ADES Holding suspends 5 offshore rigs in Saudi Arabia

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ADES Holding Company mutually agreed with its client in Saudi Arabia to temporarily halt operations on 5 of its 33 offshore jack-ups operating in the Kingdom for one year, according to a press release.

One of the suspended rigs will be deployed to the group’s awarded campaign in Thailand, which will commence operations in the second half (H2) of 2024, while a second rig is poised for another imminent opportunity in the region.

The temporary suspensions for the 5 rigs will be effective seven days from the signing date of the mutually agreed suspension notice.

Meanwhile, the company’s projected full-year earnings before interest, taxes, depreciation, and amortisation (EBITDA) in 2024 range from SAR 2.89 billion to SAR 3.04 billion.

The Saudi group will increase its efforts to boost its geographical expansion strategy and leverage the rigs’ high marketability and the solid pipeline of opportunities within and outside the MENA region.

Mohamed Farouk, CEO of ADES Holding, said: “We remain in active and healthy discussions with our major client in Saudi Arabia following the latest developments in the Saudi market as we continue to demonstrate agility with a client-centric approach – aligning with our client’s strategic needs and objectives – and while preserving the remaining backlog of the temporarily suspended contracts.”

“Concurrently, with the very high utilization rates of our offshore fleet over the past few years, new capacities made available will provide ADES with further flexibility when expanding its footprint in existing and attractive new markets,” Farouk added.

He elaborated: “This will allow us to further capitalize on the current tight market conditions with significantly high utilization and elevated daily rates and build on our recent award in Thailand and the other potential one in the region while strengthening profitability.”

In 2023, ADES Holding registered SAR 452 million in net profit, up 13.57% from SAR 398 million in 2022.