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Dec 31, 2020
Nabors Q4 2020 Earnings Report
Nabors reported stronger than expected results driven by North American market activity and improved margins in Lower 48, International rig markets, and Drilling Solutions.
Key Takeaways
Nabors Industries Ltd. reported Q4 2020 operating revenues of $443 million. The net loss from continuing operations attributable to Nabors common shareholders for the quarter was $112 million, or $16.46 per share. Adjusted EBITDA was $108 million. The company successfully completed exchanges of its outstanding notes during the fourth quarter, which materially improved the Company’s leverage and its debt maturity profile.
Fourth quarter results were stronger than expected, benefitting from activity increases in North American markets.
Margins were better than projected in Lower 48 and International rig markets, as well as in Drilling Solutions.
Completed exchanges of outstanding notes, materially improved leverage and debt maturity profile.
Realized a significant reduction in net debt to just under $2.5 billion.
Revenue by Segment
Forward Guidance
The company expects consolidated adjusted EBITDA to decrease modestly in the first quarter, reflecting the absence of the fourth quarter’s early termination revenue.
Positive Outlook
- Lower 48 industry activity has improved significantly.
- Pricing should react positively as the year progresses and we continue to increase utilization for high specification rigs.
- We have turned the corner on International activity and are starting to benefit from increased rig count in Saudi Arabia and from the removal of COVID dayrates.
- First quarter average Lower 48 rig count is expected to increase by approximately two to three rigs over the fourth quarter average.
- First quarter drilling margins are expected to approach $8,500, reflecting the continued migration of the fleet’s pricing to current market rates.
Challenges Ahead
- Sequentially, Nabors expects daily margins in the first quarter to decline by $500 to $1,000, due primarily to the absence of early termination revenue in the fourth quarter.
- First quarter adjusted EBITDA for Rig Technologies to remain roughly in line with the fourth quarter results.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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