Nabors Announces Second Quarter 2024 Results

Rhea-AI Summary

Nabors Industries (NYSE: NBR) reported Q2 2024 operating revenues of $735 million, slightly up from $734 million in Q1. The net loss narrowed to $32 million ($4.29 per diluted share) from $34 million in Q1. Adjusted EBITDA was $218 million, down from $221 million in Q1.

Key highlights include:

• International drilling segment growth with rig additions in Algeria and Saudi Arabia
• Lower 48 rig count decreased to 69 from 72 in Q1
• Drilling Solutions and Rig Technologies segments showed improved performance
• 19 international rig deployments scheduled over the next 18 months
• Adjusted free cash flow of $57 million in Q2
• Full-year 2024 adjusted free cash flow target maintained at $100-$200 million

Positive

• International drilling segment growth with rig count increasing to 84 from 81
• 19 additional international rig deployments scheduled over next 18 months
• Drilling Solutions adjusted EBITDA increased to $32.5 million from $31.8 million in Q1
• Rig Technologies adjusted EBITDA rose to $7.3 million from $6.8 million in Q1
• Adjusted free cash flow of $57 million in Q2
• Revolving credit facility increased and extended until 2029
• Placed $550 million of notes due in 2031 to retire similar notes due in 2026

Negative

• Net loss of $32 million in Q2, though improved from $34 million in Q1
• Adjusted EBITDA decreased to $218 million from $221 million in Q1
• Lower 48 rig count decreased to 69 from 72 in Q1
• Lower 48 daily adjusted gross margin down 2% compared to prior quarter

Financial Analyst

Financial performance analysis: The revenue figures for Nabors Industries are quite stable, increasing marginally from $734 million in the first quarter to $735 million in the second. However, the net loss of $32 million, a slight improvement from $34 million previously, indicates continuing financial challenges. The loss per share also reflects a minor improvement, going from $4.54 to $4.29. These figures suggest cautious optimism but underline the need for ongoing cost management and revenue enhancement strategies.

Segment-specific insights: The U.S. Drilling segment experienced a decline in EBITDA from $120.4 million to $114 million, influenced by a decrease in the average rig count and a slight fall in daily adjusted gross margins. Conversely, International Drilling saw a rise in EBITDA to $106.4 million from $102.5 million, propelled by increased rig counts in Algeria and Saudi Arabia. This is a positive indicator of geographic diversification benefiting the company's bottom line.

Cash flow and capital management: The $57 million adjusted free cash flow is a strong point, especially given the increased capital expenditures for newbuilds in Saudi Arabia. Their strategic approach to manage debt by placing $550 million notes due in 2031 and using the proceeds to retire existing notes due in 2026 also shows a proactive stance towards solidifying their capital structure.

Market Research Analyst

International expansion: Nabors' growth trajectory in the international markets is a significant highlight. The company is on track to increase its rig count internationally by at least 20% from 2023 to 2025, which is substantial. The multiyear contracts secured with Kuwait Oil Company for high-specification rigs and the upcoming deployments across the Middle East and Latin America are critical drivers for future revenue growth.

Technological advancements: The adoption of Nabors' automation technologies, such as the PACE® rigs and SmartDRILL™, indicates high performance and efficiency, particularly in challenging environments like the Delaware Basin and Eagle Ford. This technological edge can be a compelling advantage for securing new contracts and strengthening client relationships.

Potential opportunities and risks: The company identifies additional opportunities beyond the current rig awards, suggesting a robust pipeline for future growth. However, market conditions, particularly in natural gas-focused markets, remain a risk factor, necessitating a balanced and cautious approach to new investments and operational expansions.

Tech Expert

Technological integration and impact: Nabors' focus on integrating cutting-edge technology into its operations is a key differentiator. The deployment of PACE®-X and PACE®-M1000 rigs, along with NDS technology, demonstrates their capability in enhancing drilling efficiency. The significant milestones achieved in automation with SmartDRILL™ and SmartSLIDE® in the Bakken and the forthcoming RZR red zone robotics module, highlight a forward-thinking approach to operational excellence.

