We are maintaining our Neutral recommendation on Nabors Industries
before its fourth-quarter 2014 earnings release. With leading
positions in most oil-based shale plays, Nabors is a big player in
the North American land drilling market. Since 2013, the company
has also been paying quarterly dividends, creating further value
for shareholders. However, as the oil pricing environment has been
weak since last June, we don't see the company earning considerable
cash flows this year. Lower dayrates, owing to oversupply of land
drilling rigs, also remain a cause of concern. Nabors' fairly
debt-heavy balance sheet needs to be addressed as well.
Barbados-based Nabors Industries Ltd. (NBR) conducts oil, gas,
and geothermal land drilling operations and is the largest
land-drilling contractor in the world. It is also one of the
largest land well servicing companies and workover contractors in
the U.S. The company offers a number of ancillary wellsite
services, including oilfield management, engineering,
transportation, construction, maintenance, well logging, and other
support services in select domestic and international markets.
Nabors owns about 485 actively-marketed land drilling rigs. In
addition, the company has approximately 549 land workover and well
servicing rigs in North America. Nabors' offshore fleet includes 38
platform rigs, 8 jackups, and 4 barge rigs that are located in the
U.S. and other international markets. Further, Nabors deploys 20
marine transportation and supply vessels and certain related
assets, primarily in the U.S. Gulf of Mexico. In addition to its
activities in North America, Nabors has operations in almost every
major energy-producing regions of the world. The company has a 51%
ownership interest in a joint venture in Saudi Arabia, which
actively markets 5 rigs.
Nabors divides its operations into two principal business
Drilling and Rig Services: This unit includes the operations and
services associated with rigs, accounting for the bulk of Nabors'
operating earnings. Its operations are spread across 4
sub-segments: U.S., Canada, International, and Rig Services.
Completion and Production Services: Nabors' Completion and
Production Services' segment is made up of the company's workover,
well-servicing and coiled tubing operations, together with the
fluids management and pressure pumping activities.
Nabors Industries Ltd. (NBR): Read the Full
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