Core Viewpoint - Nabors Industries Ltd. has completed the acquisition of Parker Wellbore for approximately $372 million, enhancing its market presence and service offerings globally [1][10]. Strategic Rationale Behind the Acquisition - The acquisition aligns with Nabors' objectives to expand its operational footprint and diversify services, leveraging Parker Wellbore's established presence in key regions such as the U.S., Middle East, Latin America, and Asia [2]. Financial Implications and Synergy Expectations - Parker Wellbore is projected to contribute about $150 million in annualized adjusted EBITDA for 2025, with expected synergies of $40 million by the end of 2025 from reduced overhead and operational expenses [3][4]. Expansion of Drilling Solutions Portfolio - The acquisition includes Quail Tools, a subsidiary known for high-performance downhole tubulars, enhancing Nabors' rental service capabilities in the U.S. [5]. Global Operational Footprint - Parker Wellbore operates a fleet of 17 drilling rigs and offers a comprehensive suite of services, enhancing Nabors' ability to serve diverse clients in critical markets [6]. Leadership Perspectives of Nabors - Anthony Petrello, CEO of Nabors, expressed enthusiasm about the acquisition, highlighting its potential to accelerate growth in the Drilling Solutions business and strengthen the global drilling operations [7]. Operational Integration and Outlook - The integration of Parker Wellbore is expected to improve service offerings and operational efficiencies, with a focus on realizing projected synergies and expanding market presence [8].

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Core Viewpoint - Nabors Industries Ltd. has successfully completed the acquisition of Parker Wellbore, enhancing its leadership in drilling and related services [1][3]. Group 1: Acquisition Details - Parker Wellbore's portfolio includes Quail Tools, a leading provider of high-performance downhole tubulars in the U.S. and internationally [2]. - The acquisition is expected to strengthen Nabors' Drilling Solutions business and expand its market reach [8]. Group 2: Financial Outlook - Nabors anticipates that Parker's business will generate approximately $150 million in annualized adjusted EBITDA for 2025 before realizing expense synergies [4]. - Estimated expense synergies from the acquisition are projected to be $40 million by the end of 2025, with post-closing capital expenses for 2025 estimated at $70 million [4][8]. Group 3: Strategic Benefits - The acquisition is expected to provide immediate accretion to free cash flow and enhance scale and leverage metrics for Nabors [8]. - The integration of both companies is aimed at capturing projected synergies and improving customer service [3][8].

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2024 totaled $221 million, slightly down from $222 million in Q3 2024 [55][56] - Revenue from operations for Q4 was $730 million, a $2 million sequential reduction [50] - Free cash flow fell short, with a consumption of approximately $50 million compared to expectations of generating close to $20 million [63][64] Business Line Data and Key Metrics Changes - US drilling segment revenue declined by $13 million sequentially, or 5.2%, driven by a reduced rig count in the lower 48 market [51] - International drilling revenue increased by $2.8 million, reaching $371 million, despite suspensions in Saudi Arabia [53] - Rig Technologies segment revenue reached $56.2 million, up 22.6% due to increased deliveries of capital equipment and parts sales in the Middle East [55] Market Data and Key Metrics Changes - The average rig count in the lower 48 averaged 66, a decrease of two rigs [51] - Daily rig margins in the lower 48 remained at attractive levels, with average daily margins just under $15,000 [56][32] - The international rig count is expected to average between 88 and 89 rigs in 2025, with anticipated deployments in Saudi Arabia and Argentina [70] Company Strategy and Development Direction - The company aims to grow the contribution from capex-light segments, with a fourth-quarter contribution increasing to 19.5% of consolidated EBITDA [18] - The SANAD program in Saudi Arabia is a key focus, with plans for 50 rigs built over ten years, generating significant EBITDA [24][28] - The merger with Parker Wellbore is expected to realize annualized cost synergies of at least $35 million in 2025 [41] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism for international markets, particularly in Saudi Arabia, where natural gas activity is expected to expand [44][106] - The US market remains sluggish, with expectations of a 4% reduction in rig count among major operators by the end of 2025 [38] - The company anticipates a flat year in the US market but growth in international markets and drilling solutions [67] Other Important Information - Capital expenditures for Q4 were $241 million, significantly above the previous quarter due to accelerated payments for new builds in Saudi Arabia [64] - The company expects to close the Parker Wellbore transaction in the first quarter of 2025, pending regulatory approvals [66] - The 2025 capital expenses are forecasted in the range of $710 to $720 million, reflecting an increase from 2024 [71] Q&A Session Summary