Nabors' First Quarter EPS $0.21 Ex-Items of ($0.07), Operating Income Ahead
of Consensus at $138.5 Million


    



    
</pre>
<p>HAMILTON, <span class="xn-location">Bermuda</span>, <span class="xn-chron">April 20</span> /CNW/ -- Nabors Industries Ltd. (NYSE:   NBR) today reported its financial results for the first quarter of 2010.  Adjusted income derived from operating activities was <span class="xn-money">$138.5 million</span> compared to <span class="xn-money">$274.1 million</span> in the first quarter of last year and <span class="xn-money">$133.0 million</span> in the sequential quarter ended <span class="xn-chron">December 31, 2009</span>.  Net income was <span class="xn-money">$40.2 million</span>, or <span class="xn-money">$0.14</span> per diluted share, compared to <span class="xn-money">$184.4 million</span>, or <span class="xn-money">$0.65</span> per diluted share, in the first quarter of last year, and <span class="xn-money">$51.5 million</span>, or <span class="xn-money">$0.18</span> per diluted share, in the fourth quarter of 2009.  Operating Revenues and Earnings from unconsolidated affiliates for this quarter totaled <span class="xn-money">$905.7 million</span> compared to <span class="xn-money">$1.2 billion</span> in the comparable quarter of the prior year and <span class="xn-money">$841.1 million</span> in the fourth quarter of 2009.   For comparison purposes, all of the prior period results exclude certain non-cash charges which were primarily related to ceiling-test impairments in the Company's oil and gas joint venture entities.</p>
<p/>
<p><span class="xn-person">Gene Isenberg</span>, Nabors' Chairman and CEO, commented, "Our first quarter operating results were modestly ahead of both consensus estimates and our fourth quarter results, and were primarily attributable to larger-than-expected increases in our US Lower 48 Land Drilling business and our Alaskan and Canadian segments.  These gains more than offset the much larger-than-anticipated decrease in our International operations.  The quarter's results would have reflected an even larger increase were it not for weather- related startup delays in our US Offshore segment.</p>
<p/>
<p>"Net income and earnings per share were also in line with consensus estimates when we exclude certain items specific to the first quarter aggregating <span class="xn-money">$17 million</span>, or <span class="xn-money">$0.06</span> per diluted share, and a spike in the first quarter effective tax rate of <span class="xn-money">$4 million</span>, or <span class="xn-money">$0.01</span> per share.  The charges emanated primarily from three sources: the devaluation of the Venezuelan Bolivar; a market price adjustment of the carrying value of a portion of our holdings in the Chinese rig manufacturer Honghua; and a book loss on <span class="xn-money">$110 million</span> in additional first quarter purchases of our convertible debt at an average price of <span class="xn-money">$99.04</span>.  While the average purchase price of these notes represents a better yield than our cash portfolio, it is higher than the discounted value at which we carry these notes in accordance with the applicable convertible accounting rules.  We still expect the full-year effective tax rate to be approximately 12%, although the first quarter rate was 20% primarily as a result of an adjustment to our final 2009 tax liability in <span class="xn-location">Mexico</span> and <span class="xn-location">Canada</span>.</p>
<p/>
<p>"Our US Lower 48 Land Drilling operations posted <span class="xn-money">$60.3 million</span> in operating income, which represented an increase of <span class="xn-money">$11.3 million</span> over the fourth quarter.  These improved results were generated by a quarterly increase of nearly 20 rigs, bringing the average rig count to 158.6.  Today this unit's rig count stands at 173, including 11 rigs that are idle but recording revenue.  This is down significantly from the 27 idle rigs under contract at the beginning of the fourth quarter.  These remaining rig contracts are expected to expire at the rate of roughly one per month going forward.  Notably, the quarter's net increase occurred despite the expiration of a number of long-term contracts, virtually all of which were recontracted at rates that represent an increasingly smaller reduction in average margin.  Many of our PACE® rigs are now rolling over at higher rates.</p>
<p/>
