Nabors Industries (NBR) 23 Oct 242024 Q3 Earnings call transcript

Good day, and welcome to the Third Quarter 2024 Nabors Industries Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to William Conroy, Vice President of Corporate Development and Investor Relations.

Good morning, everyone. Thank you for joining Nabors' Third Quarter 2024 Earnings Conference Call. Today, we will follow our customary format with Tony Petrello, our Chairman, President and Chief Executive Officer; and William Restrepo, our Chief Financial Officer, providing their perspectives on the quarter's results, along with insights into our markets and how we expect Nabors to perform in these markets. remarks, within deck the the section nabors.com. these as available, Investor of of download a webcast support a is slide both Relations In and in the of to addition William, management and members are Instructions team. today, other Tony, this are the the well. With us replay posted for on of website me, as in call senior of Securities the Since may constitute they Act our forward meaning the much of expectations, of the our commentary today XXXX Securities XXXX. of Act statements Exchange include within and will forward-looking forward-looking as statements with time in are and Such Commission. subject to filings disclosed to risks certain our the uncertainties Exchange from Securities and by Nabors time

whether during financial income, adjusted of word All made result in net materially indicated by a references operating adjusted the from measures, As our debt, William flow may References EBITDA that in non-GAAP adjusted those cash statements. Also, implied call, and during website either adjusted defined that otherwise, cash our is flow certain our discuss cash in such to factors, may we term measure our is free by as flow. as adjusted to as qualified non-GAAP actual results their earnings release. Tony EBITDA mean free or EBITDA, or defined vary forward-looking these or presentations, earnings mean the adjusted release. and by such

GAAP file measures. The shall in offer, be or jurisdiction or the to or note, constitute in this which sale today's not to to of would investors to meeting the solicitation securities this securities to offer buy, Securities the accompanying XXXX. In of made of S-X any Parker statement and buy XX by and requirements the transaction recently joint offering prospectus sell SEC, financial any the Nabors imparting Form sell presentation under securities with proxy sale registration posted prior a offer does which nor intend law any have on such Nabors of comparable includes any securities, to an be SEC. any call Act qualification We transaction, also the prospectus, except that the important the or means proposed measures shall discussion be proposed the the there Please call. Section a to unlawful apply of with will registration of of such jurisdiction. disclosures include No statement most solicitation, connection or a with of

and well read as decisions, Parker these and Before the call over registration entire amendments making they because as I statement Nabors about proposed to begin. available, statement any that, information will will supplements any and prospectus they of turn transaction. With when the to or holders voting contain joint to important the or security to Tony documents urged investors investment proxy carefully and are become

Thank today. morning. joining us you Good for

believe see We the Before stated I of acquisition make we terms, like excited to companies. in are a strategy, and our segment. this I about few the we prospects have comment Solutions acquisition I Drilling that excellent [ our think Nabors. particularly geographic into merits the deal We And Nabors' economic results on businesses accelerates about especially footprint Parker would Wellbore. and of combination portfolio Parker, fit neatly Tools. Quail at ]. our the for growth Parker's comments in of outlook,

the mark. my the our totaled by Adjusted was third the International results detailed shift the the in This EBITDA performance positive million. Now will in expectations. on our increased quarter in XX $XXX business exceeded U.S. I line in segment mix margins international $XX,XXX the was driven in discuss in $XX,XXX growth I in EBITDA U.S. segment mark. above comments Margin a and sequentially outlook. will Adjusted markets. our Daily international begin Lower X.X%. primarily our Solutions our and remarks Drilling This with by with remained

markets remain strong the of Nabors, For a growth. source international

Our more international prior expected are rig incremental the rigs of start to EBITDA. that by end X awards have progressing XXXX. and I we note into deployments

have We number pending considerable and and which to for XXXX This prospect And detail in beyond, shortly. selective. will a opportunity additional for also of us deployments be tenders is robust. awards the the I provides

the We projects. incremental will only attractive most pursue

for activity in This increased Lower Turning and to pleased our Lower XX at XX pricing XX with industry X% I supports quarter. industry End-to-end rigs attractive the stable. am high-performance historically market. count daily rig decreased environment, the remained Lower margins average The levels. count. our course third over by pricing of market by sequentially. resilience leading-edge this the rigs U.S. In approximately rig X rig industry

