Nabors 3Q 2008 EPS Equals $0.73, on Stronger Operating Results



    HAMILTON, Bermuda, Oct. 20 /CNW/ -- Nabors Industries Ltd. (NYSE:   NBR)
today announced its results for the third quarter and nine months ended
September 30, 2008.  Adjusted income derived from operating activities was
$365.3 million for the third quarter compared to $287.3 million in the third
quarter of 2007 and $265.9 million in the second quarter of this year.  Net
income was $210.3 million ($0.73 per diluted share) for the third quarter
compared to $218.0 million ($0.76 per diluted share) in the third quarter of
2007 and $194.4 million ($0.67 per diluted share) in the second quarter of
this year.
    For the nine months ended September 30, 2008, adjusted income derived
from operating activities was $918.4 million compared to $907.9 million in
2007. Net income for the first nine months of 2008 was $635.2 million ($2.21
per diluted share) compared to $708.5 million ($2.47 per diluted share) in the
first nine months of 2007.
    Gene Isenberg, Nabors' Chairman and CEO, commented, "Our better than
previously indicated earnings were solely attributable to higher results in
all of our operating units.  Virtually all of our significant businesses
increased compared to both the prior year and the second quarter of 2008.  The
only exceptions were Alaska, which was down quarter-to-quarter due to
seasonality, and Canada, which was down year-to-year in spite of a sharp
rebound from its seasonally low second quarter.  Our operational results were
essentially equal to the record level achieved in the third quarter of 2006,
but non-operating items reduced our Net Income and Earnings per Share.  These
previously announced non-operating items were the quarterly mark-to-market of
a portion of our holdings in Honghua, a Chinese rig manufacturer, the
estimated damages to Gulf of Mexico assets from the two recent hurricanes, and
a higher effective tax rate associated with increased North American income.
    "I am pleased with the quarter's results and especially with the
performance of our new rigs. The value produced by our PACE rig technology is
becoming more widely recognized by customers, as demonstrated by the 11
additional new-build commitments we received during the quarter.   This brings
our year to date total of new rig commitments to 36 and the total number of
new rig deployments and forward commitments secured over the last three and
one-half years to 190 worldwide.  We expect the construction and start-up of
these new rigs to be seamless as both Nabors and our key vendors are better
staffed to handle the higher volume and the rigid quality assurance measures
we require.
    "Our US Lower 48 Land Drilling unit posted an excellent quarter and
contributed both the largest sequential and year-over-year increases in
operating income.  Compared to the prior quarter, rig activity increased by 21
rigs and average margins improved by $1,174 to $10,065 per rig day.  Since the
end of the quarter our rig count has averaged ten rigs higher than the third
quarter average of 263, with today's count at an all-time high of 273.  All of
this quarter's new-build rig commitments and the 21 received in the second
quarter are expected to deploy between July 2009 and mid-2010 with average
margins that should be nearly 50 percent higher than those generated by the 81
new rigs already working. Much of the sequential activity and margin
improvement stems from the ramp up we have seen in the prominent shale plays
where we have been able to supply the largest quantity of rigs in the required
sizes and capabilities.
    "While it is likely that the US land drilling industry's rig count will
decrease meaningfully as we move into next year, we expect to see a much
smaller impact on our results than we experienced during the flat rig market
that characterized the latter part of 2006 and continued into early 2008. This
reduced vulnerability stems from the large presence we enjoy in most of the
prominent shale plays and from prospective contributions from 32 new rigs.
These new rig contributions should partially offset any income losses
associated with lower utilization of our more vulnerable legacy rigs.  In
contrast to 2007 we expect minimal new rig delivery slippage or start-up
problems.
    "Our US Land well-servicing unit achieved a large improvement in its
results over the prior quarter due to a 7% sequential increase in quarterly
rig hours and a more modest impact from recent price increases in several
markets, some of which were offset by higher costs.  The higher rig hours were
attributable to a stronger market and some gains in market share, particularly
in South Texas where we had previously experienced some erosion.  The fourth
quarter should see the customary seasonal reduction in work hours as well as
lower industry activity resulting from the current economic environment.
    "Our US Offshore operations also had an excellent quarter despite the
impact of Hurricanes Gustav and Ike.   The average number of rigs working
increased by 2.1 to 19.2, leading to a small increase in operating income.
Several smaller platform workover rigs returned to work following five years
of lackluster activity in this rig class.  This unit continues to see strong
demand and is constructing two new MODS deepwater platform rigs in the 2,000
HP and 3,000 HP classes, both with customer commitments.  There is strong
interest in additional rigs in these sizes, as well as in the 1,000 HP
capacity, but we will defer construction until prospective contract
commitments are finalized.  We incurred extensive damage to our Barge Rig 100
during Hurricane Gustav when it was displaced from its anchorage and capsized.
The rig will be repaired and is covered by both property and business
interruption insurance.  We anticipate insurance deductibles and other costs
associated with this rig and minor damage to other rigs to approximate $14
million, which is reflected in this quarter's Other Expense category.
    "Third quarter results in Alaska were lower sequentially but more than
doubled last year's performance, foreshadowing the prospective growth we
anticipate in this unit over the next two years.  This quarter marks the
seasonal low point with concurrent higher than normal maintenance costs for
work that must be performed when weather permits.  We are currently preparing
