Nabors Diluted EPS Equals $0.78 for 4th Quarter and $3.25 for Full Year 2007



    HAMILTON, Bermuda, Feb. 5 /CNW/ -- Nabors Industries Ltd. (NYSE:   NBR)
today announced its results for the fourth quarter and full year 2007. 
Adjusted income derived from operating activities was $307.9 million for the
fourth quarter compared to $331.1 million in the fourth quarter of 2006 and
$287.3 million in the third quarter of 2007.  Net income from continuing
operations was $222.2 million ($0.78 per diluted share) for the fourth quarter
compared to $232.4 million ($.82 per diluted share) in the fourth quarter of
2006 and $195.8 million ($0.68 per diluted share) in the third quarter of
2007.  The results of all of the above referenced quarters reflect income from
continuing operations which excludes Sea Mar which was sold in the third
quarter of 2007.  The quarter's results include the previously disclosed gain
on the sale of a portion of the company's Oil and Gas holdings which, when
netted against the write off of some other assets, recorded as depletion
expense, resulted in an after tax gain of approximately $0.08 per diluted
share.  The quarter's results also reflect a smaller loss in certain
investments which losses the company believes are  over.  During the quarter
the Canadian statutory federal tax rate was reduced, resulting in a reduction
in Canadian deferred taxes.   The results also partially reflect the company's
repurchase of 3.93 million shares during the fourth quarter at an average cost
of $27.12 per share.
    For the full year 2007 adjusted income derived from operating activities
was $1.22 billion compared to $1.40 billion in 2006.  Income from continuing
operations for the full year 2007 was $895.7 million ($3.13 per diluted
share), compared to $993.0 million ($3.31 per diluted share) in 2006.   The
year's net income, inclusive of discontinued operations, was $930.7 million or
$3.25 per diluted share which compares to $1.0 billion or $3.40 per diluted
share in 2006.
    Gene Isenberg, Nabors' Chairman and CEO, commented, "Our 2007 results
represent the second best year in our company's history, with earnings per
share from continuing operations just 5% below 2006's record level, despite a
decline of $381 million or 30% in the operating income contribution of our
North American rig operations, excluding Alaska.  This minimal impact is
attributable primarily to offsetting growth of nearly $200 million in several
units, including International, Alaska, Oil and Gas, and Other Operating
Segments.  It is bolstered further by a lower share count and effective tax
rate.  The year's $3.13 diluted result, while down slightly, still represents
an increase of $1.16 per diluted share from continuing operations over the
$1.97 per diluted share achieved in 2005, which was previously the second best
year.  The results of the fourth quarter again reflect a mix of positive
developments and some delays and disappointments, but I expect that future
quarters will see diminishing potential for the adverse.   Since we last
reported new builds we have received 19 additional commitments for new rigs,
bringing the total number of new rig commitments since early 2005 to 140
drilling rigs and 13 coiled tubing/stem drilling rigs.  The 19 new rigs are
all for our International operations, bringing to 40 the number of new rigs in
that unit.
    "Our international operating income for the quarter increased from $63
million in the prior year to $92 million setting its eighth consecutive
quarterly record.  Operating income for the full year increased from $209
million in 2006 to $332 million in 2007, also setting a new record for the
seventh year in a row.  We expect 2008 will also show substantial increases
since the majority of the prospective improvement is defined by the deployment
of additional rigs already under term contracts and the renewal of existing
contracts at current market prices.
    "In 2007 this operation started-up 19 additional rigs under
term-contracts which yielded 13.2 rig years.  Included in this number were 17
incremental rigs and two existing offshore platform rigs.  The incremental
rigs consisted of nine new built rigs and eight underutilized rigs that were
relocated from our North American land rig operations.  During 2007 this unit
also secured term contract commitments for another 13 rigs, including 11 new
rigs, most of which will commence before the end of 2008.  The most
significant of these are two recently awarded jack-ups that should commence
operations in The Kingdom of Saudi Arabia no later than early second quarter. 
One of these rigs, Nabors Rig 660, is nearing completion at a Dubai shipyard
while the other, Nabors Rig 657, is currently enroute from Trinidad to the
same shipyard where it will undergo modification and upgrades.  The 13 rig
commitments also include the securing of eight additional rig commitments for
the Russian market meaning we will have at least nine rigs working there under
term contracts by the end of 2008.  We anticipate securing term commitments
for at least another eight land rigs in the first half of 2008, with likely
start ups in late 2008 and early 2009.
    "All of this incremental activity combined with contract renewals and the
continuing strong level of bid flow gives us a high degree of visibility for
several years, although customer induced project delays can cause the timing
to be uncertain.
    "The operating income from our Alaskan drilling operations more than
doubled in 2007, earning $37 million on the strength of increased pricing and
activity.  This unit also possesses good visibility, but on a much smaller
scale than our international business.  As this market has become more active,
we are seeing significant rate increases on available rigs and we have three
new built rigs commencing term contracts.  Two of these rigs deployed in late
2007 and the third will commence operations around the end of 2008.
    "Our Oil and Gas segment also achieved a large increase in year-over-year
income as we monetized a portion of our portfolio.  The fourth quarter results