Our global was the count essentially average in previous quarter with XXX. at rig line

total rig EBITDA quarter. count Technologies Our Rig increased previous generated and modestly. Nabors' increased the average slightly, international count their segments Together, the from U.S. million. EBITDA while Solutions rig Drilling of more $XX declined than combined

increasing an of the CapEx-light know, important segments may you component is proportion strategy. our of As the

portion In contribution increased a XX.X%. fact, as to their company's consolidated EBITDA, of the

make X will geographies import with key of Next, not drivers some international our on and some in currently the our active. I start where we comments results. I'll are

a those choose namely free pursuing meet attractive high generate encouraged most the quarter, we Algeria. for enable are of substantial prospects, our business. In by reactivating our to pending in rigs third objectives, of rigs deployments idle the only We in by deployed flow in accomplished number X These international that the our opportunities our us last capital-efficient of and carefully award cash returns manner country. additional were the the X-rig

idle rigs X We have Algeria. in another

a activate to optimistic are term. number near the in of those We

awards In with are fourth putting U.S. expect we are operations Argentina. Similar coming Algeria, of to work. rigs also Argentina, the we case the rig X in to rigs from the commence X idle to quarter, of previous the During the

third early The should XXXX. start in rig

country. those update. awards X the are announced solutions for to deploy we addition, on Arabia, we schedule drilling upgrading of in to early have items content a we Each on in rigs. In X In number a we of Kuwait, substantial expect the all currently XXXX. In Saudi is started have of All earlier. rigs the rigs

newbuild in this deploy year. quarter. the eighth end SANAD ninth same quarter, of SANAD sure Aramco, have spud rig commenced X the continues Two began its you reports July. received Kingdom. joint time, of the suspensions the third under SANAD, our seventh seen X am at is The with stated rigs add of in of those has At operation I the to of rigs in out early First, suspend fourth the later schedule mentioned notice newbuild I Also, the to operations. XX. Saudi duration previously early to venture Their on suspensions quarter. is program.

are X XXXX of should more beginning Another and XXXX. in expected one the start at

XX our Next, performance and the value they fleet rig robust, performance $XX,XXX U.S. mark. in This our remained margins Daily I'll the discuss Lower above high-performance reflects generate. resilient market the in for rigs the our

clients market we Our of this the number demands increasingly The remains drilled have portion lengths. of laterals on and the excess we are an excellent miles. focus in basins challenging automation. wells. in our to illustration lateral X long position focus. is in of that growth performance a increasingly of Recently, excellent wells an lateral are Multiple complete With their to enable across extending fleet, advanced operators their

daily earlier That resolutely from not cash on is continues comments pricing Lower yielding our XX economics results contribution to include generating rig reporting significant financial attractive combination and and any disciplined. be NDS. to do approach flow. My Our free

generates our addition own. on In this to in moment. rig detail significant discuss more margin margin, I'll NDS a its in

up were NDS than Next, each revenue third XX%. the our sequentially. NDS EBITDA technology and more expanded quarter, and let and International grew me discuss EBITDA innovation. international margin In by

are markets the our our these in validating overall, NDS Driven by EBITDA international performance, results Our expectations. strategy. met

third NDS per day. XX Now contributed XX daily This I'll discuss specifically. increased It quarter. that, Of measure, market NDS $X,XXX the $XX,XXX margin, in sequentially. Lower was the Lower

increased NDS automation drilling this the we SmartDRILL well of and the drove During and particular, Lower penetration suite, mix growth. expansion our as performance our the following installations of directional guidance, process in We SmartNAV shift on directional saw XX. in automation. SmartSLIDE a control, rigs automation Higher in quarter, the services software in systems: our Nabors as saw

During saw growth pipe software. SmartROS the and ROCKit in operating drill third-party quarter, NDS systems we also oscillation rig

our Our quarter results strategies. validate for the third

[Technical across markets. our of our international expanding rig software Difficulty] are We our automation drilling

make structure. let comments me capital some on our Next,

profile we work quarter, our to the of on continued issuance the X-year maturity through debt During notes.

