HAMILTON, Bermuda, March 29 /CNW/ -- Nabors Industries Ltd. (NYSE: NBR),
today announced that it expects its results for the first quarter of 2007 to
be lower than current analysts' consensus estimates as a result of both
operational and administrative factors. The company currently estimates first
quarter earnings to be in the range of $0.80 to $0.85 per diluted share.
Gene Isenberg, Nabors' Chairman and CEO commented, "Our reduced first
quarter outlook is primarily attributable to lower than expected rig activity
in our US Lower 48 Land drilling, Canadian and US Well-servicing units
combined with higher costs associated with startup and moving delays in our
International and US Offshore segments. These operational issues amounted to
roughly seventy percent of the variance while expenses arising from the review
of the Company's options granting practices and other miscellaneous items
constitute the balance.
The impact of the shortfall in operating rigs is largest in our US Lower
48 land drilling operations followed closely by our Canadian and US Land
Well-servicing units. Obviously, North American gas related drilling activity
has been much weaker than we previously anticipated as we now have
approximately 60 idle rigs in our US Lower 48 Land drilling operation
representing an increase of 36 rigs since the beginning of the quarter. This
implies an average working rig count of approximately 242 rigs for the
quarter. Rig renewal margins however, are proving to be relatively resilient
with renewals generally inline with current average margins. This operation
is also recording higher property tax expense due to a change in venue for the
taxation of rigs in Texas to the county of the owners domicile as opposed to
the county in which the rig is located. Proposals are being initiated in the
Texas legislature to restore rig taxation to the previous methodology but any
such revision would not likely take effect until 2008.
In Canada, lower activity and an early spring thaw are likely to result
in an average of only 57 rigs operating in the seasonally peak first quarter
versus 73 in the first quarter of last year. In our US Land Well-servicing
segment rig hours are substantially below expectations largely as a result of
the ice storms in Texas, Oklahoma and California that occurred earlier in the
quarter. Otherwise, the outlook for this business continues to appear healthy
and we anticipate opportunities for moderate rate increases in selected
regions as the year progresses.
In our international business we incurred higher than anticipated costs
with a number of delays in rig startups and moves as well as a higher than
usual amount of rig downtime. In our US Offshore unit weather induced delays
resulted in higher moving costs along with other rig startup delays.
The balance of the quarter's reduced expectations result from the
recording of expenses primarily related to the Company's review of option
granting practices, increased litigation reserves and minor asset retirements
in our International and US Well-servicing units."
The Nabors companies own and operate approximately 600 land drilling and
approximately 800 land workover and well-servicing rigs in North America.
Nabors' actively marketed offshore fleet consists of; 41 platform rigs, 14
jack-up units and 4 barge rigs in the United States and multiple international
markets. Nabors markets 25 marine transportation and supply vessels, primarily
in the U.S. Gulf of Mexico. 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
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 firstname.lastname@example.org.
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, email@example.com