NBR

Nabors Industries Ltd.

Next est. report 2026-07-28 · AMC

Energy Services '26: Land Contract DrillersEnergy Services '26: Land DrillersEnergy Services '26: Oilfield Services & Equipment Oversupply Risk '26: Offshore Drilling

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Overview

Nabors Industries Ltd. provides land and offshore drilling services and related technologies globally. Its segments include U.S. and International Drilling, Dri

Nabors Industries Ltd. provides land and offshore drilling services and related technologies globally. Its segments include U.S. and International Drilling, Drilling Solutions, and Rig Technologies, offering advanced rigs, automation, and equipment. Nabors serves oil and natural gas operators, with a growing focus on public companies and international markets like Saudi Arabia and Latin America, while actively reducing debt.

What They Do (Plain English & Analogies): Nabors Industries is like a specialized construction company for oil and gas. They provide the big, powerful drilling rigs and all the high-tech tools and services needed to dig deep into the earth, both on land and offshore, to find and extract oil and natural gas. They also make some of these specialized tools themselves. Think of them as providing the entire "drilling package" – from the heavy machinery to the smart software that makes drilling faster, safer, and more efficient.
Very Brief History: Founded in 1952, Nabors Industries Ltd. has a long history of innovation in drilling solutions. Key milestones include operating in Venezuela since the 1940s, creating Nabors Drilling Solutions (NDS) in 2015 to focus on automation and technology, establishing the SANAD joint venture in Saudi Arabia in 2017, and acquiring Parker Wellbore in March 2025, followed by the sale of Quail Tools.
"Street Stereotype": Nabors is generally perceived as a cyclical oil and gas drilling contractor, highly sensitive to commodity price fluctuations. Historically, it has been viewed with concerns about its debt levels, but recent significant debt reduction and capital structure strengthening are shifting this perception, positioning it as a potentially derisked value play with strong international growth prospects.
Subsidiaries On Linked In*: Canrig Drilling Technology Ltd. — Global supplier of rig technology, a Nabors subsidiary.; LinkedIn: canrig-drilling-technology-ltd
Nabors Drilling USA, LP — Operates land and ocean oil and gas rigs in the United States.; LinkedIn: nabors-drilling-usa-lp
SANAD (Saudi Aramco Nabors Drilling Company) — Joint venture with Saudi Aramco.; LinkedIn: sanad-drilling
Customer Sectors & Example Clients: Their customers are primarily in the oil and natural gas exploration and production (E&P) sector. Specific clients mentioned include Catalyst (in South Texas), PEMEX (Mexico), and Saudi Aramco (through the SANAD joint venture).
New Customers / Segments They'Re Targeting: Nabors is actively targeting public operators in the Lower 48 U.S. market and expanding its presence in the international drilling market, particularly in regions offering long-term visibility and multiyear contracts. They are also prepared to reactivate their idle rigs and return to work in Venezuela with suitable commercial and security arrangements. Additionally, they are pursuing opportunities that leverage their advanced technology to enhance drilling capabilities and efficiencies.
Supply Chain And Sourcing Geographies: Nabors operates a global logistics network and has internal manufacturing capabilities, notably through its Canrig subsidiary. Canrig manufactures and repairs drilling equipment, including catwalks, top drives, and other components. It has an expanded manufacturing and repair facility in Dammam, Saudi Arabia, which uses primarily locally manufactured parts. Additionally, Canrig maintains parts distribution, service hubs, and repair facilities in various locations, including Midland, TX, Williston, ND, and Magnolia, TX in the U.S.; Nisku, AB in Canada; Villavicencio, Meta in Colombia; Dubai, UAE; and Indonesia. Nabors emphasizes vendor compliance and due diligence throughout its supply chain.
Sales Geographies And Expansion Plans: Nabors currently sells its drilling and drilling-related services across the United States (Lower 48, Alaska, Offshore), Canada, and internationally in over 20 countries. Key international markets include the Middle East and North Africa (with a significant presence in Saudi Arabia through the SANAD joint venture), Latin America (Mexico, Argentina, and historically Venezuela). Management has clear plans to expand sales in several geographies: * **Saudi Arabia:** SANAD is expanding its newbuild fleet, with 5 more rigs planned for 2026 and a 20th in early 2027. Discussions are also advancing for a fifth tranche of newbuild rigs, bringing the total to 25. * **Argentina:** They expect to start 1 rig in Q1 2026 and a second in Q3 2026, bringing their rig count there to 14. * **Mexico:** They expect to restart a fourth offshore platform rig early in 2026, with an improved client payment posture. * **Venezuela:** They are prepared to return to work with their 5 idle rigs and are in discussions with multiple operators, pending suitable commercial terms and security arrangements. * **Eastern Hemisphere:** They are tracking nearly 20 opportunities for additional rigs in countries where they currently operate.
How Key Themes May Help/Hurt: The theme "Oversupply Risk '26: Offshore Drilling" presents a mixed impact for Nabors. * **Help:** The bull points of the theme, such as the structural undersupply of high-specification offshore assets and accelerating deepwater activity, could benefit Nabors' U.S. Offshore segment if they possess high-spec offshore rigs that can command higher day rates and utilization. The geopolitical tensions driving energy security could also broadly support oil and gas investment, including for Nabors' land-based operations, by maintaining higher commodity prices. Nabors' focus on advanced technology and automation aligns with the theme's emphasis on optimizing existing assets and enhancing efficiency. * **Hurt:** The bear points, particularly conflicting global oil market forecasts and the potential for a "Great Oil Glut" leading to lower oil prices, would negatively impact all of Nabors' drilling segments, including land-based, by reducing demand for new projects and potentially pressuring day rates. While Nabors has offshore exposure, its primary focus in the transcript is on land drilling, so a theme specifically about *offshore* oversupply risk might have a less direct, but still relevant, impact on their overall business due to general market sentiment and oil price sensitivity. The long-term risk of an accelerated global energy transition and ESG pressures could also hurt demand for fossil fuels, impacting Nabors' core business.

