NBR - Earnings call transcript Q2 2021

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Operator

Good day. And welcome to the Q2 2021 Nabors Industries Ltd. Earnings Conference Call. All participants will be in listen-only mode. [Operator instructions] After today’s presentation, there will be an opportunity to ask questions. this being note, Please Instructions] event recorded. is [Operator turn over Corporate to would and now Conroy, conference to like of I William the Vice Relations. Investor Development President Please go ahead.

William Conroy

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

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

a the that, the begin. comparable have measures We to section call reconciliation turn the financial recently posted of website I to these will most Tony over Investor With measures. GAAP to non-GAAP Relations to our of to

Tony Petrello

Good morning. comments. Thank begin you for the up of we with XXXX. highlights joining I morning, will questions. opening This will for overview will the our will William financial results. markets. the review our discuss quarter quarter of some I for Then discussion follow I us before from make the as remarks results and second with your concluding

start Let second our the performed in well quite me saying operations by quarter.

strong. also quarter across multiple of our EBITDA $XXX topped made progress strategic Adjusted was significant million. initiatives. Execution second segments in We all across the

CapEx results the by looking second over I first XXXX. balance approached rig net the the expectations, to priorities the on These progress for quarter, Net count growth last free million driven out the of exceeded which performance we our in for the improved after an flow. flow by half to call. quarter on quarter debt $XX the U.S., flow generate our driven rigs year. the million increased in of cash I am global $XX second progress Free financial of reporting our Once Our segment. cash second pleased and seven am free made by million. we quarter very forward the $XX our with International laid conference in cash through reduce again, drilling funding by debt. further

Next, like key about focus five you Nabors. areas think as to highlight I would

outlook daily fourth, International our on delever; leading technology margin improving our our and in our the progress energy the performance First, to for progress and in upturn our Lower commitment XX; innovation; the transition. and third, business; second, fifth, ESP in

$X,XXX to we with the field is from responsible me rates. XX realized Daily for start capabilities This Let deployed and leading disciplined unique once Lower robust performance in core again value performance. strong. maintained margins, margin our business our pricing drilling this margin as fleet remains approach Clients combination these results. achieved We mark.

the to is approximately That with market way drilling day. combine $X,XXX generated to performance in our look Another Lower NDS per at by margin the XX. to our amounts increment

So almost we’re generating basis. per this day week on $X,XXX per

and results the this from industry, compare it’s consider important we across peers think models business you As point. our to

have Russia. rig count. Arabia Next, seen upturn out rigs business, in have Coming year. Argentina, rigs We fields. Kingdom. the we International our our the benefit from our our our results performance of pricing of discipline Saudi These additional significant few There’s account collectively International the and markets XX% before approximately and financial in the has the for a of improvements have in in historic occurred potential activity. Colombia XX currently an working end pandemic,

units XXXX. been QX be has per contribute quarter approximately newbuildings of to In annualized estimated exceeding to five at They’re standard awarded today. one expected deployed five EBITDA $XX addition, are our joint approximately million. in starting venture These

each The rigs successive of an there’s of you per economics by These attractions for were Aramco for similar rigs add this participation generations a year their long-term rigs. the year. joint a plan, five venture. XX main contribution we the one our As expect know, and Aramco in procedure plan additional newbuild to Saudi Saudi in successive EBITDA

and innovation. technology Next,

the NDS’ of service on most penetration our least increased growth XX%. on and are than at penetration. we Our seeing XX Lower by services remains lines. more rigs rigs, occurred Revenue pipeline full. with third-party On technology rigs all Growth third-party exceeded sequentially five XX%. across strong

third-party remains The market for fertile NDS. rig

even of the potential full though rig suite ensure NDS to investing is are products product Nabors on run maximized We when that the our still are agnostic, rates.

see NDS across our are penetration For expect these we the and greater of to market. platform total, products in expanding digital

