Can Nabors' New Rigs Carry the Company?

One of the biggest struggles for a rig or an oil services company is to have outdated and legacy assets on its books, and Nabors Industries (NYSE: NBR  ) is finding itself in that very position. With its legacy rigs running at an awful utilization rate of 39% and its offshore rigs running at 55% at a time when more than 95% of the global marketed jack-up fleet is in use, Nabors has lots of older assets dragging on the balance sheet. To compound the problem, its smaller oil services business in America is in some of the most flooded parts of the market like pressure pumping. Unlike some of the larger oil services companies like Halliburton (NYSE: HAL  ) and Schlumberger (NYSE: SLB  ) , though, Nabors doesn't have a diverse enough oil services business to take the hits in that part of the business without it severely impacting earnings. 

While the company has some tricks up its sleeve to boost earnings in the short term, there is only one real way out of this lull for Nabors: its PACE-X Rig. Tune into the video below to find out why this top-of-the-line rig is the way to more profitable days in the future.

Companies pulling down a hefty profits from America's energy boom
Record oil and natural gas production is revolutionizing the United States' energy portfolio, but finding the right plays for your portfolio can be like finding a needle in a pile of rusty needles. For this reason, we have put together a comprehensive look at three energy companies set to soar during this transformation in the energy industry. Let us help you discover these three companies that are spreading their wings by checking out our special report, "3 Stocks for the American Energy Bonanza." Simply click here and we'll give you free access to this valuable investment resource. 


Read/Post Comments (1) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On December 13, 2013, at 10:19 PM, JustAnotherGuy1 wrote:

    1) NBR's onshore fleet is second only to HP in terms of % of AC rigs and % pad capable rigs.

    2) While NAM drilling fundamentals are weak, int'l drilling remains strong. With similar rigs, you'll find 40k+ dayrates in say Colombia vs the 25k/d rates in NAM. (NBR has 50% leverage to int'l for their drilling business)

    3) SLB and HAL, while they are service companies, are not good comps for NBR.

    4) While yes they are slightly more leveraged than competitors like PTEN, it adds to their delevering story. Increasing capital returns is years away from the onshore space as top drillers are bringing on 20 newbuilds per year. Newbuild capex is whats keeping each company in the hunt. This is necessary for everyone in the industry and not unique to NBR.

Add your comment.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2708909, ~/Articles/ArticleHandler.aspx, 8/20/2014 10:39:19 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement