Oh, Mr. Market, you morose malcontent. When will you ever recognize the value of Nabors Industries (NYSE:NBR)?

Did you even notice the company's earnings report? You know, the one where the firm reported a 35% year-over-year improvement in lower 48 land drilling and a 42% hike in pre-tax income?

Just how bad do you think things are going to get? You know what, don't answer that. I'm capable of crafting my own nightmare scenario. Besides, I'm much more interested in Nabors' own perspective on the industry's future. These guys have a history of plain talk and, along with Schlumberger (NYSE:SLB) and National Oilwell Varco (NYSE:NOV), are one of a handful of oil service firms whose quarterly conference calls I consider a must-listen.

I certainly don't see this company sweating. It sure doesn't hurt that Nabors has half of its 2009 operating income locked up via term contracts. That may not be as cozy a position as that of a deepwater ace like Transocean (NYSE:RIG), but for a land driller, it's pretty darn good.

For the past several years, Nabors has pursued a major fleet overhaul, and that strategy is paying dividends. The company is building top-quality rigs and landing strong contracts left and right -- including three dozen over the past two quarters. The company estimates that it will almost double the daily rig margin with these new rigs compared to its legacy assets.

One other key here is Nabors' increasingly dominant presence in the North American shale plays. In the Q&A session, management estimated that 25% to 30% of the fleet is drilling into shale. That doesn't even include major customer Royal Dutch Shell's (NYSE:RDS-A) (NYSE:RDS-B) recent entry into Canada's Montney play via its acquisition of Duvernay Oil. I've touted Helmerich & Payne (NYSE:HP) for its shale prowess, but just like last quarter, I need to emphasize that Nabors is a formidable competitor in this field.

Fool contributor Toby Shute doesn't have a position in any company mentioned. National Oilwell Varco is a Stock Advisor selection. The Motley Fool has a disclosure policy.