Muscat: Oman’s oil and gas drilling services firm Abraj Energy Services plans to list up to 49% of its shares on the Muscat stock exchange in March through an initial public offering (IPO), a company statement said on Sunday.

The IPO forms part of an exit plan recently announced by sovereign wealth fund, the Oman Investment Authority (OIA), the state news agency said. The IPO is a strategic step to further bolster Oman’s capital markets, boost private sector contribution to GDP, enhance the economy’s competitiveness, and attract foreign direct investments.

State energy company OQ, the selling shareholder, is wholly-owned by the OIA, which expects to exit eight investments in 2023 to generate about $1.3 billion.

A diversified oil and gas services firm, Abraj is the largest drilling contractor in Oman with a market share of almost 30 percent.

As of September 30, 2022, Abraj Energy Services had an order backlog worth OMR593 million ($1.5 billion) for the years 2023 through 2031, which is more than the revenue generated in the last five full years. The company has a strong revenue history, earning OMR125 million from customer contracts in the year ending December 31, 2021. Additionally, from 2007 to 2021, the company had a Compound Annual Growth Rate of 23 per cent, driven by growth in its drilling rig fleet.

The company plans to pay yearly dividends, subject to debt repayments and covenants, working capital requirements, operational expenditure obligations, growth plans, and necessary approvals. For the year ending December 31, 2022, Abraj Energy Services intends to pay a dividend of 85 per cent of profit in 2023. In the following years, the company plans to pay a yearly dividend for the years ended December 31, 2023, and 2024, respectively, which will be the highest of 85 per cent of the prior year’s profit or a six per cent increase on the prior year’s dividend. The company’s return on equity was 13.6% in the first nine months of 2022, and it expects to pay a dividend of 85% of profit for last year, in 2023.

Ahli Bank Oman, EFG Hermes UAE and National Bank of Oman are acting as global coordinators on the IPO which will be open to investors in Oman, and international investors outside the United States. The subscription period is expected to begin in February.