As cash of X.X approximately CapEx of our year at finish the delivered into notes SANAD average of million of of stands debt $XXX terms now, retire we of X in free Nabors $XX million the the flow supporting cash remarks newbuild quarters, on cash. I'll with program. net years. sustainability. through expect has over weighted maturity with free generation, the discussion of our of this to strongest part our quarter Heading

performance which operational rigs results emissions. improving Technologies in contributed ET the third our business. of these quarter, transition Our largest again, connects focuses the on energy the portfolio solutions The segment. reducing Once our Rig module, contributor remains to PowerTAP grid, and to to the

in The first next PowerTAP Operators in begin in work interest of several other to have international slated markets is in couple Argentina the weeks. units. unit expressed

that into translate will optimistic are interest We sales.

discuss environment. Next, rig I pricing the will

approach. pricing. Our We in again third once disciplined leading-edge our remain quarter results in XX showed resiliency in the Lower market

are MENA, As XX spread visibility They including competitors seeking as rigs. rig market. In with in opportunities America. continues flat quarter. where share surveyed recognize to market have consider international the These The of XX work near-term well, in of markets market, Latin the additional are international and upward an chasing currently geographies, we our markets discounting attractive. to largest trend. We we we continue third Lower a many Asia, impudence the as that the Pricing have the awards. across countries in or end located are the at clients to

working group's than survey expected will total the the the results XX of of from combination The quarter. indicates be end somewhat XXXX third The a quarter. covered approximately drilling the programs. XX% at the year-end the rigs Lower operators decline lower wind-down latest of at and certain consolidation survey end of this comprising industry's the of rig merger-related XX Our count

the participated including consolidation. those that Our survey the skewed is larger operators, in industry recent have towards

view For the remains international market, our bullish.

rigs to X quarter add the in XXXX. track fourth on are of We

additions factoring the these the we suspensions With expect in to XX end Arabia, Saudi and with rigs international in working. year

in activation X during newbuilds Kuwait. activations deploy are to year. look rig in Argentina, have we and scheduled to XXXX, awards that X the As we X Saudi Arabia, in X

have to just we incremental In mentioned, opportunities. X addition the significant number identified a of I

tuned. stay So

of to Next, is press we SmartCRUISE AutoDriller, NDS' highlights NDS' advanced opportunity strong automation. Uinta in The accomplished our release. was value the element operator solutions. mitigation, that example share highlights announced of is all of This in thread lateral An believes the customers. our drilled record SmartDRILL is I a it in common Basin rig. from on technology those will quarter of ran in drive REVit's couple addition in a the basin. It our process to third-party This a what stick-slip for X-mile well a notable and a

X Powder rig market. NDS the third-party fastest repeatability project further a the success NDS' drilled the of Using It creation. on operator third-party Basin. River SmartDRILL illustrates in Another targeting NDS' the rig, demonstrates the wells this value

call Now let discuss me turn results. financial our William, the who over to will

you, morning, Tony, and good everyone. Thank

quarter reflecting were strong, and third activity, activity was Our both casing markets. in the in stable, U.S. in results particularly drilling growing international international running. rig NDS

should Arabia Lower Our also Rig was SANAD similar Saudi Arabia. remain quarter. the should U.S. we've in lagged drilling U.S. markets. fourth rigs experienced and reductions technologies into by and with with in software data the deployed drilling continue affected market. The and X the additional offerings international in Saudi rigs Argentina. stable increased trends XX generally

we are performers remains that out of suspensions. point rigs will has for notified newbuild substantially our XX-month And deployments cadence X the of new starting were rigs been the XX indication quarter. no deployments. margin scheduled further as fourth During of were suspended though the in compared the the to that lower I quarter, unchanged. suspensions There

$XX,XXX, our revenue roll quarter a low- our segment fourth X.X%. sequential by up NDS the quarter the since our On into contracts $XXX. This decreased decrease equipment at level has million, and from beginning Technologies total deployed or mid-$XX,XXX rig, held latest the as in more in Average came U.S. we to daily of per per successfully and remained fleet XXXX. Revenue $XX.X increased in as range. X started Arabia, the well. contracts, we In Saudi increases Lower rig revenue improve increased in to revenue eighth deliveries activity international is both held pricing XX bringing count day has the X.X% at markets. that expect Leading-edge current country. International day We for X the the third of continue fell newbuild Rig expected Algeria, of quarter. to rates. by for working to in for