three rigs for term contracts that will commence between October and February.
In addition, our new 15,000 foot coiled tubing / stem drilling rig should
commence late in the first quarter of next year.
    "Our International operations posted a sequential increase in operating
income of $9.3 million to reach $111 million for the third quarter, which was
significantly better than we indicated previously since most of the adverse
items have been rectified.  The fourth quarter should see a significant
increase as costs and downtime abates and some new rigs commence operations.
The first two quarters of 2009 should also see significant improvement on the
strength of 12 incremental rig start-ups and the realization of full
contributions from fourth quarter deployments.  We still expect 2008 results
to exceed $420 million compared to $332 million in 2007.  When added to the
performance of the previous three years this aggregates to growth of
approximately 375%.  We believe similar growth rates are attainable going
forward as the outlook for this business remains strong even with the recent
reduction in crude oil prices.  In contrast to North America, our
international prospects are generally longer-term in nature, less subject to
producer cash flow constraints, and capable of generating sufficient economic
returns even at oil prices that are lower than those we see today.
    "Canada experienced a sequential increase of nearly $28 million as it
emerged from its seasonally driven worst quarter ever.  The near-term outlook
is relatively good through the first quarter as we head into the winter
drilling season, with robust activity shaping up in the northeast British
Columbia shales and strong activity in the more oil prone province of
Saskatchewan, particularly the Bakken Shale.  We don't expect to obtain
clarity as to 2009 full year prospects until the first quarter, but there are
numerous opportunities emerging for further new rig commitments in this market
and we will commence the industry's first year-round drilling operation this
winter with a newly commissioned Heli-portable rig in the Horn River Shale.
    "The businesses that comprise our Other Segments, Canrig, Ryan and EPOCH,
all posted solid results.  Our Alaskan joint ventures were profitable but at
their seasonal lows and our Canadian non-rig entities returned to
profitability following the second quarter spring thaw.   The outlook for all
of these entities is good and we believe collectively they will be less
susceptible to any impending downturn.
    "Our Oil and Gas operations had an excellent quarter, improving
sequentially by more than $19 million including non-cash hedging gains of $4.5
million whereas the second quarter included a $7.8 million non-cash hedging
loss.  We expect this unit to show steadily increasing contributions through
2009 as production levels increase.
    "Our financial position and liquidity remain strong as our cash and
investments equaled $1.1 billion at the end of the third quarter after cash
outlays of $451 million in Capital expenditures and investments in affiliates,
$200 million net reduction in debt, and $121 million in stock repurchases.
Obviously the recent retraction in oil and gas prices and the current state of
the credit markets will have an adverse effect on our customers' spending
plans.  As a result we believe it is prudent to anticipate a protracted period
of lower rig demand combined with constrained availability and higher costs of
capital.  Consequently, we are preemptively taking steps to maintain our
strong financial position and free cash flow regardless of future market
conditions.  To this end we are curtailing prospective capital expenditures
which are not underpinned by term contract commitments or contain other
assurances of good and relatively rapid returns.
    "Our 2009 earnings per diluted share will also be impacted by newly
promulgated accounting rules effective January 1, 2009 that will apply to our
0.94% coupon convertible debt issue.  These new rules require us to record
additional non-cash interest expense, net of capitalized interest, 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 of the notes
issuance.  This will result in an increase in equity through a reduction in
the carrying value of the debt as if it were an Original Issue Discount.  The
rule will also require that we restate three years of historical results for
the current issue and for any issues that were outstanding during the
restatement period.  We estimate the impact to be approximately $0.25 per
diluted share in 2009, solely attributable to non-cash charges.
    "I continue to believe the long-term challenges associated with
production decline rates in North American gas and the world's more
significant oilfields augur for a strong outlook for our business in spite of
short-term volatility. Whatever the extent of the current demand diminution,
it is simply a matter of time until these decline rates rebalance the supply. 
We continue to position ourselves to prosper regardless of market conditions
and I believe we are well prepared to weather any vagaries in the business
cycle."
    The Nabors companies own and operate approximately 525 land drilling and
approximately 700 land workover and well-servicing rigs in North America.
Nabors' actively marketed offshore fleet consists of; 37 platform rigs, 13
jackup units and 3 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
                                           ----------------------------------
                                                September 30,       June 30,
                                           ----------------------  ----------
    (In thousands, except per share amounts)  2008        2007        2008
                                           ----------  ----------  ----------
    Revenues and other income:
       Operating revenues                  $1,454,562  $1,250,299  $1,282,400
       Earnings (losses) from
        unconsolidated affiliates               7,933       2,689      (4,033)
       Investment (loss) income               (22,235)    (27,466)     25,057
                                           ----------  ----------  ----------
          Total revenues and other income   1,440,260   1,225,522   1,303,424
                                           ----------  ----------  ----------
    