Client adoption and future potential: The commitment from major operators to fund and install Nabors' advanced technology on their rigs is noteworthy. This not only validates Nabors' technological prowess but also provides a revenue stream that could scale significantly as these technologies prove their effectiveness in real-world applications.

Innovation and competitive edge: Nabors' continuous investment in R&D and the successful implementation of innovative solutions like red zone robotics can enhance their competitive positioning. As the energy sector increasingly moves towards automation and efficiency, Nabors is well-placed to capitalize on this trend, potentially leading to increased market share and client retention.

HAMILTON, Bermuda, July 23, 2024 /PRNewswire/ -- Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) today reported second quarter 2024 operating revenues of $735 million, compared to operating revenues of $734 million in the first quarter. The net loss attributable to Nabors shareholders for the quarter was $32 million, compared to a net loss of $34 million in the first quarter. This equates to a loss of $4.29 per diluted share, compared to a loss per diluted share of $4.54 in the first quarter. Second quarter adjusted EBITDA was $218 million, compared to $221 million in the previous quarter.

Highlights

• Nabors Lower 48 rigs continued to set the standard for performance on challenging wells. A major operator in the Delaware Basin drilled its fastest four-mile lateral, utilizing a Nabors PACE®-X rig and a package of NDS technology. A second large operator, in the Eagle Ford, drilled a single-run, four-mile lateral in 14 days, using a Nabors PACE®-M1000 rig.
• A large operator in the Bakken committed to Nabors' full automation suite across all of its rigs, including SmartDRILL™ and SmartSLIDE®. With these installations, NDS will reach record penetration of its automated directional drilling solution on Nabors rigs.
• A major operator committed funding to support the next generation of Nabors' RZR red zone robotics drillfloor automation module. This includes an installation on one of this client's rigs in the Permian, and the opportunity to scale up from there.
• Kuwait Oil Company formally awarded multiyear contracts for three high-specification rigs. The Company plans to deploy existing in-country rigs for this opportunity.

Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "Our second quarter operating results were better than we expected. This performance was driven by growth and higher average daily margins in our International Drilling segment, as well as stronger performance in our Drilling Solutions and Rig Technologies segments.

"Rig count continued to grow in our International segment, as we started up previously awarded rigs. With a substantial number of additional rig awards already in hand, across the Middle East and Latin America, we have a well-defined trajectory for international expansion over the next couple of years. We have scheduled 19 deployments over the next 18 months. We also have identified additional opportunities that could extend this growth path.

"Stable pricing supported our results in the Lower 48 market. Our average rig count decreased somewhat compared to the prior quarter, essentially in line with our expectation. Activity declines in the Northeast and South Texas were partially offset by increases in North Dakota and our Western region. Results in our Drilling Solutions segment were above our target, reflecting growth in our International markets as well as on third party rigs in the U.S."

Segment Results

The U.S. Drilling segment reported second quarter adjusted EBITDA of $114.0 million, compared to $120.4 million in the first quarter. Nabors' second quarter Lower 48 average rig count totaled 69, versus 72 in the first quarter. Daily adjusted gross margin in that market averaged $15,600, down 2% as compared to the prior quarter.

International Drilling adjusted EBITDA totaled $106.4 million, compared to $102.5 million in the first quarter. Average rig count increased to 84 from 81, driven by rig additions in Algeria and Saudi Arabia. Daily adjusted gross margin for the second quarter averaged $16,050, essentially in line with the prior quarter.

Drilling Solutions adjusted EBITDA was $32.5 million, compared to $31.8 million in the first quarter. This increase was essentially driven by revenue growth on third-party Lower 48 and international rigs of 22% and 18%, respectively.

In Rig Technologies, adjusted EBITDA increased to $7.3 million, versus $6.8 million in the first quarter. The increase was spread across business lines including capital equipment, OEM repair, and energy transition.

Adjusted Free Cash Flow

Adjusted free cash flow was $57 million in the second quarter. Capital expenditures totaled $138 million, which included $56 million supporting the newbuilds in Saudi Arabia. This compares to $112 million in the first quarter, including $35 million supporting the newbuilds.

