. Billing will occur based on the terms of the contract. The contract assets primarily
relate to the Group’s rights to consideration for the drilling and oilfield services provided to the Group’s clients
but not billed at the reporting date.

The movement in allowance for expected credit loss during the year was as follows:
31 December 31 December
2024 2023
USD ’000 USD ’000

Balance at beginning of the year 19,004 9,004

Charge during the year (note 20) 9,000 10,000

Balance at end of the year 28,004 19,004

ADNOC Drilling Company P.J.S.C. 42

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

18. Related party balances and transactions (continued)

31 December 31 December
2024 2023
USD ’000 USD ’000
Due to related parties
Turnwell Industries LLC 141,286 -
ADNOC Onshore 49,977 104,553
Abu Dhabi National Oil Company for Distribution PJSC 38,753 66,055
Abu Dhabi National Oil Company (ADNOC) 16,286 11,590
ADNOC Logistics & Services plc 4,548 6,129
ADNOC Offshore - 61,910

250,850 250,237

The balances due to/from related parties are non-interest bearing and are payable/receivable on demand.

31 December 31 December
2024 2023
USD ’000 USD ’000
Borrowings (note 15)
Abu Dhabi Commercial Bank PJSC 422,321 310,000
First Abu Dhabi Bank PJSC 399,531 310,000

821,852 620,000

31 December 31 December
2024 2023
USD ’000 USD ’000
Cash and cash equivalents (note 11)
ADNOC Group Treasury Services (AGTS) 329,816 353,613
First Abu Dhabi Bank PJSC 7 7

329,823 353,620

Significant transactions with related parties during the year are as follows:

31 December 31 December
2024 2023
USD ’000 USD ’000
Revenue
ADNOC Onshore 2,208,623 1,668,437
ADNOC Offshore 1,559,294 1,280,729
Abu Dhabi National Oil Company (ADNOC) 152,039 55,505
Turnwell Industries LLC 52,069 -
ADNOC Sour Gas 9,715 15,294
Al Dhafrah JV 1,170 179

3,982,910 3,020,144
ADNOC Drilling Company P.J.S.C. 43

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

18. Related party balances and transactions (continued)

31 December 31 December
2024 2023
USD ’000 USD ’000
Purchases
Abu Dhabi National Oil Company for Distribution PJSC 158,935 137,598
Turnwell Industries LLC 141,286 -
Abu Dhabi National Oil Company (ADNOC) 55,777 31,573
ADNOC Logistics & Services plc 14,997 13,352
ADNOC Refining - 673
370,995 183,196
Finance income
ADNOC Group Treasury Services (AGTS) 11,608 15,506

Finance cost
First Abu Dhabi Bank PJSC 2,599 9,382
Abu Dhabi Commercial Bank PJSC 5,277 9,382
7,876 18,764
Investment in Joint ventures
Share of profit from Joint ventures 8,490 -

Lease payments
Abu Dhabi National Oil Company (ADNOC) 18,969 14,036

Sale of Property and equipment

ADNOC Logistics & Services plc 3,000 -

Key management compensation

Compensation of key management personnel 6,518 6,316
Board of Directors members 7 7
Key management personnel 9 10

19. Revenue
The Group derives its revenue from providing the drilling and oilfield services over time in the following major
service lines:

31 December 31 December
2024 2023
USD ’000 USD ’000

Drilling and oilfield services 3,981,574 3,042,813

Facilitation of rigs rental 52,648 14,052

4,034,222 3,056,865

As at 31 December 2024, the Group has unsatisfied performance obligations amounting to USD 75,872
thousand (2023: to USD 62,373 thousand) that will be recognised as revenue during the next financial year.
The amount disclosed above does not include variable consideration which is constrained.
ADNOC Drilling Company P.J.S.C. 44