<p>"Average daily rig margins for the quarter declined by only <span class="xn-money">$720</span> per rig day, significantly less than the <span class="xn-money">$1,200</span> we previously indicated.  This represents a sequential improvement in margins and reflects more than a <span class="xn-money">$300</span> per day improvement in pricing, when adjusted for the <span class="xn-money">$275</span> per day cost of first quarter federal unemployment taxes and the absence of a <span class="xn-money">$700</span> per day benefit to our fourth quarter margins that resulted from a reduction in worker's compensation reserves.  The worker's compensation benefit was a result of the excellent safety record this unit achieved last year.</p>
<p/>
<p>"Despite the anemic natural gas price environment, we believe this business will continue to post modest improvements in subsequent quarters, albeit at a slower pace than the last two quarters.  Although activity in the gas shales appears to be flattening, we continue to benefit from increasing activity in our oil and liquid-rich gas directed markets, which now employ nearly one-third of our operating rigs.</p>
<p/>
<p>"Internationally, we expect this quarter's results to represent the bottom, although the <span class="xn-money">$16 million</span> reduction in operating income relative to what consensus implies was much deeper than we previously expected.  This was due to lower activity, project deferrals and contract execution delays in numerous venues, the most significant being in <span class="xn-location">Mexico</span> and <span class="xn-location">Saudi Arabia</span>, followed by <span class="xn-location">Algeria</span>.  The reductions in these three areas, partially offset by improved results in other areas, yields a reduction in forecasted 2010 operating income of <span class="xn-money">$50-$60 million</span>.</p>
<p/>
<p>"In <span class="xn-location">Mexico</span>, PEMEX has encountered funding constraints which continue to defer the restart of many of our rigs that were unexpectedly idled.  In <span class="xn-location">Saudi Arabia</span>, our rig count has declined from 33 to 24 over the course of the last 18 months, while the total rig count in the Kingdom declined even more percentagewise.  The emphasis in this market has been shifting from oil to gas development which requires significant lead times to solicit bids and upgrade rigs, resulting in significant activity interruptions.  This ultimately benefits Nabors, as illustrated by our 37% share of the gas drilling market compared to our 25% overall market share in the Kingdom.  We are currently modifying six rigs for a recent gas drilling contract award, three of which are in-country upgrades, with the other three incremental to the market.  Additionally, management changes at Sonatrach, the Algerian national oil company, have delayed the commencement of a few rigs.</p>
<p/>
<p>"Rig activity in this unit improved slightly in the last quarter.  As the year progresses, we plan to restart many of our idle rigs which, when combined with recent contract awards for incremental rigs, yields higher visibility toward modestly improving results throughout the balance of this year and a much improved 2011 outlook..  We anticipate margins to be flat for the balance of this year, with some improvement next year.</p>
<p/>
<p>"Our U.S. Land Well Servicing operation posted slightly lower income of <span class="xn-money">$7.2 million</span> compared to <span class="xn-money">$8.8 million</span> in the sequential quarter, but this obscures the overall upward trend in this business.  The fourth quarter included a net contribution of <span class="xn-money">$7.5 million</span> from favorable adjustments to worker's compensation, insurance, depreciation and management bonuses, while the first quarter includes only <span class="xn-money">$1.4 million</span> in similar items.</p>
<p/>
<p>"Rig hours in this unit have steadily improved since the beginning of the fourth quarter, with March representing a 27% increase over October.   Visibility is improving as customer plans are finally responding to favorable oil prices.  Indications are that we can expect rig hours to continue to advance, which could benefit pricing in the second half of the year.  Otherwise our management reinforcement efforts are complete, and we are capitalizing on our sister company's dominant drilling position in the Bakken Shale to expand into that rapidly growing oil market.</p>
<p/>
