NBR - Earnings call transcript Q3 2021

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and welcome to the Nabors Industries Ltd. Q3 Earnings Teleconference Call. [Operator Instructions]. Please note this event is being recorded. I would now like to turn the conference over to William Conroy, VP, Investor Relations. ahead. go Please

William Conroy

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

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

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

Anthony Petrello

will results the you XXXX. us Then for Thank joining for as and we progress our of remarks discuss to some with of third I on detail will up we quarter this begin questions. our some financial the follow concluding keys open I make review remarks, X markets. our the and results. my made your excellence comments. for we discussion William morning will I the will overview with will

operating performance quarter was Our strong. in third the

reached a of completed All that, $XXX met strategic Adjusted quarter we million. of the in we the On top grew a EBITDA high outlook across exceeded maintained segments at business. initiatives. our quarter gave level we several or ago. the execution We our overall while third milestones our

U.S. of and in driven Rig in by by for in Tech both Drilling average was excluding our increase growth drilling both grew EBITDA That drilling Solutions sequential increased impact count revenue increases quarter-on-quarter. Our Volumes count third our rig X the of quarter activity. operations. and This rigs, rig drove the global assets. those sale an the in segments Canadian

$XXX investments, debt. Free million, significantly In of the proceeds Without billion cash again sales above strong driven in cash and evidenced geothermal we was capital we generated third the Canadian line working and those on and our improved our generation, to sale. both debt This sustainability for performance to and the the quarter combination quarter, spending, our quarter our and cash thesis. third our Last U.S., with Canada reduce the innovation, free the quarter, marked X pleased progress cash year-to-date. our our by flow technology third strategic the our support our Nabors' free net business, $X.X funding in key our million. the performance, the expectations. the the include: improving twin operating delever. exceeded our to leading on and result of decreased highlighted including capital with $XX flow proceeds. capital in am priorities The to generate and commitment flow net in by energy themes and for allocation our performance the financial the These in investment results I progress quarter I drivers international that upturn believe commitment outlook disciplined transition

U.S. Let me start performance. the with

in XX Lower performance margin Our the remains strong.

This we in we line accomplishment was the We outlook with above sustainability. in the excellence, advanced gave mark. leads expected, and third operational quarter second with our As we top last margins quarter. the and specifically for industry, performance our believe $X,XXX technology, the proposition held quarter, value daily safety

validate results this. financial Our

international the our same business We to XX elements bring business. support to Lower International segment. our Next, our

in field margin Daily highly Our performance financial segment from results drilling robust. the disciplined spending. benefiting are outstanding this and remains in capital

deploy of Arabia. next, The rig quarter we is more we look working should of X Saudi come at new X occurred. the in first Currently, XXXX. awards of expect X have per quarter. first Based end program the through is in in-Kingdom balance rigs to to on Saudi delivery that recently in addition have restarts approximately manufacturer's the build in X The SANAD's and the rigs the to reactivations we Arabia. visibility progressing. you schedule, into XX As the year of This

expected new builds. excellent and at annually. growth SANAD just contribute of With a Through the million we XX long-term from expect today growth, expected activations increase by SANAD's that new for of rigs could $XX the generation of third EBITDA call annual XXXX, International EBITDA successive reported. have of end We X at of years. to our XX rig $XX versus builds approximately quarter each visibility XX% to rigs plans these total million. over Each

Let technology me innovation. to next turn and

Our of industry-leading of key performance. the our drivers is advanced one technology

Our in segment is Quarterly multiplier earnings the drilling our Drilling portfolio to XX%. market. in an and continues sequentially top EBITDA our business of Solutions scale gain by increased business. traction This has on

increased. full. improved Beyond Nabors' technology than third-party this and remains XX Lower rigs on performance, pipeline rigs sequentially on third-party by on XX%. our more rigs Revenue Penetration

in the on Notwithstanding apps in and of investing to or NDS of more In the third rigs. full deployable third-party feature, on quarter, ran XX% rigs. services. rigs continue Lower that We quarter. XX the this XX% potential that second products the our is maximized compares in Nabors are X This portfolio

