Nabors Posts Third Quarter Earnings Per Diluted Share Of $0.76



    
    Financial Tables Included
    

    HAMILTON, Bermuda, Oct. 23 /CNW/ -- Nabors Industries Ltd. (NYSE:   NBR)
today announced its results for the third quarter and nine months ended
September 30, 2007.  Adjusted income derived from operating activities was
$287.3 million for the third quarter compared to $368.2 million in the third
quarter of 2006 and $280.5 million in the second quarter of this year.  Net
income was $218.0 million ($0.76 per diluted share) for the third quarter
compared to $292.8 million ($1.02 per diluted share) in the third quarter of
2006 and $228.3 million ($0.79 per diluted share) in the second quarter of
this year.  The quarter's results include $22.3 million ($0.08 per diluted
share) in income from discontinued operations derived from the sale of our Sea
Mar unit, which was completed in early August.  Previous periods have been
adjusted to reflect Sea Mar as a discontinued operation.
    For the nine months ended September 30, 2007, adjusted income derived
from operating activities was $907.9 million compared to $1.07 billion in
2006. Net income for the first nine months of 2007 was $708.5 million ($2.47
per diluted share) compared to $782.9 million ($2.57 per diluted share) in the
first nine months of 2006.
    Gene Isenberg, Nabors' Chairman and CEO, commented, "Our third quarter
results reflect the persistent challenges in our North American gas centric
and U.S. Offshore operations, as well as our land well-servicing markets.  Our
International business again was impacted by timing and unusual cost issues
which masked the early stages of the powerful upside that is emerging. Various
other below the line income elements, including the gain on the sale of our
Sea Mar entity and a reduction in tax reserves, more than offset the after tax
impact of another net loss in investment income and a non-cash asset
impairment charge.
    Year-over-year quarterly results significantly improved in our
International, Oil and Gas, Alaskan and Other Operating Segments.  Other than
Alaska these units posted sequential improvements over those of the second
quarter, albeit most were below our previous expectations.  Canada also
improved over the seasonally low second quarter.  The largest sequential
decline came from our U.S. Lower 48 Land drilling operations, followed by our
U.S. Offshore and Alaskan units.
    The sequential improvement of our International operations does not yet
reflect the strong potential that we expect to realize over the next two
years.  Although it is the nature of this business to experience delays in the
short-term, we still expect an improvement of over 50% for the full year 2007
and again next year.  The high degree of visibility of this unit's long-term
potential emanates from the fact that nearly all of the 2008 increase is
expected to be derived from a combination of the renewal of a large number of
contracts at current market prices, and the realization of a full year's
contribution from the 26 incremental rigs commencing operations throughout
2007.  It should also be noted that while our growth expectations do not
reflect it, there is great potential for incremental rigs.
    Alaska also enjoys a strong but smaller oil driven outlook and is
characterized by occasional delays and interruptions, as evidenced by the
sequential decline in the quarter's results due to higher than usual summer
maintenance work and the seasonal stacking of one rig.   The results for the
quarter and the full year remain on track to increase substantially compared
to the prior year, with higher average rates and incremental rig activity late
in the year.  Additional upside exists over the longer term as more of our
fleet renews at market rates early in 2008 and we realize a full year's
contribution from two new built heli-portable rigs which are deploying late
this year.  Longer term results will benefit from the recent award of a
contract for a 15,000 ft. capacity coiled tubing drilling rig and will be
further improved if we are successful on recent bids for additional new
drilling rigs in this market.
    Our Other Operating Segments improved slightly despite the loss of
contribution following the sale of our marine transportation business early in
the quarter.  The improvement in this business resulted primarily from higher
third party sales in Canrig and solid performance by Ryan Energy Technologies,
our directional drilling operation.  Income from this segment should continue
to be upwardly biased but subject to seasonal fluctuations with improving
prospects in our Alaskan logistics and construction joint ventures and the
timing of top drive shipments.
    Our Oil and Gas operations posted improved results with the early quarter
sale of properties in the Fayetteville Shale, which resulted in a pre-tax gain
of approximately $15 million.  We also completed a larger sale of properties
in the Barnett Shale in early October, which will result in a pre-tax gain of
approximately $70 million which will be reflected in our fourth quarter
results.
    The significantly reduced results in our US Lower 48 Land drilling
business stems from the sequential decline in average rig margins of $767 per
rig day and a decline of seven rigs to an average of 222 rigs operating.  We
deployed 16 new rigs in the third quarter but saw another 16 existing rigs
idled, bringing to 84 the total number of idle rigs at the end of the quarter.
We expect the next several quarters to show much more modest declines in
income despite the likelihood of an even more difficult industry environment
well into 2008.  This resiliency in our results is attributable to the
positive effects on our average margins and rig count exerted by the
deployment of 57 new rigs in 2007 and early 2008 at average margins that are
roughly 40% higher than this quarter's full fleet average margin.  These
effects coupled with diminishing costs limits further downside in this unit's
income, which is contrary to industry trends.
    Our Canadian operations rebounded sharply from the dismal second quarter
