Workflow
Nabors(NBR) - 2024 Q4 - Earnings Call Transcript
NBRNabors(NBR)2025-02-13 20:59
Filings
Slide

Financial Data and Key Metrics Changes - Adjusted EBITDA for Q4 2024 totaled 221million,slightlydownfrom221 million, slightly down from 222 million in Q3 2024 [55][56] - Revenue from operations for Q4 was 730million,a730 million, a 2 million sequential reduction [50] - Free cash flow fell short, with a consumption of approximately 50millioncomparedtoexpectationsofgeneratingcloseto50 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 13millionsequentially,or5.213 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 371million,despitesuspensionsinSaudiArabia[53]−RigTechnologiessegmentrevenuereached371 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]−Theinternationalrigcountisexpectedtoaveragebetween88and89rigsin2025,withanticipateddeploymentsinSaudiArabiaandArgentina[70]CompanyStrategyandDevelopmentDirection−Thecompanyaimstogrowthecontributionfromcapex−lightsegments,withafourth−quartercontributionincreasingto19.515,000 [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 241million,significantlyabovethepreviousquarterduetoacceleratedpaymentsfornewbuildsinSaudiArabia[64]−ThecompanyexpectstoclosetheParkerWellboretransactioninthefirstquarterof2025,pendingregulatoryapprovals[66]−The2025capitalexpensesareforecastedintherangeof241 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]