Arabian Drilling Returns To $8.4M Q3 Profit As Offshore Rigs Restart

Arabian Drilling posted a net profit of $8.4 million in the third quarter of 2026, reversing a net loss of the same size in the preceding three months. The Saudi-listed contractor credited resumed offshore drilling and cost-efficiency measures for the swing, disclosed in a bourse filing on the Saudi Exchange.

Revenue for the quarter came in at $216.2 million (SAR 810.7 million), up 6% from $203.9 million (SAR 764.7 million) in the second quarter. Measured against a year earlier, sales slipped 2.9% from $222.8 million (SAR 835.4 million), with lower rig activity driving the decline.

Margins recover sharply

The profit-and-loss lines below the top line moved faster than revenue. Gross profit reached $35.5 million (SAR 133.2 million), an increase of 89.5% from $18.7 million (SAR 70.3 million) in the prior quarter. Operating profit of $21.9 million (SAR 82.2 million) was more than four times the $5 million (SAR 18.8 million) booked three months earlier.

Arabian Drilling tied the improvement to operations restarting at four offshore rigs. Weaker land-rig activity offset part of that gain. The company also pointed to more efficient rig moves and cost optimization as supports for profitability.

Founded in 1964, Arabian Drilling provides onshore and offshore oil and gas drilling services in Saudi Arabia. Its customers include Saudi Aramco, KJO, SLB and Baker Hughes.

Nine-month picture remains weak

The single-quarter recovery does not repair the year. Revenue for the first nine months fell 8.1% year on year to $639.2 million (SAR 2.397 billion) from $695.7 million (SAR 2.609 billion). Temporary suspensions of offshore drilling and the absence of extended rig-move work accounted for the drop.

Nine-month net profit collapsed 90.6% to $1.8 million (SAR 6.9 million), against $19.5 million (SAR 73.3 million) in the same stretch of 2025. Gross profit for the period declined 24.7% to $81.1 million (SAR 304 million), and operating profit fell 38% to $42.9 million (SAR 160.8 million).

The third quarter, in other words, was not enough to offset a first half spent largely waiting for rigs to go back to work.

Contract backlog and guidance

In August 2026, Arabian Drilling said every previously suspended offshore rig had clearance to resume operations, and that offshore fleet utilization was expected to hit 100% by the end of the third quarter.

Roughly a month later, the company secured a four-year contract worth about $533.3 million (SAR 2 billion) with Khafji Joint Operations covering four offshore jack-up rigs. That award is expected to start adding to revenue near the end of the fourth quarter, and the company said its contract backlog would reach a record $4.8 billion (SAR 18 billion) once it is booked, improving visibility on future sales.

Management guided fourth-quarter revenue about 8% to 10% above the third quarter, citing higher drilling activity. Capital expenditure guidance for 2026 was raised to $200 million-$213 million (SAR 750 million-SAR 800 million) to speed up rig preparation and deployment under contracts won recently.

CFO Farid Mustafayev said the increase mainly supports "acceleration and onboarding of rigs for recently awarded contracts," describing it as "disciplined investment in our potential growth" as the fleet is readied for heavier activity in 2027.

acceleration and onboarding of rigs for recently awarded contracts,

The coming quarters will test whether a quarter built on rigs returning to service can be repeated once the easy comparisons are gone — and whether a record backlog converts into the revenue that the 2026 results have so far lacked.