NESR Stock Rises 17% After Winning Multi-Billion-Dollar Saudi Aramco Contract

• National Energy Services Reunited said that, over the course of the contract, drilling and completion activity may trend higher than current levels to support the project's scale and production targets.
• Retail sentiment on National Energy Services Reunited jumped to ‘extremely bullish’ from ‘bullish’ territory compared to a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.
• On Tuesday, Saudi Aramco announced the completion of an $11 billion lease and leaseback investment agreement for its Jafurah gas processing facilities with a consortium of international investors led by funds managed by Global Infrastructure Partners.

National Energy Services Reunited Corp (NESR) shares jumped 17% in premarket trading on Wednesday after the company announced it had been awarded a multi-billion-dollar contract as part of Saudi Aramco's tender for completion services in Jafurah and other projects within the Kingdom over a five-year term.

The company said that the contract involves a significant mobilization of completion services and a broad scope of work, which is expected to support the next phase of growth of unconventional gas development, as part of the Kingdom's ambitious “Vision 2030” plan of energy diversification.

National Energy Services Reunited said that over the course of the contract, drilling and completion activity may trend higher than current activity levels, in support of the project scale and production targets.

Retail sentiment on National Energy Services Reunited jumped to ‘extremely bullish’ from ‘bullish’ territory compared to a day ago, with message volumes at ‘extremely high’ levels, according to data from Stocktwits.

The Aramco Contract Details

National Energy Services Reunited said that over the course of the contract, drilling and completion activity may trend higher than current activity levels, in support of the project scale and production targets.

On Tuesday, Saudi Aramco announced the completion of an $11 billion lease-and-leaseback investment agreement for its Jafurah gas processing facilities with a consortium of international investors led by funds managed by Global Infrastructure Partners, a part of BlackRock. 

Saudi Aramco said that as part of the transaction, Jafurah Midstream Gas Company (JMGC), a newly established Aramco subsidiary, has secured development and usage rights for the Jafurah Field Gas Plant and the Riyas NGL Fractionation Facility, leasing them back to Aramco under a 20-year agreement.

The agreement imposes no restrictions on Saudi Aramco’s production volumes, and Aramco maintains a 51% ownership stake in JMGC, with the remaining 49% held by the GIP-led investor group. 

Executive View

"The Jafurah development is a significant project through which the Kingdom has contributed to improving the blueprint for successful unconventional resources development worldwide,” said NESR CEO & Chairman Sherif Foda.

“NESR initiated operations in Jafurah back in 2019, with the initial, large-scale deployment of our frac capabilities, which contributed to improvement in stage delivery and continuous record-setting results,” Foda added.

Shares of National Energy Services Reunited have gained nearly 38% this year.

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