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

20. Direct cost

31 December 31 December
2024 2023
USD ’000 USD ’000

Staff costs (note 22) 739,280 643,488

Depreciation of property and equipment (note 5) 416,262 363,860
Repairs and maintenance 382,224 216,385
Chemicals 198,200 172,972
Hire of equipment 222,875 162,698
Fuel and lubricants 160,233 140,655
Major maintenance charges 84,250 71,751
Expected credit loss charge (note 18) 9,000 10,000
Depreciation of right-of-use assets (note 6) 14,958 5,912
Other direct cost 110,125 61,008

2,337,407 1,848,729

21. General and administrative expenses

31 December 31 December
2024 2023
USD ’000 USD ’000

Staff costs (note 22) 58,230 75,274

Depreciation of property and equipment (note 5) 10,211 4,250
Depreciation of right-of-use assets (note 6) 13,477 13,677
Amortisation of intangible assets (note 7) 3,544 3,548
Other expenses* 69,896 29,585

155,358 126,334

*Included in other expenses is auditors’ remuneration amounting to USD 308 thousand (2023: USD 262
thousand) for audit services and USD 59 thousand (2023: USD 57 thousand) for non-audit services.

The Group has not made any social contribution during the financial year ended 31 December 2024 (2023: nil).

22. Staff cost

31 December 31 December
2024 2023
USD ’000 USD ’000

Salaries and allowances 603,398 584,459

End of service benefits (note 16) 22,464 130
Pension 22,240 22,491
Other employees’ benefits 149,408 111,682

797,510 718,762
ADNOC Drilling Company P.J.S.C. 45

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
23. Finance cost
31 December 31 December
2024 2023
USD ’000 USD ’000

Finance costs on interest bearing loans 128,215 71,079

Interest on lease liabilities 7,780 3,498

135,995 74,577

24. Dividends

The Board of Directors proposed a final cash dividend of AED 7.83 fils amounting to USD 341,246 thousand for
the year ended 31 December 2022 which was approved by shareholders at the Annual General Meeting held
on 3 April 2023. The dividend was paid during the prior year.

On 9 October 2023, the Board of Directors approved an interim cash dividend of AED 8.2244 fils amounting to
USD 358,313 thousand for the first half of 2023. The dividend was paid during the prior year.

The Board of Directors, in their meeting held on 12 February 2024, proposed a final cash dividend of AED
8.2244 fils per share amounting to USD 358,310 thousand for the year ended 31 December 2023 which was
approved by shareholders at the Annual General Meeting held on 13 March 2024. The dividend was paid during
the current year.

On 2 August 2024, the Board of Directors approved an interim cash dividend of AED 9.0468 fils amounting to
USD 394,142 thousand for the first half of 2024. The dividend was paid during the current year.

25. Commitments and contingencies

The Group has the following commitments and contingent liabilities outstanding at 31 December 2024 and 31
December 2023:
31 December 31 December
2024 2023
USD ’000 USD ’000

Capital commitments – rigs procurement 77,790 93,114

Commitment for investment in Joint ventures 517,541 765,000

Bank guarantees 47 47

The above commitments and bank guarantees were issued in the normal course of business. Capital
commitments relate to ongoing and proposed projects towards procurement of rigs, cementing, wireline,
drilling system, coil tubing and other major projects across all operating segments.
ADNOC Drilling Company P.J.S.C. 46

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

26. Financial Instruments by category

31 December 31 December
2024 2023
USD ’000 USD ’000

Financial assets
Trade and other receivables* 49,840 55,169
Due from related parties 144,080 52,764
Cash and cash equivalents 330,288 354,122

524,208 462,055

Financial liabilities
Borrowings 2,294,750 1,992,264
Trade and other payables** 1,099,879 789,563
Due to related parties 250,850 250,237
Lease liabilities 25,157 189,211

3,670,636 3,221,275

* Trade and other receivables exclude advances, contract assets and prepayments
** Trade and other payables exclude contract liabilities

27. Financial instruments

Financial risk management

The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange risk, price
risk, cash flow and fair value interest rate risk), credit risk and liquidity risk. The Group’s overall risk management
programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects
on the Group’s financial performance.