We hands value holders. our Now, the of with our structure. let’s distribution places shareholders. can news in of notes. completed equity structure in The program This topic had to result discuss substantial could warrants of the outstanding this This on equity of certain innovative capital our be significant a or quite our of delivering of exercised bit warrants transaction recently. cash delevering. We

we the proceeds deal, years we We we capital drilling of cash forward assets. material sell which priorities. in In can making the summary, through approximately the With pull-forward We I’ll $XX flow, ESG look Canadian we’ve deploy This in will future. the and agreement made also finish will business. even headway with discussion transition. plus additional free downturn. to this signed this to multiple result of an into the working highlights cash in strategic of our our million, our progress sale liquidate

enhance ESG. continue our ESG drove focus Annual disclosure. on We our recently Report in score This additional and updated to from a with We our improvement ISS. refine environmental X-point

social recorded we environmental categories addition improvements our of In several the score. in also performance, to

began Our shape. the take to also position energy firmer in transition

Nabors’ in in transition two is Our Board strategy very markets. technology own our here we global energy our our huge. scale initiatives and environmental areas; operations; opportunity to adjacent second, and in potentially the believe the scale of applied for optimize drive footprint Significantly, to can believe broad to and the transition of be space. first, supported drive transition We the holds attractive the fully by Nabors investors. The it is prospects footprint,

border For energy example, we our are carbon to working both in market. and footprint expertise to reduce the own acquire

have to We market multiple diesel as exclusive large consumption reduce own of fleets. fuel additives, fuel emissions which our well other and as engines, agreements materially

as adjacent market synergistic core with areas investing into field. include, several to burgeoning believe are These think which the identified We ventures renewable enable we enormous our geothermal power. operation. deploy holds early-stage a our source geothermal also baseload have will These of expertise this us energy companies. in promise We

investment capture as in license IP recently realize well markets drilling, measure verticals. with agreed The the returns target are We to opportunities. to other expect carbon as area. the to innovative in We

We’re see beyond excited tuned. which technology, about we reaching so ultimately stay the oilfield, the

transition. investment the a evaluating variety energy are We of structures in

spectrum enable the Our our opportunities. investment across to intent is participation of

ability confident transition. and in is the opportunity. We compelling We a in to participate energy think ultimately help drive this our are

I WTI just range Now, with broke above a has activity will $XX. conducive climbed below fluctuated began be in should drilling spend few $XXs. the macro early markets. This moments quarter The environment. to and But the to between WTI then high Since June it across there and increases mid-$XXs on $XX.

the of increased the Inverness the quarter XX%. larger rig the or versus comparison first XX stacked rig growth in the review Lower second [ph], by excludes clients, smaller count rate amongst Hughes the our rate. X%. operators I’ll to Next, rig XX%. by count. Baker averages count quarter to This of rig growth the of The quarter through According by quarter, the XX approximately working Lower from count at the XX our the beginning land the rigs significantly in spectrum across X% X%. increased focus end, Comparing second the average increased clients on With outpaced second

the rigs, clients. rig same comparison, by the for accounted group we XX% by survey the rig In of declined for average This of increased rate largest accounts count. of Lower the Once seven the group total count. stacked four. last working XX while on count the number again call, on Our XX% approximately rigs rig working

have activity. increased oil notwithstanding, a commodity the in show markets activity lows. global acceptable quarter, potential that incremental Our the the prices those sum remains all we uptick With virus. levels up, in to current share as risk, markets a generate In international from our the prices we remain range, we for in the XXXX. conducive economics vigilant activity about as markets demand balance gained areas resurgence the increase economic to impact the virtually pandemic review served current of of plan our recover in In to risen of modest environment as increased. we activity operator their expected. clients To That drilling mind, saw where of continue in commodity second significantly operate. In

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

William Restrepo

the good were $XXX second represented quarter of Thank continuing the loss tax from $XX.XX of included or from segment. million related per a Results a International impairments, contingencies assets million and sale share. of you, to Tony, operations to $XX net in reserves of in per our Canada which $XX.XX to attributable Drilling and net everyone. The loss share quarter morning, one-time largely loss our the for

Second $XXX $XX.XX loss million per compared in the a first of or quarter. quarter to results share

improvement quarterly income tax and as depreciation from compared one-time second better to results, operational the quarterly continues for lower Revenue to previously the with well quarter. the primary X% Total reflecting quarter our first expenses. of $XXX in a its improvement we strong increased million, reflects experienced which the increase million Canada, prices. quarter. Revenue the higher Excluding mentioned was $XX $XXX anticipated, Revenue a and seasonal significantly million items, both revenue expanded as million EBITDA primarily internationally, operations all was adjusted by across than our segments with almost exception to This the substantially for $XX markets. for normal of higher increase downturn. domestically commodity the

