Even though their shares have bounced back lately, onshore contract drillers still aren't many investors' cup of Texas tea. If you're wary, I can't blame you. Just last week, Chesapeake Energy
Operators are so eager to back out of prior drilling commitments that they're actually paying Nabors Industries
Overall, the company reported results that were about as good as could be hoped for, given the brutal drilling downturn. International, Alaskan, and even U.S. offshore segments were highlights, while Canada cratered. A ceiling test writedown in the oil and gas business hit the earnings numbers pretty hard, but such non-cash charges are nothing to worry about as long as your debt covenants aren't strained.
On that front, Nabors is in fine shape, having paid down most of its shorter-term debt with new 10-year notes issued in January. Nabors borrowed the new funds at 9.25%, a rate favorable to the terms on Petrohawk's
In addition to Nabors' financial strength, it holds a strong position in places like the Haynesville shale, where it runs between 40% and 50% of the working rigs. In absolute terms, at least, that dwarfs the presence of competitors like Helmerich & Payne