    
    Costs and other deductions:
       Direct costs                           805,533     722,058     740,178
       General and administrative expenses    122,648     105,975     116,914
       Depreciation and amortization          161,340     125,089     148,023
       Depletion                                7,656      12,533       7,343
       Interest expense                        25,506      13,450      21,676
       Losses (gains) on sales of long-lived
        assets, impairment charges and other
        expense (income), net                  10,875      30,524       3,158
                                           ----------  ----------  ----------
          Total costs and other deductions  1,133,558   1,009,629   1,037,292
                                           ----------  ----------  ----------
    

    
    Income from continuing operations
     before income taxes                      306,702     215,893     266,132
                                           ----------  ----------  ----------
    

    
    Income tax expense:
       Current                                 83,501       4,211      39,759
       Deferred                                12,902      15,919      32,012
                                           ----------  ----------  ----------
          Income tax expense                   96,403      20,130      71,771
                                           ----------  ----------  ----------
    

    
    Income from continuing operations, net
     of tax                                   210,299     195,763     194,361
    Income from discontinued operations,
     net of tax                                   -        22,265         -
                                           ----------  ----------  ----------
    Net income                             $  210,299  $  218,028  $  194,361
                                           ----------  ----------  ----------
    

    
    Earnings per share: (1)
       Basic from continuing operations    $      .75  $      .70  $      .70
       Basic from discontinued operations  $      -    $      .08  $      -
                                           ----------  ----------  ----------
    Total Basic                            $      .75  $      .78  $      .70
                                           ----------  ----------  ----------
    

    
       Diluted from continuing operations  $      .73  $      .68  $      .67
       Diluted from discontinued
        operations                         $      -    $      .08  $      -
                                           ----------  ----------  ----------
    Total Diluted                          $      .73  $      .76  $      .67
                                           ----------  ----------  ----------
    