This drilling trend X.X% is second million adjusted XX% a we that or by the U.S. EBITDA of revenue. year. sequentially $X to up in increase quarterly $XX.X of during half of million expect was a continue improvement part on the

expectations. those was increase average at count in Nonetheless, have Lower edge performance Although, falling rigs. to our range. our rig margins the quality margins inflected Daily in our regularization fell came our in within $X,XXX, XX and expected markets leading high with increased, for rates continues market. day XX line tightening with rig Lower

we average continue For market quarter, quarter, daily with rates to expect margin grind the stable remain third day upward. second to rig as

moderately. expectations. rigs Lower from somewhat count within Second EBITDA forecast other at XX%, a improved Adjusted rig stands quarter count versus of average. markets to four the of segment six second XX.X, an was our quarterly U.S. Currently, quarter in our which the quarter the increase increase XX. Drilling rig We our XX averaged above third

For expect higher quarter, quarter gained eastern rigs, and in to strong persist larger quarter. $X EBITDA to primarily International from that the levels. Mexico in the expect or anticipated, third quarter, and the we adjusted second quarter the remain principally Saudi we these markets headwinds as In operational in in the XX% Arabia at million experienced improvement markets with we activity The sequentially. the almost second Colombia, third into some performance hemisphere. generally came

in X%. price. activity strikes expectation We are believe to The XX.X accommodate by quarter this quarter. or quarter. to second $X between rig continue higher is unfavorable related to in in to line with friction, second the International in delivered Latin activity third and rigs a our the Average Despite our for in the than beating modifications segment linked over move was profile of the revenue general Current the America. second Also, margins count from $X.X platforms $X.X impact million Daily the million X.X International strong at to our rig commodity unrest expectations rigs $XXX. changes count in million to $XXX customer. to increased XX. by to we the these lost these margin is quarter, of and in moves We in forecast quarter by increased more International gross XX,XXX the

Latin America. per day loss margin included moves Mexico from in and in the in second unrest The $XXX quarter approximately

slightly to as our average clients. to with second expect remain third quarter, daily margin quarter. line in decrease rigs by rig Turning of forecast to two International move our one to between rig rigs, count two We the the we

approximately quarter from fees additional Mexico. offset in moves Our loss the third early of forecast includes our in by from one $X,XXX termination margin rigs

the by seasonal close month the $X.X XX% of Solutions trending positively the for $X.X the operations TRS improved anticipated million Most of internationally Canada million, running assets million, increase, casing services. a software totaled At before our $XX.X one EBITDA reflecting strengthened, notably, the margin of Lower quarter. This our up our we comes quarter, the Penetration of all was $X.X margin Drilling for As gross gross end and top to fell month. will EBITDA drilling of adjusted this for million, Lower million spring driving the third revenue divestiture performance XX and activity closing Drilling transaction. the of million. adjusted improvement. point, Drilling XX Canada of in quarter and of include second Lower the Solutions lines. Canada Drilling expect of XX the the breakup. on In we $X by Drilling product in in performance segment $XX.X second the software

third quarter equipment million Rig We quarter, strong million second revenue second in expect a sale. The improvement technologies of growth was to to XX% generated adjusted repairs the on $X primarily $X.X in improve increase. results. adjusted EBITDA EBITDA the on the quarter and related an higher of

equipment on adjusted move EBITDA sales. gradually the and third quarters For fourth should upward improved capital

liquidity and generation. million flow cash will I second flow compares in the total Now, In free turn was to the review quarter. This our free million. cash $XX quarter, to cash $XX of first approximately

driven the first higher newbuilds. $XX $XX was insurance semiannual other million third we and for SANAD for million $XX outflows, including Our annual million These mainly million quarter. from the generation the cash quarter in in first Capital payments, SANAD quarter, by the include were amounts the collections forecast for capital and quarter improved newbuilds expenditures, second investments and respectively. million $X In $XX of expenses $XX offset million quarter, up interest and premiums. of second expenditures lower in by capital

