Nabors 2Q 2008 EPS $0.67 Despite ($0.06) from Tax Adjustment, Share Count and E&P Hedging Loss



    HAMILTON, Bermuda, July 22 /CNW/ - Nabors Industries Ltd. (NYSE:   NBR)
today announced its results for the second quarter and six months of 2008. 
Adjusted income derived from operating activities was $265.9 million for the
current quarter compared to $280.5 million in the second quarter of last year
and $287.2 million in the first quarter of this year. Net Income was $194.4
million ($0.67 per diluted share) for the current quarter compared to $228.3
million ($0.79 per diluted share) in the second quarter of last year and
$230.5 million ($0.81 per diluted share) in the first quarter of this year. 
Operating revenues and Earnings from unconsolidated affiliates was $1.28
billion in the current quarter compared to $1.14 billion in the second quarter
of last year and $1.30 billion in the first quarter of this year.  For the six
months ended June 30, 2008, adjusted income derived from operating activities
was $553.1 million compared to $620.6 million in the first six months of 2007.
 Net income for the first six months of 2008 was $424.9 million ($1.48 per
diluted share) compared to $490.5 million ($1.71 per diluted share) in the
first six months of 2007.  Operating revenues and Earnings from unconsolidated
affiliates for the first six months of 2008 rose to $2.57 billion, up from
$2.39 billion for the first six months of 2007.
    "Our second quarter saw a dramatic and rapid turnaround in activity and
in the outlook for our North American businesses," said Gene Isenberg, Nabors
Chairman and CEO, "although non-operational items obscured bottom line
results.  It is now clear that our operating income bottomed out in the second
quarter and the outlook for the second half and beyond is improving more
rapidly than we had anticipated.
    "The quarter's net income and per share results were reduced by
approximately six cents per diluted share as a result of an adjustment to our
full year estimated taxes ($0.03), an accounting rules dictated increase in
diluted shares ($0.01), and the non-cash mark-to-market loss on certain
forward hedges in our First Reserve E&P joint venture entities ($0.02).
    "Operationally, we achieved improving sequential results in every
significant business unit except for Canada and Alaska, which were down
seasonally although less than anticipated.  The most significant evidence of
the turn around in our businesses is demonstrated by more than 20 term
contract commitments for additional new-built rigs that we received since last
quarter, the preponderance of which were secured by our US Lower 48 Land
Drilling unit.  There are also a large number of additional term commitments
pending.  We have recently placed an order with National Oilwell Varco for a
number of their Rapid Rigs(TM), which we feel are ideally suited for the
shallower shale plays that are increasingly active.
    "In our US Lower 48 Land Drilling unit we have seen the working rig count
increase by 31 rigs over our first quarter average.  Our US Lower 48 rig count
now stands at 257 rigs after averaging 242.3 rigs in the second quarter and to
225.7 in the first quarter.  Our second quarter average margins were
essentially flat sequentially at $8,900 per rig day.  This is a combination of
lower but higher than expected margins on renewing term contracts, offset by
idle rigs returning to work at improving rates and the attainment of full
margins on our 75 new rigs deployed to date.  Our new PACE rigs continue to
set records in virtually every area in which they operate and the magnitude of
this quarter's new build commitments and the higher rates they are commanding
substantiates their value.
    "Our US Offshore operations experienced a very good quarter as income
rebounded sharply from the lackluster first quarter.  This primarily was due
to more consistent utilization of our jackups and $1.6 million (pre-tax) in
business interruption insurance associated with the Barge Rig 100 fire last
summer.  Rates and activity are improving and it appears that the current
strong environment will continue for the foreseeable future.  We do not expect
to see the substantial slowdown in third quarter activity that has
characterized the last two hurricane seasons.  Rather we are seeing
opportunities for additional rigs and interest is increasing for longer-term
contract commitments.
    "Although our US Well Servicing unit is not doing well, we still posted a
slightly improved quarter on higher hours.  This market is improving and we
have recently instituted price increases in most regions in which we operate.
We are regaining market share in certain markets where price competition has
been acute and we expect further gains over the next two quarters.  Customer
recognition of the inherent advantages of the new technology that is
incorporated in our Millennium rigs is increasing broadly.  We will take
delivery of 10 of the 400 horsepower version of these Millennium rigs during
the second half of this year, with potential for another 90 thereafter.
    "Our International unit posted a significant sequential improvement and
expects to achieve much larger sequential increases over the next two
quarters.  The quarter was aided by $3.9 million (pre-tax) in business
interruption insurance for one of our small jackups that incurred flooding
damage during mobilization last fall.  The largest increase will come from the
full impact of our new jackup rig 660, which incurred delays and start up
issues which hurt its second quarter contribution.  This is followed by the
start-up of jackup rig 657 in early July and the full contribution of four
other land rigs that commenced in the first half, all of which also had some
delays that impacted the second quarter.  All of these rigs are now operating
satisfactorily and contributing as expected.  Six other land rigs are set to
commence operations during the third quarter, with potentially as many as 13
other rigs in the fourth quarter.  The international outlook remains strong in
virtually every region and new rig possibilities continue to materialize.  We
still anticipate an increase in operating income of approximately 40% over
2007's results.
    "Alaska was down slightly as the winter exploration season wound down
early in the quarter.  This market is seeing healthy increases in activity and
rates both in and away from the established producing fields on the North
Slope and in the Cook Inlet.  We expect to see a large increase in income
contribution over the next two years, albeit from a small base as several
incremental development projects commence and exploration activity increases.
Results will be bolstered by two new built Heli-portable rigs which commenced
operations near the start of 2008, and by two legacy rigs which are receiving
standby revenue while being upgraded and refurbished for long term contracts.
Our new Coiled Tubing/Stem drilling rig, which is the only such rig capable of
drilling to 15,000 feet, will commence operations in early 2009 and we have
two proposals pending for additional multi-year contracts.
    "As anticipated, Canada experienced the worst quarter in its history
during this year's spring thaw, although it was modestly better than we had
expected.  The outlook has improved substantially over the last two months,
although it is still too early to be definitive regarding the timing and
extent of the recovery.  To date the third quarter has been plagued by wetter
than normal weather, with approximately 30 rigs currently waiting to commence
contracts.  The extent of future activity in Alberta is still dependant upon
modifications to the provincial royalty increases there which are set to
commence in 2009 and which have driven several operators to deploy capital
elsewhere.  Meanwhile, in British Columbia we are seeing rapidly accelerating
activity, particularly in the new shale plays of Horn River and Montney.  We
have a large number of both new and legacy rig commitments for these and other
emerging shale plays in other areas of Canada and we are currently negotiating
commitments for several more.  We will also soon deploy one of our new Heli-
portable rigs for what looks to be year-around work in Horn River, where no
roads currently exist and where access has heretofore been limited to winter
only.
    "Our Other Operating Segments posted a very good quarter and continues to
enjoy a very strong outlook.  The primary contributor to this unit's
performance was our Canrig entity where sales are increasing significantly,
particularly to third parties.  Our instrumentation and data management entity
and our directional drilling unit also posted very good results despite the
seasonally weak Canadian market.  Our 50% owned Alaskan construction and
logistics joint ventures contributed less significantly due to the customary
spring quarter drop off in activity and income.
    "I remain very pleased with the performance of our oil and gas entities,
although operating income results will not be evident until the latter part of
the year.  Even though we have experienced accounting losses associated with
the commodity price hedges we have in place, they are providing us with
exactly what we envisioned, that being higher than expected returns while
substantially eliminating downside risk.  We continue to find very attractive
investment opportunities and we have acreage holdings in most of the emerging
North American shale plays.  Not only is this business poised to contribute
significantly in the near future, it is providing us with valuable insight to
better target our rig marketing activities.
    "Earlier today, we closed on the issuance, through a wholly owned
subsidiary, an additional $400 million of our 6.15% Senior Notes due 2018. The
notes were issued at an offering price of 97.192%, plus accrued interest from
February 20, 2008.  This was an additional placement of the $575 million in
notes we issued in February of this year.  This brings to $975 million the
aggregate total of these notes which are fully and unconditionally guaranteed
by Nabors Industries Ltd.  These notes will provide financing for what we
think will be a large and profitable investment program for new built rigs and
other attractive capital expenditures.
    "Our expectations for 2009 are increasing although we will be subject to
a recent non-cash, non-operational, accounting rule change regarding
convertible debt which will effect our net income and earnings per share
starting with the beginning of 2009.  This rule will require us to record
non-cash interest expense on our 0.94% coupon convertible debt due 2011 in an
amount equal to the extent that the actual coupon represents a discount to our
estimated borrowing rate for conventional debt at the time the convertible
notes were issued.  We will also be required to restate three years of results
for any convertible issues that were outstanding during that period.  The
offsetting entry will be to treat the lower coupon as a debt discount on our
balance sheet and to accrete the value of the debt as the non-cash interest
expense is recorded.  This change will have no effect on the real economic
results of our business but will obviously affect our reported GAAP earnings.
    "I remain convinced of the strength of the North American gas markets,
short-term volatility notwithstanding.  Gas remains the most attractive fuel
and there is minimal likelihood that LNG will be a negative price factor in
these markets for the foreseeable future.  This puts Nabors in an advantageous
position to prosper going forward across all of our North American business
lines and, when coupled with the ongoing strength and growing market share we
enjoy internationally, promises a very bright future."
    The Nabors companies own and operate approximately 548 land drilling and
approximately 749 land workover and well-servicing rigs in North America.
Nabors' actively marketed offshore fleet consists of; 36 platform rigs, 13
jackup units and 4 barge rigs in the United States and multiple international
markets. In addition, Nabors manufactures top drives and drilling
instrumentation systems and provides comprehensive oilfield hauling,
engineering, civil construction, logistics and facilities maintenance, and
project management services. Nabors participates in most of the significant
oil, gas and geothermal markets in the world.
    The information above includes forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Such forward-looking statements are subject to certain risks and
uncertainties, as disclosed by Nabors from time to time in its filings with
the Securities and Exchange Commission. As a result of these factors, Nabors'
actual results may differ materially from those indicated or implied by such
forward-looking statements.
    For further information, please contact Dennis A. Smith, Director of
Corporate Development of Nabors Corporate Services, Inc. at 281-775-8038. To
request Investor Materials, call our corporate headquarters in Hamilton,
Bermuda at 441-292-1510 or via email at mark.andrews@nabors.com.



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
    

    
                        CONSOLIDATED STATEMENTS OF INCOME
    

    
                                   (Unaudited)
    

    
                                                    Three Months Ended
                                          -----------------------------------
                                                  June 30,          March 31,
                                          -----------------------  ----------
    (In thousands, except per share
     amounts)                                 2008        2007        2008
                                          ----------   ----------  ----------
    Revenues and other income:
       Operating revenues                 $1,282,400   $1,134,684  $1,299,858
       Earnings (loss) from
        unconsolidated affiliates             (4,033)       3,436     (4,451)
       Investment (loss) income               25,057       (9,272)     26,182
                                          ----------   ----------  ----------
          Total revenues and other
           income                          1,303,424    1,128,848   1,321,589
                                          ----------   ----------  ----------
    Costs and other deductions:
       Direct costs                          740,178      637,104     747,770
       General and administrative
        expenses                             116,914       99,952     111,321
       Depreciation and amortization         148,023      111,372     135,478
       Depletion                               7,343        9,160      13,685
       Interest expense                       21,676       13,733      18,109
       Losses (gains) on sales of
        long-lived assets, impairment
        charges and other expense
        (income), net                          3,158      (39,634)      8,097
                                          ----------   ----------  ----------
          Total costs and other
           deductions                      1,037,292      831,687   1,034,460
                                          ----------   ----------  ----------
    Income from continuing operations
     before income taxes                     266,132      297,161     287,129
                                          ----------   ----------  ----------
    Income tax expense (benefit):
       Current                                39,759       53,973      99,293
       Deferred                               32,012       22,326    (42,670)
                                          ----------   ----------  ----------
          Income tax expense                  71,771       76,299      56,623
                                          ----------   ----------  ----------
    Income from continuing operations,
     net of tax                              194,361      220,862     230,506
    Income from discontinued
     operations, net of tax                       -         7,487         -
                                          ----------   ----------  ----------
    Net income                            $  194,361   $  228,349  $  230,506
                                          ----------   ----------  ----------
    Earnings per share (1):
       Basic from continuing operations   $      .70   $      .79  $      .83
       Basic from discontinued operations $       -    $      .03  $      -
                                          ----------   ----------  ----------
    Total Basic                           $      .70   $      .82  $      .83
                                          ----------   ----------  ----------
       Diluted from continuing operations $      .67   $      .77  $      .81
       Diluted from discontinued
        operations                        $       -    $      .02  $      -
                                          ----------   ----------  ----------
    Total Diluted                         $      .67   $      .79  $      .81
                                          ----------   ----------  ----------
    

    
    Weighted-average number of common
     shares outstanding (1):
       Basic                                 277,719      279,253     277,584
                                          ----------   ----------  ----------
       Diluted                               291,454      287,898     283,361
                                          ----------   ----------  ----------
    Adjusted income derived from
     operating activities (2)             $  265,909   $  280,532  $  287,153
                                          ==========   ==========  ==========
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
    

    
                        CONSOLIDATED STATEMENTS OF INCOME
    

    
                                   (Unaudited)
                                               ----------------------------
                                                      Six Months Ended
                                               ----------------------------
                                                          June 30,
                                               ----------------------------
    (In thousands, except per share
     amounts)                                     2008               2007
                                               ----------        ----------
    Revenues and other income:
       Operating revenues                      $2,582,258        $2,370,697
       Earnings (loss) from
        unconsolidated affiliates                  (8,484)           15,877
       Investment (loss) income                    51,239            19,437
                                               ----------        ----------
          Total revenues and other income       2,625,013         2,406,011
                                               ----------        ----------
    Costs and other deductions:
       Direct costs                             1,487,948         1,321,401
       General and administrative
        expenses                                  228,235           213,849
       Depreciation and amortization              283,501           214,980
       Depletion                                   21,028            15,785
       Interest expense                            39,785            26,785
       Losses (gains) on sales of long-
        lived assets, impairment charges
        and other expense (income), net            11,255           (25,749)
                                               ----------        ----------
          Total costs and other deductions      2,071,752         1,767,051
                                               ----------        ----------
    Income from continuing operations
     before income taxes                          553,261           638,960
                                               ----------        ----------
    Income tax expense (benefit):
       Current                                    139,052           159,827
       Deferred                                   (10,658)            1,381
                                               ----------        ----------
          Income tax expense                      128,394           161,208
                                               ----------        ----------
    Income from continuing operations,
     net of tax                                   424,867           477,752
    Income from discontinued operations,
     net of tax                                       -              12,759
                                               ----------        ----------
    Net income                                 $  424,867        $  490,511
                                               ----------        ----------
    Earnings per share (1):
       Basic from continuing operations        $     1.53        $     1.72
       Basic from discontinued operations      $    -            $      .04
                                               ----------        ----------
    Total Basic                                $     1.53        $     1.76
                                               ----------        ----------
       Diluted from continuing operations      $     1.48        $     1.67
       Diluted from discontinued
        operations                             $    -            $      .04
                                               ----------        ----------
    Total Diluted                              $     1.48        $     1.71
                                               ----------        ----------
    

    
    Weighted-average number of common
      shares outstanding (1):
       Basic                                      277,651           278,098
                                               ----------        ----------
       Diluted                                    287,407           286,356
                                               ----------        ----------
    

    
    Adjusted income derived from
     operating activities (2)                    $553,062          $620,559
                                               ==========        ==========
    


    
    (1)  See "Computation of Earnings Per Share" included herein as a separate
         schedule.
    

    
    (2)  Adjusted income derived from operating activities is computed by:
         subtracting direct costs, general and administrative expenses,
         depreciation and amortization, and depletion expense from Operating
         revenues and then adding Earnings from unconsolidated affiliates.
         Such amounts should not be used as a substitute to those amounts
         reported under accounting principles generally accepted in the United
         States of America (GAAP).  However, management evaluates the
         performance of our business units and the consolidated company based
         on several criteria, including adjusted income derived from operating
         activities, because it believes that this financial measure is an
         accurate reflection of the ongoing profitability of our company.  A
         reconciliation of this non-GAAP measure to income from continuing
         operations before income taxes, which is a GAAP measure, is provided
         within the table set forth immediately following the heading "Segment
         Reporting".
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
    

    
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
    


    
                                          June 30,     March 31, December 31,
    (In thousands, except ratios)           2008         2008        2007
                                        -----------  -----------  -----------
    ASSETS
    Current assets:
    Cash and short-term investments     $ 1,236,547  $ 1,450,244  $   767,051
    Accounts receivable, net              1,083,748    1,112,190    1,039,238
    Other current assets                    410,051      392,291      398,823
                                        -----------  -----------  -----------
         Total current assets             2,730,346    2,954,725    2,205,112
    Long-term investments and other
     receivables                            239,866      310,938      359,534
    Property, plant and equipment, net    7,020,941    6,758,516    6,632,612
    Goodwill                                363,158      360,709      368,432
    Other long-term assets                  550,333      520,335      537,692
                                        -----------  -----------  -----------
         Total assets                   $10,904,644  $10,905,223  $10,103,382
                                        ===========  ===========  ===========
    LIABILITIES AND SHAREHOLDERS'
     EQUITY
    Current liabilities:
    Current portion of long-term debt      $588,847     $700,000     $700,000
    Other current liabilities               776,833      786,130      794,132
                                        -----------  -----------  -----------
         Total current liabilities        1,365,680    1,486,130    1,494,132
    Long-term debt                        3,822,285    3,881,575    3,306,433
    Other long-term liabilities             783,020      749,678      788,696
                                        -----------  -----------  -----------
         Total liabilities                5,970,985    6,117,383    5,589,261
    Shareholders' equity                  4,933,659    4,787,840    4,514,121
                                        -----------  -----------  -----------
         Total liabilities and
          shareholders' equity          $10,904,644  $10,905,223  $10,103,382
                                        ===========  ===========  ===========
    


    
    Cash, short-term and long-term
     investments (1)                    $ 1,510,842  $ 1,821,043  $ 1,179,639
    

    
    Funded debt to capital ratio: (2)
        - Gross                            0.45 : 1     0.47 : 1     0.44 : 1
        - Net of cash and investments      0.35 : 1     0.34 : 1     0.36 : 1
    Interest coverage ratio: (3)           25.7 : 1     29.6 : 1     32.5 : 1
    


    
    (1)  The June 30, 2008, March 31, 2008 and December 31, 2007 amounts
         include $34.4 million, $59.9 million and $53.1 million, respectively,
         in cash proceeds receivable from brokers from the sale of certain
         investments that are included in other current assets.  These
         proceeds were received during the following respective month.
    

    
    (2)  The gross funded debt to capital ratio is calculated by dividing
         funded debt by funded debt plus deferred tax liabilities net of
         deferred tax assets plus capital. Funded debt is defined as the sum
         of (1) short-term borrowings, (2) current portion of long-term debt
         and (3) long-term debt.  Capital is defined as shareholders' equity.
         The net funded debt to capital ratio is calculated by dividing net
         funded debt by net funded debt plus deferred tax liabilities net of
         deferred tax assets plus capital.  Net funded debt is defined as the
         sum of (1) short-term borrowings, (2) current portion of long-term
         debt and (3) long-term debt reduced by the sum of cash and cash
         equivalents and short-term and long-term investments.  Capital is
         defined as shareholders' equity.  Both of these ratios are a method
         for calculating the amount of leverage a company has in relation to
         its capital.  The net funded debt to capital ratio is not a measure
         of operating performance or liquidity defined by accounting
         principles generally accepted in the United States of America and may
         not be comparable to similarly titled measures presented by other
         companies.
    

    
    (3)  The interest coverage ratio is a trailing twelve-month computation of
         the sum of income from continuing operations before income taxes,
         interest expense, depreciation and amortization, and depletion
         expense less investment income and then dividing by interest expense.
         This ratio is a method for calculating the amount of operating cash
         flows available to cover interest expense.  The interest coverage
         ratio from continuing operations is not a measure of operating
         performance or liquidity defined by accounting principles generally
         accepted in the United States of America and may not be comparable to
         similarly titled measures presented by other companies.
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
    

    
                                SEGMENT REPORTING
                                   (Unaudited)
    
    The following tables set forth certain information with respect to our
reportable segments and rig activity:


    
                                                    Three Months Ended
                                           ----------------------------------
                                                  June 30,          March 31,
                                           ---------------------  -----------
    (In thousands, except rig activity)        2008        2007        2008
    

    
    Reportable segments:
    Operating revenues and Earnings from
     unconsolidated affiliates from
     continuing operations: (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling      $  438,848  $  426,787  $  407,061
          U.S. Land Well-servicing            182,222     182,410     171,141
          U.S. Offshore                        65,723      60,316      51,455
          Alaska                               45,114      36,777      54,369
          Canada                               67,782      75,088     178,852
          International                       342,892     261,262     303,572
                                           ----------  ----------  ----------
            Subtotal Contract Drilling (3)  1,142,581   1,042,640   1,166,450
        Oil and Gas (4) (5)                    11,352      18,110      14,040
        Other Operating Segments (6) (7)      172,865     140,024     165,782
        Other reconciling items (8)           (48,431)    (62,654)    (50,865)
                                           ----------  ----------  ----------
          Total                            $1,278,367  $1,138,120  $1,295,407
                                           ==========  ==========  ==========
    Adjusted income (loss) derived from
      operating activities from continuing
      operations: (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling      $  134,322  $  154,667  $  126,871
          U.S. Land Well-servicing             31,468      40,105      30,386
          U.S. Offshore                        17,983      19,206       6,458
          Alaska                               13,466       8,225      17,783
          Canada                              (14,326)     (7,992)     41,973
          International                       101,752      85,409      90,650
                                           ----------  ----------  ----------
            Subtotal Contract Drilling        284,665     299,620     314,121
    

    
        Oil and Gas                            (1,645)      3,374      (4,852)
        Other Operating Segments               19,006       6,739      12,434
        Other reconciling items (9)           (36,117)    (29,201)   (34,550)
                                           ----------  ----------  ----------
          Total                               265,909     280,532     287,153
    Interest expense                          (21,676)    (13,733)   (18,109)
    Investment (loss) income                   25,057      (9,272)     26,182
    (Losses) gains on sales of long-lived
     assets, impairment charges and other
     expense (income), net                     (3,158)     39,634     (8,097)
                                           ----------  ----------  ----------
    Income from continuing operations
     before income taxes                    $ 266,132  $  297,161  $  287,129
                                           ==========  ==========  ==========
    

    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land Drilling              242.3       228.5       225.7
       U.S. Offshore                             17.1        17.6        16.1
       Alaska                                    10.4         8.8        10.6
       Canada                                    16.9        18.5        49.4
       International (11)                       121.5       117.1       117.8
                                           ----------  ----------  ----------
          Total rig years                       408.2       390.5       419.6
                                           ==========  ==========  ==========
    Rig hours: (12)
       U.S. Land Well-servicing               272,101     291,430     259,477
       Canada Well-servicing                   40,257      41,613      79,137
                                           ----------  ----------  ----------
          Total rig hours                     312,358     333,043     338,614
                                           ==========  ==========  ==========
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
    

