Nabors Industries Ltd. ("Nabors") (NYSE: NBR) reported fourth quarter 2024 operating revenues of $730 million, compared to operating revenues of $732 million in the third quarter. The net loss attributable to Nabors shareholders for the quarter was $54 million, compared to a net loss of $56 million in the third quarter. This equates to a loss of $6.67 per diluted share, compared to a loss per diluted share of $6.86 in the third quarter. Fourth quarter adjusted EBITDA was $221 million, compared to $222 million in the previous quarter.
Highlights
- Nabors shareholders approved the issuance of shares to Parker Wellbore ("Parker") stockholders in connection with the merger between Parker and Nabors. Parker shareholders also approved the merger. Pending certain international regulatory approvals, the merger is expected to close during the first quarter of 2025.
- Nabors received awards for three rigs in Argentina, two of which will be transferred from the U.S. on five-year contracts. The third rig is currently working in country and is scheduled to start its new contract before the end of the year. In addition, the Company received another award for an idle rig in Colombia. These reactivations are capital efficient opportunities to support growth, while improving Nabors' asset utilization.
- In the fourth quarter, SANAD deployed its ninth newbuild rig and is expected to start up two more in the first quarter of 2025. As Saudi Aramco continues to grow its natural gas activity, Nabors continues to participate in its customer's expansion plans with commitments to add rigs built in the Kingdom over the coming years and its leading portfolio of drilling-related services.
- In Rig Technologies, Canrig was awarded a comprehensive rig upgrade package by a third-party drilling contractor in the U.S. Canrig is currently pursuing a number of upgrade opportunities, both domestically and internationally. These projects demonstrate Canrig's advanced technology suite, which enables contractors to remain competitive as the drilling market becomes increasingly demanding.
Anthony G. Petrello, Nabors Chairman, CEO and President, commented, "We are looking forward to adding Parker to the Nabors portfolio. Our integration planning reinforces the Parker attributes that we identified earlier. We are confident that this acquisition will advance our strategic objectives while creating value for our stakeholders.
"The market environment in the fourth quarter provided us with some challenges in the U.S., as operators continued to modulate their activity levels in oil basins, mainly driven by recent mergers. Leading edge pricing in this market remained steady, supporting our daily margins at relatively high levels. For 2025, we are planning for stable market activity through the early part of the year. Given this activity level, we are responding with actions to improve efficiency and align our cost structure.
"Our international businesses continued to expand in multiple markets, including Saudi Arabia and Argentina. Although our international success places pressure on our capital expenditures, these are attractive growth opportunities for multiyear contracts with high returns. In 2025, we have startups planned in the Kingdom, Argentina, Colombia, and Kuwait. We project these deployments will drive this segment's margins higher through the year.
"SANAD, our 50/50 joint venture with Saudi Aramco, is progressively adding 50 rigs over approximately 10 years. Through 2024, SANAD has deployed nine of these units. The rigs work under six-year initial contracts that are structured to recover the invested capital over five years. This term is followed by a four-year renewal mechanism, providing at least 10 years of utilization.
"In 2025, SANAD's working newbuild fleet should approximately double its contribution in adjusted EBITDA over 2024. SANAD's expansion remains one of our most exciting investment opportunities. We believe that in the next several years our joint venture will start generating cash flow in excess of the annual investment required for the newbuild rigs, meaningfully increasing value for Nabors as a whole."