3 Main Long-Term Bull Details

Strong International Growth and Backlog: Nabors has significant, visible growth in international markets, particularly through the SANAD joint venture in Saudi Arabia with a multi-year newbuild program and potential for further tranches, as well as expansion in Latin America. This provides long-term contract visibility and attractive returns.
Technology Leadership and Automation: The company's continuous investment in and deployment of advanced drilling technology, automation (e.g., PACE-X Ultra, NDS services, Canrig innovations), and digital solutions enhances efficiency, safety, and performance for clients, driving demand for their high-spec rigs and services and generating attractive returns.
Strengthened Capital Structure and Free Cash Flow: Significant debt reduction and refinancing efforts have materially derisked the company's capital structure, lowered interest expenses, and are expected to boost free cash flow generation (excluding SANAD's near-term cash consumption), providing financial flexibility for future growth and shareholder value creation.

3 Main Long-Term Bear Details

Commodity Price Volatility and Demand Uncertainty: The company remains highly exposed to global oil and gas price fluctuations and supply/demand imbalances, which can lead to unpredictable client investment decisions, rig count reductions, and pressure on day rates, particularly in the highly competitive U.S. Lower 48 market.
High Capital Intensity of Growth Initiatives: While SANAD offers attractive long-term returns, its newbuild program requires substantial capital expenditures in the near term, consuming a significant portion of consolidated free cash flow and potentially limiting other capital allocation priorities.
Geopolitical and Operational Risks in International Markets: Operating in numerous international locations exposes Nabors to geopolitical instability, regulatory changes, payment issues (as experienced in Venezuela and Mexico previously), and operational disruptions, which can impact activity levels and profitability.

Competitors And Differentiation: While specific competitors are not named in the transcript, the industry includes other major land and offshore drilling contractors. Nabors differentiates itself through: * **Advanced Technology and Automation:** They develop and deploy innovative technology, including their PACE-X Ultra rigs, full automation packages from Nabors Drilling Solutions (NDS), managed pressure drilling, and casing running services. Their new Canrig 3-bite wrench with automation is another example. * **Performance Excellence:** A focus on operational efficiency and cost discipline, particularly in the Lower 48, which has led to improved daily margins. * **International Market Focus:** Expanding in international markets that offer attractive returns and multiyear contracts, such as the SANAD joint venture in Saudi Arabia, which provides long-term visibility. * **Vertical Integration:** Through Canrig, they manufacture key drilling equipment, which allows them to offer integrated solutions and potentially reduce third-party dependence.
Recent Performance & What The Market'S Focused On: Nabors reported strong fourth-quarter 2025 results, with adjusted EBITDA of $222 million exceeding expectations. Full-year 2025 revenue grew 8.7% to $3.2 billion, and adjusted EBITDA was $913 million. The company significantly reduced net debt by over $550 million, reaching its lowest level since 2005, and improved its net leverage ratio. The Lower 48 rig count increased to 66, and international activity saw growth, particularly in Saudi Arabia and Argentina. The market is currently focused on: * **Debt Reduction and Capital Structure:** The continued strengthening of the balance sheet and further debt reduction, given the substantial progress made. * **Free Cash Flow Generation:** The distinction between consolidated free cash flow (impacted by SANAD's capital needs) and free cash flow generated by the rest of the business, and the timing of SANAD's free cash flow crossover. * **International Growth Trajectory:** The successful deployment of newbuild rigs in Saudi Arabia, the potential for additional tranches, and the ramp-up of activity in other international markets like Argentina and Mexico. * **U.S. Lower 48 Outlook:** The sustainability of the increased rig count and daily margins in a cautious market environment, and the adoption of high-end drilling technology like PACE-X Ultra.

Revenue Segments And Estimated Mix: International Drilling — Mix: ~53.1%; Source: Q4 2025 transcript; Trend: Revenue grew 4.1% sequentially; EBITDA increased 2.9% sequentially.
U.S. Drilling — Mix: ~30.2%; Source: Q4 2025 transcript; Trend: Revenue declined 3.7% sequentially, primarily due to divestiture of Quail Tools. Lower 48 revenue decreased 2.2% sequentially, while Alaska and Offshore decreased 7.9% sequentially.
Drilling Solutions (NDS) — Mix: ~13.5%; Source: Q4 2025 transcript; Trend: Normalized for Quail sale, revenue increased slightly and EBITDA grew 2.3% sequentially.
Rig Technologies — Mix: ~4.8%; Source: Q4 2025 transcript; Trend: Revenue increased 6% sequentially, predominantly related to year-end equipment sales.
Product Brands: REVit
ROCKit
SmartNAV
SmartSLIDE
RigCLOUD
PACE-X
PACE-X Ultra
Canrig

