Nabors Announces Third Quarter 2025 Results

Core Insights - Nabors Industries reported third quarter 2025 operating revenues of $818 million, a decrease from $833 million in the previous quarter. However, net income attributable to shareholders was $274 million, a significant recovery from a net loss of $31 million in the second quarter. This resulted in earnings per diluted share of $16.85, compared to a loss of $2.71 in the prior quarter. The quarter included a one-time after-tax gain of $314 million from the sale of Quail Tools, equating to $20.52 per diluted share [1][2][3]. Financial Performance - The third quarter adjusted EBITDA was $236 million, down from $248 million in the previous quarter [1][2]. - The sale of Quail Tools was highlighted as a transformative event, with $330 million used to reduce gross debt, expected to decrease by over 20% compared to June 30, 2025, leading to an annual interest expense reduction of approximately $45 million [3][14]. - Consolidated adjusted free cash flow for the third quarter was $6 million, down from $41 million in the prior quarter, impacted by lower collections in Mexico and reduced cash flow from the Quail Tools operation [11][13]. Segment Performance - International Drilling adjusted EBITDA increased to $127.6 million from $117.7 million in the previous quarter, driven by an increase in average rig count and improved daily margins [7][8]. - The U.S. Drilling segment reported adjusted EBITDA of $94.2 million, a decrease from $101.8 million, attributed to moderating industry demand [8][9]. - Drilling Solutions adjusted EBITDA was $60.7 million, down from $76.5 million, with a notable contribution from Quail Tools in the second quarter [9][10]. Operational Highlights - The company successfully deployed additional rigs in the Eastern Hemisphere, including 13 new builds in Saudi Arabia, with daily drilling margins approaching $18,000 [5][6]. - The integration of Parker Wellbore businesses has shown a sequential increase in adjusted EBITDA contribution by over 70%, with further cost synergies expected [16][20]. Outlook - For the fourth quarter of 2025, Nabors anticipates a Lower 48 average rig count of 57-59 rigs and a daily adjusted gross margin of approximately $13,000 [17][20]. - Adjusted free cash flow is projected to be around $10 million, with capital expenditures estimated at $180-190 million [20].