but remain at less than one-half of the level of income we achieved last year,
reflecting the ongoing weakness in this market.  We expect further improvement
in the fourth quarter with the onset of the winter activity ramp-up, leading
to a full year result that is also less than one-half the prior year.  The
outlook for 2008 is essentially the same with no visible reasons to expect a
recovery before the 2008-2009 winter drilling season.
    Our U.S. Well-servicing business experienced a 6% reduction in hours
worked compared to the second quarter, reflecting weaker market conditions
primarily in the lower price and more competitive markets such as West Texas.
Despite the lower hours, sequential income actually increased slightly but is
more than 20% below last year.  The increased income on reduced hours was due
to the number of our new 500 hp Millennium and 200 hp rigs deployed into
higher revenue markets and strong results in the trucking and fluid handling
portion of this business.
    We expect the fourth quarter to show a reduction in income as we enter
the seasonally slowest period of the year due to the holidays and short
daylight hours.  The possibility of further deterioration in this largely oil
driven business has been the most significant adverse surprise, leading us to
significantly reduce our 2008 expectations to essentially flat.
    Results in our U.S. Offshore operations were significantly below the
second quarter as softening gas prices and the threat of hurricanes led to
many project deferrals, especially for our jackup and barge rigs which
contribute meaningfully when working and incur significant costs when stacked
for short periods.  Income from our barge rigs was further dampened when we
experienced an engine room fire early in the quarter which will keep a rig out
of service until early next year.  We expect a much improved fourth quarter as
seven rigs have returned or will soon return to work.  Next year should
reflect a modest increase despite moderating jackup and barge rig pricing as
we achieve a full year's contribution from the two new barge rigs that
deployed in mid-year, one of which only worked two months as a result of the
aforementioned fire.
    In other income we experienced two losses and two gains, the net result
of which was a modest positive effect on net income.  We recorded a pre-tax
loss of $30.5 million primarily related to the non-cash reduction in the book
value of our non-marketed inventory of rigs and components across several
units.  We again incurred a net cash loss in our investment portfolio of
approximately $27.5 million, the majority of which occurred in August as the
debt markets experienced significant turmoil.  We have substantially reduced
the risk in this portion of our portfolio and continue to redeem fixed income
and high beta funds as fast as possible.
    Offsetting these losses were the gain on the sale of Sea Mar and a
reversal of certain tax reserves.  The Sea Mar sale closed in early August and
resulted in a pre-tax gain of $50 million.  This gain and the income from
operations during part of the quarter are included in the $0.08 in earnings
per share from discontinued operations.  Our historical results, including our
Other Operating Segments breakout, are restated to reflect the Sea Mar results
as discontinued operations.  The reduction in tax reserves amounted to $38
million and occurred as a result of certain issues which were resolved in our
favor.
    In summary, the quarter contained an inordinate number of moving parts,
with a series of short-term, negative developments obscuring the potential of
our businesses.  2007 earnings per share will likely be the second best in the
company's history, partly due to a lower effective tax rate and reduced share
count, and operating income should approximate last year's record level.  We
expect 2008 also to achieve near record results in spite of continuing and
significant weakness in our North American gas directed and US land well
servicing units.  These accomplishments are largely due to the strength of our
International operations and the limited downside in our U.S. Land Drilling
business.
    The longer term outlook for our international business is even stronger
and we expect it to be the primary driver of our future growth.  We expect
this growth to compound with the eventual self-correction in our North
American gas and U.S. Well servicing businesses.  Nabors is in an excellent
position to capitalize on strengthening markets because of the strategic
investments we have made in new rig capacity over the last three years, which
have been substantially underwritten by long-term contracts yielding good
returns.  By mid-2008 our expanded fleet will have over 140 new state-of-the-
art drilling rigs and 200 new generation workover/well-servicing rigs.  This
gives Nabors the largest fleet of enhanced capability rigs and positions us to
achieve much higher returns in the future."
    The Nabors companies own and operate approximately 670 land drilling and
approximately 825 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. In addition, Nabors manufactures top drives and drilling
instrumentation systems and provides comprehensive oilfield hauling,
engineering, civil construction, logistics and facilities maintenance, and
project management services. Nabors participates in most of the significant
oil, gas and geothermal markets in the world.
    The information above includes forward-looking statements within the
meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934.
Such forward-looking statements are subject to certain risks and
uncertainties, as disclosed by Nabors from time to time in its filings with
the Securities and Exchange Commission. As a result of these factors, Nabors'
actual results may differ materially from those indicated or implied by such
forward-looking statements.
    For further information, please contact Dennis A. Smith, Director of
Corporate Development of Nabors Corporate Services, Inc. at 281-775-8038. To
request Investor Materials, call our corporate headquarters in Hamilton,
Bermuda at 441-292-1510 or via email at mark.andrews@nabors.com.