finished Healthy revenue rigs. Nabors NDS reduced It resume by and performance revenue It its in primarily [Indiscernible]. operations third $X.X working offset new currently the increased X.X%. declined Compared than XXXX, for other in X.X% contract. sequentially the million or along business $XX.X U.S. remaining quarter. prepared Drilling increases by million, operations rig international early NDS being is land, Solutions' more with international during Our Kuwait should X in in our software lower-margin in activity were globally by quarter, lines. third revenue in to of

a rigs increases in in by the almost daily EBITDA the driven our just saw rig turning from EBITDA quarter, $XXX was sequentially, down as market XX and XX, similar down a improved at was Now by our to were the of of our a quarter, high. in line they million, to million $XX,XXX, and $XXX.X X.X% per driven churn primarily were average EBITDA revenue our below no increase. activity second with remained but million or third X.X% our by in forecast. business. in we day. quarter decrease essentially XX U.S. reduction margins prior In rigs This by $XXX general and our Total couple the expectations Lower Average Lower came $X.X outlook. below the million Drilling $X.X

in fourth the fourth for as rig market day quarter, Lower project XX our about our We quarter. converges rates. average remain XX fleet pricing to our with margins at at For $XX,XXX the anticipate count leading-edge our we daily this

forecast SANAD is substantially we In similar increasing On $X.X Arabia markets day. average million, third than growth than $X.X This improving primarily to slight in EBITDA net approximately the combined increased on In and $XX,XXX the X margin the experienced approximately better Our incentive over of $XX.X million, Lower well or in in the level churn, benefited improved from quarter, stability of XX U.S. offshore $XXX improvement in and and increase Alaska is somewhat a X%, as reflects million, oil increased these better-than-normal Daily stable schedule only working the by by contributions despite $XX,XXX. $X,XXX a performed results ahead prices, Saudi of somewhat anticipated. at gross combined as from contracts. was market. from EBITDA by Arabia by moves dependent Alaska. International quarter, did the rig these count. almost X Latin basis, up exceptionally activity performance well, by Saudi low-margin EBITDA, the over fourth $X,XXX $X,XXX. per for million. operations should driven prior was and Mexico newbuilds. fewer margins America rigs quarters. Argentina also bonuses between And in businesses

average remain count XX gross deployments come daily in quarter. the Our $XX,XXX, offset start-up should the in rig of the anticipate at quarter SANAD Argentina, with rig somewhat level the line with by to We in assumes quarter fourth third ninth X Arabia. and suspensions Saudi Rig forecast at newbuild rigs. in third the quarter the fourth in margins

improve fourth Our in the should fleet quarter. mix

quarter to experienced despite the will casing be RigCLOUD. U.S. However, $X,XXX. $XX.X million a as performance and of was we XX%. casing performance and gross product approximately third and margin daily in And In market, our revenue mix compared quarter. above prior revenue drilling improvement the day per EBITDA gross running a the decrease. This X.X% software, increase combined the geographies for XX% slightly up $X,XXX, were gross the match. Drilling tough improvements rig NDS the particularly that our X.X%. in revenue to XX margin to our Solutions delivered better-than-normal software was reached quarter, was Lower several took Among grew. material EBITDA lines, solutions our largest strong services, were margin services in second running

NDS For over EBITDA the approximately quarter the fourth quarter, we higher level. are targeting X% by third

quarter million international be in million spare expect of deliveries sales shipments compared in range equipment to the fourth quarter several from EBITDA the into EBITDA both energy large EBITDA primarily the third the quarter. lower We transition $X.X equipment second. that million markets. Rig U.S. also came and declined. increases Fourth should slipped of U.S. million, in of products parts $XX and The reflecting decrease to $X delivered the in Technologies in in $X.X Capital

turning In million. cash $XX flow Now totaled in third flow to cash the This free generation. to and the liquidity second free cash $XX quarter. million quarter, compares of

of million these significant The payments $XX.X in The approximately year the portion of issued quarter. million interest issue. compared with preceding third of approximately equates the million as notes quarter of A the extra last to included months $XX third initial of million after interest in interest related was quarter $XXX we X due towards $XX X.X to the were months their end the expenditures below coupon million. Capital payments to second. $XX

newbuilds. The million third included $XX quarter SANAD for the

includes Our target million, million Saudi is manufacturing CapEx Arabia, million. its now going for $XXX newbuilds. This and for $XXX forecast $XXX forward. earlier million. supplier SANAD's We for CapEx XXXX performance to now is milestones. newbuilds related expect improved of now now quarter delivery the $XXX forecast newbuild resulting with fourth the In SANAD has rig rigs annual CapEx The at SANAD

