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2017-08-03 09:21:00

NABORS NET LOSS $282 MLN

NABORS NET LOSS $282 MLN

NABORS - Nabors Industries Ltd. ("Nabors" or the "Company") (NYSE: NBR) reported second quarter 2017 operating revenues of $631 million, compared to operating revenues of $563 million in the prior quarter. Net income from continuing operations attributable to Nabors for the quarter was a loss of $117 million, or $0.41 per diluted share, compared to a loss of $149 million, or $0.52 per diluted share, in the first quarter of 2017. The second quarter results include $7.3 million in net after-tax charges, or $0.03 per diluted share, primarily due to premiums paid on a debt redemption. 

 

NABORS INDUSTRIES LTD. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(Unaudited)

 
 

Three Months Ended

 

Six Months Ended

 

June 30,

 

March 31,

 

June 30,

                   

(In thousands, except per share amounts)

2017

 

2016

 

2017

 

2017

 

2016

                   

Revenues and other income:

                 

Operating revenues 

$  631,355

 

$  571,591

 

$  562,550

 

$  1,193,905

 

$  1,169,162

Earnings (losses) from unconsolidated affiliates

-

 

(54,769)

 

2

 

2

 

(221,920)

Investment income (loss)

(886)

 

270

 

721

 

(165)

 

613

   Total revenues and other income

630,469

 

517,092

 

563,273

 

1,193,742

 

947,855

                   

Costs and other deductions:

                 

Direct costs

417,521

 

341,279

 

387,644

 

805,165

 

706,302

General and administrative expenses

63,695

 

56,624

 

63,409

 

127,104

 

118,958

Research and engineering

11,343

 

8,180

 

11,757

 

23,100

 

16,342

Depreciation and amortization

208,090

 

218,913

 

203,672

 

411,762

 

434,731

Interest expense

54,688

 

45,237

 

56,518

 

111,206

 

90,967

Other, net

10,104

 

74,607

 

13,510

 

23,614

 

257,011

      Total costs and other deductions

765,441

 

744,840

 

736,510

 

1,501,951

 

1,624,311

                   

Income (loss) from continuing operations before income taxes

(134,972)

 

(227,748)

 

(173,237)

 

(308,209)

 

(676,456)

                   

Income tax expense (benefit)

(19,496)

 

(41,183)

 

(25,609)

 

(45,105)

 

(93,247)

                   

Income (loss) from continuing operations, net of tax

(115,476)

 

(186,565)

 

(147,628)

 

(263,104)

 

(583,209)

Income (loss) from discontinued operations, net of tax

(15,504)

 

(984)

 

(439)

 

(15,943)

 

(1,910)

                   

Net income (loss)

(130,980)

 

(187,549)

 

(148,067)

 

(279,047)

 

(585,119)

     Less: Net (income) loss attributable to noncontrolling interest

(1,971)

 

2,899

 

(917)

 

(2,888)

 

2,175

Net income (loss) attributable to Nabors

$ (132,951)

 

$ (184,650)

 

$ (148,984)

 

$   (281,935)

 

$   (582,944)

                   

Amounts attributable to Nabors:

                 

Net income (loss) from continuing operations

$ (117,447)

 

$ (183,666)

 

$ (148,545)

 

$   (265,992)

 

$   (581,034)

Net income (loss) from discontinued operations

(15,504)

 

(984)

 

(439)

 

(15,943)

 

(1,910)

Net income (loss) attributable to Nabors

$ (132,951)

 

$ (184,650)

 

$ (148,984)

 

$   (281,935)

 

$   (582,944)

                   

Earnings (losses) per share:

                 

   Basic from continuing operations

$         (.41)

 

$         (.65)

 

$         (.52)

 

$           (.93)

 

$         (2.06)

   Basic from discontinued operations

(.05)

 

-

 

-

 

(.06)

 

(.01)

    Basic

$         (.46)

 

$         (.65)

 

$         (.52)

 

$           (.99)

 

$         (2.07)

                   

   Diluted from continuing operations

$         (.41)

 

$         (.65)

 

$         (.52)

 

$           (.93)

 

$         (2.06)

   Diluted from discontinued operations

(.05)

 

-

 

-

 

(.06)

 

(.01)

    Diluted

$         (.46)

 

$         (.65)

 

$         (.52)

 

$           (.99)

 

$         (2.07)

                   
                   

Weighted-average number of common shares outstanding:

                 

   Basic 

278,916

 

276,550

 

277,781

 

278,348

 

276,201

   Diluted 

278,916

 

276,550

 

277,781

 

278,348

 

276,201

                   
                   

Adjusted EBITDA

$   138,796

 

$  165,508

 

$    99,740

 

$    238,536

 

$    327,560

                   

Adjusted operating income (loss)

$   (69,294)

 

$  (53,405)

 

$(103,932)

 

$  (173,226)

 

$  (107,171)

                   

 

 

Anthony Petrello, Nabors Chairman and CEO, commented, "I am pleased with the sequential improvement in our second quarter results. This reflected meaningful increases across all of our operations except Canada, which performed better than expected during the seasonally low quarter. The results also reflected normalized operations in our largest international market and higher pricing as well as lower reactivation costs for our Lower 48 fleet. The results were aligned with our expectations and reflect positively on the steps we have taken through the downturn to control costs and enhance capabilities.