<p>"Our US Offshore business posted <span class="xn-money">$7.4 million</span> in operating income, reflecting a slight increase over the previous quarter although significantly lower than we had anticipated.  While we averaged three additional lower-margin rigs working, we had a number of higher-margin rig startups that were deferred until the second quarter, primarily as a result of adverse weather.  When combined with the usual first quarter payroll tax impact, margins declined sequentially.  The fourth quarter also saw a benefit of <span class="xn-money">$2 million</span> from a favorable worker's compensation reserve adjustment.  We remain confident of a 30% increase in full-year operating income, as we previously indicated.</p>
<p/>
<p>"In Alaska, operating income of <span class="xn-money">$14 million</span> was generally in line with the fourth quarter, but significantly below the prior year due to three fewer rigs operating.  We expect lower results for the next two quarters with the end of seasonal winter exploration programs and the incurrence of summer maintenance expenses.  While we are pursuing several longer-term strategic projects, the intermediate term remains very challenging.  We are still achieving good returns on average capital employed and enjoy leading positions in coiled tubing drilling and AC rig technology.  Today's oil prices augur for an improved longer-term outlook although we still expect this year's results to approximate 60% of those achieved in 2009.</p>
<p/>
<p>"Our Other Operating Segments posted a sequential increase with seasonal high activity in both our Alaska joint ventures and our Canadian directional drilling operations.  These results were augmented by a sizeable increase in third-party sales by Canrig.  Canrig's third-party backlog is also expanding, which should offset weaker second-quarter results in our seasonal operations and provide growth in the second half.</p>
<p/>
<p>"Our Oil and Gas operations saw a significant sequential increase, although we still reported a modest loss as seasonal seismic expenses incurred by our wholly owned entities in <span class="xn-location">Colombia</span> and Alaska offset the quarter's income.  We continue to analyze the optimal means and timing of the monetization of these assets.</p>
<p/>
<p>"Meanwhile, our financial position remains strong with <span class="xn-money">$1.16 billion</span> in cash and investments at the end of the quarter, even after funding <span class="xn-money">$155 million</span> in capital expenditures and the aforementioned debt purchases.  We still expect significant free cash flow generation for the full year and for the first half of next year which, when coupled with good access to the capital markets, should provide adequate resources to fund the redemption of the remaining <span class="xn-money">$1.57 billion</span> in convertible notes due in May of next year.</p>
<p/>
<p>"In summary, we are cognizant of the challenging natural gas environment, but we do not believe the current price is sustainable over the longer term or even over the intermediate term.   To date, we have not seen this weakness manifested in our US Lower 48 Land Drilling operations other than a flattening in the growth of shale gas drilling, which continues to be overshadowed by significant activity increases in our oil and liquid-rich gas markets.  We are also confident this quarter will mark the bottom of our international business and the second half will show signs of resuming the robust growth trajectory that characterized this business prior to 2009.  Likewise, all of our other businesses have improving near-term outlooks with the only exceptions being <span class="xn-location">Canada</span> and Alaska, although the long- term outlook in these two markets is promising."</p>
<p/>
<p>The Nabors companies own and operate approximately 548 land drilling and approximately 729 land workover and well-servicing rigs in <span class="xn-location">North America</span>.  Nabors' actively marketed offshore fleet consists of; 40 platform rigs, 13 jackup units and 3 barge rigs in the <span class="xn-location">United States</span> 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 and gas markets in the world.</p>
<p/>
<p>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.</p>
<p/>
<p>For further information, please contact Dennis A. Smith, Director of Corporate Development for Nabors Corporate Services, Inc. at 281-775-8038. To request Investor Materials, contact our corporate headquarters in Hamilton, <span class="xn-location">Bermuda</span> at 441-292-1510 or via email at <a href="mailto:mark.andrews@nabors.com">mark.andrews@nabors.com</a>.</p>
<pre>
    