William Restrepo, Nabors CFO, stated, "Our overall results exceeded our outlook. The emerging international market strength we saw last year is now manifesting in rig additions for our International drilling segment. We expect our pipeline of scheduled international deployments to drive an increase in rig count of at least 20% from the end of 2023 through the end of 2025. This includes rigs in Algeria, Argentina, Kuwait, and Saudi Arabia. On top of these, we have multiple attractive opportunities. Our approach to these opportunities will remain disciplined, ensuring they are consistent with our free cash flow commitments over the next few years.

"In the U.S., our Lower 48 results were supported by continued high utilization of high-spec rigs and strong pricing. As we look ahead, we see opportunities to add rigs and offset some of the attrition in the natural gas focused markets. We expect our rig count to increase moderately for the balance of the year.

"We achieved significant milestones to solidify our capital structure. During the second quarter, we increased the amount on our revolving credit facility and extended it until 2029. More recently, we placed $550 million of notes due in 2031. With these proceeds, we intend to retire the similar notes due in 2026. Once completed, our next maturity comes in mid-2027.

"The strong results drove our cash generation. Adjusted free cash flow for the first half of the year reached $65 million. This performance supports our previous full-year 2024 adjusted free cash flow target of $100-$200 million."

Outlook

Nabors expects the following metrics for the third quarter of 2024:

U.S. Drilling               

• Lower 48 average rig count of approximately 70 rigs
• Lower 48 daily adjusted gross margin of $15,100-$15,200
• Alaska and Gulf of Mexico combined adjusted EBITDA of approximately $20 million

International

• Average rig count up by approximately one rig versus the second quarter average
• Daily adjusted gross margin of $16,200-$16,300

Drilling Solutions

• Adjusted EBITDA up sequentially by approximately 6%

Rig Technologies

• Adjusted EBITDA up sequentially by approximately $1.5 million

Capital Expenditures

• Capital expenditures of $190-$200 million, with $80-$85 million for the newbuilds in Saudi Arabia
• Full-year capital expenditures of approximately $590 million, including funding for the recent rig awards

Adjusted Free Cash Flow

• Full-year adjusted free cash flow of $100-$200 million

Mr. Petrello concluded, "These results, and our outlook, illustrate the success of our strategy. We remain committed to deploying the global drilling industry's leading   technology. The growing adoption of these innovations by our client base across the globe gives us confidence that we are on the right track. And as I've stated before, we expect the extraordinary strength of the international markets to continue driving our growth over the coming years."

About Nabors Industries

Nabors Industries (NYSE: NBR) is a leading provider of advanced technology for the energy industry. With presence in more than 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and responsible energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower-carbon world. Learn more about Nabors and its energy technology leadership: www.nabors.com.

Forward-looking Statements

The information included in this press release includes forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to a number of risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors' actual results may differ materially from those indicated or implied by such forward-looking statements. The forward-looking statements contained in this press release reflect management's estimates and beliefs as of the date of this press release. Nabors does not undertake to update these forward-looking statements. 

Non-GAAP Disclaimer

This press release presents certain "non-GAAP" financial measures. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Adjusted operating income (loss) represents income (loss) from continuing operations before income taxes, interest expense, investment income (loss), and other, net. Adjusted EBITDA is computed similarly, but also excludes depreciation and amortization expenses. In addition, adjusted EBITDA and adjusted operating income (loss) exclude certain cash expenses that the Company is obligated to make. Net debt is calculated as total debt minus the sum of cash, cash equivalents and short-term investments.

Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders. Management believes that this non-GAAP measure is useful information to investors when comparing our cash flows with the cash flows of other companies.

Each of these non-GAAP measures has limitations and therefore should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including Adjusted EBITDA, adjusted operating income (loss), net debt, and adjusted free cash flow, because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance. Securities analysts and investors also use these measures as some of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently. Reconciliations of consolidated adjusted EBITDA and adjusted operating income (loss) to income (loss) from continuing operations before income taxes, net debt to total debt, and adjusted free cash flow to net cash provided by operations, which are their nearest comparable GAAP financial measures, are included in the tables at the end of this press release. We do not provide a forward-looking reconciliation of our outlook for Segment Adjusted EBITDA, Segment Gross Margin or Adjusted Free Cash Flow, as the amount and significance of items required to develop meaningful comparable GAAP financial measures cannot be estimated at this time without unreasonable efforts. These special items could be meaningful.