    
                                SEGMENT REPORTING
                                   (Unaudited)
    
    The following tables set forth certain information with respect to our
reportable segments and rig activity:


    
                                                        Six Months Ended
                                                   --------------------------
                                                            June 30,
                                                   --------------------------
    (In thousands, except rig activity)               2008             2007
                                                   ----------      ----------
    Reportable segments:
    Operating revenues and Earnings from
     unconsolidated affiliates from
     continuing operations: (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling              $  845,909      $  879,383
          U.S. Land Well-servicing                    353,363         364,628
          U.S. Offshore                               117,178         116,091
          Alaska                                       99,483          84,613
          Canada                                      246,634         268,368
          International                               646,464         485,744
                                                   ----------      ----------
            Subtotal Contract Drilling (3)          2,309,031       2,198,827
        Oil and Gas (4) (5)                            25,392          31,239
        Other Operating Segments (6) (7)              338,647         270,374
        Other reconciling items (8)                   (99,296)      (113,866)
                                                   ----------      ----------
            Total                                  $2,573,774      $2,386,574
                                                   ==========      ==========
    Adjusted income (loss) derived from
     operating activities from continuing
     operations: (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling                $261,193      $  327,593
          U.S. Land Well-servicing                     61,854          83,461
          U.S. Offshore                                24,441          34,255
          Alaska                                       31,249          24,792
          Canada                                       27,647          45,136
          International                               192,402         151,427
                                                   ----------      ----------
            Subtotal Contract Drilling                598,786         666,664
    

    
        Oil and Gas                                    (6,497)          4,502
        Other Operating Segments                       31,440          18,333
        Other reconciling items (9)                   (70,667)       (68,940)
                                                   ----------      ----------
           Total                                      553,062         620,559
    Interest expense                                  (39,785)       (26,785)
    Investment (loss) income                           51,239          19,437
    (Losses) gains on sales of long-lived
     assets, impairment charges and other
     expense (income), net                            (11,255)         25,749
                                                   ----------      ----------
    Income from continuing operations before
     income taxes                                  $  553,261      $  638,960
                                                   ==========      ==========
    

    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land Drilling                      234.0           235.7
       U.S. Offshore                                     16.6            17.4
       Alaska                                            10.5             9.1
       Canada                                            29.8            38.2
       International (11)                               119.6           114.4
                                                   ----------      ----------
          Total rig years                               410.5           414.8
                                                   ==========      ==========
    Rig hours: (12)
       U.S. Land Well-servicing                       531,578         590,518
       Canada Well-servicing                          119,394         139,201
                                                   ----------      ----------
          Total rig hours                             650,972         729,719
                                                   ==========      ==========
    


    
    (1)  All segment information excludes the Sea Mar business, which has been
         classified as a discontinued operation.
    

    
    (2)  These segments include our drilling, workover and well-servicing
         operations, on land and offshore.
    

    
    (3)  Includes earnings (losses), net, from unconsolidated affiliates,
         accounted for by the equity method, of $2.8 million, $.7 million and
         $6.8 million for the three months ended June 30, 2008 and 2007 and
         March 31, 2008, respectively, and $9.6 and $2.5 million for six
         months ended June 30, 2008 and 2007, respectively.
    

    
    (4)  Represents our oil and gas exploration, development and production
         operations.
    

    
    (5)  Includes earnings (losses), net, from unconsolidated affiliates,
         accounted for by the equity method, of ($6.7) million, ($.8) million
         and ($17.9)  million for the three months ended June 30, 2008 and
         2007 and March 31, 2008, respectively, and ($24.6) million and ($.8)
         million for the six months ended June 30, 2008 and 2007,
         respectively.
    

    
    (6)  Includes our drilling technology and top drive manufacturing,
         directional drilling, rig instrumentation and software, and
         construction and logistics operations.
    

    
    (7)  Includes earnings (losses), net, from unconsolidated affiliates,
         accounted for by the equity method, of ($.1) million, $3.5 million
         and $6.7 million for the three months ended June 30, 2008 and 2007
         and March 31, 2008, respectively, and $6.6 million and $14.2 million
         for the six months ended June 30, 2008 and 2007, respectively.
    

    
    (8)  Represents the elimination of inter-segment transactions.
    

    
    (9)  Represents the elimination of inter-segment transactions and
         unallocated corporate expenses.
    

    
    (10) Excludes well-servicing rigs, which are measured in rig hours.
         Includes our equivalent percentage ownership of rigs owned by
         unconsolidated affiliates.  Rig years represent a measure of the
         number of equivalent rigs operating during a given period.  For
         example, one rig operating 182.5 days during a 365-day period
         represents 0.5 rig years.
    