Question: Clarification on free cash flow and debt reduction - Management indicated that free cash flow outside SANAD is expected to be around $150 million, which will be used to reduce gross debt by approximately the same amount in 2025 [89][91] Question: Outlook for international rig count and releases - Management believes there may be some additional rig releases, but they are committed to maintaining the new build program with Aramco [94][96] Question: Working capital and cash taxes outlook - Management expects collections from Mexico to be sorted out in the first half of 2025, with working capital remaining under control [114][116] Question: Business climate in Argentina - The company has implemented a new operating model that allows for cash extraction in US dollars, improving the cash flow situation in Argentina [121][122] Question: Full-year 2025 guidance and G&A outlook - Management is working to reduce G&A costs and expects operational pieces to be higher than in 2024, with a focus on efficiency [129][130]

Operational Performance - As of December 31, 2024, Nabors operated an average of 158.8 rigs, a decrease of 3.1% from 163.9 rigs in 2023[19] - The U.S. drilling segment had an average of 75.1 rigs working in 2024, down from 86.3 in 2023, representing a decline of 14%[19] - International drilling saw an increase in average rigs working to 83.7 in 2024, up 7.9% from 77.6 in 2023[19] - Nabors has a total of 285 actively marketed rigs for land-based drilling and 26 for offshore platform drilling as of December 31, 2024[21] Revenue Sources - Saudi Aramco accounted for approximately 31% of Nabors' consolidated operating revenues in 2024, highlighting the significance of this customer[38] - The company received approximately 43%, 37%, and 36% of its consolidated operating revenues from its three largest contract drilling customers in 2024, 2023, and 2022, respectively, with Saudi Aramco representing 31%, 26%, and 26% of revenues during these periods[93] - The company derived 28% of its operating revenue from joint ventures in 2024, indicating a significant reliance on these partnerships[103] Technology and Innovation - The company has developed advanced drilling technologies, including the PACE®-X800 rig, which enhances efficiency in multi-well drilling operations[23] - The company is committed to enhancing its technology position and advancing drilling technology, including investments in alternative energy and carbon reduction technologies[35] - The company has a fast-growing portfolio of technologies aimed at energy efficiency and emissions reductions, including investments in alternative energy sources[65][66] - The company emphasizes the critical need for developing new technology to maintain competitiveness, with risks of declining demand if it fails to keep pace with technological advances[128] Workforce and Management - Nabors employs approximately 12,400 employees worldwide, with 8,800 located outside the United States[39] - The company has implemented a cloud-based Human Capital Management system across 26 countries to improve workforce planning and operational excellence[42] - The loss of key executives or inability to attract experienced personnel could reduce competitiveness and harm future success prospects[209] Financial Risks and Debt - As of December 31, 2024, the company's total outstanding indebtedness was $2.5 billion, which may impact its financial flexibility and ability to service debt[114] - The company is required to maintain an interest coverage ratio of no less than 2.75:1.00 under its 2024 Credit Agreement, which could limit operational flexibility[113] - The Federal Reserve raised interest rates by a total of 450 basis points from March 2022 through early 2024, affecting the company's borrowing costs[117] - Lower oil and natural gas prices could adversely affect the company's cash forecast models, potentially leading to future impairment of long-lived assets[82] Market Competition - The company operates in a highly competitive market with excess drilling capacity, leading to strong price competition and sensitivity to pricing during market instability[54][55] - The company may face difficulties in renewing customer contracts due to the highly competitive nature of the industry, which could adversely affect its financial condition and results of operations[86] - Competitors are expected to enhance their technology systems, potentially improving their drilling efficiency and service quality, which may impact the company's competitive position[127] Regulatory and Compliance Risks - The company is subject to complex and evolving laws and regulations regarding environmental matters, which could impact its operations and financial results[70] - The company is subject to environmental regulations that could increase operating costs and affect the demand for its services, particularly in light of changing laws regarding greenhouse gas emissions[146] - Legal and regulatory risks associated with international operations could lead to significant penalties, impacting the company's reputation and financial position[142] Cybersecurity - The company is subject to cybersecurity risks that could impact its operations and financial condition[82] - Cybersecurity is a critical component of