Investor Contacts:  William C. Conroy, CFA, Vice President of Corporate Development & Investor Relations, +1 281-775-2423 or via e-mail william.conroy@nabors.com, or Kara Peak, Director of Corporate Development & Investor Relations, +1 281-775-4954 or via email kara.peak@nabors.com. To request investor materials, contact Nabors' corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail mark.andrews@nabors.com 

 

	NABORS INDUSTRIES LTD. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)
	(Unaudited)
			Three Months Ended						Six Months Ended
			June 30,				March 31,		June 30,
	(In thousands, except per share amounts)		2024		2023		2024		2024		2023
	Revenues and other income:
	Operating revenues		$            734,798		$            767,067		$            733,704		$         1,468,502		$         1,546,206
	Investment income (loss)		8,181		11,743		10,201		18,382		21,609
	Total revenues and other income		742,979		778,810		743,905		1,486,884		1,567,815
	Costs and other deductions:
	Direct costs		440,225		455,531		437,077		877,302		917,860
	General and administrative expenses		62,154		63,232		61,751		123,905		124,962
	Research and engineering		14,362		13,281		13,863		28,225		28,355
	Depreciation and amortization		160,141		159,698		157,685		317,826		322,729
	Interest expense		51,493		46,164		50,379		101,872		91,305
	Other, net		12,079		(1,775)		16,108		28,187		(44,150)
	Total costs and other deductions		740,454		736,131		736,863		1,477,317		1,441,061
	Income (loss) before income taxes		2,525		42,679		7,042		9,567		126,754
	Income tax expense (benefit)		15,554		26,448		16,044		31,598		49,463
	Net income (loss)		(13,029)		16,231		(9,002)		(22,031)		77,291
	Less: Net (income) loss attributable to noncontrolling interest		(19,226)		(11,620)		(25,331)		(44,557)		(23,456)
	Net income (loss) attributable to Nabors		$             (32,255)		$                4,611		$             (34,333)		$             (66,588)		$              53,835
	Earnings (losses) per share:
	Basic		$                 (4.29)		$                 (0.31)		$                 (4.54)		$                 (8.83)		$                  4.05
	Diluted		$                 (4.29)		$                 (0.31)		$                 (4.54)		$                 (8.83)		$                  3.79
	Weighted-average number of common shares outstanding:
	Basic		9,207		9,195		9,176		9,191		9,178
	Diluted		9,207		9,195		9,176		9,191		10,141
	Adjusted EBITDA		$            218,057		$            235,023		$            221,013		$            439,070		$            475,029
	Adjusted operating income (loss)		$              57,916		$              75,325		$              63,328		$            121,244		$            152,300

 

	NABORS INDUSTRIES LTD. AND SUBSIDIARIES
	CONDENSED CONSOLIDATED BALANCE SHEETS
	(Unaudited)
			June 30,		March 31,		December 31,
	(In thousands)		2024		2024		2023
	ASSETS
	Current assets:
	Cash and short-term investments		$             473,608		$             425,560		$          1,070,178
	Accounts receivable, net		368,550		416,873		347,837
	Other current assets		235,632		231,926		227,663
	Total current assets		1,077,790		1,074,359		1,645,678
	Property, plant and equipment, net		2,813,148		2,841,294		2,898,728
	Other long-term assets		724,755		729,319		733,559
	Total assets		$          4,615,693		$          4,644,972		$          5,277,965
	LIABILITIES AND EQUITY
	Current liabilities:
	Current debt		$                         -		$                         -		$             629,621
	Trade accounts payable		331,468		319,436		294,442
	Other current liabilities		259,454		282,982		289,918
	Total current liabilities		590,922		602,418		1,213,981
	Long-term debt		2,514,169		2,512,175		2,511,519
	Other long-term liabilities		247,587		256,956		271,380
	Total liabilities		3,352,678		3,371,549		3,996,880
	Redeemable noncontrolling interest in subsidiary		761,415		750,600		739,075
	Equity:
	Shareholders' equity		250,371		286,338		326,614
	Noncontrolling interest		251,229		236,485		215,396
	Total equity		501,600		522,823		542,010
	Total liabilities and equity		$          4,615,693		$          4,644,972		$          5,277,965

