Our base-case DCF to 2030 generates a TP of 170 SAR, driven by a WACC of 8.7%, terminal growth of 1.5% p.a., and operating rig expansion to 63 (vs 49 today).

Our investment theses and TP are subject to the following risks: 1) Low oil prices could reduce drilling activity and day rates; 2) Market is highly fragmented with strong competition; 3) Backlog is heavily concentrated in Saudi Arabia; and 4) Negative long-term oil demand trends. We see the primary downside risk as a reduction in drilling activity in the KSA given its concentrated backlog in the country.