risk management at Nabors, supporting technology infrastructure and information systems essential for operations and financial processes[212] - The Board of Directors is actively engaged in overseeing the cybersecurity program, focusing on prevention, detection, and recovery from incidents[215] Strategic Transactions and Mergers - The company completed a business combination with Vast Solar Pty. Ltd., enhancing its investment in concentrated solar thermal power systems[67] - Following the merger with Parker Drilling Company, the market value of Nabors common shares could be negatively affected by risks associated with the combined company[183] - The success of the merger will depend significantly on the ability to integrate the businesses and realize expected synergies, which may take longer than anticipated[197] Sustainability and Corporate Responsibility - The company is committed to sustainability and has integrated sustainable practices into its corporate culture and strategic plans[63] - The Inflation Reduction Act of 2022 incentivizes investment in alternative energy sources, which could accelerate the shift away from traditional oil and gas, adversely affecting the company's prospects[154]

Financial Data and Key Metrics Changes - Free cash flow in Q4 2024 fell short of expectations, primarily due to significant receivables in Mexico and accelerated milestone payments in Saudi Arabia [7][30] - Adjusted EBITDA for the fourth quarter totaled $221 million, a slight decrease from $222 million in the previous quarter [45] - Revenue from operations for Q4 was $730 million, a sequential reduction of $2 million [42] Business Line Data and Key Metrics Changes - U.S. drilling segment revenue declined by $13 million sequentially, or 5.2%, driven by a reduced rig count in the Lower 48 market [42] - Rig Technologies segment revenue reached $56.2 million, up $10.4 million or 22.6%, driven by increased deliveries of capital equipment and parts sales in the Middle East [45] - Technology-focused businesses, NDS and RigTech, generated combined EBITDA of over $43 million, with NDS's gross margin exceeding 54% in the quarter [28][49] Market Data and Key Metrics Changes - The average rig count in the Lower 48 averaged 66, a decrease of two rigs [42] - International drilling revenue was $371 million, an increase of $2.8 million, despite suspensions in Saudi Arabia [44] - The average daily gross margin for international operations was approximately $16,700, a decrease of $400 from the previous quarter [48] Company Strategy and Development Direction - The company aims to grow contributions from CapEx light segments, with NDS's contribution increasing to 19.5% of consolidated EBITDA [13] - The strategy includes a focus on international markets, with a strong pipeline of additional tenders and rig deployments expected in 2025 [10][11] - The merger with Parker Wellbore is anticipated to provide significant strategic and financial benefits, with expected annualized cost synergies of at least $35 million in 2025 [34][60] Management's Comments on Operating Environment and Future Outlook - Management expressed a bullish outlook for international markets, particularly in Saudi Arabia, where natural gas activity is expected to expand [36][75] - The U.S. market remains sluggish, with limited indications of a near-term recovery in the Lower 48 drilling rig market [39] - The company anticipates a flat year in U.S. markets but growth in international markets and drilling solutions [52] Other Important Information - Capital expenditures for Q4 were $241 million, with a forecast of $710 million to $720 million for 2025 [51][54] - The company expects to generate approximately $150 million of free cash flow outside SANAD, which will be used to reduce gross debt [67][68] Q&A Session Summary Question: Clarification on free cash flow and debt reduction - Management indicated that free cash flow generation outside SANAD is expected to be around $150 million, which will be allocated to reducing gross debt [67][68] Question: Outlook on international rig count and releases - Management believes that rig count reductions in Saudi Arabia may be complete, with continued investment in new builds [70][76] Question: Working capital and cash taxes outlook - Management expects collections from Mexico to be sorted out in the first half of 2025, with working capital remaining under control [85][88] Question: Business climate in Argentina - The company has implemented a new operating model in Argentina to improve cash extraction, which has been well received by customers [89][90] Question: Full year 2025 guidance and G&A outlook - Management is working to reduce G&A costs and expects operational improvements to lead to higher EBITDA than in 2024 [97][98]

4Q 2024 Earnings Presentation NABORS INDUSTRIES February 12, 2024 NABORS INDUSTRIES Forward Looking Statements We often discuss expectations regarding our future markets, demand for our products and services, and our performance in our annual, quarterly, and current reports, press releases, and other written and oral statements. Such statements, including statements in this document that relate to matters that are not historical facts, are "forward-looking statements" within the meaning of the safe harbor p ...