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
SEGMENT REPORTING
(Unaudited)
The following tables set forth certain information with respect to our reportable segments and rig activity:
			Three Months Ended						Six Months Ended
			June 30,				March 31,		June 30,
(In thousands, except rig activity)			2024		2023		2024		2024		2023
Operating revenues:
	U.S. Drilling		$            259,723		$            314,830		$            271,989		$            531,712		$            665,482
	International Drilling		356,733		337,650		349,359		706,092		657,698
	Drilling Solutions		82,961		76,855		75,574		158,535		151,898
	Rig Technologies (1)		49,546		63,565		50,156		99,702		122,044
	Other reconciling items (2)		(14,165)		(25,833)		(13,374)		(27,539)		(50,916)
	Total operating revenues		$            734,798		$            767,067		$            733,704		$         1,468,502		$         1,546,206
Adjusted EBITDA: (3)
	U.S. Drilling		$            114,020		$            141,446		$            120,403		$            234,423		$            297,935
	International Drilling		106,371		98,331		102,498		208,869		186,939
	Drilling Solutions		32,468		32,756		31,787		64,255		64,670
	Rig Technologies (1)		7,330		6,408		6,801		14,131		11,362
	Other reconciling items (4)		(42,132)		(43,918)		(40,476)		(82,608)		(85,877)
	Total adjusted EBITDA		$            218,057		$            235,023		$            221,013		$            439,070		$            475,029
Adjusted operating income (loss): (5)
	U.S. Drilling		$              45,085		$              75,408		$              50,529		$              95,614		$            161,277
	International Drilling		23,672		10,407		22,476		46,148		12,364
	Drilling Solutions		27,319		28,351		26,893		54,212		55,489
	Rig Technologies (1)		4,860		5,052		4,209		9,069		8,746
	Other reconciling items (4)		(43,020)		(43,893)		(40,779)		(83,799)		(85,576)
	Total adjusted operating income (loss)		$              57,916		$              75,325		$              63,328		$            121,244		$            152,300
Rig activity:
Average Rigs Working: (7)
	Lower 48		68.7		81.6		71.9		70.3		87.4
	Other US		6.3		7.0		6.8		6.5		7.0
	U.S. Drilling		75.0		88.6		78.7		76.8		94.4
	International Drilling		84.4		77.1		81.0		82.7		76.8
	Total average rigs working		159.4		165.7		159.7		159.5		171.2
Daily Rig Revenue: (6),(8)
	Lower 48		$              35,334		$              36,751		$              35,468		$              35,402		$              36,593
	Other US		68,008		65,860		64,402		66,135		68,263
	U.S. Drilling (10)		38,076		39,049		37,968		38,020		38,940
	International Drilling		46,469		48,106		47,384		46,917		47,319
Daily Adjusted Gross Margin: (6),(9)
	Lower 48		$              15,598		$              16,890		$              16,011		$              15,809		$              16,784
	Other US		38,781		35,932		35,184		36,912		36,520
	U.S. Drilling (10)		17,544		18,394		17,667		17,607		18,246
	International Drilling		16,050		16,276		16,061		16,056		15,754