reflect a gain on the sale of some of our oil and gas holdings which, when
combined with a smaller sale in the third quarter, aggregates to over $88
million in gains for the year which was partially offset by the aforementioned
write-off of other assets.  This still leaves a large amount of unrealized
value in this increasingly significant business particularly when NFR's recent
successes are included.
    "Our Other Operating Segments achieved a record year, excluding Sea Mar.
While the fourth quarter was slightly lower sequentially, the longer term
outlook for these businesses is very strong, driven primarily by the
increasing proportion of third-party sales in our manufacturing and technology
businesses, continuing market penetration by our directional drilling
operation, and a healthy outlook in our Alaskan construction and logistics
joint ventures.
    "Our US Lower 48 land drilling operations posted sequentially higher
operating income in the fourth quarter increasing from $131 million to $138
million, primarily attributable to new rig deployments at higher margins and
reduced cost and downtime as new rig start-up difficulties are being rectified
expeditiously.  We expect a significant number of expiring term contracts for
older rigs to roll over in 2008 at lower margins causing a further drop in
average margins in the first quarter.  However, we expect that the higher
margins associated with the remaining new rig deployments and improving
margins of the previously deployed new rigs will substantially offset any
further deterioration.
    "This unit deployed another seven new built rigs during the quarter and
expects to deploy the remaining 12 in the first half of 2008.  Our new PACE
rigs are performing well, setting over 20 new drilling records for multiple
customers in high growth areas, including the Barnett Shale, East Texas and
the Rocky Mountains.
    "Operating income from our US Offshore operations was down to $52 million
in 2007 from the $65 million we achieved in 2006.  The quarter's results were
also down slightly to $8.0 million from the $9.2 million we posted in the
third quarter, despite a very promising start to the quarter.  The reduced
results of both periods were attributable primarily to significantly lower
utilization of our small workover jackups and the loss of one of our high-
margin barge rigs to a fire shortly after start-up, which left it out of
service for the balance of the year.  Fortunately, 2008 is off to a strong
start with some jackups and the damaged barge rig returning to work and a full
year's availability from our other new deep capacity barge rig, which was
commissioned last June.  We are seeing improved prospects for platform
workover rigs for the first time in nearly five years, with certain operators
contemplating significant projects.  Our platform drilling rigs, especially
the deep water portion, continued to provide a solid foundation for this
unit's income with high demand and the resulting strong pricing environment.
    "Our Canadian operations reported operating income of $87 million for the
full year 2007 compared to $185 million compared to 2006 and illustrated the
dismal state of this market.  The ramp-up to the seasonally high first quarter
yielded a meaningful sequential improvement in the fourth quarter and we
expect the same in the first quarter, although both are substantially below
the level recorded last year.  This leads us to set our near-term expectations
for this market very low, anticipating 2008 to represent another 50% decrease
compared to 2007.  We have recently reallocated certain rigs from this
business to our international operations and we shall continue to focus on
costs until a recovery is apparent.
    "Our US Well servicing's operating income was $30 million in the fourth
quarter, down sequentially from $42 million in the third quarter.  This led to
full year income of $156 million, which was also down significantly from last
year's $200 million result.  While the fourth quarter is always the seasonally
low quarter of the year, it seemed to be exacerbated by excess capacity which
weighed heavily on the most competitive market regions, primarily Oklahoma,
West Texas and South Texas.  Rig activity has improved significantly early in
the new year, but we continue to expect another challenging year with results
essentially flat to slightly lower for 2008.
    "Obviously the performance of our North American gas related and well
servicing businesses was very disappointing, however, we believe the potential
for further adverse effects is significantly diminished going forward.  We
also expect 2008 will provide indications of an impending recovery in our
North American gas related businesses, and more fully demonstrate the emerging
prominence of our international and non-gas related businesses.  The rapidly
growing contribution from these businesses, combined with the large number of
underutilized rigs in our US Land, US Offshore, and Canadian drilling and
workover fleets, provides disproportionate leverage to a prospective
recovery."
    The Nabors companies own, operate and actively market a fleet of
approximately 535 land drilling and approximately 737 land workover and
well-servicing rigs in North America.  Nabors' actively marketed offshore
fleet consists of 35 platform rigs, 12 jack-up 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.
    The Company has posted a group of slides on its website
http://www.nabors.com, under "Investor Information", "Events Calendar", which
provide more detailed current and historical information.  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
                                           -----------------------------------
                                                 December 31,    September 30,
                                           --------------------- -------------
    (In thousands, except per share
     amounts)                                 2007        2006        2007
                                           ----------- ----------  -----------
    