spending the facility approximately required the newbuilds. to cash from proceeds million. $XX second for around Our capital divestiture drawn on at and $X $XX end excluding million our billion flow quarter around should Free Saudi strategic $XXX be outflows. the credit third and moderate XXXX million, to At total was of our continues million million transaction closed million, quarter, for targeted Canada cash excluding $XXX $XXX amount the balance the $XXX for

on the start $X.X down $X.X of was at pandemic. from Our June net debt billion, billion XX the

of closest the rig COVID the count of has and and our to prioritize focus we previously to the shutdowns, absolute our targets. reduction continue the leverage probably seen dropped. notes. than Activity had exercised of a fundamentals higher EBITDA These globe and announced shareholders. our at of debt future with warrants by our have By cash were fruits Nabors control Despite of the distribution dropped This toughest been XX reach is combined months generation of some end we to cost We We leading our Putting the EBITDA we results amount maintained edge faced. and will our the that, industry commitment small public our across transaction to the plummeted of delevering. demonstration last discipline. the warrants pricing levels things capital another perspective, competitors. quarter in until driven three

While software, data and we remote have the driven in investments from of benefited automation, fleet also infrastructure. our with highest leading performance, maintaining our overall strategy by quality operations drilling

of our profile, revenue capital our percent of dropped. result expenditures As have a revenue as new a

cash by net to international sharp with again, business debt U.S. once during the the the headwinds generated also superior at also the comparison we us good our billion address allow for transaction flow worst debt activity addition, the covenant drop period. much delivered times. in we competitors. then beginning our our our of absorb the renegotiated our off In months, just by to and of potential we during credit been better And helping new the last near-term Together results, the material to complete avoid exchange we of operational us while stewards issued meaningful has long-term pandemic, facility our during of at last reducing to past year, to million have Despite a maturities. $XXX XX before convinced debt I toughest of $X end breaches am the capital the pandemic shareholders of year. in

new and new energy, As rapidly of capital initiative reduction. maintain commitment into expanding discipline continued our debt we we a significant will now the field absolute launch to

activities. have scope initiatives, recent limited may have we of these our into despite cash the seen you deployed announcements, As our from

investments concluding, despite something, would minority companies these like to energy into we placing business. significant signed help alliance companies And with their technologies. to emphasize Nabors’ to over them our to our clean have own I aspirations with develop portfolio ourselves portion our develop In a of restricted initiatives have to agreements time. We adjacent

our remarks. capital his will for over cash reduction. Tony With as that, discipline, I to turn will on concluding our well as focus call We retain the debt and generation

Tony Petrello

my the assets portfolio our technologies. significant strategy with well morning we’re that the sold Thank progress recovery we is into Once you, transition. of and and time, COVID financial process with in notably, of of we this quarter investing working portfolio imperative remarks us This better the These quarter our leading William. businesses. began to results conclude core expect to automation of the second and through performances goals. has edge top making I pumping now continually our will the same We businesses, This robust At servicing provide management on the and our and made and reinforced well first we depths reevaluate delever. now most portfolio. [ph] following. to again, the advanced results our is of digitalization the our now served toward to headway it as years The we resilience ago, we’re pressure and and in act continue. testament execution

the We in of phase has Nabors global played development drilling role industry. of have industry. energy evolution throughout new the the entered a the key a

for your now this With future. questions. extend and attention. That remarks investing Thank morning. you will concludes my are we in your take that, to this We the time leadership

Operator

Thank Pickering, go question Our Holt. you. comes Zurcher [Operator Instructions] ahead. Taylor Please with from first Tudor,

Taylor Zurcher

in as starts the we think half on about My question. the core I higher the as a back activity the pretty work potentially back guidance year. heading rigs of back of the countries was in in other perspective. curtailment? rollback of one likely from activity clear the you newbuilds is Plus But more my International, is GCC production QX taking going Saudi, and to for suspect into Thanks everyone. Hey, year, excluding the half for first couple talked OPEC an some to some

any you the curious So and activity just we momentum if about on of thoughts into maybe high thinking should cadence thinking for could us, just frame international and QX level be from here? how beyond,