As geographies We're targeting this approximately newbuild reductions has various into a moved CapEx to up $XX million increase. in XXXX. result, now offset of

to EBITDA meaningful of in the is The our and [Technical strategy. Given with of to we attractive in activity acquire is Additionally, signed by light week, recent with rig and $XXX end and Parker long-term It free the growth $XXX $X transaction CapEx our Difficulty] between Last up million. grows million. provide XXXX to well-aligned million an agreement a expecting SANAD's XXXX Wellbore. Parker million lower newbuild expect our CapEx flow XXXX, quarter, shift fourth into now $XXX suspensions slightly U.S. Aramco, cash we

Parker with addition turn call remarks. the with of concluding Tony the for to are our We existing to that, excited his platform. And I'll

now conclude I this my remarks will morning.

clear the quarter the performance in additional this client strong awards expansion rigs business increasingly free a We drive is are additional pipeline of significantly our With expectations. Solutions thought, success. the accelerating. NDS' and met to at grow have International a internationally that prospect our opportunities, Lower will deployed of growth doubles to duplicate deliver path to that, essentially looking a path the base. cash see concludes today. questions. expands and performance Parker And this penetration my segment's has to remarks adding increased industry-leading as international We Our potential a you for of solutions continued markets. time portfolio the the XX there your expansion, third in will we achievements faster our across we and the in to Operators in size our and higher. With advanced attention. NDS' rate. Thank NDS. That your flow our final this segment. Drilling believe take With And

Arun [Operator Instructions] question first JPMorgan. Our Jayaram comes from with

if and And economic the see Tony, businesses NDS? acquisition of as with you integrate moat kind relative talk I the Wellbore. of could do surface of what some recent of NDS? the of in tubulars existing if about you businesses, the could start I the the wanted discuss to capital your you of Parker to that with just segment you broadly businesses was wondering within that kind intensity

Sure. of principal there's areas. I Well, all, -- think first X X

with fits existing in squarely for do cost both grabbed. contracts synergies offshore easily maintenance for today, hopefully we First and the rigs in us, that what there's layup are Alaska like rigs is O&M offshore with the a obviously, jurisdictions it's that obviously of

are, well. There's which running. as well X the fishing now business. Then construction, in casing The casing that areas right you in principal running as some that's So the principally the markets migrating out, point well. U.S., have the an Saudi base and know, the they a as integrated all complement to in presences of UAE, there, business, model. And for which you we have as us both strategy is

on I in people out third owned goldplayed It's significant years. I move Quail, which, to the combine over a actually that as first coveted been that all, well -- business the out great higher is those well. of think And so we're bet, Tools. them as less a in upside including a a in hopeful kind the the And an then industry, combined, as the Thomas of of we automation industry, wrote, and we're we're with company. It carrying a going we by you've always that Quail against you model player people Schlumberger pretty think, that active heard It's frankly, services. has That's from many base, reputation the U.S. we where margins use competed other more when forces. And is what people in to is with get

success they're I have have -- announcement think you first-class, There's we the track record. guys today no see we had. continuing. see from and And established about are question an can our what

I are counts the think equal more to driven rig that's It makes it's for a to sense. clear operators longer And with well longer with more laterals going get laterals. be content way that per what economically, for they do. with us to

comment on And you I William historically free can is combine that when of but range. I think all, kind to Quail flow the XX% number so XX%, intensity, think capital cash it

I here well a that, which covet, software. mentioned, our more little our historically. Now portion that as activity drive capital-light what is we to obviously, itself thinking NDS was construction which behind that though, at it. they've is has And wellbore least model, to thing mission one than to higher of that of which But part But XX%. close NDS is is of all course, done than the is a

you that think -- know. price entry a we improves have we metrics, it, So all on our top of we synergies financial it's and is paid And obviously, and price. very as it attractive the

it it has work a -- logic. industrial you think lot through, I just when of there's so And

William? that, missed anything, with So I

No.