    
    Revenues and other income:
      Operating revenues                   $1,317,852  $1,267,300  $1,250,299
      Earnings (loss) from unconsolidated
       affiliates                                (842)      1,070       2,689
      Investment (loss) income                 (7,862)     34,254     (27,466)
                                           ----------- ----------  -----------
        Total revenues and other income     1,309,148   1,302,624   1,225,522
                                           ----------- ----------  -----------
    

    
    Costs and other deductions:
      Direct costs                            721,100     675,869     722,058
      General and administrative expenses     116,458     148,901     105,975
      Depreciation and amortization           127,661     102,618     125,089
      Depletion                                43,864       9,919      12,533
      Interest expense                         13,467      12,616      13,450
      Losses (gains) on sales of long-
       lived assets, impairment charges
       and other expense (income), net          6,120      12,193      30,524
                                           ----------  ----------  -----------
         Total costs and other deductions   1,028,670     962,116   1,009,629
                                           ----------  ----------  -----------
    

    
    Income from continuing operations
     before income taxes                      280,478     340,508     215,893
                                           ----------- ----------  -----------
    

    
    Income tax expense (benefit):
      Current                                  63,913      88,001       4,211
      Deferred                                 (5,587)     20,120      15,919
                                           ----------  ----------  -----------
        Income tax expense                     58,326     108,121      20,130
                                           ----------  ----------  -----------
    

    
    Income from continuing operations, net
     of tax                                   222,152     232,387     195,763
    Income from discontinued operations,
     net of tax                                    --       5,402      22,265
                                           ----------  ----------  -----------
    Net income                             $  222,152  $  237,789  $  218,028
                                           ----------  ----------  -----------
    

    
    Earnings per share (1):
       Basic from continuing operations    $      .79  $      .84  $      .70
       Basic from discontinued operations  $       --  $      .02  $      .08
                                           ----------  ----------  -----------
    Total Basic                            $      .79  $      .86  $      .78
                                           ----------  ----------  -----------
    

    
       Diluted from continuing operations  $      .78  $      .82  $      .68
       Diluted from discontinued
        operations                         $       --  $      .02  $      .08
                                           ----------  ----------  -----------
    Total Diluted                          $      .78  $      .84  $      .76
                                           ----------  ----------  -----------
    


    
    Weighted-average number
     of common shares outstanding (1):
      Basic                                   279,757     276,003     280,152
                                           ----------  ----------  -----------
      Diluted                                 285,744     284,419     287,969
                                           ----------  ----------  -----------
    


    
    Adjusted income derived from operating
     activities (2)                        $  307,927  $  331,063  $  287,333
                                           ==========  ==========  ===========
    





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

    
                                                          Year Ended
                                           ----------------------------------
                                                         December 31,
                                           ----------------------------------
    

    
    (In thousands, except per share amounts)  2007                   2006
                                           ----------             -----------
    

    
    Revenues and other income:
      Operating revenues                   $4,938,848             $4,707,289
      Earnings (loss) from
       unconsolidated affiliates               17,724                 20,545
      Investment (loss) income                (15,891)               102,007
                                           -----------            -----------
        Total revenues and other income     4,940,681              4,829,841
                                           -----------            -----------
    

