Nabors CEO Sees Good Times Ahead With Walking Rigs

Nabors CEO Sees Good Times Ahead With Walking Rigs

Demand for newer rigs expected to be strong in 2014
by John Pendleton  |   Sunday, February 23, 2014
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Drillers across North America have been losing ground in terms of pricing and rig utilization due to the increasing popularity of pad drilling and other cost-cutting technologies in major shale plays especially in North Dakota's Bakken. But the era of earning reductions, which has been more of a trough than a slump, could be coming to an end.

Tony Petrello, Chairman and CEO of Bermuda-based Nabors Industries, addressed investors via a conference call on Tuesday, telling them that he is confident that "We’ve seen the bottom."

As more American oil and gas companies have turned to the practice of using "pads" (multiwell drilling platforms), daily rental rates for mobile "walking" rigs have risen.

The company owns and operates the world’s biggest land-based drilling rig fleet and fields one of the largest completion, workover and well service rig fleets on the North American continent. They are also one of the leading deliverers of offshore platform workover and drilling rigs.

In fourth quarter 2013, 94% of their roughly 150 pad-oriented walking rigs were active, even as the demand for their mechanical rigs (representing older technology) was noticeably soft. The newer, more sophisticated rigs frequently rent at premium pricing levels and the last three months of 2013 saw Nabors racking up a four hundred percent profit increase when compared to the same three-month period in 2012.

Although bad weather, including the Polar Vortex that has brought unseasonably cold temperatures to much of the U.S., cost the company multiple days when drilling just wasn't possible, the company's forecast for the rest of this year is decidedly favorable.

In spite of sagging prices on fracing projects, Nabors has managed to renew contracts that expired, although doing so required reductions in the rates they charged customers.

The market reacted favorably to Petrello's remarks and Nabors stock rose in trading on the NYSE to $21.18, a 13.5% improvement.

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Christy Ferrell | Friday, June 09, 2017
Yea.. Too bad with all that money this company can't take care of their injured employees. You'd rather send them home without medical, fire them and hope they die than admit you screwed up....
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