Bull / Bear Details

Nabors Industries is positioned for enhanced value creation through continued debt reduction and a strengthened capital structure. Robust international expansio

Thesis

Nabors Industries is positioned for enhanced value creation through continued debt reduction and a strengthened capital structure. Robust international expansion, particularly in Saudi Arabia and Latin America, provides long-term growth. An improving Lower 48 market, driven by high-spec rig technology and NDS services, is expected to increase rig count and pricing, underpinning a more optimistic outlook despite geopolitical and market volatility. (Updated: 2026-07-14)

Bull case

Nabors continues to prioritize and execute significant debt reduction, having redeemed the remaining 2028 notes and targeting a 1x net leverage ratio long-term. This delevering strategy reduces interest expense and enhances free cash flow, with the company outperforming Q1 FCF expectations and projecting to exceed full-year guidance, strengthening its financial flexibility and investor confidence.
The company demonstrates robust international expansion, with the SANAD newbuild program on track (15th deployed, 4 more in 2026, 20th in early 2027, discussions for 5th tranche). Activity is improving in Mexico and Argentina, and Venezuela presents a substantial long-term opportunity. This diversified international portfolio provides visible, multi-year contracts and attractive returns, mitigating U.S. market volatility.
Nabors is outperforming the broader Lower 48 market, increasing its rig count to 66 and guiding to 69 by Q2 end, maintained through H2 2026, while the industry rig count declined. This growth is driven by demand for high-spec PACE-X Ultra rigs and NDS technology, which enable complex wells and are expected to drive progressive pricing increases into the mid-$30,000s through 2027.

Bear case

Ongoing geopolitical instability in the Middle East, while not disrupting core operations, introduces operational inefficiencies impacting logistics, supply chain, and crew rotations, leading to an estimated $3.5 million EBITDA impact in Q1 and $6-8 million in Q2. This conflict also contributes to commodity price volatility, complicating long-term planning for operators.
Despite recent oil price strength, the market remains volatile with backward-dated futures, tempering broad-based capital spending increases from Lower 48 operators. The EIA continues to report concerns about oversupply, and natural gas demand for electricity generation has declined, posing risks to sustained activity levels and day rates if prices do not hold.
While SANAD is a long-term growth driver, its newbuild program continues to consume a significant portion of consolidated adjusted free cash flow (expected $10 million in Q2). This ongoing cash consumption could still limit the pace of overall debt reduction, and the Lower 48 market, despite recent improvements, remains susceptible to rapid downturns, as acknowledged by management.

Bull / Bear Case

Bear Case: The bear case for Nabors Industries centers on persistent geopolitical instability in the Middle East, which, despite not disrupting core operations, introduces operational inefficiencies impacting logistics, supply chain, and crew rotations, leading to an estimated $3.5 million EBITDA impact in Q1 and $6-8 million in Q2. This conflict also contributes to commodity price volatility, with backward-dated oil futures and declining natural gas prices (down 17.93% year-over-year as of July 14, 2026), tempering broad-based capital spending increases from Lower 48 operators. The EIA continues to report concerns about oversupply in the broader oil market. Furthermore, while SANAD is a long-term growth driver, its newbuild program continues to consume a significant portion of consolidated adjusted free cash flow (expected $10 million in Q2), potentially limiting the pace of overall debt reduction.
Bull Case: Nabors Industries presents a compelling bull case driven by its aggressive debt reduction strategy, having redeemed remaining 2028 notes and targeting a 1x net leverage ratio long-term. This deleveraging is enhancing free cash flow, with Q1 2026 outperformance and expectations to exceed full-year guidance. The company demonstrates robust international expansion, particularly with the SANAD newbuild program in Saudi Arabia, which is on track for multiple deployments through early 2027 and advancing discussions for further tranches, providing visible, multi-year contracts. Additionally, Nabors is outperforming the broader Lower 48 market, increasing its rig count while the industry declined, fueled by demand for its high-spec PACE-X Ultra rigs and NDS technology, which are expected to drive progressive pricing increases into the mid-$30,000s through 2027.
More Compelling & Why: Bull. Nabors' current EV/EBITDA of approximately 3.0x is significantly below its 10-year median of 7.74x and industry averages for oilfield services (5-8x). The strongest argument is the company's consistent execution on debt reduction, outperformance in the Lower 48 rig count, and visible international growth, which appear undervalued by the market. My view would flip if NBR consistently fails to meet its debt reduction targets and free cash flow guidance, or if a severe and sustained downturn in global drilling activity leads to significant contract cancellations and unrecoverable day rate pressure.