Tony Petrello

be we Well, more year of currently toward think visibility rigs there three an earlier in should and additional two what I last in reported the XXXX. as possibly quarter, some we the Saudi have end

today’s to like in Emirates, in lot prices, fair it’s say, are the as of decline the as think well I across in region the a Kazakhstan. there, places seeing given particularly we robust and climate activity

all uptick East, in as an the So to activities is in South in well. Middle conducive generally it’s across as up, places as with in both entering well Board, American XXXX the picking activity, that’s

have So now And rigs I positive think all as several the of the are looking looking forward to signs visibility the we XXXX. end on said, I towards year. right

William Restrepo

now one that in thing tendering I there’s been activity the we noticed And market in have clients. is an right uptick think by

we quite So them tenders time. had. more of we have outstanding had in a We’ve long significant, and that some

Taylor Zurcher

Okay. those accretive do fold from have and around that the newbuilder EBITDA my maybe is newbuilds about of is contribution broadly you And Understood. Thanks forward? current do margin speaking, around think probably, international into how might and our around just NDS? on the within -- ability clear, for and the annual My pretty penetration you moving more Is how million to products further follow-ups pathway various business. the in that. rigs here certainly, of question newbuilds? NDS some for services the to some NDS saw more And the $XX into these of fold

Tony Petrello

excellent point. It’s Yeah.

now upgraded I the it’s that those Saudi now. rigs, and be base second, to think existing Arabia, the very in really, to hot is particular, case. for looking on And -- will we’re radar NDS One, target the a platform, them. our us on needs it’s in to add NDS expansion two-fold. the existing of newbuilds platform be for the going rigs the right international services to And as provide NDS our at

duplicate to operators as that. get of that a is the on in And the for region the to a LCs scale target players degree to other performance going the -- key there’s and been from of is [ph] a I viewed duplicates element interest a optimization of NDS, a high in particular, think lot U.S. but well, NDS of market regionally and So the as want in that particularly Saudi, in in level the

really some So that’s already We’ve one that with thing in NDS we’re pushing had success well. Argentina.

We’re super of on major working have some they down NDS rig for performance gains for and produced there a incredible the them.

as our basically slip-to-slip, not to automation, know, latest automate rig particularly entire allows off SmartDRILL just you NDS, with operators bottom. from So application the our sequence

it’s So be other the services -- don’t the the rig. that it other a it’s and products in something a plus marketplace integrated into to do allows

in So operator, we offer things think value International a the obviously, for of and these markets degree for particular, really high could upside for us.

So now. high priority on it’s very a our right

Taylor Zurcher

All answer. right. Good to hear. Thanks for the

Operator

Your with from comes Dan next Kutz Morgan Stanley. go ahead. question Please

Dan Kutz

Good Thanks. Hey. morning.

Tony Petrello

Good morning.

William Restrepo

morning. Good

Dan Kutz

Hey.

characterize just I your color if the wondering So ask, in versus was appreciate traction of markets seeing activity far. outlook kind to International is and the or and U.S. release what call two what terms pricing on wanted the I and you’re kind juxtapose in kind just for those you of markets, of of forward? moving in so pricing press on could the

Tony Petrello

U.S. across think, I regions. on higher now fronts the is the it’s the news grinding good all in Well, right all

XX% think it’s you rates getting edge working rate between today near-term. inflection point know, I to get that leading high-teens leading you In you the edge, the of crossover fair the to XXs. moving roughly convergence occur and are till And rig see, should a whole, as in a we’re the as sector our low average which suggests to as say utilization. the don’t

now, like think, probably terms at super utilization, highest we’re think, in the XX% today. right and we’re of rigs think we others, I I spec I

we But our XX% which XXX is pricing, rig some of toward another are little than think point to approach march of think, quoting competitors that we all roughly. a as will I that. utilization on maybe number, round inflection count less I the