    
</pre>
<p> </p>
<p> </p>
<pre>
    
                       NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF INCOME (LOSS)
                                    (Unaudited)
    
</pre>
<p> </p>
<pre>
    
                                                  Three Months Ended
                                         ----------------------------------
                                              March 31,        December 31,
                                         --------------------- ------------
    (In thousands, except per
     share amounts)                        2010         2009       2009
                                           ----         ----       ----
    
</pre>
<p> </p>
<pre>
    
    Revenues and other income:
      Operating revenues                 $902,049    $1,198,045  $834,527
      Earnings (losses) from
       unconsolidated
       affiliates (1)                       3,661       (64,427) (155,584)
      Investment income (loss)             (2,360)        9,141       172
          Total revenues and other
           income                         903,350     1,142,759   679,115
                                          -------     ---------   -------
    
</pre>
<p> </p>
<pre>
    
    Costs and other deductions:
      Direct costs                        512,402       665,287   460,267
      General and
       administrative expenses             75,823       107,343    76,462
      Depreciation and
       amortization                       172,274       159,152   168,917
      Depletion                             6,755         2,753     2,440
      Interest expense                     66,745        67,078    65,172
      Losses (gains) on sales
       and retirements of
       long-lived assets and
       other expense (income), 
       net                                 20,309       (16,246)   12,196
      Impairments and other
       charges (2)                             -             -   112,046
          Total costs and other
           deductions                     854,308       985,367   897,500
                                          -------     ---------   -------
    
</pre>
<p> </p>
<pre>
    
    Income (loss) before
     income taxes                          49,042       157,392  (218,385)
                                          -------     ---------   -------
    
</pre>
<p> </p>
<pre>
    
    Income tax expense (benefit)            9,944        33,273  (171,159)
                                          -------     ---------   -------
    
</pre>
<p> </p>
<pre>
    
    Net income (loss)                      39,098       124,119   (47,226)
        Less: Net (income) loss
         attributable to
         noncontrolling interest            1,102         1,051       (34)
    Net income (loss)
     attributable to Nabors              $ 40,200    $  125,170  $(47,260)
                                          -------     ---------   -------
    
</pre>
<p> </p>
<pre>
    
    Earnings (losses) per
     Nabors share: (3)
      Basic                                  $.14          $.44     $(.17)
      Diluted                                $.14          $.44     $(.17)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Weighted-average number
     of common shares
     outstanding: (3)
      Basic                               284,672       283,098   283,854
                                          -------     ---------   -------
      Diluted                             290,736       283,119   283,854
                                          -------     ---------   -------
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Adjusted income (loss)
     derived from operating
     activities (1) (4)                  $138,456      $199,083  $(29,143)
                                         ========     =========  ========
    
</pre>
<p> </p>
<pre>
    
    (1)  Included our proportionate share of full-cost ceiling test
         writedowns recorded by our oil and gas joint ventures of $(75.0)
         million and $(162.1) million for the three months ended March 31,
         2009 and December 31, 2009, respectively.
    
</pre>
<p> </p>
<pre>
    
    (2)  Represents impairments and other charges recorded for the three
         months ended December 31, 2009.  See detail of Impairments and other
         charges at "Summary of Non-Cash Charges (Non-GAAP)" included
         herein as a separate schedule.
    
</pre>
<p> </p>
<pre>
    
    (3)  See "Computation of Earnings (Losses) Per Share" included herein
         as a separate schedule.
    
</pre>
<p> </p>
<pre>
    
    (4)  Adjusted income (loss) 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 (losses) 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 (loss) derived from operating activities, because it
         believes that these financial measures are an accurate reflection of
         the ongoing profitability of our Company.  A reconciliation of this
         non-GAAP measure to income (loss) before income taxes, which is a
         GAAP measure, is provided within the  table set forth immediately
         following the heading "Segment Reporting".



    
</pre>
<p> </p>
<p> </p>
<pre>
    
                        NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                         CONDENSED CONSOLIDATED BALANCE SHEETS
                                      (Unaudited)
    
</pre>
<p> </p>
<pre>
    
                                                     March 31,   December 31,
    (In thousands, except ratios)                      2010         2009
                                                   -----------  -------------
    
</pre>
<p> </p>
<pre>
    
    ASSETS
    Current assets:
    Cash and short-term investments                $ 1,061,014  $ 1,090,851
    Accounts receivable, net                           735,432      724,040
    Other current assets                               358,255      361,773
                                                       -------      -------
        Total current assets                         2,154,701    2,176,664
    Long-term investments and other receivables         99,195      100,882
    Property, plant and equipment, net               7,646,608    7,646,050
    Goodwill                                           164,756      164,265
    Investment in unconsolidated affiliates            307,044      306,608
    Other long-term assets                             252,421      250,221
        Total assets                               $10,624,725  $10,644,690
                                                   ===========  ===========
    
