Arabian Drilling draws $43bn in orders for Riyadh IPO

Arabian Drilling Co., a Saudi oilfield-services firm partly held by Schlumberger, drew $43bn in orders for its initial public offering, underscoring the strong investor appetite for Middle Eastern share sales.

The company set the final offer price at SAR100 ($26.6) a share, the top end of a range, raising $710m after a book-building process for institutional investors. The IPO opens for retail investors on October 18 until October 19.

The Middle East has been a bright spot for IPOs in 2022, a year otherwise marked by stock selloffs and recession fears. Elevated oil prices and investor inflows drove deals in Saudi Arabia, Dubai and Abu Dhabi, and the deals pipeline still remains busy.

Arabian Drilling’s offering was fully covered across the price range of SAR90 and SAR100 a share within only hours of opening for subscription. About a third of the IPO will be new shares, and the proceeds will be used to scale up onshore and offshore fleet and expand operations in the GCC region.

“Global investors have come to recognise the significant and integral role we play – and will continue to play – in the oil and gas value chain in the kingdom,” chief executive officer Ghassan Mirdad said in a statement. “Looking ahead, we also have plans to grow and expand further into the GCC, where we are also witnessing strong demand increases.”

Arabian Drilling was founded in 1964 and counts Saudi Aramco among its main customers. Saudi Arabia’s Industrialization & Energy Services Co. owns 51 per cent of the firm, while Services Petroliers Schlumberger owns the rest.

Goldman Sachs Group, HSBC Holdings and SNB Capital are managing the IPO.