    
    Weighted-average number
     of common shares outstanding: (1)
       Basic                                  279,373     280,152     277,719
                                           ----------  ----------  ----------
       Diluted                                287,590     287,969     291,454
                                           ----------  ----------  ----------
    

    
    Adjusted income derived from operating
     activities (2)                        $  365,318  $  287,333  $  265,909
                                           ==========  ==========  ==========
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                                   (Unaudited)
    

    
                                                     Nine Months Ended
                                               ---------------------------
                                                       September 30,
                                               ---------------------------
    

    
    (In thousands, except per share amounts)      2008              2007
                                               ----------       ----------
    Revenues and other income:
       Operating revenues                      $4,036,820       $3,620,996
       Earnings (losses) from
        unconsolidated affiliates                    (551)          18,566
       Investment (loss) income                    29,004           (8,029)
                                               ----------       ----------
          Total revenues and other income       4,065,273        3,631,533
                                               ----------       ----------
    

    
    Costs and other deductions:
       Direct costs                             2,293,481        2,043,459
       General and administrative expenses        350,883          319,824
       Depreciation and amortization              444,841          340,069
       Depletion                                   28,684           28,318
       Interest expense                            65,291           40,235
       Losses (gains) on sales of long-lived
        assets, impairment charges and other
        expense (income), net                      22,130            4,775
                                               ----------       ----------
          Total costs and other deductions      3,205,310        2,776,680
                                               ----------       ----------
    Income from continuing operations
     before income taxes                          859,963          854,853
                                               ----------       ----------
    Income tax expense:
       Current                                    222,553          164,038
       Deferred                                     2,244           17,300
                                               ----------       ----------
          Income tax expense                      224,797          181,338
                                               ----------       ----------
    

    
    Income from continuing operations,
     net of tax                                   635,166          673,515
    Income from discontinued operations,
     net of tax                                       -             35,024
                                               ----------       ----------
    Net income                                 $  635,166       $  708,539
                                               ----------       ----------
    

    
    Earnings per share: (1)
       Basic from continuing operations        $     2.28       $     2.42
       Basic from discontinued operations      $      -         $      .12
                                               ----------       ----------
    Total Basic                                $     2.28       $     2.54
                                               ----------       ----------
    

    
       Diluted from continuing operations      $     2.21       $     2.35
       Diluted from discontinued operations    $      -         $      .12
                                               ----------       ----------
    Total Diluted                              $     2.21       $     2.47
                                               ----------       ----------
    

    
    Weighted-average number
     of common shares outstanding: (1)
       Basic                                      278,225          278,782
                                               ----------       ----------
       Diluted                                    287,468          286,894
                                               ----------       ----------
    

    
    Adjusted income derived from
     operating activities (2)                  $  918,380       $  907,892
                                               ==========       ==========
    

    
    (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)
    

    
                                        September 30,  June 30,   December 31,
    (In thousands, except ratios)           2008         2008         2007
                                        -----------  -----------  -----------
    ASSETS
    Current assets:
    Cash and short-term investments     $   838,128  $ 1,236,547  $   767,051
    Accounts receivable, net              1,161,426    1,083,748    1,039,238
    Other current assets                    368,347      410,051      398,823
                                        -----------  -----------  -----------
         Total current assets             2,367,901    2,730,346    2,205,112
    Long-term investments and other
     receivables                            229,567      239,866      359,534
    Property, plant and equipment, net    7,166,048    7,020,941    6,632,612
    Goodwill                                354,517      363,158      368,432
    Other long-term assets                  657,744      550,333      537,692
                                        -----------  -----------  -----------
         Total assets                   $10,775,777  $10,904,644  $10,103,382
                                        ===========  ===========  ===========
    