Key Factors5 rows

Key Factor	Why It Matters	What To Watch	What It Signals	Where/How To Track	Free Alt Data	Paid Alt Data
Lower 48 Average Rig Count	The Lower 48 is a significant segment for Nabors. The average rig count indicates activity levels and directly impacts revenue and profitability, especially with the company's focus on high-spec rigs and longer laterals.	Nabors' actual average rig count in the Lower 48 for Q1 2026 (guidance 64-65 rigs) and the full year 2026 (guidance 61-64 rigs).	Bullish if Q1 2026 average rig count meets or exceeds 65 rigs and full-year guidance is maintained or increased. Bearish if Q1 2026 average rig count falls below 64 rigs or full-year guidance is lowered.	Nabors' quarterly earnings reports and conference calls. Baker Hughes weekly rig count for overall market trends.	Baker Hughes Rig Count (weekly) for Lower 48 land rigs; EIA Drilling Productivity Report for U.S. oil and gas production trends.	Enverus: U.S. rig activity and operator spending; Thinknum: Nabors' U.S. job postings for rig crew.
Net Debt Reduction Progress	Debt reduction is Nabors' highest financial priority, improving the capital structure, reducing interest expense, and boosting free cash flow, which is crucial for equity investors.	Progress towards the target of reducing gross debt by at least $100 million in 2026. Monitor reported net debt and gross debt figures in quarterly financial statements.	Bullish if gross debt reduction meets or exceeds $100 million for the full year 2026. Bearish if reported gross debt reduction is less than $100 million for the full year 2026.	Nabors' quarterly earnings reports, SEC filings (10-K, 10-Q), and press releases regarding debt redemptions.	Credit rating agency reports (e.g., S&P, Moody's, Fitch) for debt rating changes. Simply Wall St for analysis on capital structure.	Bloomberg Terminal: NBR bond prices and credit default swaps; S&P Global Market Intelligence: NBR debt metrics and covenants.
SANAD Newbuild and Suspended Rig Deployments	This factor directly indicates the growth and future EBITDA generation from Nabors' high-return Saudi Arabia joint venture, which is a significant long-term value driver for the company.	Monitor the commencement of 5 newbuild rigs in Saudi Arabia during 2026, the 20th newbuild in early 2027, and the resumption of 2 suspended rigs (one in March 2026 and one in June 2026).	Bullish if all 5 newbuilds and 2 suspended rigs commence work on schedule or earlier. Bearish if any deployment is delayed beyond the stated quarter or cancelled.	Nabors' quarterly earnings reports and conference calls, company press releases, SANAD announcements.	Industry news sites (e.g., Rigzone, Offshore-energy.biz) for reports on Saudi drilling activity. Westwood Global Energy Group's 'Global Land Drilling Rigs Tracker' for updates on rig deployments in Saudi Arabia.	Rystad Energy: Saudi Arabia rig count and contract awards; Wood Mackenzie: Middle East drilling activity forecasts.
International Daily Gross Margin	International drilling is a key growth area for Nabors, offering attractive returns and multi-year contracts. Margin expansion in this segment directly contributes to overall profitability and cash flow.	Actual average daily gross margin for International Drilling in Q1 2026 (guidance $17,500-$17,600) and full year 2026 (target $18,500).	Bullish if Q1 2026 average daily gross margin for International Drilling is $17,600 or higher and the full-year 2026 target of $18,500 is maintained or increased. Bearish if Q1 2026 average daily gross margin is below $17,500 or the full-year 2026 target is lowered.	Nabors' quarterly earnings reports and conference calls.	Industry reports on international drilling day rates (e.g., Rigzone articles, IEA oil market reports for regional demand).	Rystad Energy: Global drilling contractor day rates and contract terms; Wood Mackenzie: International rig market analysis.
Nabors Drilling Solutions (NDS) EBITDA Growth	NDS is a low-capital-intensity segment that generates significant value for clients and Nabors. Its growth, especially in international markets and on third-party rigs, indicates successful technology adoption and market penetration.	NDS EBITDA for Q1 2026 (guidance approximately $39 million) and full year 2026 (expected $160 million to $170 million, normalized for Quail).	Bullish if Q1 2026 NDS EBITDA is $39 million or higher and the full-year 2026 target of $160 million to $170 million is maintained or increased. Bearish if Q1 2026 NDS EBITDA is below $39 million or the full-year 2026 target is lowered.	Nabors' quarterly earnings reports and conference calls.	Nabors' investor presentations for NDS segment updates; industry publications on drilling technology and automation trends.	Thinknum: NBR job postings for NDS-related roles (e.g., automation engineers, drilling software specialists); Sensor Tower/Apptopia: Usage data for drilling optimization software (if applicable and publicly tracked).

Key Reported Metrics, Reratings Triggers & Results3 rows

Adjusted EBITDA is a key profitability metric, indicating the company's operational performance before non-cash and non-recurring items. Investors watch this fo