Core Insights - Nabors Industries Ltd. reported a fourth-quarter 2024 adjusted loss of $6.67 per share, significantly wider than the Zacks Consensus Estimate of a loss of $1.86, primarily due to lower operating income and increased costs [1][2] - The company's operating revenues were $730 million, slightly down from $738 million year-over-year, with adjusted EBITDA decreasing to $220.5 million from $230.1 million [2] Financial Performance - U.S. Drilling segment generated operating revenues of $241.6 million, down 9.1% from $265.8 million a year ago, with operating profit of $39 million compared to $51.5 million [7] - International Drilling's revenues increased to $371.4 million from $342.8 million year-over-year, with operating profit rising to $29.5 million from $18.6 million [8] - Drilling Solutions segment revenues totaled $76 million, down 1.3% from $77 million, with operating income of $28.9 million, lower than the previous year's $30.1 million [9] - Rig Technologies revenues were $56.2 million, down 5.1% from $59.3 million, but operating profit increased to $8.4 million from $5.8 million [10] Cost Structure - Total costs and expenses rose to $756.3 million from $714.7 million year-over-year, exceeding predictions [11] Strategic Developments - Nabors secured contracts for three rigs in Argentina and an additional contract for an idle rig in Colombia, enhancing asset utilization [4] - The SANAD project deployed its ninth new-build rig and plans to deploy two more in early 2025, aligning with Saudi Aramco's expansion [5] - Canrig, part of Nabors' Rig Technologies, was awarded a comprehensive rig upgrade package, indicating ongoing technological advancements [6] Future Guidance - For Q1 2025, Nabors anticipates an average rig count of approximately 61 in the U.S. drilling segment and 85 to 86 in the International Drilling segment [13] - Expected adjusted EBITDA for the Drilling Solutions segment is around $36 million, with capital expenditures projected between $195 million and $205 million [14] - Full-year capital expenditures are expected to total approximately $710 million to $720 million, with $360 million earmarked for SANAD new builds [15]

Core Insights - Nabors Industries (NBR) reported revenue of $729.82 million for Q4 2024, reflecting a year-over-year decline of 1.1% and an EPS of -$6.67 compared to -$3.84 a year ago, indicating a significant deterioration in earnings performance [1] - The revenue fell short of the Zacks Consensus Estimate of $730.4 million by 0.08%, while the EPS was significantly below the consensus estimate of -$1.86, resulting in an EPS surprise of -258.60% [1] Financial Performance Metrics - Daily Rig Revenue for International Drilling was reported at $47.62 million, exceeding the three-analyst average estimate of $47.04 million [4] - Daily Adjusted Gross Margin for International Drilling was $16.69 million, slightly below the three-analyst average estimate of $16.94 million [4] - Average Rigs Working in International Drilling was 85, surpassing the three-analyst average estimate of 84, while U.S. Drilling had 73 rigs working, compared to the average estimate of 72 [4] - Daily Rig Revenue for U.S. Drilling was $36.14 million, lower than the estimated $37.52 million [4] - Operating Revenues for U.S. Drilling were $241.64 million, which is a 9.1% decline compared to the year-ago quarter and below the average estimate of $256.58 million [4] - Operating Revenues for International Drilling were $371.41 million, exceeding the average estimate of $362.82 million and representing an 8.4% year-over-year increase [4] - Operating Revenues for Drilling Solutions were $75.99 million, slightly below the average estimate of $77.63 million, marking a 1.3% decline year-over-year [4] - Operating Revenues for Rig Technologies were $56.17 million, compared to the average estimate of $49.04 million, indicating a 5.3% year-over-year decrease [4] - Investment income (loss) was reported at $8.83 million, below the average estimate of $9.18 million, reflecting a 26.7% decline compared to the year-ago quarter [4] Stock Performance - Nabors' shares have returned -13% over the past month, contrasting with the Zacks S&P 500 composite's +4.3% change, indicating underperformance relative to the broader market [3] - The stock currently holds a Zacks Rank 4 (Sell), suggesting potential continued underperformance in the near term [3]

