Abu Dhabi National Oil Company (Adnoc) has said it has raised over $1.1 billion through an initial public offering of its Adnoc Drilling subsidiary, which was oversubscribed multiple times by local, regional and international investors.

The Emirati state-owned giant said on Monday that total “gross demand for the IPO amounted to over $34 billion, implying an oversubscription level in excess of 31 times in aggregate”.

Adnoc had initially offered a 7.5% stake in the IPO but later “increased offering size from 1,200,000,000 ordinary shares to 1,760,000,000 ordinary shares, equivalent to 11% of the total issued share capital”.

An offer price of 2.30 dirhams ($0.63) per ordinary share, will be resulting in gross proceeds of over $1.1 billion to Adnoc, upon settlement, it added.

“Upon settlement, Adnoc Drilling’s IPO will be the largest ever ADX (Abu Dhabi Securities Exchange) listing, further bolstering the UAE and Abu Dhabi’s equity capital markets,” it said.

Upon listing on the local stock exchange ADX, Adnoc will continue to own “a majority 84% stake in the company, while Baker Hughes, which entered into a strategic partnership with Adnoc Drilling in October 2018, will retain its 5% shareholding”, the company added.

Helmerich & Payne will hold 1% through its IPO cornerstone investment announced on 8 September.

Adnoc’s IPO plans for its drilling unit is its second offering after it listed its downstream subsidiary Adnoc Distribution in 2017 on the ADX.

Raising cash

State-owned oil and gas giants in the Middle East are increasingly selling stakes in their key assets, aimed at diversifying their oil-dependent economies and raising cash for their expansion plans.

Adnoc said the IPO would allow the company to more “actively manage and optimise its portfolio of assets and create new investment opportunities across its business [and] increase trading liquidity in the shares".

Group chief executive Sultan Ahmed al Jaber earlier said the IPO is a “highly compelling offering, in a company with a robust growth trajectory and attractive dividend policy".

Largest regional drilling player

Adnoc previously said: “Adnoc Drilling is the largest national drilling company in the Middle East by rig fleet size with 107 rigs, of which 96 rigs are owned and 11 rigs are rented.”

A key member of the elite Opec grouping, Adnoc has sold stakes in its oil and gas pipelines raising billions of dollars, a move aimed at diversifying its business and maintaining the company’s focus on its core assets.

The Adnoc group has ambitious plans to scale up its oil production capacity to 5 million barrels per day by end of this decade, significantly higher than its existing 4 million bpd capacity.