Key reported metrics			Rerating thresholds
Metric	Last period	Why it matters	What's needed for rerating	Rerating context	Earnings date
Adjusted EBITDA	0.45%	Adjusted EBITDA is a key profitability metric, indicating the company's operational performance before non-cash and non-recurring items. Investors watch this for the company's ability to generate core earnings and meet its full-year guidance.	Nabors Industries Ltd. (NBR) needs to raise its full-year 2026 consolidated Adjusted EBITDA guidance to exceed $986 million. This target represents the high end of its previously stated 6-8% normalized growth over 2025's Adjusted EBITDA of $913 million. Achieving this would require strong operational performance in Q2 2026 (upcoming earnings) and subsequent quarters, maintaining or exceeding the Q1 2026 Adjusted EBITDA run rate of $205 million.	Achieving full-year Adjusted EBITDA above $986 million signals robust operational outperformance, validating the success of international expansion and high-spec technology adoption. This demonstrates stronger cash flow generation for debt reduction and future growth, enhancing investor confidence and justifying a higher valuation multiple.	2026-07-28
Net Debt	-26.33%	Debt reduction is Nabors' highest financial priority, significantly impacting its capital structure and free cash flow. Continued progress in lowering net debt is vital for improving financial health and investor confidence.	Nabors Industries Ltd. needs to demonstrate continued significant progress in its debt reduction strategy by meeting or exceeding its stated goal of reducing gross debt by at least $100 million for the full year 2026. Further improvement in its net leverage ratio, currently at 1.7x, would also contribute to a higher rerating.	Achieving this debt reduction target is Nabors' highest financial priority, as it derisks the capital structure, lowers interest expenses, and boosts free cash flow. This enhances financial flexibility, improves investor confidence, and supports a higher valuation by signaling a stronger, more sustainable financial position.	2026-07-28
International Drilling Average Rig Count	9.76%	This metric is crucial as Nabors is focused on international expansion and growth, particularly with the SANAD newbuild program and increased activity in Latin America. It directly reflects the company's operational scale and future revenue potential.	The International Drilling Average Rig Count needs to meet or exceed Nabors' full-year 2026 projection of 96 to 98 rigs, with a strong indication of exiting December 2026 at or above 101 rigs.	This metric is crucial as it directly reflects Nabors' operational scale and future revenue potential from its international expansion, especially the SANAD program. Exceeding these targets confirms successful growth, boosts investor confidence in diversified revenue streams, and supports a higher valuation.	2026-07-28

Key Questions

Can Nabors' International Drilling segment, particularly SANAD, sustain its planned rig deployments and achieve its targeted daily gross margins for Q2 and the

Can Nabors' International Drilling segment, particularly SANAD, sustain its planned rig deployments and achieve its targeted daily gross margins for Q2 and the full year 2026, despite persistent Middle East geopolitical disruptions and their impact on logistics and costs?

Question 2: Will Nabors continue to outperform the broader Lower 48 market by increasing its rig count to 69 by Q2 exit and achieving its projected pricing increases into the mid-$30,000s, or will broader market caution and commodity price volatility temper this momentum in the second half of 2026?
Question 3: Can Nabors sustain its accelerated debt reduction efforts and exceed its full-year adjusted free cash flow guidance, particularly given the significant capital expenditures for the SANAD newbuild program and the company's long-term net leverage target of 1x?

Earnings Transcript SummaryTable

2026-02-12 · 2025Q4 Earnings Call

3 Things Management Is Most Focused On	Call Takeaway & Tone	Prior Quarter'S Y/Y Growth By Segment	3 Things Analysts Most Pressed On (And Mgmt Responses)	Revenue Segments
1. Debt Reduction and Capital Structure Improvement: Management's highest financial priority is delevering, having reduced net debt by over $550 million compared to the end of 2024, reaching its lowest level since 2005. This also reduces annualized cash interest expense by approximately $45 million and improves free cash flow. 2. International Drilling Expansion and Growth: Management is focused on expanding in the international drilling market, where they generate attractive returns, benefit from multiyear contracts, and see significant growth prospects across the Middle East, Asia Pacific, and Latin America, particularly with the SANAD newbuild program and opportunities in Mexico and Argentina. 3. Deployment of Advanced Technology and Performance Excellence in Lower 48: Management highlighted their focus on performance excellence in the Lower 48 rig market, deploying advanced technologies like the PACE-X Ultra rig and Nabors Drilling Solutions (NDS) services, which enhance operator investment returns with improved production and efficiencies, and generate attractive returns for Nabors with low capital intensity.	The call conveyed a cautiously optimistic tone. The key takeaway was Nabors' significant progress in strengthening its capital structure through substantial debt reduction, driven by strategic transactions and improved free cash flow generation outside of SANAD. The company highlighted robust growth prospects in international drilling, particularly with the SANAD newbuild program and increased activity in Mexico and Argentina, and the strong performance of its high-spec rigs and technology in the Lower 48. While management expressed caution regarding the Lower 48 market in the second half of 2026 due to external uncertainties, they were confident in their ability to maintain momentum and capture value from their diversified portfolio.	For Q3 2025, Nabors Industries reported a consolidated revenue growth of 11.80% year-over-year. Segment-specific year-over-year revenue growth for Q3 2025 was not explicitly provided in the available search results. However, sequential changes for Q3 2025 were reported as: International Drilling revenue increased by 5.8% sequentially; U.S. Drilling revenue decreased by 2.2% sequentially; and Drilling Solutions EBITDA, normalized for the Quail sale, increased modestly sequentially.	1. Lower 48 Outlook and Rig Count Drivers: Analysts questioned the drivers behind Nabors' increasing rig count in the Lower 48 (up to 66 rigs), which bucked industry trends. Management responded that the increase was mainly for public operators (80% public now), with a higher gas rig count (20%), and driven by the trend towards longer laterals (3- and 4-mile laterals growing significantly), for which Nabors' PACE-X rigs (including the Ultra) are well-suited. They also noted maintaining cost discipline and a cautious view for H2 2026. 2. Saudi Arabia Market Conditions and Timelines for Rigs: Analysts asked about the situation on the ground in Saudi Arabia, particularly confidence in the timelines for reactivating suspended rigs and deploying newbuilds given the tight labor market. Management expressed high confidence in the scheduled return of SANAD's suspended rigs (one in late Q1, one in late Q2) and the 5 newbuilds, citing Nabors' position and vertical integration. They viewed Aramco's large-scale resumption of rigs as a positive signal for 2027. 3. Mexico Activity and SANAD's Free Cash Flow Impact: Analysts inquired about potential for additional rigs in Mexico beyond the fourth platform rig and the impact of SANAD's capital expenditures on consolidated free cash flow. Management stated they are focused on the current profitable rigs in Mexico but acknowledged a more positive market. Regarding SANAD, management clarified that while SANAD consumes cash until crossover, Nabors' businesses excluding SANAD are expected to generate $80 million to $90 million in free cash flow for debt reduction, emphasizing the long-term value creation of the SANAD investment.	Consolidated revenue for full year 2025 grew 8.7% year-over-year. Segment-specific year-over-year revenue growth for Q4 2025 was not explicitly provided in the transcript. The transcript reported sequential changes for Q4 2025 as follows: International Drilling revenue increased by 4.1% sequentially; U.S. Drilling revenue declined by 3.7% sequentially; Drilling Solutions revenue, normalized for the Quail sale, increased slightly sequentially; and Rig Technologies revenue increased by 6% sequentially.