Financial Performance - Fourth quarter 2024 operating revenues were $730 million, slightly down from $732 million in the third quarter[2]. - The net loss attributable to Nabors shareholders for the quarter was $54 million, equating to a loss of $6.67 per diluted share, an improvement from a loss of $6.86 per diluted share in the previous quarter[2]. - Adjusted EBITDA for the fourth quarter was $221 million, compared to $222 million in the third quarter[2]. - Operating revenues for Q4 2024 were $729,819,000, a slight increase from $725,801,000 in Q4 2023[36]. - Net loss attributable to Nabors for Q4 2024 was $53,671,000, compared to a loss of $16,703,000 in Q4 2023[36]. - Adjusted EBITDA for the year ended December 31, 2024, was $881,335,000, down from $915,157,000 in 2023[36]. - Adjusted EBITDA for the three months ended December 31, 2024, was $220,545 thousand, a decrease from $230,103 thousand in the same period of 2023, representing a decline of approximately 4%[44]. - The company's net income for Q4 2024 was a loss of $32,869 thousand, compared to a profit of $3,857 thousand in Q4 2023, indicating a significant decline[46]. - Total basic earnings per share for the year ended December 31, 2024, was $(22.37), compared to $(5.49) for the year ended December 31, 2023, indicating a significant decline[43]. Segment Performance - International Drilling adjusted EBITDA totaled $112 million, down from $116 million in the third quarter, with an average rig count of 85[9]. - U.S. Drilling segment reported adjusted EBITDA of $105.8 million, compared to $108.7 million in the previous quarter, with a Lower 48 average rig count of 66[10]. - The adjusted operating income for the U.S. Drilling segment was $38,973 thousand for the three months ended December 31, 2024, down from $51,494 thousand in the same period of 2023, reflecting a decrease of about 24%[44]. - The company reported an adjusted operating income of $176,281 thousand for the U.S. Drilling segment for the year ended December 31, 2024, compared to $262,353 thousand for the year ended December 31, 2023, a decline of about 33%[44]. - Adjusted operating income for Lower 48 - U.S. Drilling was $27,354 thousand for Q4 2024, down from $40,108 thousand in Q4 2023, representing a decrease of 31.5%[45]. Cash Flow and Expenditures - Consolidated adjusted free cash flow in the fourth quarter was a use of $53 million, impacted by a $50 million collections shortfall in Mexico and higher capital expenditures of $241 million[12][13]. - Capital expenditures for 2025 are projected to be between $710 million and $720 million, with approximately $360 million allocated for SANAD newbuild construction[15][21]. - Adjusted free cash flow for Q4 2024 was negative at $(53,296) thousand, compared to positive $17,544 thousand in Q3 2024, indicating a cash flow challenge[51]. Assets and Liabilities - Total assets decreased to $4,504,301,000 as of December 31, 2024, from $5,277,965,000 a year earlier[38]. - Current liabilities were $571,917,000, a decrease from $1,213,981,000 in the previous year[38]. - Total liabilities stood at $3,297,963,000 as of December 31, 2024, compared to $3,996,880,000 a year prior[38]. - Total debt as of December 31, 2024, was $2,505,217 thousand, with net debt at $2,107,918 thousand after accounting for cash and short-term investments[49]. Operational Metrics - Average rigs working in U.S. Drilling decreased to 72.7 in Q4 2024 from 76.3 in Q4 2023[40]. - Daily rig revenue for U.S. Drilling was $36,137 in Q4 2024, down from $37,865 in Q4 2023[40]. - The average rigs working during the quarter can be calculated as rig revenue days divided by the number of calendar days in the period, indicating operational efficiency[6]. - Daily rig revenue for the quarter is derived from operating revenue divided by the total number of revenue days, providing insight into revenue generation capabilities[8]. Research and Engineering - Research and engineering expenses for Q4 2024 were $14,434,000, compared to $13,926,000 in Q4 2023[36]. - Research and engineering costs for Lower 48 - U.S. Drilling were $1,002 thousand in Q4 2024, down from $1,276 thousand in Q4 2023, a decrease of 21.4%[45]. Interest and Tax Expenses - Interest expense increased to $53,642,000 in Q4 2024 from $49,938,000 in Q4 2023[36]. - The company's income tax expense for Q4 2024 was $15,231 thousand, compared to $19,244 thousand in Q4 2023, showing a reduction of 21.0%[46]. Future Outlook - The merger with Parker Wellbore is expected to close in the first quarter of 2025, pending regulatory approvals, and is anticipated to provide incremental free cash flow of $35 million[6][17]. - SANAD's working newbuild fleet is projected to double its contribution to adjusted EBITDA in 2025 compared to 2024[9]. - For the first quarter of 2025, Nabors expects U.S. Drilling adjusted EBITDA of approximately $33 million and Rig Technologies adjusted EBITDA of approximately $5 million[17][18].