I will where some soon they, anytime we term as on to hopefully, So, together The know, market was meantime, market lock today, you other you’re given where constructive. with things had going the the think, up showing U.S., where we players in given it’s the the in on are. and are market In discipline obviously, we the there. get good

right So roll being which terms forward. up helps our actually of move us able now in things to as pricing march

hand, of you other in see see coverage, the nor good the down, compared three market, the marked, looked at really EBITDA International which thing have us the portfolio, that the to well as same you hockey portfolio of in you as about downside contracts as is, volatility. EBITDA have because -- our don’t largest On the you a you’re have not to the we our International a and doesn’t same were term that combined know, our therefore, International we our the same, company and downturn competitors, that’s going that stick combined place, up so of served which we’ve exceeded

today come the bells do all if news you the thing. to horsepower does it’s So pricing, is of quantity -- market want the word, think rig, going the if available But termed In not you think exist, market your doesn’t quickly, going a internationally which don’t other market in move force basically, out they robust as groups X,XXX to not increases at prospect quality whistles rates I to average guess for the to those with good the the and into want when to exist, rigs is are That’s means that pricing But -- to rig constructive. heat to -- -- the to the general. replacement happen. up, new actually that’s cost a which thing. it’s we good good

numbers at of going fleet So terms going meaningful a and margins translating be our looking be it’s is up creative think, out directly obviously, to to I is in International, be the the meaningful, price whole to more but can for it higher the limited. to ability

Tony Petrello

coming were that prior out the contracts all significantly maybe of prices in internationally than quarters But the I that will point couple signed recently, ago. a are say signings higher

Dan Kutz

SANAD back that quickly on Got program. then all so to touch newbuild for this SANAD it. Thanks -- And just color. on

all of color appreciate shared have capital terms So this you in the plans guys spending year.

kind rate Just that moving half quarterly number, or wondering terms $XX the per of a plan moves the Like be might of look newbuild downside you could year what program on if range give like is us any there in there CapEx beyond assuming run basis could that quarter a kind of second upside is on per decent that, to forward? CapEx rig moving pace million or five XXXX?

Tony Petrello

to on five now, relatively but So the does contracts, a on year it’s this not it drilling Aramco and So for providing fixed. hinge it’s based is fully right? it rigs easy estimate, those that, time

going CapEx is a much have roadmap forward, to growth We guaranteed how going of be.

and going years over so next assuming several We how we’re is year. our per and we million to in of is know in plans many about the portfolio year We how our planning cost a really reasonably. we’re everything the adding a those much said $XXX stable. that That’s year newbuilds. pretty running rigs however, very exceeding are piece The for be -- rig rest five rigs a

also operating, of that are rigs course, Now, CapEx, the is we to expect of to linked those go the up. number

be increase So higher certainly don’t than our to $XXX the next footprint. should any in major numbers rig somewhat but have with year, rigs. million, a We line programs

continue idle invest sufficient rig year Saudi next have to exceeding capacity in in rigs additional to having expanding We Arabia. without those

Dan Kutz

the for Thanks it color. back. I’ll Understood. it. Got turn

Operator

Sachs. Goldman with Blunden Karl from comes Please go question next ahead. Your

Karl Blunden

again this the Congrats Hi. on the cash Good EBITDA and both results side. quarter flow morning. strong on

Tony Petrello

Thanks, Karl.

Karl Blunden

the U.S. Just on for slides your here, one it XX. like looks question Lower

You XX of, rigs mentioned spec XX. high which there on revenue are

utilization growth rig. also outside But spec. that of is when look at high increased high most it reporting sequentially, So the coming of of like looks I you’re the spec

just you both So more color bit a I that sequential you the on change expect and give was what dynamic then going please? forward, could hoping

Tony Petrello

the are actually rigs I looking today what rigs spec. -- the don’t know high at, all operating you’re we’re

high today have we is XX count -- So rigs. we and spec XXX and rigs actually rig the

XX spec. is They’re today. it’s XXX, which of all XX% So out high

Karl Blunden

With understand I’ll just warrants, bonds warrants I obviously, little under you the amount you. to them a the Got exercise depending price this bit make that the a longer quarter. the about committing on the term, warrants the accelerate is. and encourage where and essentially conditions to you’d what debt reduction? talk Could the you using share offline consider think sure to When you to follow during the Maybe about exercised numbers there. of mentioned regard were small