(1)	Includes our oilfield equipment manufacturing activities.
(2)	Represents the elimination of inter-segment transactions related to our Rig Technologies operating segment.
(3)	Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance.  Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance.  Other companies in this industry may compute these measures differently.  A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)".
(4)	Represents the elimination of inter-segment transactions and unallocated corporate expenses.
(5)	Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance.  Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance.  Other companies in this industry may compute these measures differently.  A reconciliation of this non-GAAP measure to net income (loss), which is the most closely comparable GAAP measure, is provided in the table set forth immediately following the heading "Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)".
(6)	Rig revenue days represents the number of days the Company's rigs are contracted and performing under a contract during the period.  These would typically include days in which operating, standby and move revenue is earned.
(7)	Average rigs working represents a measure of the average number of rigs operating during a given period.  For example, one rig operating 45 days during a quarter represents approximately 0.5 average rigs working for the quarter.  On an annual period, one rig operating 182.5 days represents approximately 0.5 average rigs working for the year.  Average rigs working can also be calculated as rig revenue days during the period divided by the number of calendar days in the period.
(8)	Daily rig revenue represents operating revenue, divided by the total number of revenue days during the quarter.
(9)	Daily adjusted gross margin represents operating revenue less direct costs, divided by the total number of rig revenue days during the quarter.
(10)	The U.S. Drilling segment includes the Lower 48, Alaska, and Gulf of Mexico operating areas.

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
Reconciliation of Earnings per Share
(Unaudited)
	Three Months Ended									Six Months Ended
	June 30,						March 31,			June 30,
(in thousands, except per share amounts)	2024			2023			2024			2024			2023
BASIC EPS:
Net income (loss) (numerator):
Income (loss), net of tax	$	(13,029)		$	16,231		$	(9,002)		$	(22,031)		$	77,291
Less: net (income) loss attributable to noncontrolling interest		(19,226)			(11,620)			(25,331)			(44,557)			(23,456)
Less: distributed and undistributed earnings allocated to unvested shareholders		—			—			—			—			(1,869)
Less: accrued distribution on redeemable noncontrolling interest in subsidiary		(7,283)			(7,436)			(7,283)			(14,566)			(14,790)
Numerator for basic earnings per share:
Adjusted income (loss), net of tax - basic	$	(39,538)		$	(2,825)		$	(41,616)		$	(81,154)		$	37,176
Weighted-average number of shares outstanding - basic		9,207			9,195			9,176			9,191			9,178
Earnings (losses) per share:
Total Basic	$	(4.29)		$	(0.31)		$	(4.54)		$	(8.83)		$	4.05
DILUTED EPS:
Adjusted income (loss) from continuing operations, net of tax - basic	$	(39,538)		$	(2,825)		$	(41,616)		$	(81,154)		$	37,176
Add: after tax interest expense of convertible notes		—			—			—			—			1,272
Add: effect of reallocating undistributed earnings of unvested shareholders		—			—			—			—			10
Adjusted income (loss), net of tax - diluted	$	(39,538)		$	(2,825)		$	(41,616)		$	(81,154)		$	38,458
Weighted-average number of shares outstanding - basic		9,207			9,195			9,176			9,191			9,178
Add: if converted dilutive effect of convertible notes		—			—			—			—			918
Add: dilutive effect of potential common shares		—			—			—			—			45
Weighted-average number of shares outstanding - diluted		9,207			9,195			9,176			9,191			10,141
Earnings (losses) per share:
Total Diluted	$	(4.29)		$	(0.31)		$	(4.54)		$	(8.83)		$	3.79

 

	NABORS INDUSTRIES LTD. AND SUBSIDIARIES
	NON-GAAP FINANCIAL MEASURES
	RECONCILIATION OF ADJUSTED EBITDA BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT
	(Unaudited)
	(In thousands)
			Three Months Ended June 30, 2024
			U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
	Adjusted operating income (loss)		$  45,085		$         23,672		$   27,319		$             4,860		$     (43,020)		$     57,916
	Depreciation and amortization		68,935		82,699		5,149		2,470		888		160,141
	Adjusted EBITDA		$114,020		$       106,371		$   32,468		$             7,330		$     (42,132)		$   218,057
			Three Months Ended June 30, 2023
			U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
	Adjusted operating income (loss)		$  75,408		$         10,407		$   28,351		$             5,052		$     (43,893)		$     75,325
	Depreciation and amortization		66,038		87,924		4,405		1,356		(25)		159,698
	Adjusted EBITDA		$141,446		$         98,331		$   32,756		$             6,408		$     (43,918)		$   235,023
			Three Months Ended March 31, 2024
			U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
	Adjusted operating income (loss)		$  50,529		$         22,476		$   26,893		$             4,209		$     (40,779)		$     63,328
	Depreciation and amortization		69,874		80,022		4,894		2,592		303		157,685
	Adjusted EBITDA		$120,403		$       102,498		$   31,787		$             6,801		$     (40,476)		$   221,013
			Six Months Ended June 30, 2024
			U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling  items		Total
	Adjusted operating income (loss)		$  95,614		$         46,148		$   54,212		$             9,069		$     (83,799)		$   121,244
	Depreciation and amortization		138,809		162,721		10,043		5,062		1,191		317,826
	Adjusted EBITDA		$234,423		$       208,869		$   64,255		$           14,131		$     (82,608)		$   439,070
			Six Months Ended June 30, 2023
			U.S. Drilling		International Drilling		Drilling Solutions		Rig Technologies		Other reconciling items		Total
	Adjusted operating income (loss)		$161,277		$         12,364		$   55,489		$             8,746		$     (85,576)		$   152,300
	Depreciation and amortization		136,658		174,575		9,181		2,616		(301)		322,729
	Adjusted EBITDA		$297,935		$       186,939		$   64,670		$           11,362		$     (85,877)		$   475,029