    
    Costs and other deductions:
      Direct costs                          2,764,559              2,511,392
      General and administrative
       expenses                               436,282                416,610
      Depreciation and amortization           467,730                364,653
      Depletion                                72,182                 38,580
      Interest expense                         53,702                 46,586
      Losses (gains) on sales of long-
       lived assets, impairment charges
       and other expense (income), net         10,895                 24,118
                                           -----------            -----------
        Total costs and other deductions    3,805,350              3,401,939
                                           -----------            -----------
    

    
    Income from continuing operations
     before income taxes                     1,135,331              1,427,902
                                           -----------            -----------
    

    
    Income tax expense (benefit):
      Current                                 227,951                213,866
      Deferred                                 11,713                221,027
                                           -----------            -----------
        Income tax expense                    239,664                434,893
                                           -----------            -----------
    

    
    Income from continuing operations,
     net of tax                               895,667                993,009
    Income from discontinued operations,
     net of tax                                35,024                 27,727
                                           -----------            -----------
    Net income                             $  930,691             $1,020,736
                                           -----------            -----------
    

    
    Earnings per share (1):
      Basic from continuing operations          $3.21                  $3.42
      Basic from discontinued operations         $.13                   $.10
                                           -----------            -----------
    Total Basic                                 $3.34                  $3.52
                                           -----------            -----------
    

    
      Diluted from continuing operations        $3.13                  $3.31
      Diluted from discontinued
       operations                                $.12                   $.09
                                           -----------            -----------
    Total Diluted                               $3.25                  $3.40
                                           -----------            -----------
    


    
    Weighted-average number
      of common shares outstanding (1):
       Basic                                  279,026                290,241
                                           -----------            -----------
       Diluted                                286,606                299,827
                                           -----------            -----------
    


    
    Adjusted income derived from
     operating activities (2)              $1,215,819             $1,396,599
                                           ===========            ===========
    


    
    (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)
    


    
                                       December 31, September 30, December 31,
    (In thousands, except ratios)          2007         2007          2006
                                       ------------ ------------- ------------
    

    
    ASSETS
    Current assets:
    Cash and short-term investments    $   767,051   $   879,973  $ 1,140,016
    Accounts receivable, net             1,039,238     1,043,235    1,109,738
    Other current assets                   416,560       623,213      255,102
                                       -----------   -----------  -----------
       Total current assets              2,222,849     2,546,421    2,504,856
    Long-term investments                  236,253       383,288      513,269
    Property, plant and equipment, net   6,689,126     6,466,732    5,410,101
    Goodwill, net                          368,432       367,376      362,269
    Other long-term assets                 604,459       314,590      351,808
                                       -----------   -----------   ----------
       Total assets                    $10,121,119   $10,078,407   $9,142,303
                                       ===========   ===========   ==========
    

    
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Current portion of long-term debt  $   700,000   $   700,000   $       --
    Other current liabilities              794,132       857,496      854,360
                                       -----------   -----------   ----------
       Total current liabilities         1,494,132     1,557,496      854,360
    Long-term debt                       3,306,433     3,305,840    4,004,074
    Other long-term liabilities            806,433       801,378      747,216
                                       -----------   -----------   ----------
       Total liabilities                 5,606,998     5,664,714    5,605,650
    Shareholders' equity                 4,514,121     4,413,693    3,536,653
                                       -----------   -----------   ----------
       Total liabilities and
        shareholders' equity           $10,121,119   $10,078,407   $9,142,303
                                       ===========   ===========   ==========
    



    
    Cash, short-term and long-term
     investments (1)                   $ 1,056,358   $ 1,306,816   $1,653,285
    

    
    Funded debt to capital ratio: (2)
      - Gross                               0.44:1        0.45:1       0.50:1
      - Net of cash and investments         0.37:1        0.35:1       0.37:1
    Interest coverage ratio: (3)            32.5:1        32.2:1       38.1:1
    


    
    (1)  The December 31 and September 30, 2007 amounts include $53.1
         million and $43.6 million, respectively, in cash proceeds receivable
         from brokers from the sale of certain long-term investments that
         are included in other current assets.  These proceeds were received
         during January 2008 and October 2007, respectively.
    

    
    (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.
    

    
    (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.
    