    
    LIABILITIES AND SHAREHOLDERS'
     EQUITY
    Current liabilities:
    Current portion of long-term debt   $   224,825  $   588,847  $   700,000
    Other current liabilities               867,253      776,833      794,132
                                        -----------  -----------  -----------
         Total current liabilities        1,092,078    1,365,680    1,494,132
    Long-term debt                        3,986,722    3,822,285    3,306,433
    Other long-term liabilities             700,363      783,020      788,696
                                        -----------  -----------  -----------
         Total liabilities                5,779,163    5,970,985    5,589,261
    Shareholders' equity                  4,996,614    4,933,659    4,514,121
                                        -----------  -----------  -----------
         Total liabilities and
          shareholders' equity          $10,775,777  $10,904,644  $10,103,382
                                        ===========  ===========  ===========
    

    
    Cash, short-term and long-term
     investments (1)                    $ 1,073,784  $ 1,510,842  $ 1,179,639
    

    
    Funded debt to capital ratio: (2)
        - Gross                            0.44 : 1     0.45 : 1     0.44 : 1
        - Net of cash and investments      0.37 : 1     0.35 : 1     0.36 : 1
    Interest coverage ratio: (3)           23.4 : 1     25.7 : 1     32.5 : 1
    


    
    (1) The September 30, 2008, June 30, 2008 and December 31, 2007 amounts
        include $6.1 million, $34.4 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 and $202.5 million, $188.8 million and $123.3 million,
        respectively, in oil and gas financing receivables that are included
        in long-term investments and other receivables.
    

    
    (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 and other receivables.  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
                                           ---------------------------------
                                               September 30,        June 30,
                                           ----------------------  ---------
    

    
    (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      $  505,197  $  416,525  $  438,848
          U.S. Land Well-servicing            204,029     180,370     182,222
          U.S. Offshore                        68,581      48,895      65,723
          Alaska                               38,496      30,854      45,114
          Canada                              125,335     132,434      67,782
          International                       368,418     296,219     342,892
                                           ----------  ----------  ----------
           Subtotal Contract Drilling (3)   1,310,056   1,105,297   1,142,581
    

    
        Oil and Gas (4) (5)                    29,532      35,770      11,352
        Other Operating Segments (6) (7)      171,208     163,397     172,865
        Other reconciling items (8)           (48,301)    (51,476)    (48,431)
                                           ----------  ----------  ----------
          Total                            $1,462,495  $1,252,988  $1,278,367
                                           ==========  ==========  ==========
    

    
    Adjusted income (loss) derived from
     operating activities from continuing
     operations: (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling      $  176,819  $  130,761  $  134,322
          U.S. Land Well-servicing             42,433      42,291      31,468
          U.S. Offshore                        18,456       9,245      17,983
          Alaska                               10,159       4,214      13,466
          Canada                               13,396      16,920     (14,326)
          International                       111,048      88,574     101,752
                                           ----------  ----------  ----------
           Subtotal Contract Drilling         372,311     292,005     284,665
    

    
        Oil and Gas                            17,577      17,868      (1,645)
        Other Operating Segments               18,375      10,297      19,006
        Other reconciling items (9)           (42,945)    (32,837)    (36,117)
                                           ----------  ----------  ----------
          Total                               365,318     287,333     265,909
    Interest expense                          (25,506)    (13,450)    (21,676)
    Investment (loss) income                  (22,235)    (27,466)     25,057
    (Losses) gains on sales of long-lived
     assets, impairment charges and other
     (expense) income, net                    (10,875)    (30,524)     (3,158)
                                           ----------  ----------  ----------
    Income from continuing operations
     before income taxes                   $  306,702  $  215,893  $  266,132
                                           ==========  ==========  ==========
    

    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land Drilling              263.3       221.6       242.3
       U.S. Offshore                             19.2        14.4        17.1
       Alaska                                    11.0         8.4        10.4
       Canada                                    35.8        37.0        16.9
       International (11)                       121.3       117.9       121.5
                                           ----------  ----------  ----------
          Total rig years                       450.6       399.3       408.2
                                           ==========  ==========  ==========
    Rig hours: (12)
       U.S. Land Well-servicing               290,680     274,084     272,101
       Canada Well-servicing                   67,141      72,593      40,257
                                           ----------  ----------  ----------
          Total rig hours                     357,821     346,677     312,358
                                           ==========  ==========  ==========
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                                SEGMENT REPORTING
                                   (Unaudited)
    