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
RECONCILIATION OF ADJUSTED GROSS MARGIN BY SEGMENT TO ADJUSTED OPERATING INCOME (LOSS) BY SEGMENT
(Unaudited)
			Three Months Ended						Six Months Ended
			June 30,				March 31,		June 30,
(In thousands)			2024		2023		2024		2024		2023
Lower 48 - U.S. Drilling
	Adjusted operating income (loss)		$              32,841		$              60,496		$              39,264		$              72,105		$            134,567
	Plus: General and administrative costs		4,390		5,209		4,823		9,213		10,264
	Plus: Research and engineering		909		1,189		964		1,873		2,708
	GAAP Gross Margin		38,140		66,894		45,051		83,191		147,539
	Plus: Depreciation and amortization		59,332		58,533		59,733		119,065		118,041
	Adjusted gross margin		$              97,472		$            125,427		$            104,784		$            202,256		$            265,580
Other - U.S. Drilling
	Adjusted operating income (loss)		$              12,244		$              14,912		$              11,265		$              23,509		$              26,710
	Plus: General and administrative costs		306		323		325		631		668
	Plus: Research and engineering		45		132		47		92		259
	GAAP Gross Margin		12,595		15,367		11,637		24,232		27,637
	Plus: Depreciation and amortization		9,602		7,504		10,142		19,744		18,616
	Adjusted gross margin		$              22,197		$              22,871		$              21,779		$              43,976		$              46,253
U.S. Drilling
	Adjusted operating income (loss)		$              45,085		$              75,408		$              50,529		$              95,614		$            161,277
	Plus: General and administrative costs		4,696		5,532		5,148		9,844		10,932
	Plus: Research and engineering		954		1,321		1,011		1,965		2,967
	GAAP Gross Margin		50,735		82,261		56,688		107,423		175,176
	Plus: Depreciation and amortization		68,934		66,037		69,875		138,809		136,657
	Adjusted gross margin		$            119,669		$            148,298		$            126,563		$            246,232		$            311,833
International Drilling
	Adjusted operating income (loss)		$              23,672		$              10,407		$              22,476		$              46,148		$              12,364
	Plus: General and administrative costs		15,434		14,089		14,415		29,849		28,424
	Plus: Research and engineering		1,404		1,821		1,508		2,912		3,606
	GAAP Gross Margin		40,510		26,317		38,399		78,909		44,394
	Plus: Depreciation and amortization		82,700		87,924		80,022		162,722		174,576
	Adjusted gross margin		$            123,210		$            114,241		$            118,421		$            241,631		$            218,970
	Adjusted gross margin by segment represents adjusted operating income (loss) plus general and administrative costs, research and engineering costs and depreciation and amortization