Transcript TidbitsTable

2026-02-12

About Expanding Eligible Market	About Competition	About The Broader Industry	Where Things Are Headed	Updates On Theme	Broader Themes Emerging	Bullish-Leaning Quotes (Short)	Bearish-Leaning Quotes (Short)	Hiring
Nabors is expanding in the international drilling market, where it generates attractive returns. The company is prepared to return to work in Venezuela with 5 idle rigs and a small number of key local personnel, and is already in discussions with multiple operators. Across the Middle East and North Africa, several markets aspire to increase production capacity, aligning with Nabors' business portfolio. In the Lower 48, Nabors' gas rig count increased by 50% in 2025, with gas-directed activity comprising approximately 20% of its overall rig count. The company's activity outlook in Mexico has improved, with plans to restart a fourth offshore platform rig early this year, adding to the current three. In Argentina, Nabors expects to start one rig this quarter and a second in the third quarter, bringing its rig count there to 14. In the Eastern Hemisphere, Nabors is tracking nearly 20 opportunities for additional rigs in countries where it currently operates. SANAD, the joint venture in Saudi Arabia, continues discussions for a fifth tranche of newbuild rigs, which would bring the total to 25. Nabors Drilling Solutions (NDS) strategy to target third-party rigs is paying off, with NDS revenue on third-party rigs in the Lower 48 (excluding Quail) increasing sequentially by 10% in the fourth quarter.	Nabors believes its fleet of PACE-X rigs is well-suited for drilling longer laterals, with the PACE-X Ultra rig already demonstrating its value for Catalyst in South Texas. The company is working towards deploying a second PACE-X Ultra and upgrading existing PACE-X rigs for other operators to drill longer lateral wells, demonstrating the versatility and capability of its high-end drilling technology. Tony Petrello asserted that Nabors' investments in the Kingdom, particularly SANAD, offer orders of magnitude better returns than other deals made by competitors. He also stated that no other company in the industry has Nabors' level of built-in growth, strong client base, or partnership with the #1 oil company in the world in the largest market. The new Canrig 3-bite wrench, loaded with feedback and automation, has received a highly positive initial reaction, with drilling contractors expressing interest.	Oil prices experienced a downward trend in the second half of 2025, which lasted until the U.S. announced crude imports from Venezuela in early January, followed by a production interruption in Kazakhstan and uncertainty around tariffs related to Greenland and protests in Iran. Global oil supply exceeded demand throughout 2025, according to EIA figures. Looking ahead, potential impacts on oil prices include ongoing uncertainty around future tariff actions, oil production increases both inside and outside OPEC, reported inventory builds, higher demand concentrated in Asia, and conflicts involving Ukraine and Iran. Operators in the Lower 48 are focused on maintaining production but are prepared to react quickly if oil prices do not support their investment returns. The outlook for natural gas remains positive for the next several years, with U.S. LNG exports and domestic consumption expected to ramp up, and continued expansion of natural gas supporting drilling activity in the Middle East and Latin America. The Baker Hughes weekly Lower 48 land rig count decreased by 3 rigs from the end of September through December, indicating apparent stability. A survey of large Lower 48 operators, accounting for 42% of the market's working rig count, suggests the rig count will remain largely stable through the end of 2026, though two companies indicate declines. The large-scale resumption of Aramco reactivating nearly half of its suspended rigs is seen as an incredibly positive signal, suggesting Aramco is positioning for a strong 2027. The EIA continues to report concerns about oversupply in the market.	Nabors is confident its strategic priorities will lead to future success. The company is well-positioned to benefit from improvements in global drilling markets due to its geographic reach. Nabors stands ready to respond to increased demand across gas-producing basins. The company's rig count recently stood at 66, up from 62 at the end of Q4 2025. SANAD plans to deploy five more newbuild rigs in 2026, bringing the total to 19, with the 20th expected in early 2027. SANAD is also advancing discussions for a fifth tranche of newbuild rigs, which would bring the total to 25. Nabors aims for further debt reduction, expecting to generate free cash flow outside SANAD. The outlook for 2026 envisions EBITDA performance matching 2025, with increases in several operations offsetting the Quail disposition. For the full year 2026, Nabors expects EBITDA to grow by 6% to 8% normalized for Quail, maintaining the same reported EBITDA level as 2025. Lower 48 average rig count is expected to be 61 to 64 rigs, with a cautious view for the second half. International drilling average rig count is projected at 96 to 98 rigs, exiting December at or above 101 rigs, with average daily gross margin targeted at $18,500 (5% up). NDS EBITDA is expected to grow by 6% to 7% normalized for Quail, reaching $160 million to $170 million, largely driven by international growth. Rig Technologies EBITDA is expected to range between $22 million and $25 million. The retained Parker businesses are expected to generate at least $70 million of EBITDA in 2026. For 2026, SANAD is expected to consume $100 million to $120 million in adjusted free cash flow, while the rest of the businesses generate $80 million to $90 million, with plans to reduce gross debt by at least $100 million. Events in Venezuela could lead to increased oil activity. Each annual tranche of five SANAD newbuilds is projected to generate incremental annualized EBITDA of more than $60 million, translating to over $500 million of value creation each year at current Middle East driller valuations.	