Land drilling contractor, Nabors Industries Ltd.NBR has announced extension of both its borrowing capacity and the terms of revolving credit facility.
This line of credit is usually utilized by customers for operating activities, when needed, in exchange for a commitment fee.
It is to be noted that Nabors' borrowing capacity has been hiked to $2.2 billion while the terms have been enlarged until Jul 2020. However, the revised rate of the credit facility has been lowered to LIBOR plus 125 basis points.
The proceeds from the extended facility will likely be utilized by Nabors for refinancing debt, making strategic investments and for corporate activities.
The company is expected to release its second-quarter 2015 results on Jul 28, 2015. The Zacks Consensus Estimate for the company's second quarter stands at a loss of 10 cents.
Barbados-based Nabors 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.
However, low dayrates stemming from plentiful supply of the land drilling rigs in the U.S. market has been impacting the company's earnings. Moreover, the challenging near-to-intermediate term outlook for Nabors' international business might hamper its profitability in the coming months.
As a result, Nabors currently has a Zacks Rank #3 (Hold), implying that the stock will perform in line with the broader U.S. equity market over the next one to three months.
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