Market risk management

Foreign exchange risk

Foreign exchange risk is limited as the Group’s transactions are principally in UAE Dirhams or US Dollars. As
the UAE Dirham is pegged to the US Dollar, balances in AED are not considered to represent significant currency
risk.

Price risk

The Group has no significant direct exposure to commodity price risk. Reduction in oil prices may lead to
reduction in the level of future drilling services procured by customers who have significant exposure to oil and
gas prices.
ADNOC Drilling Company P.J.S.C. 47

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

27. Financial instruments (continued)

Financial risk management (continued)

Fair value interest rate risk

The following table demonstrates the sensitivity to reasonably possible changes in interest rates, with all other
variables held constant, of the Group’s profit.

Effect on profit
USD’000

2024
+10 increase in basis points (2,295)

-10 increase in basis points 2,295

2023
+10 increase in basis points (1,992)

-10 increase in basis points (1,992)

The fair values of the Group 's financial instruments are not materially different from their carrying amounts.

Credit risk management

Credit risk arises from balances with banks and financial institutions, as well as credit exposures to customers,
including outstanding receivables, due from group companies and committed transactions. Management
assesses the credit quality of its customers, taking into account financial position, past experience and other
factors. Individual risk limits are based on management’s assessment on a case-by-case basis. The utilisation
of credit limits is regularly monitored.

The Group’s policy is to place cash and cash equivalents with reputable banks and financial institutions and the
Group’s management does not expect any losses from non-performance of its counterparties as it believes that
adequate allowance has been created against the impaired receivables.

The Group’s trade receivable balances are monitored on an ongoing basis with the result that the Group’s
exposure to bad debts is not significant. The maximum exposure is the carrying amount of the trade receivables
as disclosed in note 10.

Liquidity risk management

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset. The Group 's approach to
managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its liabilities
when due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage
to the Group 's reputation.
ADNOC Drilling Company P.J.S.C. 48

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

27. Financial instruments (continued)

Financial risk management (continued)

Liquidity risk management (continued)

The Group ensures that it has sufficient cash on demand to meet expected operational expenses for a short
term period, including the servicing of financial obligations; this excludes the potential impact of extreme
circumstances that cannot reasonably be predicted, such as natural disasters. The table below summarises the
maturity profile of the Group’s financial liabilities at 31 December 2024 and 2023 based on the contractual
undiscounted payments.

Carrying Contractual 1 year More than

Notes value cash flows or less 1 year
USD’000 USD’000 USD’000 USD’000
31 December 2024
Lease liabilities 6 25,157 26,872 13,163 13,709
Borrowings 15 2,294,750 2,299,523 799,523 1,500,000
Trade and other payables 17 1,099,879 1,099,879 1,099,879 -
Due to related parties 18 250,850 250,850 250,850 -

3,670,636 3,677,124 2,163,415 1,513,709

31 December 2023
Lease liabilities 6 189,211 200,641 36,833 163,808
Borrowings 15 1,992,264 2,000,000 - 2,000,000
Trade and other payables 17 789,563 789,563 789,563 -
Due to related parties 18 250,237 250,237 250,237 -

3,221,275 3,240,441 1,076,633 2,163,808

Capital risk management

The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going
concern in order to provide returns for its shareholders and benefits for other stakeholders and to maintain an
optimal capital structure to reduce the cost of capital. The policies are based on management’s assessment of
available options, in conjunction with the shareholders.

In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to
shareholders or issue new shares.