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

    
                                                     Three Months Ended
                                           ----------------------------------
                                                 September 30,       June 30,
                                           ----------------------  ----------
    (In thousands, except per share
      amounts)                                 2007        2006        2007
                                            ----------  ----------  ----------
    Revenues and other income:
       Operating revenues                  $1,250,299  $1,213,252  $1,134,684
       Earnings from unconsolidated
        affiliates                              2,689       5,706       3,436
       Investment (loss) income               (27,466)     37,155      (9,272)
                                            ----------  ----------  ----------
          Total revenues and other income   1,225,522   1,256,113   1,128,848
                                            ----------  ----------  ----------
    

    
    Costs and other deductions:
       Direct costs                           722,058     654,265     637,104
       General and administrative expenses    105,975      92,783      99,952
       Depreciation and amortization          125,089      95,937     111,372
       Depletion                               12,533       7,731       9,160
       Interest expense                        13,450      13,744      13,733
       Losses (gains) on sales of long-
        lived assets, impairment charges
        and other expense (income), net        30,524       4,076     (39,634)
                                            ----------  ----------  ----------
          Total costs and other deductions  1,009,629     868,536     831,687
                                            ----------  ----------  ----------
    

    
    Income before income taxes from
      continuing operations                   215,893     387,577     297,161
                                            ----------  ----------  ----------
    

    
    Income tax (benefit) expense:
       Current                                  4,211      15,207      53,973
       Deferred                                15,919      87,587      22,326
                                            ----------  ----------  ----------
          Income tax expense                   20,130     102,794      76,299
                                            ----------  ----------  ----------
    

    
    Income from continuing operations, net
     of tax                                   195,763     284,783     220,862
                                            ----------  ----------  ----------
    

    
    Income from discontinued operations,
     net of tax                                22,265       7,968       7,487
    Net income                             $  218,028  $  292,751  $  228,349
                                            ----------  ----------  ----------
    

    
    Earnings per share (1):
       Basic from continuing operations    $      .70  $     1.02  $      .79
       Basic from discontinued operations  $      .08  $      .03  $      .03
                                            ----------  ----------  ----------
    Total Basic                            $      .78  $     1.05  $      .82
                                            ----------  ----------  ----------
    