    
    (11) International rig years include our equivalent percentage ownership
         of rigs owned by unconsolidated affiliates which totaled 4.0 years
         during the three months ended June 30, 2008 and 2007 and March 31,
         2008 and the six months ended June 30, 2008 and 2007, respectively
    

    
    (12) Rig hours represents the number of hours that our well-servicing rig
         fleet operated during the period.
    



    
                   NABORS INDUSTRIES LTD. AND SUBSIDIARIES
    

    
                      COMPUTATION OF EARNINGS PER SHARE
                                 (Unaudited)
    
    A reconciliation of the numerators and denominators of the basic and
diluted earnings per share computations is as follows:



    
                                                  Three Months Ended
                                          -----------------------------------
                                                 June 30,            March 31,
                                         -----------------------  -----------
    (In thousands, except per share amounts)  2008       2007          2008
                                         ----------- -----------  -----------
    Net income (numerator):
      Income from continuing
       operations, net of tax -
       basic                             $  194,361  $   220,862  $   230,506
      Add interest expense on assumed
       conversion of our zero coupon
       convertible/exchangeable senior
       debentures/notes, net of tax:
         $2.75 billion due 2011 (1)             -           -             -
         $82.8 million due 2021 (2)             -           -             -
         $700 million due 2023 (3)              -           -             -
                                         ----------- -----------  -----------
      Adjusted income from continuing
       operations, net of tax -
        diluted                             194,361      220,862      230,506
      Income from discontinued
       operations, net of tax                   -          7,487          -
                                         ----------- -----------  -----------
    Total adjusted net income            $  194,361   $  228,349   $  230,506
                                         ----------- -----------  -----------
    Earnings per share:
      Basic from continuing operations   $      .70   $      .79   $      .83
      Basic from discontinued
       operations                        $      -     $      .03   $      -
                                         ----------- -----------  -----------
    Total Basic                          $      .70   $      .82   $      .83
                                         ----------- -----------  -----------
      Diluted from continuing
       operations                        $      .67   $      .77   $      .81
      Diluted from discontinued
       operations                        $      -     $      .02   $      -
                                         ----------- -----------  -----------
    Total Diluted                        $      .67   $      .79   $      .81
                                         ----------- -----------  -----------
    Shares (denominator):
      Weighted-average number of
       shares outstanding-basic(4)          277,719      279,253      277,584
      Net effect of dilutive stock
       options, warrants and restricted
       stock awards based on the
       treasury stock method                  8,606        8,645        5,777
      Assumed conversion of our zero
       coupon convertible/exchangeable
       senior debentures/notes:
         $2.75 billion due 2011 (1)             -            -            -
         $82.8 million due 2021 (2)             -            -            -
         $700 million due 2023 (3)            5,129          -            -
                                         ----------- -----------  -----------
      Weighted-average number of
       shares outstanding - diluted         291,454       287,898     283,361
                                         ----------- -----------  -----------
    



    
                   NABORS INDUSTRIES LTD. AND SUBSIDIARIES
    

    
                      COMPUTATION OF EARNINGS PER SHARE
                                 (Unaudited)
    
    A reconciliation of the numerators and denominators of the basic and
diluted earnings per share computations is as follows:

    
                                                         Six Months Ended
                                                    --------------------------
                                                             June 30,
                                                    --------------------------
    (In thousands, except per share amounts)            2008           2007
                                                   ----------      ----------
    Net income (numerator):
      Income from continuing operations, net of
       tax - basic                                  $  424,867     $  477,752
      Add interest expense on assumed conversion
       of our zero coupon convertible/exchangeable
       senior debentures/notes, net of tax:
         $2.75 billion due 2011 (1)                        -              -
         $82.8 million due 2021 (2)                        -              -
         $700 million due 2023 (3)                         -              -
                                                   ----------      ----------
      Adjusted income from continuing operations,
       net of tax - diluted                            424,867        477,752
                                                   ----------      ----------
      Income from discontinued operations, net
       of tax                                              -           12,759
    Total adjusted net income                        $ 424,867     $  490,511
    

    
    Earnings per share:
      Basic from continuing operations               $    1.53     $     1.72
      Basic from discontinued operations             $    -        $      .04
                                                   ----------      ----------
    Total Basic                                      $    1.53     $     1.76
                                                   ----------      ----------
      Diluted from continuing operations             $    1.48     $     1.67
      Diluted from discontinued operations           $    -        $      .04
                                                   ----------      ----------
    Total Diluted                                    $    1.48     $     1.71
                                                   ----------      ----------
    Shares (denominator):
      Weighted-average number of shares
       outstanding-basic(4)                            277,651        278,098
      Net effect of dilutive stock options,
       warrants and restricted stock awards
       based on the treasury stock method                7,191          8,258
      Assumed conversion of our zero coupon
       convertible/exchangeable senior debentures/notes:
         $2.75 billion due 2011 (1)                        -              -
         $82.8 million due 2021 (2)                        -              -
         $700 million due 2023 (3)                       2,565            -
                                                    ----------     ----------
    Weighted-average number of shares outstanding -
     diluted                                          287,407        286,356
                                                    ----------     ----------
    