quite quality that free Parker's we the you You But said at intensity, everything the answered one capital way it And is all I the the of EBITDA. would is about have said. EBITDA conversion high. look cash of question from

proportions bit the a say what do, our cash free given even fact, than it's global that of better little conversion. In must I they

rig Saudi free NDS, rig XX%. which drilling legacy you our if with XX%. about and look So at is the the means XX% exclude to conversion newbuilds comes Arabia just cash business, Quail in business, our

So the for XX% it of XX% a does of improve our NDS relative does that the whole. our total on have company the the longer a conversion about basis, total, of which free from to And we is as it term. take cash footprint one objectives

We that obvious about wanted brings business our rig NDS to reasons. for business. XX% growth. to to have But than said we to we take is number XX% faster total drilling It the less traditional it of from with CapEx And take Parker, our XX%. of that course, XX%

So that we transaction. are pretty happy with

Two on that. comments other follow-up

respect both it is transaction, all, of including the to the on number transaction. investment improve the think from it rating path of First whole an does eventually all will it, well to re-rating We shares metrics, an because transaction that equity good. on various size, value as our think multiple The was leverage, rating we as us gives had which with us to of the bond a which lead us transaction. a we obviously, think

thinking. the that's So

you one. In the cash with today, the dilution to flow, That's the free free should flow free per flow you cash when terms the share crank though, it's number note accretive per numbers, cash of that transaction. of share

transaction. our per of share of part cash It again, what So flow free because that's, on was does the William just our improve said thinking.

now, meant to this fact, the if what to was the trades is be just get the the protect shares higher And the the should at, value do stock realize that collar the does to on multiple number is you deal, of you pre tell actually been people collar if around Nabors' look we've it. like collar shareholders. price of numbers, also a trading I'd a down. the should fact at the at thing And crank cut thing have what deal would and they actually because what actual the Nabors price trade going if than at in other The deal

into was transaction that of that's all the So shareholders protective built recognize the a for the the they device transaction. if value

that deal. you work an it. up the hopefully, And does way. But of of another that's will do write So guys you that when out it feature analysis

the how mature of quarters. shale sense XX on from very using a numbers gains? what because give times late of wanted for rig on your well on XX for to to That's efficiency Lower Thanks take this the is gain gotten year-over-year U.S. few additional have buy-side demand you And But can And Great. follow that of Because Obviously, queries I efficiency is kind broader off basis? we to gains about or see view demand of in technology. some context remarkable of today. is Tony, the In quite Slide the XXXX? the color. are your we're rig and X it kind a are helpful. XXXX? how up impact X/X implications I of Because over slide. last surprised drilling the what X/X cycle how us does in seeing think of the ability are quite to a well efficiency cycle taking times perspective, be off do a you

is think on Yes. do of a infrastructure returns existing have today. diminishing I lot there we that

we're I extracting approaching that with in operators some that very So have think some benefits. large -- all where and are we independents first-class

to they're to rigs it's And so you're going that to develop. see hard say kind awfully the curve of pushing that hard. And continue

obviously, longer well. focused of laterals From and is can you is view, want to of on. the things that service now having the improve flat time. the area point obviously, Now Flat economics our really that the longer everyone rigs the time on laterals change

us. less it is positive which for but rigs, necessarily the not economics the so changed meaning well, And of

to well The construction, other I -- the overall well drilling process add including By value the construction. mean, more completion.

while to have, only the them operators completion design. will with will and information gain of that but not them the tools that, the of drilling hoping downhole that some also that them now help realize using help So better we're potential help we actually geosteer optimize

put off recovery. economics which that wellbore So production to side, help that we see rigs EUR than And the help the the the next of now. and helping leg can upside. the we attack, leg whatever think into happen, will we better things that's realize right And is bit on the to do the from operator a is one other different focused that little Nabors be our that's people

And a Arun, great because I'll too, on that it's comment question.

