Behold the power of lowered expectations.

Earlier this week, Nabors Industries (NYSE: NBR) released first-quarter results that, while soft, still beat all but the highest of earnings estimates. (Performing with 20 pairs of analytical eyeballs on you is no easy task.) Adjusted operating income from contract drilling came in 14% lower than last year, while firmwide pre-tax income fared slightly worse. Still, both were an improvement over last quarter.

So is it finally time to stop being bearish on North American land-based oil and gas drilling? Nabors, for one, sees definite signs of bottoming in both pricing -- i.e. dayrates -- and activity levels. If you're taking anyone's word for it, make it Nabors or Patterson-UTI (Nasdaq: PTEN) -- they've got the meatiest fleets. Importantly, those two companies have a lot of the idle rigs in the increasingly tight 1,000-1,500 horsepower category.

On its conference call, Nabors had some instructive comments on both its cooperative and competitive positioning.

First off, it never hurts to have Saudi Aramco as your largest customer. The Saudis have been bidding for jackup rigs lately, and Nabors is about to start a tasty four-year contract at about $180,000 per day. Here in the Gulf of Mexico, the shallow-water jackup market has been tepid, but Nabors' CEO noted that his "alma mater," ExxonMobil (NYSE: XOM), is finally increasing its activity there. Finally, on the cooperative front, Nabors noted its strong relationship with both National Oilwell Varco (NYSE: NOV) and its recent quarry. That should allay any fears about a dearth of drillpipe over the next year.

On the competitive front, many operators are feelin' it when it comes to Helmerich & Payne's (NYSE: HP) flashy FlexRigs. Nabors' answer to this directional drilling dynamo is the PACE rig, which made up about a quarter of the fleet last year. Customers like EOG Resources (NYSE: EOG) need the high-end goods for their shale game, and Nabors is willing and able to accommodate them. Nabors is no newbie in this area, and will be able to compete most competently.

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Fool contributor Toby Shute isn't flashy, and doesn't have a position in any company mentioned. The Motley Fool has a disclosure policy.