    
       Diluted from continuing operations  $      .68  $      .99  $      .77
       Diluted from discontinued
        operations                         $      .08  $      .03  $      .02
                                            ----------  ----------  ----------
    Total Diluted                          $      .76  $     1.02  $      .79
                                            ----------  ----------  ----------
    

    
    Weighted-average number of
     common shares outstanding (1):
       Basic                                  280,152     277,553     279,253
                                            ----------  ----------  ----------
       Diluted                                287,969     286,544     287,898
                                            ----------  ----------  ----------
    

    
    Adjusted income derived from operating
     activities (2)                        $  287,333  $  368,242  $  280,532
                                            ==========  ==========  ==========
    



    
                                                    Nine Months Ended
                                           ----------------------------------
                                                      September 30,
                                           ----------------------------------
    (In thousands, except per share
     amounts)                                   2007                2006
                                             ----------          ----------
    Revenues and other income:
       Operating revenues                    $3,620,996          $3,439,989
       Earnings from unconsolidated
        affiliates                               18,566              19,475
       Investment (loss) income                  (8,029)             67,753
                                             ----------          ----------
          Total revenues and other income     3,631,533           3,527,217
                                             ----------          ----------
    Costs and other deductions:
       Direct costs                           2,043,459           1,835,523
       General and administrative expenses      319,824             267,709
       Depreciation and amortization            340,069             262,035
       Depletion                                 28,318              28,661
       Interest expense                          40,235              33,970
       Losses (gains) on sales of long-
        lived assets, impairment charges
        and other expense (income), net           4,775              11,925
                                             ----------          ----------
          Total costs and other deductions    2,776,680           2,439,823
                                             ----------          ----------
    Income before income taxes from
     continuing operations                      854,853           1,087,394
                                             ----------          ----------
    Income tax (benefit) expense:
       Current                                  164,038             125,865
       Deferred                                  17,300             200,907
                                             ----------          ----------
          Income tax expense                    181,338             326,772
                                             ----------          ----------
    

    
    Income from continuing operations, net
     of tax                                     673,515             760,622
                                             ----------          ----------
    Income from discontinued operations, net
     of tax                                      35,024              22,324
    Net income                               $  708,539          $  782,946
                                             ----------          ----------
    Earnings per share (1):
       Basic from continuing operations      $     2.42          $     2.58
       Basic from discontinued operations    $      .12          $      .07
                                             ----------          ----------
    Total Basic                              $     2.54          $     2.65
                                             ----------          ----------
    

    
       Diluted from continuing operations    $     2.35          $     2.50
       Diluted from discontinued operations  $      .12          $      .07
                                             ----------          ----------
    Total Diluted                            $     2.47          $     2.57
                                             ----------          ----------
    Weighted-average number
       of common shares outstanding (1):
       Basic                                    278,782             294,987
                                             ----------          ----------
       Diluted                                  286,894             305,066
                                             ----------          ----------
    Adjusted income derived from
     operating activities (2)                $  907,892          $1,065,536
                                             ==========          ==========
    

    
    (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 before income taxes,
        which is a GAAP measure, is provided within the table set forth
        immediately following the heading "Segment Reporting".
    



    
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (Unaudited)
    

    
                                          September 30, June 30,  December 31,
    (In thousands, except ratios)             2007        2007        2006
                                           ----------  ----------  ----------
    ASSETS
    Current assets:
    Cash and short-term investments       $   879,973 $   827,291 $ 1,140,016
    Accounts receivable, net                1,043,235   1,035,895   1,109,738
    Other current assets                      623,213     395,040     255,102
                                           ----------  ----------  ----------
         Total current assets               2,546,421   2,258,226   2,504,856
    Long-term investments                     383,288     480,341     513,269
    Property, plant and equipment, net      6,466,732   6,298,371   5,410,101
    Goodwill, net                             367,376     388,981     362,269
    Other long-term assets                    314,590     486,341     351,808
                                           ----------  ----------  ----------
         Total assets                     $10,078,407  $9,912,260 $ 9,142,303
                                           ==========  ==========  ==========
    