</pre>
<p> </p>
<pre>
    
    LIABILITIES AND EQUITY
    Current liabilities:
    Current portion of long-term debt                     $209         $163
    Other current liabilities                          579,075      608,459
                                                       -------      -------
        Total current liabilities                      579,284      608,622
    Long-term debt                                   3,855,897    3,940,605
    Other long-term liabilities                        930,861      913,484
                                                       -------      -------
        Total liabilities                            5,366,042    5,462,711
    Equity:
    Shareholders' equity                             5,245,031    5,167,656
    Noncontrolling interest                             13,652       14,323
                                                       -------      -------
        Total equity                                 5,258,683    5,181,979
        Total liabilities and equity               $10,624,725  $10,644,690
                                                   ===========  ===========
    
</pre>
<p> </p>
<p> </p>
<p> </p>
<p>Cash, short-term and long-term investments(1)  <span class="xn-money">$ 1,160,209</span>  <span class="xn-money">$ 1,191,733</span></p>
<p> </p>
<pre>
    
    Funded debt to capital ratio: (2)
        - Gross                                       0.40 : 1     0.41 : 1
        - Net of cash and investments                 0.32 : 1     0.33 : 1
    Interest coverage ratio: (3)                       5.5 : 1      6.2 : 1
    
</pre>
<p> </p>
<pre>
    
    (1) The March 31, 2010 and December 31, 2009 amounts included $91.4
        million and $92.5 million, respectively, in oil and gas financing
        receivables that were included in long-term investments and other
        receivables.
    
</pre>
<p> </p>
<pre>
    
    (2) The gross funded debt to capital ratio is calculated by dividing
        * funded debt by (y) funded debt plus deferred tax liabilities
        (net of deferred tax assets) plus capital. Funded debt is the sum of
        (1) short-term borrowings, (2) the current portion of long-term
        debt and (3) long-term debt.  Capital is shareholders' equity.  The
        net funded debt to capital ratio is calculated by dividing * net
        funded debt by (y) net funded debt plus deferred tax liabilities
        (net of deferred tax assets) plus capital.  Net funded debt is
        funded debt minus the sum of cash and cash equivalents and short-
        term and long-term investments and other receivables.  Both of
        these ratios are used to calculate a company's leverage in relation
        to its capital.  Neither ratio measures operating performance or
        liquidity as defined by GAAP and, therefore, may not be comparable
        to similarly titled measures presented by other companies.
    
</pre>
<p> </p>
<pre>
    
    (3) The interest coverage ratio is a trailing 12-month quotient of
        the sum of net income (loss) attributable to Nabors, interest
        expense, depreciation and amortization, depletion expense,
        impairments and other charges, income tax expense (benefit) and our
        proportionate share of writedowns from our unconsolidated oil and
        gas joint ventures less investment income (loss) divided by cash
        interest expense. This ratio is a method for calculating the amount
        of operating cash flows available to cover cash interest expense.
        The interest coverage ratio is not a measure of operating
        performance or liquidity defined by GAAP and may not be comparable
        to similarly titled measures presented by other companies.


    
</pre>
<p> </p>
<p> </p>
<pre>
    
                       NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                                   SEGMENT REPORTING
                                       (Unaudited)
    
</pre>
<p> </p>
<pre>
    
    The following tables set forth certain information with respect to our
    reportable segments and rig activity:
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                                                 Three Months Ended
                                         -----------------------------------
                                               March 31,        December 31,
                                         ---------------------  ------------
    (In thousands, except
     rig activity)                         2010         2009        2009
                                           ----         ----        ----
    Reportable segments:
    Operating revenues and
     Earnings (losses) from
      unconsolidated affiliates:
        Contract Drilling: (1)
          U.S. Lower 48 Land
           Drilling                      $271,497   $  389,879   $ 230,789
          U.S. Land Well-
           servicing                       97,991      134,362      88,342
          U.S. Offshore                    38,198       60,392      29,258
          Alaska                           49,794       62,782      43,208
          Canada                          115,560      113,594      81,189
          International                   245,344      342,656     287,230
            Subtotal Contract
             Drilling (2)                 818,384    1,103,665     760,016
    