    
                     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
                                           -----------------------------------
                                                 December 31,    September 30,
                                           --------------------  -------------
    

    
    (In thousands, except rig activity)        2007        2006        2007
                                           ----------- ----------  -----------
    

    
    Reportable segments:
    Operating revenues and Earnings from
     unconsolidated affiliates: (1)
      Contract Drilling: (2)
       U.S. Lower 48 Land Drilling         $  415,082  $  496,992  $  416,525
       U.S. Land Well-servicing               170,416     185,965     180,370
       U.S. Offshore                           47,174      59,377      48,895
       Alaska                                  37,023      34,902      30,854
       Canada                                 144,233     172,040     132,434
       International                          312,839     234,973     296,219
                                           ----------  ----------  -----------
        Subtotal Contract Drilling (3)      1,126,767   1,184,249   1,105,297
    

    
      Oil and Gas (4)(5)                       85,311      10,623      35,770
      Other Operating Segments (6)(7)         154,712     138,870     163,397
      Other reconciling items (8)             (49,780)    (65,372)    (51,476)
                                           ----------  ----------  -----------
          Total                            $1,317,010  $1,268,370  $1,252,988
                                           ==========  ==========  ===========
    

    
    Adjusted income (loss) derived from
     continuing operating activities: (1)
      Contract Drilling: (2)
       U.S. Lower 48 Land Drilling         $  137,948  $  209,909  $  130,761
       U.S. Land Well-servicing                30,491      51,944      42,291
       U.S. Offshore                            8,008      13,715       9,245
       Alaska                                   8,388       7,793       4,214
       Canada                                  24,990      39,593      16,920
       International                           92,282      62,563      88,574
                                           ----------  ----------  -----------
        Subtotal Contract Drilling            302,107     385,517     292,005
    

    
      Oil and Gas                              33,763      (3,686)     17,868
      Other Operating Segments                  6,643       5,683      10,297
      Other reconciling items (9)             (34,586)    (56,451)    (32,837)
                                           ----------  ----------  -----------
       Total                                  307,927     331,063     287,333
    Interest expense                          (13,467)    (12,616)    (13,450)
    Investment (loss) income                   (7,862)     34,254     (27,466)
    Losses (gains) on sales of long-lived
     assets, impairment charges and other
     expense (income), net                     (6,120)    (12,193)    (30,524)
                                           ----------  ----------  -----------
    Income from continuing operations
     before income taxes                   $  280,478  $  340,508  $  215,893
                                           ==========  ==========  ===========
    


    
    Rig activity:
    Rig years: (10)
      U.S. Lower 48 Land Drilling               224.7       256.2       221.6
      U.S. Offshore                              14.0        16.8        14.4
      Alaska                                      8.3        10.0         8.4
      Canada                                     33.4        49.4        37.0
      International (11)                        114.2       107.8       117.9
                                           ----------  ----------  -----------
        Total rig years                         394.6       440.2       399.3
                                           ==========  ==========  ===========
    Rig hours: (12)
      U.S. Land Well-servicing                254,895     302,967     274,084
      Canada Well-servicing                    71,677      86,210      72,593
                                           ----------  ----------  -----------
        Total rig hours                       326,572     389,177     346,677
                                           ==========  ==========  ===========
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                                SEGMENT REPORTING
                                   (Unaudited)
    

    
    The following tables set forth certain information with respect to our
    reportable segments and rig activity:
    

    
                                                          Year Ended
                                           ----------------------------------
                                                         December 31,
                                           ----------------------------------
    (In thousands, except rig activity)                2007              2006
                                                 ----------        -----------
    

    
    Reportable segments:
    Operating revenues and Earnings from
     unconsolidated affiliates: (1)
      Contract Drilling: (2)
        U.S. Lower 48 Land Drilling              $1,710,990        $1,890,302
        U.S. Land Well-servicing                    715,414           704,189
        U.S. Offshore                               212,160           221,676
        Alaska                                      152,490           110,718
        Canada                                      545,035           686,889
        International                             1,094,802           746,460
                                                 -----------       -----------
         Subtotal Contract Drilling (3)           4,430,891         4,360,234
    

    
      Oil and Gas (4) (5)                           152,320            59,431
      Other Operating Segments (6) (7)              588,483           505,286
      Other reconciling items (8)                  (215,122)         (197,117)
                                                 -----------       -----------
        Total                                    $4,956,572        $4,727,834
                                                 ===========       ===========
    