Offshore	AI, Automation, and Digitalization as Core Operational Drivers: Nabors highlighted the integral full automation package supplied by Nabors Drilling Solutions in its PACE-X Ultra rig and the new 3-bite Canrig wrench, which is capable of fully autonomous mode. This aligns with the broader industry trend of leveraging advanced technologies to enhance efficiency and reduce risks. Geopolitical and Energy Security Drivers: The transcript mentions ongoing conflicts involving Ukraine and Iran, uncertainty around tariffs, and the U.S. announcement to import Venezuelan crude, all of which are geopolitical factors influencing oil markets and energy security. M&A and Consolidation: Nabors completed significant transactions, including the purchase of Parker Wellbore and the sale of Quail Tools, reflecting the ongoing consolidation trend in the industry.	This improvement significantly derisks our capital structure. Our commitment to these priorities led to our recent accomplishments. We are confident they will lead us to future success as well. The outlook for natural gas remains positive over the next several years. Our momentum accelerated during the fourth quarter. This diversity is encouraging. It suggests favorable operator economics across basins. The newbuild fleet there continues to expand. Across other markets in the Eastern Hemisphere, we are seeing potential activity growth. Our activity outlook in Mexico has improved. Our leading position in this market enables us to opportunistically capture additional work. The first unit has been working for Catalyst in South Texas since mid-September. We had high expectations for this rig. It has delivered. Our net debt is down by more than $550 million. It stands at the lowest level since 2005. Our outlook for 2026 envisions EBITDA performance that matches last year's. Our organization is well positioned to operate at peak performance and deliver durable growth and long-term value. We are very pleased with the progress in a rather complex market at present. The large-scale resumption of Aramco putting back all these rigs to work... is an incredibly positive signal to the market. This exceptional performance drove our full year adjusted free cash flow to approximately $117 million, significantly exceeding our revised post-parket guidance of approximately $80 million. We improved our credit ratings, extended our maturity profile into 2029... reduced net debt by more than $554 million and improved our net leverage ratio to approximately 1.7x, the lowest since 2008. The transformation of our capital structure shifts significant value to our equity investors. Each annual tranche of new builds at 5 per year should generate incremental annualized EBITDA of more than $60 million. We remain pretty bullish on the long-term picture for gas. The initial reaction [to the new Canrig wrench] is really high.	Oil prices were in a downward trend in the second half of 2025. These events occurred against the backdrop of global oil supply exceeding demand. The EIA's figures showed a surplus each month of 2025. Looking ahead, we see several issues that could impact oil prices. Operators in the Lower 48 appear focused on maintaining production. At the same time, they are positioned to react quickly should oil prices no longer support their investment return metrics. SANAD recently elected not to renew 3 of its owned rigs... They generated very little EBITDA and free cash flow. Thus far, we have not seen oil prices at the level that concerned us a quarter ago. Taken together, these operators expect the rig count to remain largely stable through the end of 2026. Looking more closely, 2 companies indicate declines. This outlook reflects a step down in daily margins driven primarily by a change in the scope of work of our marquee offshore platform rig as well as reduced activity levels in Alaska. Lower 48 to average 61 to 64 rigs, reflecting a cautious view for the second half of the year. For the first quarter, we expect to consume $80 million to $90 million of consolidated adjusted free cash flow, with SANAD alone consuming approximately $50 million to $60. Funding SANAD's newbuild program results in the consumption of cash at the JV until crossover. It's more just the constant -- all the external noise, the EIA, even as of last week, is talking about oversupply and the market's reaction.	SANAD can utilize the experienced crew from three non-renewed rigs on its planned deployments during the quarter, which should help mitigate the effects of a tight labor market in Saudi Arabia. Tony Petrello also mentioned that the labor market in the Kingdom is 'fairly tight'.

