ADNOC Drilling, which listed on ADX in late 2021, is getting into the investment space through its newly struck alliance with Alpha Dhabi. Image Credit: Supplied

Dubai: A new joint venture has got underway between ADNOC Drilling Company and Alpha Dhabi Holding - one of Abu Dhabi's biggest investment companies. The new entity will 'pursue global investments' in energy technology and expand tech-enabled energy services.

As the first investment in the JV, Alpha Dhabi contributed its 25 per cent stake in Gordon Technologies, a US-based provider of measurement while drilling technology to the oil and gas industry. (The stake has been valued at around $180 million.)

ADNOC Drilling holds 51 per cent in the venture, with both having equal representation on the board of directors. The JV’s financial results will be accounted for by ADNOC Drilling through the equity method starting from Q1-2024 financials.

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The JV - and the 25 per cent Gordon stake - should create 'value accretive returns' to both shareholders and will be 'synergistic' with ADNOC Drilling’s business. "It will also support ADNOC Drilling’s long-term dividend growth profile," said a statement.

What will be the JV's focus?
Incorporated in ADGM, the new JV will acquire and invest in companies offering tech-enabled oilfield services
solutions. It plans to be a 'major driver' of investment decisions with the ability to support the UAE’s wider energy transition ambitions.

"Since Alpha Dhabi’s minority stake acquisition of Gordon Technologies in 2022, we have supported its growth strategy in the US market - and put the foundations in place for expansion to the Middle East," said Hamad Al Ameri, Managing Director and Group CEO of Alpha Dhabi.

No debt

As for Gordon Technologies, the company has zero leverage and its acquisition is 'economically accretive' to the JV partners from a 'profitability, valuation multiple, cash flow generation and dividend potential standpoint'. It will also likely have a FY2023 free cash flow yield of more than 10 per cent.