    
    Adjusted income (loss) derived from
     continuing operating activities: (1)
      Contract Drilling: (2)
        U.S. Lower 48 Land Drilling              $  596,302        $  821,821
        U.S. Land Well-servicing                    156,243           199,944
        U.S. Offshore                                51,508            65,328
        Alaska                                       37,394            17,542
        Canada                                       87,046           185,117
        International                               332,283           208,705
                                                 -----------       -----------
         Subtotal Contract Drilling               1,260,776         1,498,457
    

    
      Oil and Gas                                    56,133             4,065
      Other Operating Segments                       35,273            30,028
      Other reconciling items (9)                  (136,363)         (135,951)
                                                 -----------       -----------
        Total                                     1,215,819         1,396,599
    Interest expense                                (53,702)          (46,586)
    Investment (loss) income                        (15,891)          102,007
    Losses (gains) on sales of long-lived
     assets, impairment charges and other
     expense (income), net                          (10,895)          (24,118)
                                                 -----------       -----------
    Income from continuing operations
     before income taxes                         $1,135,331        $1,427,902
                                                 ===========       ===========
    


    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land Drilling                    229.4             255.5
       U.S. Offshore                                   15.8              16.4
       Alaska                                           8.7               8.6
       Canada                                          36.7              53.3
       International (11)                             115.2              97.1
                                                 -----------       -----------
          Total rig years                             405.8             430.9
                                                 ===========       ===========
    Rig hours: (12)
       U.S. Land Well-servicing                   1,119,497         1,256,141
       Canada Well-servicing                        283,471           360,129
                                                 -----------       -----------
          Total rig hours                         1,402,968         1,616,270
                                                 ===========       ===========
    

    
    (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 $(.3) million, $(1.8) million
         and $3.4 million for the three months ended December 31, 2007 and
         2006 and September 30, 2007, respectively, $5.6 million and $4.0
         million for the years ended December 31, 2007 and 2006, 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 $(1.1) million, $0 and $(2.0)
         million for the three months ended December 31, 2007 and 2006 and
         September 30, 2007, respectively, and $(3.9) million and $0 for the
         years ended December 31, 2007 and 2006, 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 $.6 million, $2.9 million and
         $1.3 million for the three months ended December 31, 2007 and 2006
         and September 30, 2007, respectively, and $16.0 million and $16.5
         million for the years ended December 31, 2007 and 2006, 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 December 31, 2007 and 2006 and
         September 30, 2007 and the years ended December 31, 2007 and 2006,
         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
                                             ---------------------------------
                                                 December 31,   September 30,
                                             ------------------ --------------
    

    
    (In thousands, except per share amounts)   2007       2006         2007
                                           ----------- ----------  -----------
    

    
    Net income (numerator):
      Income from continuing operations,
       net of tax - basic                    $222,152    $232,387     $195,763
      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       222,152     232,387      195,763
      Income from discontinued
       operations, net of tax                      --       5,402       22,265
                                            ---------    --------     --------
    Total adjusted net income                $222,152    $237,789     $218,028
                                            ---------    --------     --------
    

    
      Earnings per share:
        Basic from continuing operations     $    .79    $    .84     $    .70
        Basic from discontinued operations   $     --    $    .02     $    .08
                                            ---------    --------     --------
      Total Basic                            $    .79    $    .86     $    .78
                                            ---------    --------     --------
    

    
        Diluted from continuing operations   $    .78    $    .82     $    .68
        Diluted from discontinued operations $     --    $    .02     $    .08
                                            ---------    --------     --------
      Total Diluted                          $    .78    $    .84     $    .76
                                            ---------    --------     --------
    

    
    Shares (denominator):
      Weighted-average number of shares
       outstanding - basic (4)                279,757     276,003      280,152
      Net effect of dilutive stock options,
       warrants and restricted stock awards
       based on the treasury stock method       5,987       8,416        7,817
      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)                  --          --           --
                                            ---------    --------     --------
      Weighted-average number of shares
       outstanding - diluted                  285,744     284,419      287,969
                                            ---------    --------     --------
    




    
                   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:


    
                                                          Year Ended
                                                    -----------------------
                                                          December 31,
                                                    -----------------------
    

    
    (In thousands, except per share amounts)            2007           2006
                                                    ---------    ----------
    

    
    Net income (numerator):
      Income from continuing operations,
       net of tax - basic                           $895,667      $ 993,009
      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              895,667        993,009
      Income from discontinued
       operations, net of tax                         35,024         27,727
    