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO NET INCOME (LOSS)
(Unaudited)
		Three Months Ended						Six Months Ended
		June 30,				March 31,		June 30,
(In thousands)		2024		2023		2024		2024		2023
Net income (loss)		$             (13,029)		$              16,231		$               (9,002)		$             (22,031)		$              77,291
Income tax expense (benefit)		15,554		26,448		16,044		31,598		49,463
Income (loss) from continuing operations before income taxes		2,525		42,679		7,042		9,567		126,754
Investment (income) loss		(8,181)		(11,743)		(10,201)		(18,382)		(21,609)
Interest expense		51,493		46,164		50,379		101,872		91,305
Other, net		12,079		(1,775)		16,108		28,187		(44,150)
Adjusted operating income (loss) (1)		57,916		75,325		63,328		121,244		152,300
Depreciation and amortization		160,141		159,698		157,685		317,826		322,729
Adjusted EBITDA (2)		$            218,057		$            235,023		$            221,013		$            439,070		$            475,029
(1) Adjusted operating income (loss) represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, and other, net. Adjusted operating income (loss) is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted operating income (loss) excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance.  Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance.  Other companies in this industry may compute these measures differently.
(2) Adjusted EBITDA represents net income (loss) before income tax expense (benefit), investment income (loss), interest expense, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in isolation or as a substitute for the amounts reported in accordance with GAAP. In addition, adjusted EBITDA excludes certain cash expenses that the Company is obligated to make. However, management evaluates the performance of its operating segments and the consolidated Company based on several criteria, including adjusted EBITDA and adjusted operating income (loss), because it believes that these financial measures accurately reflect the Company's ongoing profitability and performance.  Securities analysts and investors use this measure as one of the metrics on which they analyze the Company's performance. Other companies in this industry may compute these measures differently.

 

	NABORS INDUSTRIES LTD. AND SUBSIDIARIES
	RECONCILIATION OF NET DEBT TO TOTAL DEBT
	(Unaudited)
			June 30,		March 31,		December 31,
	(In thousands)		2024		2024		2023
	Current debt		$                         -		$                         -		$             629,621
	Long-term debt		2,514,169		2,512,175		2,511,519
	Total Debt		2,514,169		2,512,175		3,141,140
	Less: Cash and short-term investments		473,608		425,560		1,070,178
	Net Debt		$          2,040,561		$          2,086,615		$          2,070,962

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED FREE CASH FLOW TO
NET CASH PROVIDED BY OPERATING ACTIVITIES
(Unaudited)
		Three Months Ended				Six Months Ended
		June 30,		March 31,		June 30,
(In thousands)		2024		2024		2024
Net cash provided by operating activities		$             181,659		$               107,239		$                288,898
Add: Capital expenditures, net of proceeds from sales of assets		(125,010)		(99,125)		(224,135)
Adjusted free cash flow		$               56,649		$                   8,114		$                  64,763
Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets. Management believes that adjusted free cash flow is an important liquidity measure for the company and that it is useful to investors and management as a measure of the company's ability to generate cash flow, after reinvesting in the company for future growth, that could be available for paying down debt or other financing cash flows, such as dividends to shareholders.  Adjusted free cash flow does not represent the residual cash flow available for discretionary expenditures.  Adjusted free cash flow is a non-GAAP financial measure that should be considered in addition to, not as a substitute for or superior to, cash flow from operations reported in accordance with GAAP.

 

View original content:https://www.prnewswire.com/news-releases/nabors-announces-second-quarter-2024-results-302204506.html

SOURCE Nabors Industries Ltd.

FAQ

What were Nabors' Q2 2024 financial results?

Nabors reported Q2 2024 operating revenues of $735 million, a net loss of $32 million ($4.29 per diluted share), and adjusted EBITDA of $218 million.

How did Nabors' International Drilling segment perform in Q2 2024?

The International Drilling segment's adjusted EBITDA increased to $106.4 million, with the average rig count rising to 84 from 81, driven by additions in Algeria and Saudi Arabia.

What is Nabors' outlook for its Lower 48 rig count in Q3 2024?

Nabors expects its Lower 48 average rig count to be approximately 70 rigs in Q3 2024.

What is Nabors' full-year 2024 adjusted free cash flow target?

Nabors maintains its full-year 2024 adjusted free cash flow target of $100-$200 million.

How many international rig deployments does Nabors have scheduled?

Nabors has scheduled 19 international rig deployments over the next 18 months.