I peak, back had then, last the -- XXXX day at so, revenue think the in more peak we we our margin peaked And at our recent back I peaked $XX,XXX. in -- when per since we $XX,XXX. -- or at think

being value of amount by So is talking specifically rigs. which that, about. of Tony had creation that of to over on And related we value our $X,XXX was revenue, delivered that that's significant a NDS top

So out we comfortably used of the the to get above margins getting than $XX,XXX, last the our peak. we double rig platform almost were at we're

So efficiency getting there's Nabors. with capital. that shows for a better that, returns we're investment, but significant because we're efficiency, And also having in that's I benefiting getting a think ourselves yes, twice we're lower that that -- of invest to capital that from or means without amount

comes And Morgan from with Kutz Dan Stanley. next question our

XX-month there's love companies? could I pricing but question regardless, investors that comment So and from on broadly, question hearing just just for that we've hear on they you're lower-margin asking Saudi you But that drilling on been you hearing as wanted we've I Saudi and pricing I flagged in a if just some to pricing international then seeing and trends concession some from comments, chance were to this is the guess, guys And of would margin the your three asking more had kind its ask rigs. been comments suspensions any space. what service Saudi getting

came about give Saudi, XX rigs you on year-to-date. Saudi let down first. So Arabia color me some

XX And as around think land. have notice you as we're working. there's suspensions, so the think XX, today, noted, X XX on offshore, XX. and had in fourth XXX noted, And I in quarter, going back rigs I and we putting have to we of we're we

on are most So that our strong X-year oil That's relative wells. on our one. strong that position extended obviously, reflects of position. in of And number recently rigs two, basis, Number gas-directed a a on today, are contracts. probably that the fact rigs we're the very -- XX%

So position. a in Nabors pretty of terms good it's itself, in

our there driver William newbuild has dollars. Aramco in there that very investing taxed in is in of part committed the this is because Secondly, we And cadence flow outlier of you're or when why in kind are investing, cash no change million as environment free newbuild in rigs. is bit newbuild the is obviously, a an of absolutely CapEx rates little been and explains program, the $XXX new program. said,

we're doing doing nobody In is That's because that. doing why we doing those the in that? And We're it. why are fact, industry that rigs.

our taxes interim, cash flow think we it yes, in it's worth the So it. but free

I they're the thinking, so is what the condensate And some And think what purport unconventional, -- interesting supply on thing what's Arabia. lot doing more just member is on is in amount other And Aramco terms by is there that other surprised not think overall of just observations, concern has think is to probably the that, in terms global would there Aramco in gas. the but dissatisfaction some with of Saudi allocations. unconventional. market In concern high. countries point wouldn't there I that I some that I the really which obviously, track And happening second is a been of some inside it's make have of there's are I but

that funding, overall requiring budget least of the Aramco at government from changes. And third time. is driving notion day per of period more thing, XXX,XXX them I that than something drilling. gas coming I more barrels understand think equivalent for now some and of In through the short of there's ease to what's almost looking kind that's a these then is is And they're fact, to some course, therefore,

the well-positioned usual. what where this deal. affecting of -- terms that's why in and has we think environment. But response deal And with as partner their its positioned us, well. business it's to Aramco the us. We're the So they very happy with that's treated did environment, we reason extremely we're

I that. a XX have been So mean that bit misleading couple on unconventional. a rigs I comments, expanding the suspended, little it's because they're of think,

in rigs have XX X unconventional. about awarded they for also -- have ahead have they awarded more So And us. we rigs

you X numbers, about it's XX. if those So add

think reduction us. bit the offshore, little They more pricing don't that land the -- will is issue XX for be a we say. of are more misleading. a on And would bit issue So I cutting little an rigs

understand understood. or earlier you press a cadence performance potential that it. might program, comment you its milestones that, notes in than for Maybe faster Is was manufacturing just helpful, X newbuild of had rigs expect year? a your Are how the change rig and pace really we on reaching to and then no SANAD could be the the the SANAD and of there that had Got than All going slotted the in have guys mean that the I think guys ultimately, release faster pace improved about sooner forward. next delivery it's... supplier you

had X year. we this No,

this have We X year.

they're pace increase now, don't that from which Now to that per rate. We the year. to correct X getting is expect

one just one. And Understood. quick

the this that but out I'm of much SANAD control, might any fourth of tranche Nabors' you think is order idea I fairly sure receive when pretty for the newbuilds?