</pre>
<p> </p>
<pre>
    
        Oil and Gas (3) (4)                17,324      (60,044)   (153,137)
        Other Operating Segments(5)(6)     95,509      155,468      96,109
        Other reconciling items(7)        (25,507)     (65,471)    (24,045)
          Total                          $905,710   $1,133,618   $ 678,943
                                         ========   ==========    ========
    
</pre>
<p> </p>
<pre>
    
    Adjusted income (loss)
     derived from
     operating activities:
        Contract Drilling: (1)
          U.S. Lower 48 Land
           Drilling                      $ 60,286   $  129,242   $  48,980
          U.S. Land Well-
           servicing                        7,185       13,658       8,758
          U.S. Offshore                     7,373       16,830       7,117
          Alaska                           13,957       20,825      14,398
          Canada                           14,565       13,335         632
          International                    53,579      102,975      74,423
                                           ------      -------      ------
            Subtotal Contract
             Drilling (2)                 156,945      296,865     154,308
    
</pre>
<p> </p>
<pre>
    
        Oil and Gas (3) (4)                  (727)     (71,334)   (169,883)
        Other Operating Segments(5)(6)      7,201       18,954       5,867
        Other reconciling items(8)        (24,963)     (45,402)    (19,435)
                                          -------      -------     -------
          Total                           138,456      199,083     (29,143)
    Interest expense                      (66,745)     (67,078)    (65,172)
    Investment income (loss)               (2,360)       9,141         172
    (Losses) gains on sales
     and retirements of
     long-lived assets and
     other (expense) income,
     net                                  (20,309)      16,246     (12,196)
    Impairments and other
     charges (9)                                -            -    (112,046)
    Income (loss) before
     income taxes                         $49,042   $  157,392   $(218,385)
                                          =======     ========   =========
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land
        Drilling                            158.6        192.8       139.1
       U.S. Offshore                         12.0         15.3         8.6
       Alaska                                 9.1         11.9         8.0
       Canada                                34.8         34.4        21.2
       International (11)                    88.3        114.0        85.9
          Total rig years                   302.8        368.4       262.8
                                            =====        =====       =====
    Rig hours: (12)
        U.S. Land Well-
         servicing                        148,347      179,567     133,474
        Canada Well-servicing              46,032       50,224      38,018
          Total rig hours                 194,379      229,791     171,492
                                          =======      =======     =======
    
</pre>
<p> </p>
<pre>
    
    (1) These segments include our drilling, workover and well-servicing
        operations, on land and offshore.
    
</pre>
<p> </p>
<pre>
    
    (2) Included earnings (losses), net from unconsolidated affiliates,
        accounted for using the equity method, of $.1 million, $1.3 million,
        and $3.0 million for the three months ended March 31, 2010 and 2009
        and December 31, 2009, respectively.
    
</pre>
<p> </p>
<pre>
    
    (3) Represents our oil and gas exploration, development and
        production operations.  Includes our proportionate share of full-
        cost ceiling test writedowns recorded by our oil and gas joint
        ventures of $(75.0) million and $(162.1) million for the three
        months ended March 31, 2009 and December 31, 2009, respectively.
    
</pre>
<p> </p>
<pre>
    
    (4) Included earnings (losses), net from unconsolidated affiliates,
        accounted for using the equity method, of $.6 million, $(72.2)
        million and $(162.7) million for the three months ended March 31,
        2010 and 2009 and December 31, 2009, respectively.
    
</pre>
<p> </p>
<pre>
    
    (5) Includes our drilling technology and top drive manufacturing,
        directional drilling, rig instrumentation and software, and
        construction and logistics operations.
    
</pre>
<p> </p>
<pre>
    
    (6) Included earnings (losses), net from unconsolidated affiliates,
        accounted for using the equity method, of $3.0 million, $6.5 million
        and $4.1 million, for the three months ended March 31, 2010 and 2009
        and December 31, 2009, respectively.
    
