Patterson-UTI Signs Term Sheet to Partner with ADNOC Drilling in the UAE

HOUSTON, TX / ACCESSWIRE / May 13, 2024 / PATTERSON-UTI ENERGY, INC. (NASDAQ:PTEN) ("Patterson-UTI" or "the Company") today announced that its subsidiary, Patterson-UTI International Holdings, Inc., has signed a non-binding term sheet with ADNOC Drilling, the largest national drilling contractor in the Middle East and the sole provider of drilling rig services in the Emirate of Abu Dhabi. Subject to the execution of definitive agreements and any necessary regulatory approvals, Patterson-UTI expects to hold a minority equity interest in Turnwell Industries LLC OPC ("Turnwell"), a company recently formed by ADNOC Drilling. Patterson-UTI expects that Schlumberger Middle East SA, a subsidiary of SLB, will also hold a minority equity interest in Turnwell. Turnwell has been awarded a $1.7 billion contract to drill and complete 144 unconventional wells for Abu Dhabi National Oil Company (ADNOC).

In exchange for the minority equity interest, Patterson-UTI expects to primarily provide drilling, completion, and other oilfield service expertise to Turnwell, as well as a limited cash contribution to fund our portion of working capital. While Patterson-UTI does not plan to initially contribute or provide drilling and completion equipment, the Company may later do so depending on the long-term capital return opportunity.

"We are pleased that ADNOC Drilling recognizes Patterson-UTI as a premier drilling and completions company and technology leader, and we look forward to reaching an agreement to bring our expertise to the initial phase of this groundbreaking project," said Andy Hendricks, Patterson-UTI's Chief Executive Officer. "We are excited by the opportunity to partner with ADNOC Drilling and SLB to improve our position in one of the most important oil and gas regions in the world. There is a vast unconventional resource that is expected to be developed in the United Arab Emirates over many years, and we are confident that our expertise and knowledge from our experience in the United States can help Turnwell deliver to the customer U.S. shale type efficiencies to the drilling and completions process."

Mr. Hendricks continued, "I am excited about this potential opportunity to allow Patterson-UTI to grow our presence in the Middle East in a capital efficient manner, as we do not expect to initially contribute any capital equipment. We also do not expect this opportunity to change our previously announced capital expenditure budget or impact our expectation to return at least $400 million to shareholders in 2024 through dividends and share repurchases. We will continue to be strategic about our capital deployment and this potential opportunity with ADNOC Drilling allows us to participate in the early stages of a project that could provide substantial growth prospects over the course of many years. We think this opportunity has the potential to create significant value for our partners, the customer, and our shareholders."