I can say. all is XXXX

from RBC Markets. Keith our comes question MacKey And next with Capital

Just wanted Certainly the the well on mark. quarter very this did international hitting with rig to start out margins. $XX,XXX

daily XXXX about of bit As of just these some should lower-margin Argentina heavy little with new the you the some component NDS of some new we how with all suspended and you rigs, think you context? through the thinking margins Saudi. as of talk folding removal of rigs SANAD be rigs in rig have Can that a in these about about

things to how of with we've because honest what did. third But did mean, expected in we needle, see So of happened was improve the that's excellent geographies by the the I I a can say the rigs in in the that some quarter fourth in of mix $XX,XXX been couple our totally the quarter to quarter. doing have coming it's performance. performance International to schedule ahead well some move of we and surprised that actually and based be you, did this on I

fourth a would third we average the bit if the is expect we terms we guidance. better these the in the things in little $XX,XXX, operations, we the tend fourth did -- out. -- But just than a the in same the is in mix did think third higher So now. as which of performance in And we to should

we don't those in does number do have the were I So geographies, coming we incur. third one. And and two, create quarter uncertainty costs uptime that particular we'll And we bit to have terms that of a in number think excellent of in some the X be little as as of rigs that in. are

bit at for put we'll we entirely margins forward we more hopefully higher we internationally $XX,XXX. rigs as do finalized than something But fourth SANAD cautious, going wins $XX,XXX the So being little more get budget, that And a possible and we looking the quarter. into next XXXX, year. but that we haven't think could it's the some add be that that's get for

of Got regions. the you through it. demand talk in U.S. gave helpful. looks like? markets you supply-demand know maybe the and rig international. quarters? main that internationally the us the playing various But context Lower very with some the just could which Curious versus of mentioned still on how a No, balance a -- the market, that's balance market I versus maybe in do how Arabia. Lower And the color see in what international Saudi the about supply-demand geographic good the commentary flattish are can kind within on couple us just more bullish And bit you And general U.S. out being next you XX, if supply the seeing the is regions, you're you give like you're XX? little

talk the see as by form. in rigs Mexico. particularly a Colombia follows. really opportunities lot Argentina, don't In and are and about exist Latin region, Well, spread topically, looking think America, spread when those Argentina rigs, -- in we between Colombia, a there, of XX the I I about The usable markets

good it's most things that matter doesn't is, the see X various Oman, we does Asian Saudi, have countries, that's to Algeria, higher Asia, or think, going environment -- X tend are there's MENA, a is to work, in to a there is. there, opportunities of now going well. think to them say UAE, another In several that And but to can And in right we're maybe the ground. us again, rigs for or half on pricing. operator to I work I example. would from as between capital, drive specifications, and the go It company operator for contractor international. getting them drive go that of countries are need who away who But -- maybe the the So In because -- therefore, which pricing those I that thing, you markets. lot

obviously we're number the opportunities. that do it's can But so in. of cherry-pick why we're it we think of existing market with minimize attractive. fit-for-purpose most return and So we to asset only the ones we're a kind good a the And maximize right to that's we're make optimization. we and solution. think pretty that opportunity And the That's to capital, customer the feeling now, because those with to given set of we diverse that try provide sure opportunities about with the optimize are assets capital trying base, going to our the our

MENA, mentioned. XX Tony So as in

in Asia, and So in America, roughly, XX X in XX MENA, right? Latin

MENA. XX

MENA? XX Sorry.

and Latin America, in X Asia. Yes. XX MENA, in XX in

XXXX, talk capital different you'd the sure If up in this something we it's I'm XXXX, what is about, is maybe about number? than about think little talk a meaningfully but just -- bit piece to can to in to that early spend $XXX the expect for which million you adding

this X year, Well, to in Arabia next versus X rigs year. going we're deploy Saudi

outside year-on-year, doesn't going our so increase be good thing right? really that SANAD. is The affect envelope, the cash it significant flow is within a just So SANAD to

a to can pay use is that although the SANAD, outside will debt. cash Outside we So higher headline and easily part, CapEx the our you that's see not SANAD is down cash.

there. increase an see you'll but -- So

we -- rigs higher a year. than this next number across have You year will of also also globe the

mean, maintenance the we be a year. sense of attack I approximately. We number in XX% CapEx this year same don't we have up. next the the So somewhat of maybe I opportunities increase to get how try we many will think should that think

not be high. will new contracts as for So international CapEx potentially, the

So of now. say we the -- year. grinder, budget, grain the to That's with think will that give finalized be But all CapEx higher salt. the I haven't that I'll take I put and in so can you all next a

question-and-answer session. I turn remarks. the would conference concludes for This like over any to closing William to our Conroy back

today. for much, joining very you Thank us everyone,

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