NotesTable

Date	Comment	Comment Type	Comment Sentiment	Link	Price Reaction
2026-02-12	Nabors Industries reported strong Q4 2025 results, exceeding expectations, driven by U.S. Drilling and international expansion. Significant debt reduction ($554M) and a positive outlook for international rig count, particularly SANAD, were highlighted. Despite cautious H2 2026 U.S. guidance, the market reacted very positively, with the stock outperforming SPY by a wide margin (6.61% vs 0.23% post-earnings), indicating strong investor confidence in NBR's operational performance and capital structure improvements.	Earnings Transcript	Neutral		+6.61% (vs SPY: +6.38%)

Upcoming Events11 rows

Catalyst ID	Estimated Timing	Estimated Date Start	Estimated Date End	Catalyst	Why It Matters	Ticker Or Theme Specific	Transcript Date	Source Type
NBR_f621e7db	prepared to return to work there, already in discussions with multiple operators	2026-04-24	2027-02-12	Potential reactivation of 5 idle rigs in Venezuela, contingent on suitable commercial terms and security arrangements.	Reactivation would increase Nabors' rig count and revenue, especially since it is not factored into current full-year guidance, providing potential upside to EBITDA and cash flow.	Ticker	2026-02-12	earnings_transcript
NBR_df79ff11	Five more rigs are planned to commence work during 2026	2026-01-01	2026-12-31	Commencement of operations for 5 newbuild rigs for the SANAD joint venture in Saudi Arabia during 2026.	These rigs are a key part of SANAD's long-term growth strategy, expected to generate significant incremental annualized EBITDA and contribute to the International Drilling segment's performance.	Ticker	2026-02-12	earnings_transcript
NBR_a1f5f3d6	The JV is evaluating alternatives to return them to work.	2026-04-24	2027-02-12	SANAD evaluating and potentially securing new contracts for 3 non-renewed, low-margin workover rigs.	Successful re-deployment could add some EBITDA and cash flow, while failure means these rigs remain idle, with an uncertain outcome.	Ticker	2026-02-12	earnings_transcript
NBR_4625be26	Currently, we are tracking nearly 20 opportunities for additional rigs in countries where we currently operate.	2026-04-24	2027-02-12	Potential for securing contracts for nearly 20 additional rigs across various Eastern Hemisphere markets.	Winning these opportunities would significantly expand Nabors' international rig count, driving substantial revenue and EBITDA growth.	Ticker	2026-02-12	earnings_transcript
NBR_9aff2abe	We expect to start 1 rig this quarter. We have a second rig scheduled to start work there in the third quarter.	2026-01-01	2026-09-30	Deployment of two additional rigs in Argentina (one in Q1, one in Q3 2026).	These deployments will increase Nabors' rig count in Argentina to 14, enhancing the international segment's revenue and EBITDA.	Ticker	2026-02-12	earnings_transcript
NBR_8426edc5	We expect these to conclude in the coming months.	2026-02-12	2026-08-12	Conclusion of discussions with the client for the fifth tranche of 5 newbuild rigs for SANAD in Saudi Arabia.	Securing this tranche would bring the total newbuilds to 25, further extending SANAD's long-term growth and future EBITDA generation, reinforcing Nabors' strong position in the Saudi market.	Ticker	2026-02-12	earnings_transcript
NBR_0c2ba15d	working toward an agreement to deploy a second PACE-X Ultra.	2026-04-24	2027-02-12	Agreement and deployment of a second high-spec PACE-X Ultra rig.	Deployment of advanced technology rigs demonstrates market leadership, commands higher day rates, and generates attractive returns, enhancing Nabors' competitive position.	Ticker	2026-02-12	earnings_transcript
NBR_0d0fcf2c	working with another operator to upgrade an existing PACE-X rig... in discussions to similarly upgrade a PACE-X rig for South Texas.	2026-04-24	2027-02-12	Upgrades of existing PACE-X rigs for 4-mile lateral wells in the Permian Basin and for South Texas.	These upgrades enhance rig capabilities to meet increasing demand for longer laterals, demonstrating versatility and generating attractive returns on investment.	Ticker	2026-02-12	earnings_transcript
NBR_89c358bb	reflecting a cautious view for the second half of the year.	2026-07-01	2026-12-31	Potential decline in Lower 48 average rig count in the second half of 2026 due to a cautious market outlook.	A reduction in rig count would negatively impact the U.S. Drilling segment's revenue and EBITDA, potentially leading to lower-than-expected full-year results.	Ticker	2026-02-12	earnings_transcript
NBR_8f5c7856	plan to further reduce Nabors gross debt by at least $100 million during the year.	2026-01-01	2026-12-31	Nabors' plan to reduce gross debt by at least $100 million in 2026.	Successful debt reduction strengthens the balance sheet, lowers annual interest expense, and improves financial flexibility, positively impacting investor sentiment and valuation.	Ticker	2026-02-12	earnings_transcript
NBR_2c4fbc20	until crossover	2027-01-01	2027-12-31	SANAD achieving free cash flow crossover, becoming cash flow positive.	This milestone would eliminate SANAD's cash consumption, significantly boosting Nabors' consolidated free cash flow, improving overall valuation, and enhancing investor sentiment.	Ticker	2026-02-12	earnings_transcript