Tony Petrello

time Well, need we the I think, to let mechanism some work.

it to this bond captured So step Basically, with shared the all the is to means the allow what to understand be shareholders. a a be of second got discount and was to about. back

be you it bankruptcy equity, market swapped the have happens that results know, in easily really stick. short where no guys exchange debt getting As with in usually don’t available and there of is can equity the end the

is of through opportunity warrants. exercise that fashion way to a the doing our given really the themselves this shareholders in capture to bond the normal what is allowing be discount a of So

of to premium price, value you good in got When get huge do number value the the effect you is Now that you at a a amount lot if to that using amount. of debt with exercise a for updates there volume it’s and since you shares there got do the exercise. been is get math, be through to is holders announced to the you price The of of calculations that for the really what has where the upside the trading discount of a the the you warrants a meaningful, to shares trading market debt news the of exercise do warrants. calculate in you’ll face you been that the bonus shares, for is current bond at get see

by to compare would of the transaction In and first think was us, the I them. volume double fact, day to activity if that you of trading done warrant amount our we one compared

buying person shareholder, think it’s the where the for some now so who are there put always going position whether is owns warrants. the a to I being about bonds bondholders And think or warrants in is

positioned and there’s that positioned I economic they’ll it’s to be the the where being that into think upside, it’s exercise. where zone, gets price stock way

look there warrants assess not expect discount. we happens is, of future that But what a this as but we’ll at when yet. of march the we obviously capture we’re So see. warrants then we’ll matrix, the the to that good we happens Once portion we once that the exercise

Karl Blunden

the debt the around Is bank those two kind disconnected of That’s reduction any and exercise helpful facility with extending or very there in certainly to goals. timing that element their relative and transactions? line

Tony Petrello

position and our question. we’ll in like great better think sheet warrant up where a we be today. balance transaction a stands. a than That’s see Obviously, with we’d We see are we end to where

terms coming and Canada flow a addition, have free we have in in cash we proceeds we’ll generation. the In of second from half think strong

help lenders. all think I with will better those a more our discussion So have dynamics us constructive

with So quarter, the see towards the expect you of end -- I anything be within There’ll the the should think towards -- the I end something to fourth year. don’t think respect three our facility credit to next couple more months.

the on explore the longer care we to debt issuing of term that, to maturities additional also take revolver. out In addition options of for some expanding term a maybe and short-term will

are of having sense But, better all achievable. warrant transaction remains could the will is expect, benchmark, that what you us the completed is some once a those So things of give bit a open. of obviously,

Karl Blunden

Thanks.

You a Really appreciate bunch time. my the anticipated of questions.

Tony Petrello

Thanks, Karl.

Operator

Please comes Andrew [Operator next ahead. from Pressprich. R.W. Instructions] go Our question with Ginsburg

Andrew Ginsburg

proceeds of color Hi, I the were answered. clarification around my wanted Drilling segment. so far. was guys. Thanks provided from to One for Most the you make questions the Canadian

initiatives. mentioned guys used strategic have that’s it initiatives? guys for debt versus be on key that to in use reduction key going proportion you for what You other any Do you are color

Tony Petrello

The initiative reduction. debt cash overriding in strategic utilization is of terms

So…

Andrew Ginsburg

Okay.

Tony Petrello

a made companies, we stakes terms minority but pretty -- millions. that So have some geothermal of in single-digit investments, in single-digit of and investments for couple those that’s number -- a

So…

Andrew Ginsburg

Sure.

Tony Petrello

accommodated easily within cash existing that’s flow. … our

that to going would the I used Canada to debt. So are be say proceeds fully reduce of

Andrew Ginsburg

had. your Thanks you. for question guys. I Thank outstanding That’s the Perfect. only time

William Restrepo

you. Thank

Tony Petrello

you. Thank

Operator

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

William Conroy

you joining up Thank call. everyone us for That’ll our morning. this wrap

Nabors end ups there. and we’ll contact If please the you. you us have call Thank follow at any

Operator

concluded. Thank Conference for today’s has you presentation. attending now

disconnect. now may You

Nabors Industries (NBR) 28 Jul 212021 Q2 Earnings call transcript