</pre>
<p> </p>
<p>(7) Represents the elimination of inter-segment transactions.</p>
<p> </p>
<pre>
    
    (8) Represents the elimination of inter-segment transactions and
        unallocated corporate expenses.
    
</pre>
<p> </p>
<pre>
    
    (9) Represents impairments and other charges recorded for the three
        months ended December 31, 2009.  See detail of Impairments and other
        charges at "Summary of Non-Cash Charges (Non-GAAP)" included
        herein as a separate schedule.
    
</pre>
<p> </p>
<pre>
    
    (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.
    
</pre>
<p> </p>
<pre>
    
    (11) International rig years included our equivalent percentage
         ownership of rigs owned by unconsolidated affiliates which totaled
         2.5 years, 2.8 years and 2.5 years during the three months ended
         March 31, 2010 and 2009 and December 31, 2009, respectively.
    
</pre>
<p> </p>
<pre>
    
    (12) Rig hours represents the number of hours that our well-
         servicing rig fleet operated during the period.
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                       NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                      COMPUTATION OF EARNINGS (LOSSES) PER SHARE
                                     (Unaudited)
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    A reconciliation of the numerators and denominators of the basic and
    diluted earnings (losses) per share computations is as follows:
    
</pre>
<p> </p>
<pre>
    
                                                Three Months Ended
                                          -------------------------------
                                              March 31,      December 31,
                                          ----------------   ------------
    (In thousands, except per
     share amounts)                         2010      2009       2009
                                            ----      ----       ----
    Net income (loss)
     attributable to Nabors
     (numerator):
    Net income (loss)
     attributable to Nabors               $40,200  $125,170   $(47,260)
      Add interest expense on
       assumed conversion of our
       0.94% senior exchangeable notes
       due 2011, net of tax (1)                 -         -          -
                                          -------  --------   --------
    
</pre>
<p> </p>
<pre>
    
    Adjusted net income (loss)
     attributable to Nabors -
     diluted                              $40,200  $125,170   $(47,260)
                                          -------  --------   --------
    
</pre>
<p> </p>
<pre>
    
      Earnings (losses) per
       Nabors share:
        Basic                                $.14      $.44      $(.17)
                                          -------  --------   --------
        Diluted                              $.14      $.44      $(.17)
                                          -------  --------   --------
    
</pre>
<p> </p>
<pre>
    
    Shares (denominator):
      Weighted-average number of
       shares outstanding-basic(2)        284,672   283,098    283,854
      Net effect of dilutive
       stock options, warrants
       and restricted
       stock awards based on the
       if-converted method                  6,064        21          -
      Assumed conversion of our
       0.94% senior exchangeable
       notes due 2011 (1)                       -         -          -
                                          -------  --------   --------
      Weighted-average number of
       shares outstanding -
       diluted                            290,736   283,119    283,854
                                          -------  --------   --------
    
</pre>
<p> </p>
<p> </p>
<pre>
    
    (1) Diluted earnings (losses) per share for the three months ended
        March 31, 2010 and 2009 and December 31, 2009 excluded any
        incremental shares issuable upon exchange of the 0.94% senior
        exchangeable notes due 2011.  Since 2008 and through March 31, 2010,
        we purchased $1.2 billion par value of these notes in the open
        market, leaving approximately $1.6 billion par value outstanding.
        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 issue an incremental number of shares only upon exchange of
        these notes.  Such shares are included in the calculation of the
        weighted-average number of shares outstanding in our diluted
        earnings per share calculation only 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 any period for the three
        months ended March 31, 2010 and 2009 and December 31, 2009.
    
</pre>
<p> </p>
<pre>
    
    (2) On July 31, 2009, the exchangeable shares of Nabors (Canada)
        Exchangeco Inc. ("Nabors Exchangeco") were exchanged for Nabors
        common shares on a one-for-one basis.  Basic shares outstanding
        included the following weighted-average number of common shares and
        restricted stock of Nabors and weighted-average number of
        exchangeable shares of Nabors Exchangeco, respectively: 284.7
        million shares cumulatively for the three months ended March 31,
        2010; 283.0 million and .1 million shares for the three months ended
        March 31, 2009; and 283.9 million shares cumulatively for the three
        months ended December 31, 2009.
    