    The following tables set forth certain information with respect to our
reportable segments and rig activity:

    
                                                   Nine Months Ended
                                             -----------------------------
                                                     September 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        $1,351,106         $1,295,908
          U.S. Land Well-servicing              557,392            544,998
          U.S. Offshore                         185,759            164,986
          Alaska                                137,979            115,467
          Canada                                371,969            400,802
          International                       1,014,882            781,963
                                             ----------         ----------
           Subtotal Contract Drilling (3)     3,619,087          3,304,124
    

    
        Oil and Gas (4) (5)                      54,924             67,009
        Other Operating Segments (6) (7)        509,855            433,771
        Other reconciling items (8)            (147,597)          (165,342)
                                             ----------         ----------
          Total                              $4,036,269         $3,639,562
                                             ==========         ==========
    

    
    Adjusted income (loss) derived from
     operating activities from
     continuing operations: (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling        $  438,012         $  458,354
          U.S. Land Well-servicing              104,287            125,752
          U.S. Offshore                          42,897             43,500
          Alaska                                 41,408             29,006
          Canada                                 41,043             62,056
          International                         303,450            240,001
                                             ----------         ----------
           Subtotal Contract Drilling (3)       971,097            958,669
        Oil and Gas (4) (5)                      11,080             22,370
        Other Operating Segments (6) (7)         49,815             28,630
        Other reconciling items (9)            (113,612)          (101,777)
                                             ----------         ----------
          Total                                 918,380            907,892
    Interest expense                            (65,291)           (40,235)
    Investment (loss) income                     29,004             (8,029)
    (Losses) gains on sales of long-lived
     assets, impairment charges and other
     (expense) income, net                      (22,130)            (4,775)
                                             ----------         ----------
    Income from continuing operations
     before income taxes                     $  859,963         $  854,853
                                             ==========         ==========
    

    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land Drilling                243.8              231.0
       U.S. Offshore                               17.5               16.4
       Alaska                                      10.6                8.9
       Canada                                      34.0               37.8
       International (11)                         120.2              115.6
                                             ----------         ----------
          Total rig years                         426.1              409.7
                                             ==========         ==========
    Rig hours: (12)
       U.S. Land Well-servicing                 822,258            864,602
       Canada Well-servicing                    186,535            211,794
                                             ----------         ----------
          Total rig hours                     1,008,793          1,076,396
                                             ==========         ==========
    


    
    (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 $.1 million, $3.4 million and
         $2.8 million for the three months ended September 30, 2008 and 2007
         and June 30, 2008, respectively, and $9.7 million and $5.9 million
         for nine months ended September 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 $7.1 million, ($2.0) million
         and ($6.7)  million for the three months ended September 30, 2008 and
         2007 and June 30, 2008, respectively, and ($17.6) million and
         ($2.8) million for the nine months ended September 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 $.7 million, $1.3 million and
         ($.1) million for the three months ended September 30, 2008 and 2007
         and June 30, 2008, respectively, and $7.4 million and $15.5 million
         for the nine months ended September 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 3.3 years,
         4.0 years and 3.7 years during the three months ended September 30,
         2008 and 2007 and June 30, 2008, respectively, and 3.6 years and
         4.0 years during the nine months ended September 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
                                           ----------------------------------
                                                September 30,       June 30,
                                           ----------------------  ----------
    (In thousands, except per share amounts)  2008        2007        2008
                                           ----------  ----------  ----------
    Net income (numerator):
      Income from continuing
       operations, net of tax - basic      $  210,299  $  195,763  $  194,361
      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       210,299     195,763     194,361
      Income from discontinued operations,
       net of tax                                 -        22,265         -
                                           ----------  ----------  ----------
    Total adjusted net income              $  210,299  $  218,028  $  194,361
                                           ----------  ----------  ----------
    