    
    LIABILITIES AND SHAREHOLDERS' EQUITY
    Current liabilities:
    Current portion of long-term debt     $   700,000 $   700,000 $        --
    Other current liabilities                 857,496     948,685     854,360
                                           ----------  ----------  ----------
         Total current liabilities          1,557,496   1,648,685     854,360
    Long-term debt                          3,305,840   3,305,249   4,004,074
    Other long-term liabilities               801,378     835,711     747,216
                                           ----------  ----------  ----------
         Total liabilities                  5,664,714   5,789,645   5,605,650
    Shareholders' equity                    4,413,693   4,122,615   3,536,653
                                           ----------  ----------  ----------
         Total liabilities and
          shareholders' equity            $10,078,407 $ 9,912,260 $ 9,142,303
                                           ==========  ==========  ==========
    


    
    Cash, short-term and long-term
     investments (1)                      $ 1,306,816 $ 1,360,545 $ 1,653,285
    

    
    Funded debt to capital ratio: (2)
        - Gross                              0.45 : 1    0.46 : 1      0.50:1
        - Net of cash and investments        0.35 : 1    0.36 : 1      0.37:1
    Interest coverage ratio: (3)               32.2:1      33.4:1      38.1:1
    

    
    (1) The September 30, 2007 amount includes $43.6 million in cash proceeds
        receivable from brokers from the sale of non-marketable securities
        that is included in the other current assets.  These proceeds were
        received during October.  The June 30, 2007 amount includes $52.9
        million in cash proceeds receivable from brokers from the sale of
        certain equity securities that is included in other current assets.
        These proceeds were received during the first week of July.
    

    
    (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
                                           ----------------------------------
                                               September 30,        June 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      $  416,525  $  498,173  $  426,787
          U.S. Land Well-servicing            180,370     188,650     182,410
          U.S. Offshore                        48,895      56,219      60,316
          Alaska                               30,854      24,098      36,777
          Canada                              132,434     167,705      75,088
          International                       296,219     195,445     261,262
                                           ----------  ----------  ----------
           Subtotal Contract Drilling (3)   1,105,297   1,130,290   1,042,640
    

    
        Oil and Gas (4) (5)                    35,770       9,268      18,110
        Other Operating Segments (6) (7)      163,397     120,539     140,024
        Other reconciling items (8)           (51,476)    (41,139)    (62,654)
                                           ----------  ----------  ----------
          Total                            $1,252,988  $1,218,958  $1,138,120
                                           ==========  ==========  ==========
    

    
    Adjusted income (loss) derived from
      continuing operating activities: (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling      $  130,761  $  219,485  $  154,667
          U.S. Land Well-servicing             42,291      54,495      40,105
          U.S. Offshore                         9,245      17,492      19,206
          Alaska                                4,214       2,123       8,225
          Canada                               16,920      42,549      (7,992)
          International                        88,574      58,145      85,409
                                           ----------  ----------  ----------
           Subtotal Contract Drilling         292,005     394,289     299,620
    

    
        Oil and Gas                            17,868      (5,101)      3,374
        Other Operating Segments               10,297       7,975       6,739
        Other reconciling items (9)           (32,837)    (28,921)    (29,201)
                                           ----------  ----------  ----------
          Total                               287,333     368,242     280,532
    Interest expense                          (13,450)    (13,744)    (13,733)
    Investment (loss) income                  (27,466)     37,155      (9,272)
    Losses (gains) on sales of long-lived
     assets, impairment charges and other
     expense (income), net                    (30,524)     (4,076)     39,634
                                           ----------  ----------  ----------
    Income before income taxes from
     continuing operations                 $  215,893  $  387,577  $  297,161
                                           ==========  ==========  ==========
    