</pre>
<p> </p>
<pre>
    
    For all periods presented, the computation of diluted earnings
    (losses) per Nabors share excluded outstanding stock options and
    warrants with exercise prices greater than the average market price
    of Nabors' common shares, because their inclusion would have been
    anti-dilutive and because they were not considered participating
    securities. The average number of options and warrants that were
    excluded from diluted earnings (losses) per share that would have
    potentially diluted earnings (losses) per share in the future were
    10,055,869 and 31,023,161 shares during the three months ended March
    31, 2010 and 2009, respectively; and 34,197,583 shares during the
    three months ended December 31, 2009.  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 are included in our diluted earnings (losses)
    per share computation using the if-converted method of accounting.
    Restricted stock is included in our basic and diluted earnings
    (losses) per share computation using the two-class method of
    accounting in all periods because it is considered a participating
    security.

    
</pre>
<p> </p>
<p> </p>
<pre>
    
                       NABORS INDUSTRIES LTD. AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF INCOME (LOSS) ITEMS EXCLUDING 
                        CERTAIN NON-CASH CHARGES (NON-GAAP)
                                     (Unaudited)
    
</pre>
<p> </p>
<pre>
    
                                                                   As adjusted
                                                                    to Exclude
    (In thousands, except per               Actuals                  Charges
     share amounts)                         (GAAP)       Charges    (Non-GAAP)
                                           ----------    -------    ----------
                                           Three Months Ended March 31, 2009
                                           ----------------------------------
    Operating revenues and
     Earnings (losses) from
     unconsolidated affiliates            $1,133,618   $(75,000)  $1,208,618
    Adjusted income (loss) 
     derived from operating
     activities                              199,083    (75,000)     274,083
    Income (loss) before
     income taxes                            157,392    (75,000)     232,392
    Net income (loss) attributable
     to Nabors                               125,170    (59,250)     184,420
    Diluted earnings (losses) per
     Nabors share                              $0.44     $(0.21)       $0.65
    
</pre>
<p> </p>
<pre>
    
                                                     
                                          Three Months Ended December 31, 2009
                                          ------------------------------------
    Operating revenues and
     Earnings (losses) from
     unconsolidated affiliates              $678,943  $(162,121)    $841,064
    Adjusted income (loss) derived
     from operating activities               (29,143)  (162,121)     132,978
    Income (loss) before income taxes       (218,385)  (274,167)      55,782
    Net income (loss) attributable
     to Nabors                               (47,260)   (98,784)      51,524
    Diluted earnings (losses) per
     Nabors share                             $(0.17)    $(0.35)       $0.18
    
</pre>
<p> </p>
<p> </p>
<pre>
    
                        NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                         SUMMARY OF NON-CASH CHARGES (NON-GAAP)
                                      (Unaudited)
    
</pre>
<p> </p>
<pre>
    
                                                 Three Months Ended
                                         ---------------------------------
                                              March 31,       December 31,
                                         -----------------    ------------
    (In thousands)                       2010         2009         2009
                                         ----         ----         ----
    Equity method oil and gas
     joint venture impairments             $-     $(75,000)   $(162,121)
    Impairments of oil and gas-
     related assets                         -            -      (93,381)
    Other-than-temporary
     impairments on securities              -            -      (18,665)
                                          ---     --------      -------
    
</pre>
<p> </p>
<pre>
    
    Total charges before income
     taxes                                  -      (75,000)    (274,167)
    
</pre>
<p> </p>
<pre>
    
    Tax benefit (expense)                   -       15,750      175,383
                                          ---     --------      -------
    
</pre>
<p> </p>
<pre>
    
    Total charges after income
     taxes                                 $-     $(59,250)    $(98,784)
                                          ===     ========     ========





    

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

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Nabors Industries Ltd.

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