    
    (1) Diluted earnings per share for the three and six months ended June 30,
        2008 and 2007 and the three months ended March 31, 2008 do not include
        any incremental shares issuable upon exchange of the $2.75 billion
        0.94% senior exchangeable notes due 2011.  The number of shares that
        we would be required to issue upon exchange consists of only the
        incremental shares that would be issued above the principal amount of
        the notes, as we are required to pay cash up to the principal amount
        of the notes exchanged. We would only issue an incremental number of
        shares upon exchange of these notes.  Such shares are only included in
        the calculation of the weighted-average number of shares outstanding
        in our diluted earnings per share calculation, when our stock price
        exceeds $45.83 as of the last trading day of a quarter and the average
        price of our shares for the ten consecutive trading days beginning on
        the third business day after the last trading day of the quarter
        exceeds $45.83, which did not occur for the three and six months ended
        June 30, 2008 and 2007 and the three months ended March 31, 2008.
    

    
    (2) Diluted earnings per share for the three and six months ended June 30,
        2008 and 2007 and the three months ended March 31, 2008 excludes
        approximately 1.2 million potentially dilutive shares initially
        issuable upon the conversion of the $82.8 million aggregate principal
        amount at maturity zero coupon convertible senior debentures due 2021.
        The maximum number of shares required to be issued upon conversion
        would equate to the excess of the conversion value of the debentures
        over their principal amount.  Such shares would only be included in
        the calculation of the weighted-average number of shares outstanding
        in our diluted earnings per share calculation if the price of our
        shares exceeded approximately $52.  In June 2008, Nabors Delaware
        called for redemption the full $82.8 million aggregate principal
        amount at maturity of its zero coupon senior convertible debentures
        due 2021 and in July 2008, paid cash of $60.6 million; an amount equal
        to the issue price of $50.4 million plus accrued original issue
        discount of $10.2 million.
    

    
    (3) Diluted earnings per share for the three and six months ended June 30,
        2008 reflect the conversion of the $700 million zero coupon senior
        exchangeable notes due 2023 resulting in the inclusion of the
        incremental number of shares that were required to be issued upon the
        exchange of these notes.  The number of shares issued upon exchange
        equated to the excess of the exchange value of the notes over their
        principal amount, as Nabors Delaware was required to pay cash up to
        the principal amount of the notes exchanged.  Because the conversion
        was only partially completed in June 2008, only .5 million of our
        common shares actually issued in June 2008  were included in the
        calculation of the weighted-average basic shares outstanding for the
        three and six months ended June 30, 2008, resulting in an incremental
        .121 million weighted-average basic shares outstanding.  For the
        remaining shares that were issued in July 2008, we included the
        dilutive effect that, when added to the shares included in basic
        shares outstanding, gives effect to the entire 5.25 million shares to
        be issued related to the conversion of the $700 million zero coupon
        senior exchangeable notes due 2023 in diluted shares outstanding.
        Diluted earnings per share for the three and six months ended June 30,
        2007 and the three months ended March 31, 2008 does not include any
        incremental shares issuable upon exchange of the $700 million zero
        coupon senior exchangeable notes as the price of our shares did not
        exceed $35.05 on June 30, 2007 or March 31, 2008.
    

    
    (4) Includes the following weighted-average number of common shares of
        Nabors and weighted-average number of exchangeable shares of Nabors
        (Canada) Exchangeco Inc., respectively: 277.6 million and .1 million
        shares for the three months ended June 30, 2008; 279.2 million and
        .1 million shares for the three months ended June 30, 2007;
        277.5 million and .1 million for the three months ended March 31,
        2008;  277.6 million and .1 million shares for the six months ended
        June 30, 2008; and 277.9 million and .2 million shares for the six
        months ended June 30, 2007.  The exchangeable shares of Nabors
        Exchangeco are exchangeable for Nabors' common shares on a one-for-one
        basis, and have essentially identical rights as Nabors Industries Ltd.
        common shares, including but not limited to, voting rights and the
        right to receive dividends, if any.

    




For further information:

For further information: Dennis A. Smith, Director of Corporate
Development of Nabors Corporate Services, Inc., +1-281-775-8038, or Investor
Materials, +1-441-292-1510, mark.andrews@nabors.com

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Nabors Industries Ltd.

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