The Group monitors capital on the basis of its gearing ratio. This ratio is calculated as net debt divided by total
equity plus net debt. Net debt is calculated as total borrowings (including current and non-current borrowings as
shown in the consolidated statement of financial position) less cash and cash equivalents. Total capital is
calculated as total equity as shown in the consolidated statement of financial position plus net debt.
ADNOC Drilling Company P.J.S.C. 49

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)
28. Segment reporting

Information regarding the Group’s operating segments is set out below in accordance with IFRS 8 Operating
Segments. IFRS 8 requires operating segments to be identified on the basis of internal reports about
components of the Group that are regularly reviewed by the Chief Executive Officer, as the Chief Operating
Decision Maker (CODM), in order to allocate resources to the segment and to assess its performance.
Information reported to the Chief Executive Officer for the purpose of resource allocation and assessment of
segment performance focuses on the financial performance of each business segment and property and
equipment only. No information that includes the segments’ assets (excluding property and equipment) and
liabilities are reported to the Chief Executive Officer. There were no changes in the current year which warranted
a reassessment of the operating segments.

For management purpose the Group is organised into four operating segments, all of which are referred to as
‘business units’:

Onshore segment is the largest segment with land rigs, water wells, work over rigs deployed mainly across
ADNOC Onshore with a few rigs also assigned to other concessions within the ADNOC group.

Offshore Jackup with owned jackups and some rentals predominantly meeting the ADNOC Offshore drilling
needs with a few rigs also assigned to other concessions within the ADNOC group.

Offshore Island rigs is the third largest segment representing the Island part of ADNOC Offshore’s
requirement.

Oilfield Services (OFS) segment was created to provide oil field services through the partnership with Baker
Hughes in late 2018.

The Group operates primarily in United Arab Emirates and accordingly no further geographical analysis of
revenue, profit, assets and liabilities has been provided.

The revenue reported represents revenue generated from external customers only. There were no inter-
segment sales in current or previous year.

Earnings before interest, tax, depreciation and amortisation “EBITDA” is the measure of the profitability being
reviewed by the CODM which is the profit for the year before finance cost, net (both of which are as presented
in consolidated statement of profit or loss and other comprehensive income) depreciation, amortisation and
impairment.

Refer to note 18 for analysis of revenue from major customers.

ADNOC Drilling Company P.J.S.C. 50

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

28. Segment reporting (continued)

Offshore Offshore
Onshore Jackup Island OFS Total
31 December 2024 USD’000 USD’000 USD’000 USD’000 USD’000

Revenue 1,892,670 1,116,043 212,393 813,116 4,034,222

Direct cost
(excluding depreciation and
impairment) (894,919) (310,245) (77,756) (623,287) (1,906,207)

Gross profit (excluding 997,751 805,798 134,637 189,829 2,128,015

depreciation and impairment)

General and administrative

expenses (excluding depreciation &
amortisation) (75,339) (40,603) (6,680) (5,484) (128,106)
Share of profit 1,100 - - 7,390 8,490
Other income, net 3,714 2,375 463 (164) 6,388

EBITDA 927,226 767,570 128,420 191,571 2,014,787

EBITDA is reconciled to profit before for the year as follows:

Offshore Offshore
Onshore Jackup Island OFS Total
31 December 2024 USD’000 USD’000 USD’000 USD’000 USD’000

EBITDA 927,226 767,570 128,420 191,571 2,014,787

Depreciation included in direct cost (128,994) (211,940) (22,193) (68,093) (431,220)

Depreciation & amortisation
included in general and
administrative expenses (15,507) (8,366) (2,088) (1,271) (27,232)

Total depreciation & amortisation (144,501) (220,306) (24,281) (69,364) (458,452)

Finance cost, net (71,365) (42,169) (8,224) (2,501) (124,259)

Profit before tax for the year 711,360 505,095 95,915 119,706 1,432,076
ADNOC Drilling Company P.J.S.C. 51

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

28. Segment reporting (continued)

Offshore Offshore
Onshore Jackup Island OFS Total
31 December 2023 USD’000 USD’000 USD’000 USD’000 USD’000

Revenue 1,495,057 799,726 209,079 553,003 3,056,865

Direct cost (excluding depreciation

and impairment) (714,316) (261,068) (67,482) (436,091) (1,478,957)

Gross profit (excluding 780,741 538,658 141,597 116,912 1,577,908

depreciation and impairment)

General and administrative

expenses (excluding depreciation &
amortisation) (61,355) (31,911) (8,402) (3,191) (104,859)
Other income, net 5,079 3,321 635 812 9,847