    
                                                    ---------    ----------
    Total adjusted net income                       $930,691     $1,020,736
                                                    ---------    ----------
    

    
      Earnings per share:
        Basic from continuing operations            $   3.21     $     3.42
        Basic from discontinued operations          $    .13     $      .10
                                                    ---------    ----------
      Total Basic                                   $   3.34     $     3.52
                                                    ---------    ----------
    

    
        Diluted from continuing operations          $   3.13     $     3.31
        Diluted from discontinued operations        $    .12     $      .09
                                                    ---------    ----------
      Total Diluted                                 $   3.25     $     3.40
                                                    ---------    ----------
    

    
    Shares (denominator):
      Weighted-average number of
       shares outstanding - basic (4)                279,026        290,241
      Net effect of dilutive stock options,
       warrants and restricted stock awards
       based on the treasury stock method              7,580          9,446
      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)                         --            140
                                                    ---------    ----------
      Weighted-average number of shares
       outstanding - diluted                         286,606        299,827
                                                    ---------    ----------
    



    
    (1)  Diluted earnings per share for the three months and years ended
         December 31, 2007 and 2006 and the three months ended September 30,
         2007 do not include any incremental shares issuable upon the exchange
         of the $2.75 billion 0.94% senior exchangeable notes.  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 the price of our shares exceeds $45.83 on the last
         trading day of the quarter, which did not occur during the three
         months ended December 31, 2007 and 2006 and September 30, 2007 and
         the years ended December 31, 2007 and 2006.
    

    
    (2)  Diluted earnings per share for the three months and years ended
         December 31, 2007 and 2006 and the three months ended September 30,
         2007 exclude approximately 1.2 million potentially dilutive shares
         initially issuable upon the conversion of the $82.8 million zero
         coupon convertible senior debentures.  We would only issue an
         incremental number of shares upon conversion of these debentures.
         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 $51.
    

    
    (3)  Diluted earnings per share for the three months ended December 31,
         2007 and 2006 and September 30, 2007 and the year ended December 31,
         2007 do not include any incremental shares issuable upon the exchange
         of the $700 million zero coupon senior exchangeable notes.  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 the price of our shares exceeds $35.05 on the last
         trading day of the quarter.  This was the case for the quarter ended
         March 31, 2006, and is, therefore, included in the weighted-average
         number of shares outstanding in our diluted earnings per share
         calculation for the year ended December 31, 2006.
    

    
    (4)  Includes the following weighted-average number of common shares of
         Nabors and weighted-average number of exchangeable shares of our
         subsidiary Nabors (Canada) Exchangeco Inc., respectively: 279.7
         million and .1 million shares for the three months ended December 31,
         2007; 275.8 million and .2 million shares for the three months ended
         December 31, 2006; 280.1 million and .1 million for the three months
         ended September 30, 2007; 278.9 million and .1 million shares for the
         year ended December 31, 2007; and 290.0 million and .2 million shares
         for the year ended December 31, 2006. 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 all periods presented, the computation of diluted earnings per share
    excludes outstanding stock options and warrants with exercise prices
    greater than the average market price of Nabors' common shares, because
    the inclusion of such options and warrants would be anti-dilutive.  The
    average number of options and warrants that were excluded from diluted
    earnings per share that would potentially dilute earnings per share in the
    future were 5,923,720, 4,652,025 and 4,601,925 shares during the three
    months ended December 31, 2007 and 2006 and September 30, 2007,
    respectively, and 4,952,799 and 2,995,447 shares during the years ended
    December 31, 2007 and 2006, respectively.  In any period during which the
    average market price of Nabors' common shares exceeds the exercise prices
    of these stock options and warrants, such stock options and warrants will
    be included in our diluted earnings per share computation using the
    treasury stock method of accounting.  Restricted stock will similarly be
    included in our diluted earnings per share computation using the treasury
    stock method of accounting in any period where the amount of restricted
    stock exceeds the number of shares assumed repurchased in those periods
    based upon future unearned compensation.
    




For further information:

For further information: Dennis A. Smith, Director of Corporate 
Development of Nabors Corporate Services, Inc., +1-281-775-8038, or Investors,
 corporate headquarters, +1-441-292-1510, mark.andrews@nabors.com, both of 
Nabors Industries Ltd. Web Site: http://www.nabors.com

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