    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land Drilling              221.6       257.3       228.5
       U.S. Offshore                             14.4        16.0        17.6
       Alaska                                     8.4         9.3         8.8
       Canada                                    37.0        52.9        18.5
       International (11)                       117.9       100.8       117.1
                                           ----------  ----------  ----------
          Total rig years                       399.3       436.3       390.5
                                           ==========  ==========  ==========
    Rig hours: (12)
       U.S. Land Well-servicing               274,084     322,445     291,430
       Canada Well-servicing                   72,593      91,047      41,613
                                           ----------  ----------  ----------
          Total rig hours                     346,677     413,492     333,043
                                           ==========  ==========  ==========
    



    
                                                      Nine Months Ended
                                            ----------------------------------
                                                        September 30,
                                            ----------------------------------
    (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          $ 1,295,908       $ 1,393,310
          U.S. Land Well-servicing                 544,998           518,224
          U.S. Offshore                            164,986           162,299
          Alaska                                   115,467            75,816
          Canada                                   400,802           514,849
          International                            781,963           511,487
                                                ----------        ----------
           Subtotal Contract Drilling (3)        3,304,124         3,175,985
    

    
        Oil and Gas (4) (5)                         67,009            48,808
        Other Operating Segments (6) (7)           433,771           366,416
        Other reconciling items (8)               (165,342)         (131,745)
                                                ----------        ----------
          Total                                $ 3,639,562       $ 3,459,464
                                                ==========        ==========
    

    
    Adjusted income (loss) derived from
      continuing operating activities:
       (1)
        Contract Drilling: (2)
          U.S. Lower 48 Land Drilling          $   458,354       $   611,912
          U.S. Land Well-servicing                 125,752           148,000
          U.S. Offshore                             43,500            51,613
          Alaska                                    29,006             9,749
          Canada                                    62,056           145,524
          International                            240,001           146,142
                                                ----------        ----------
           Subtotal Contract Drilling              958,669         1,112,940
    

    
        Oil and Gas                                 22,370             7,751
        Other Operating Segments                    28,630            24,345
        Other reconciling items (9)               (101,777)          (79,500)
                                                ----------        ----------
          Total                                    907,892         1,065,536
    Interest expense                               (40,235)          (33,970)
    Investment (loss) income                        (8,029)           67,753
    Losses (gains) on sales of long-lived
     assets, impairment charges and other
     expense (income), net                          (4,775)          (11,925)
    
    ----------        ----------    Income before income taxes
    
    from continuing operations                  $  854,853       $ 1,087,394
                                                ==========        ==========
    

    
    Rig activity:
    Rig years: (10)
       U.S. Lower 48 Land Drilling                   231.0             255.3
       U.S. Offshore                                  16.4              16.3
       Alaska                                          8.9               8.1
       Canada                                         37.8              54.6
       International (11)                            115.6              93.5
                                                ----------        ----------
          Total rig years                            409.7             427.8
                                                ==========        ==========
    Rig hours: (12)
       U.S. Land Well-servicing                    864,602           953,174
       Canada Well-servicing                       211,794           273,919
                                                ----------        ----------
          Total rig hours                        1,076,396         1,227,093
                                                ==========        ==========
    

    
    (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 $3.4 million, $1.1 million and
         $.7 million for the three months ended September 30, 2007 and 2006
         and June 30, 2007, respectively, and $5.9 million for each of the
         nine months ended September 30, 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 ($2.0) million, $0 and ($.8)
         million for the three months ended September 30, 2007 and 2006 and
         June 30, 2007, respectively, and ($2.8) million and $0 for the nine
         months ended September 30, 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 $1.3 million, $4.6 million and
         $3.5 million for the three months ended September 30, 2007 and 2006
         and June 30, 2007, respectively, and $15.5 million and $13.6 million
         for the nine months ended September 30, 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 September 30, 2007 and 2006
         and June 30, 2007 and the nine months ended September 30, 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
                                           ----------------------------------
                                                September 30,        June 30,
                                           ----------------------  ----------
    (In thousands, except per share
      amount)                                 2007        2006        2007
                                           ----------  ----------  ----------
    Net income (numerator):
      Income from continuing operations,
       net of tax - basic                 $  195,763   $  284,783  $  220,862
      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        195,736      284,783     220,862
    