"Sequentially, we saw our Lower 48 daily average rig margins increase by 19% while our average rigs working increased by 15% to 95 rigs during the quarter. Today the 102 rigs we have working represent nearly a threefold increase compared to the low point of 35 rigs in May of 2016. We continue to realize full utilization on our highest capability rigs illustrating our customers' preference for these rigs and their features.

"Internationally our average rigs working increased sequentially for the first time in two years to 93 during the quarter compared with 90 during the first quarter of 2017. The recent oil price volatility has reduced contracting urgency for some customers. Nonetheless we see additional activity improvements in both North America and certain international markets.

"Another positive note in this quarter is the substantial improvement in results for our Nabors Drilling Solutions ("NDS") division as more customers adopt our technologies and service offering. We achieved several important milestones this quarter, and we believe that NDS results will continue to increase in coming quarters as our market penetration and margins improve."

Consolidated and Segment Results

Adjusted operating income for the Company was a loss of $69 million for the quarter, as compared to a loss of $104 million in the prior quarter. Adjusted EBITDA for the quarter increased substantially to $139 million, compared to $100 million in the first quarter. During the second quarter, the Company averaged 206 rigs working at an average gross margin of $10,809 per rig day, compared to 201 average rigs working at $9,333 per rig day during the first quarter.

The U.S. Drilling segment posted adjusted EBITDA of $38 million for the quarter with an average of 101 rigs working compared to 89 rigs during the first quarter. The Lower 48 operation increased by 12 average rigs working during the second quarter, including the deployment of two new build SmartRig™ units. As expected, rig reactivations resulted in additional costs during the second quarter. With fewer rigs reactivated however, the impact was lower than the prior quarter. The Company expects these costs to abate throughout the balance of the year, resulting in margin improvement.

Increased margins are also expected as around 80% of the Lower 48 rig contracts are expiring during the remainder of this year. Many of these rigs are expected to renew at higher day rates. Results should also benefit from the expected deployment, before year end, of five new build SmartRig™ units that are currently under construction. Additionally, there are still existing rigs being converted to SmartRig™ units before year end, all of which should command higher rates. Although the Company plans to continue the upgrade program over the following quarters, a handful of upgradable rigs in the northern regions are not committed at this point. Depending on customer demand, the $4 million per rig capital expenditures for some of these rigs could be deferred into 2018.

International adjusted EBITDA increased by $26 million to $135 million, compared to $109 million in the prior quarter. The improvement was driven by increases in rig activity and margins. A significant portion of this improvement was due to the absence of higher-than-usual costs and lost revenue in our largest market that impacted first quarter results. The Company expects the rig count to continue to increase in the fourth quarter.

Canada results were higher than normal for the seasonally low second quarter. The average rigs working during the second quarter were 12 as compared to 4 rigs during the second quarter of 2016. Additionally, average margins increased substantially by $1,151 per rig day, equating to $5,136 compared to $3,985 in the first quarter of 2017. The Company expects meaningful improvement relative to 2016.

Adjusted EBITDA for Rig Services, which consists of the Company's manufacturing, drilling technology, and other related services, increased substantially to $5.5 million compared with a loss of $2.1 million in the first quarter of 2017. This increase was driven by a large improvement in NDS operating margins, which delivered $7.6 million in adjusted EBITDA for the quarter, and a smaller but still large improvement in Canrig, the Company's manufacturing unit. The increasing penetration of NDS services at higher margins than in previous quarters is expected to continue improving quarterly results. Canrig is anticipated to be adjusted EBITDA positive during the second half of the year.

William Restrepo, Nabors Chief Financial Officer, stated, "Our results during the second quarter returned to more normal levels, while also benefiting from strong operational performance across our international markets, pricing improvements in the U.S. for all product lines, as well as continued volume improvements in Canrig and NDS. As anticipated, Lower 48 dayrates and margins inflected, while active international drilling rigs continued to increase from their low point at the end of last year. In a strong growth environment we managed to keep our net debt in check and are targeting to maintain the current levels for the end of the year. We expect capital expenditures to finish 2017 within our previously communicated $550 million to $600 million range. Finally, we continue to work towards our long-term target of $2.25 billion in net debt by 2020."

Mr. Petrello concluded, "I am pleased that our results came in ahead of our expectations. This quarter gave us a solid indication that we are on the right path towards our ultimate goal to be the performance driller of choice. We are building the most capable fit-for-purpose rig fleet in the industry, while integrating these rigs with the latest automated drilling technologies in our NDS portfolio. Additionally, we are in the process of deploying our revolutionary first quad drilling design rigs in the U.S. and we expect the iRackerTM automated tubular handling system to be deployed on multiple field trials during the second half of 2017.