    
    Earnings per share:
      Basic from continuing operations     $      .75  $      .70  $      .70
      Basic from discontinued operations   $      -    $      .08  $      -
                                           ----------  ----------  ----------
    Total Basic                            $      .75  $      .78  $      .70
                                           ----------  ----------  ----------
    

    
      Diluted from continuing operations   $      .73  $      .68  $      .67
      Diluted from discontinued
       operations                          $      -    $      .08  $      -
                                           ----------  ----------  ----------
    Total Diluted                          $      .73  $      .76  $      .67
                                           ----------  ----------  ----------
    

    
    Shares (denominator):
      Weighted-average number of shares
       outstanding-basic (4)                  279,373     280,152     277,719
      Net effect of dilutive stock
       options, warrants and restricted
       stock awards based on the treasury
       stock method                             8,217       7,817       8,606
      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                  287,590     287,969     291,454
                                           ----------  ----------  ----------
    



    
                   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:

    
                                                         Nine Months Ended
                                                      ------------------------
                                                            September 30,
                                                      ------------------------
    

    
    (In thousands, except per share amounts)            2008           2007
                                                      --------       --------
    Net income (numerator):
      Income from continuing operations, net
       of tax - basic                                 $635,166       $673,515
      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                            635,166        673,515
      Income from discontinued operations, net of tax      -           35,024
                                                      --------       --------
    Total adjusted net income                         $635,166       $708,539
                                                      --------       --------
    

    
      Earnings per share:
        Basic from continuing operations              $   2.28       $   2.42
        Basic from discontinued operations            $    -         $    .12
                                                      --------       --------
      Total Basic                                     $   2.28       $   2.54
                                                      --------       --------
    

    
        Diluted from continuing operations            $   2.21       $   2.35
        Diluted from discontinued operations          $     -        $    .12
                                                      --------       --------
      Total Diluted                                   $   2.21       $   2.47
                                                      --------       --------
    

    
    Shares (denominator):
      Weighted-average number of shares
       outstanding-basic (4)                           278,225        278,782
      Net effect of dilutive stock options,
       warrants and restricted stock awards based
       on the treasury stock method                      7,533          8,112
      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)                        1,710            -
                                                      --------       --------
    Weighted-average number of shares
     outstanding - diluted                             287,468        286,894
                                                      --------       --------
    

    
    (1) Diluted earnings per share for the three and nine months ended
        September 30, 2008 and 2007 and the three months ended June 30,
        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 the 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 during the three
        months ended September 30, 2008 and 2007 and June 30, 2008 and the
        nine months ended September 30, 2008 and 2007.
    

    
    (2) In June 2008 Nabors Delaware called for redemption of 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.  No common shares were issued as part of the redemption
        of the $82.8 million zero coupon convertible senior debentures.
    

    
    (3) Diluted earnings per share for the nine months ended September 30,
        2008 and the three months ended June 30, 2008 reflect the
        conversion of the $700 million zero coupon senior exchangeable
        notes due 2023.  In May 2008 Nabors Delaware called for redemption
        all of its $700 million zero coupon senior exchangeable notes and
        in June and July 2008 issued an aggregate 5.25 million common
        shares which equated to the excess of the exchange value of the
        notes over their principal amount, as cash was required up to the
        principal amount of the notes exchanged.  Diluted earnings per
        share for the three and nine months ended September 30, 2007 do
        not include any incremental shares issuable upon exchange of the
        $700 million zero coupon senior exchangeable 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 the price of our shares exceeds $35.05 on the
        last trading day of the quarter, which did not occur on September
        30, 2007.
    

    
    (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: 279.3 million and .1 million
        shares for the three months ended September 30, 2008; 280.1 million
        and .1 million shares for the three months ended September 30, 2007;
        277.6 million and .1 million shares for the three months ended June
        30, 2008; 278.1 million and .1 million shares for the nine months
        ended September 30, 2008; and 278.6 million and .2 million shares for
        the nine months ended September 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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