    
    Income from discontinued operations,
     net of tax                               22,265        7,968       7,487
                                           ----------  ----------  ----------
    Total adjusted net income             $  218,028   $  292,751  $  228,349
                                           ----------  ----------  ----------
    
    Earnings per share:
    
     Basic from continuing operations     $      .70   $     1.02  $      .79
     Basic from discontinued operations   $      .08   $      .03  $      .03
    
    ----------  ----------  ----------    Total Basic                        
   $      .78   $     1.05  $      .82
    ----------  ----------  ----------

    
     Diluted from continuing operations   $      .68   $      .99  $      .77
     Diluted from discontinued operations $      .08   $      .03  $      .02
    
    ----------  ----------  ----------    Total Diluted                      
   $      .76   $     1.02  $      .79
    ----------  ----------  ----------

    
    Shares (denominator):
      Weighted-average number of shares
       outstanding - basic (4)               280,152      277,553     279,253
      Net effect of dilutive stock options,
       warrants and restricted stock awards
       based on the treasury stock method      7,817        8,991       8,645
      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                    287,969      286,544     287,898
                                           ----------  ----------  ----------
    



    
                                                      Nine Months Ended
                                            ----------------------------------
                                                        September 30,
                                            ----------------------------------
    (In thousands, except per share amounts)      2007              2006
                                               ----------        ----------
    Net income (numerator):
      Income from continuing operations,
       net of tax - basic                      $  673,515        $  760,622
      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 net income from continuing      ----------        ----------
       operations - diluted                       673,515           760,622
                                               ----------        ----------
      Income from discontinued operations,
       net of tax                                  35,024            22,324
                                               ----------        ----------
    Total adjusted net income                  $  708,539        $  782,946
                                               ----------        ----------
    

    
    Earnings per share:
      Basic from continuing operations         $     2.42        $     2.58
      Basic from discontinued operations       $      .12        $      .07
    
    ----------        ----------    Total Basic                              
  $     2.54        $     2.65
    
                                               ----------        ----------
      Diluted from continuing operations       $     2.35        $     2.50
      Diluted from discontinued operations     $      .12        $      .07
    
    ----------        ----------    Total Diluted                            
  $     2.47        $     2.57
    
                                               ----------        ----------
    Shares (denominator):
      Weighted-average number of shares
       outstanding - basic (4)                    278,782           294,987
      Net effect of dilutive stock options,
       warrants and restricted stock awards
       based on the treasury stock method           8,112             9,893
      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)                      --               186
                                               ----------        ----------
      Weighted-average number of shares
        outstanding - diluted                     286,894           305,066
                                               ----------        ----------
    



    
    (1) Diluted earnings per share for the three and nine months ended
        September 30, 2007 and 2006 and the three months ended June 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 September 30, 2007 and 2006 and June 30, 2007 and the
        nine months ended September 30, 2007 and 2006.
    

    
    (2) Diluted earnings per share for the three and nine months ended
        September 30, 2007 and 2006 and the three months ended June 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, and
        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 September 30,
        2007 and 2006 and June 30, 2007 and the nine months ended September
        30, 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 nine months ended September 30, 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: 280.1
        million and .1 million shares for the three months ended September 30,
        2007; 277.4 million and .2 million shares for the three months ended
        September 30, 2006; 279.2 million and .1 million for the three months
        ended June 30, 2007; 278.6 million and .2 million shares for the nine
        months ended September 30, 2007; and 294.8 million and .2 million
        shares for the nine months ended September 30, 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 4,601,925,
4,327,513 and 4,322,513 shares during the three months ended September 30,
2007 and 2006 and June 30, 2007, respectively, and 4,629,158 and 2,443,254
shares during the nine months ended September 30, 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 for
Investor  Materials, +1-441-292-1510, mark.andrews@nabors.com

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Nabors Industries Ltd.

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