"The positive momentum in the U.S. combined with our strong performance allowed us to deploy several rigs during the quarter. In the U.S. Drilling segment we reversed the negative trend in margins. Additionally we expect sequential margin increases going forward as a result of improved pricing and cost reductions, coupled with the deployment of incremental new builds and SmartRig™ upgrades. Internationally, our margins recovered from the material cost and lost revenue impact during the first quarter in one of our major markets. Finally I am excited with the opportunities presented by our joint venture with Saudi Aramco, officially named Sanad. We expect to commence operations within the next few months."

-----

Earlier:

NABORS NET LOSS $149 MLN
2017, May, 2, 16:00:00

NABORS NET LOSS $149 MLN

Nabors Industries Ltd. reported first quarter 2017 operating revenue of $563 million, compared to operating revenue of $539 million in the prior quarter. Net income from continuing operations attributable to Nabors for the quarter was a loss of $149 million, or $0.52 per share, compared to a loss of $331 million, or $1.17 per share, in the fourth quarter of 2016. The first quarter results include $7.8 million in net after-tax charges, or $0.03 per share, representing premiums incurred in open market purchases of near-term debt.

 
 NABORS NET LOSS $1 BLN
2017, March, 21, 18:35:00

NABORS NET LOSS $1 BLN

Nabors Industries Ltd. ("Nabors") (NYSE: NBR) reported full-year 2016 operating revenue of $2.2 billion, compared to operating revenue of $3.9 billion in the prior year, which included $366 million in revenue from the Completion and Production Services segment (NCPS), a business line that merged with C&J Energy Services, Inc. (CJES) on March 24, 2015 and ceased to be consolidated with Nabors on that date. Net income from continuing operations for the year was a loss of $1.0 billion, or $3.58 per share, compared to a loss of $330 million, or $1.14 per share, in FY 2015. Included in the net loss from continuing operations for full year 2016 were total after-tax impairments and other charges of $487 million, or $1.71 per share, as well as $0.80 per share in Nabors' proportional share of CJES' net loss for the period. This compares to prior year impairments and other charges of $380 million, or $1.31 per share, and $0.29 per diluted share for the company's proportional share of CJES' net loss.

 

 WEATHERFORD & NABORS ALLIANCE
2017, February, 3, 18:40:00

WEATHERFORD & NABORS ALLIANCE

Weatherford International plc (NYSE: WFT) and Nabors Industries Ltd. (NYSE: NBR) announced today they have signed a non-binding Memorandum of Understanding (MOU) to form an alliance focused on delivering enhanced drilling solutions to the oil and gas land market in the lower 48 states of the United States.

 

 SAUDI & NABORS AGREEMENT
2016, November, 1, 18:55:00

SAUDI & NABORS AGREEMENT

Nabors Industries Ltd. reported the signing of an agreement to form a joint venture in Saudi Arabia to own, manage, and operate onshore drilling rigs. The JV, which will be equally owned by Saudi Aramco and Nabors, is expected to be formed and commence operations in second-quarter 2017.

 

 NABORS NET LOSS $694 MLN
2016, October, 26, 21:00:00

NABORS NET LOSS $694 MLN

Nabors Industries Ltd. ("Nabors") (NYSE: NBR) today reported third-quarter 2016 operating revenues of $519.7 million, compared to operating revenues of $571.6 million in the second quarter of 2016. Net income from continuing operations, attributable to Nabors, for the current quarter was a loss of $99.0 million, or $0.35 per diluted share, compared to a loss of $183.7 million, or $0.65 per diluted share, last quarter.

 

 NABORS NET LOSS $583 MLN
2016, August, 3, 18:30:00

NABORS NET LOSS $583 MLN

Nabors Industries Ltd. ("Nabors") (NYSE: NBR) today reported second quarter 2016 operating revenues of $571.6 million, compared to operating revenues of $597.6 million in the first quarter. Net income from continuing operations for the quarter was a loss of $186.6 million, or ($0.65) per diluted share, compared to a loss of $396.6 million, or ($1.41) per diluted share, last quarter. Net income from continuing operations for the second quarter includes a loss of $0.39 per share due to impairments and losses related to disposed businesses and assets. The largest component, totaling $0.34 per share, is comprised of an impairment to the carrying value of the Company's investment in C&J Energy Services Ltd. ("C&J") and its proportionate share of C&J losses from the prior quarter. In addition, the second quarter benefitted from the renegotiation of two contracts, as well as early termination revenue that improved reported net income by $24.1 million or $0.09 per share.

 

 NABORS NET LOSS $398.3 MLN
2016, April, 26, 19:45:00

NABORS NET LOSS $398.3 MLN

Net income (loss) from continuing operations for the quarter was a loss of $396.6 million, or ($1.41) per diluted share, compared to a loss of $161.1 million, or ($0.57) per diluted share, last quarter.

 

 

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