EBITDA 724,465 510,068 133,830 114,533 1,482,896

EBITDA is reconciled to profit for the year as follows:

Offshore Offshore
Onshore Jackup Island OFS Total
31 December 2023 USD’000 USD’000 USD’000 USD’000 USD’000

EBITDA 724,465 510,068 133,830 114,533 1,482,896

Depreciation included in direct cost (109,729) (178,721) (13,623) (67,699) (369,772)

Depreciation, amortisation and
impairment included in general and
administrative expenses (12,806) (5,682) (1,718) (1,269) (21,475)

Total depreciation, amortisation

and impairment (122,535) (184,403) (15,341) (68,968) (391,247)
Finance cost, net (33,861) (19,980) (5,009) - (58,850)

Profit for the year 568,069 305,685 113,480 45,565 1,032,799

*Excludes depreciation, amortisation and impairment.

ADNOC Drilling Company P.J.S.C. 52

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

28. Segment reporting (continued)

The following table represents segment assets for the Group’s operating segments as reviewed by CODM:

Offshore Offshore
Onshore Jackup Island OFS Total
USD ’000 USD ’000 USD ’000 USD ’000 USD ’000

31 December 2024

Property and equipment 1,442,018 2,832,305 223,398 854,953 5,352,674

31 December 2023

Property and equipment 1,242,716 2,726,326 186,674 691,824 4,847,540

29. Basic and diluted earnings per share

Earnings per share (EPS) amounts are calculated by dividing the profit attributable to shareholders of the Group
by the weighted average number of shares outstanding during the year.

31 December 31 December
2024 2023
USD ’000 USD ’000

Profit attributable to shareholders of the Group (USD’000) 1,303,566 1,032,799

Weighted average number of shares for the purpose of basic

earnings per share (note 13)
15,998,530 16,000,000

Earnings per share (USD‘000) 0.081 0.065

The weighted average number of ordinary shares takes into account the weighted average effect of changes
in treasury shares (note 14) during the year.
ADNOC Drilling Company P.J.S.C. 53

Notes to the consolidated financial statements

for the year ended 31 December 2024 (continued)

30. Income tax

The Group is subject to income tax at 9% on its taxable profits in accordance with the fiscal arrangement (the
“Fiscal Arrangement”) with Abu Dhabi Supreme Council for Financial and Economic Affairs effective 1 January
2024.
31 December
2024
USD’000

Current income tax expense 129,907

Deferred tax credit (1,397)
128,510

Recognized deferred taxes of the Group relate to the tax effects of the following:
31 December
2024
USD’000
Net temporary differences arising from carrying values of
- provision for employees end of service benefits 15,525

The charge for the year can be reconciled to the profit before tax as follows:
31 December
2024
USD’000

Profit before tax 1,432,076

- Applicable tax charge at statutory rates (9%) 128,887

- Tax effect of share of results of equity accounted
investee (764)
- Impact of permanent difference 1,785

Current tax reported in the consolidated statement

of profit or loss 129,907

The current tax charge includes the impact of taxes from its foreign operations as per laws and regulations of
the respective jurisdiction. The Organisation of Economic Cooperation and Development (OECD) has published
GloBE Model Rules, which include a minimum 15% tax rate by jurisdiction ("Pillar Two"). Various countries have
enacted or intend to enact tax legislation to comply with Pillar Two rules. As of the reporting date, Pillar Two
legislation has not been substantively enacted in the UAE. The Group is in the process of an assessment of its
impact on its future earnings.
31. Subsequent event
The Board of Directors, in their meeting held on 12 February 2025, proposed a final cash dividend of AED
9.0468 fils per share amounting to USD 394,144 thousand for the year ended 31 December 2024. The proposed
dividend is subject to approval of the shareholders at the Annual General Meeting.
32. Approval of the consolidated financial statements
The consolidated financial statements were approved by the Board of Directors and authorised for issue on 12
February 2025.