NDS For digital these market. products our across total, of are the Over to we portfolio further. we time, committed penetration greater in expect see expanding to

significant Next, highlight a technology I to breakthrough. like would

need casing With The crew Rig rig the the With suite floor. have fully depth drilling degree to controls precision During has this industry's software. high design, to less the we our and It of required, the the hands on smart drilling greatly our other safety XX,XXX a of package. interest the removing fully-automated talent performance. work rig a we've will its change from from casing rig With incorporates without people leading XXX labor quarter, available initial out month, and well. deployed with of experience innovations. are removed way, of step on feet for automatically improvement operators. incorporates pool automated we we a XXX rig By the physical equipment. reached This has rig, land the runs potential expand rigs. and total first rig also harm's all this seen rig edge in separate a to robotic PACE-RXXX. offer, confident this this of Rig already Earlier Features number

Now let's delevering. discuss

flow to progress was improve the delivering flow. to cash multifaceted quarter quarter third committed The primary remain in The cash marked continue delever. capital free is Free approach a structure. We to to strong. focus our significant

We our transition. additional themes forward think future. in we're far finish commitment demonstrate look I results the energy reporting illustrate to sustainability year thus I'll and but our progress of discussion our not and this success, this finished. with our now the

additional and our the scores We an gas ISS. on emissions on continue XXXX. We track from in remain enhance in to in We our progress social for and focus environmental made sustainability. U.S. on greenhouse additional refine X% reduction

Our TRIR performance employee by TRIR has year. safety record measured improved quarter This each leads industry. this our

We also initiatives. our in transition progress made energy

These We capture hydrogen results have of our and technologies. been encouraging. testing are currently prototypes carbon

several more projects We underway. have

As these proceed, be results. reporting the we'll

companies will and in adjacent as view existing We geothermal During early-stage from covers a well asset geothermal of our our innovative third have X expertise. our we immediately spectrum quarter, engineering of portfolio completed now manufacturing Each business. these the as to that geothermal technologies. We investments the as platform benefit companies.

renewable source drive excited to are We of baseload this the energy. development help widespread of

We companies required will down commercial time stages. these help reach to their the cut respective

presence, global technology these to the be initiatives other and scale applied and Our drive will transition space. in

We technologies. in reach taking take expand own carbon applying approach by the to and activity to helping can transition. areas of to these three-pronged advantage our We And other adjacent the to companies reduced investing our are We opportunities technologies scale. a new footprint these verticals. by in we them

it WTI be across But spend the was The above of the should range quarter end drilling began I Since markets. conducive in macro increases at $XX This then, with on environment. it where has to reached a mark remains the $XX. Now few moments September, WTI mid-XXs. in will the recently. activity

X%. the rig quarter count. quarter. Lower Lower nearly the by of I'll Inverness, end survey from X/X growth. approximately XX rig land Baker averages working again, second the group Smaller Next, of XX of through the XX%. the clients the third count. rig quarter accounted increased This Lower the we rig XX the of for of third count this the beginning surveyed Once the quarter, Comparing to According review for the largest end, accounts approximately third by or at count the clients XX all to increased the

outlook approaching by E&P end an going we encouraging into year. spending survey for as XX% into the in end increasing increase consistent this group is the with Our very the the year. of of indicates activity It This XXXX. is look

America, We with and have of reactivation rig Saudi in I'll year. supply potential In rigs our we this next update particular, for labor are wrap additional in discussion also and early our an chain. additional visibility an Latin added on up to markets. increases rigs global we recently We availability optimistic Arabia. beginning macro see suspended the international in activity

in For difficult, XX. labor, support particularly Lower increases Recently, activity. has in at and we have this recruiting our been staffing successful become to more

during in consequence, quarter. the additional are monitoring we and raised helped, steps last a has necessary. compensation As this increase we whether be market This will

the Now address supply let me chain.

significantly. up, offset stretched we their not our seen point current we are have rise In experienced We and day margins. economic The Natural global sum more would in operational rates like on continue all With prices also than fleet. XX have cost virtually range, see I for have to times by economics delivered years. favorable have where oil maintain we have increases commodity continued gas that been the cost have moderate activity operator we increased as inflation in global increases To lead continuity. our similar increased. areas in generate able operate. to levels to systems, has prices prices our to to out

potential and early an observed Those to the level virus prices. disruptions With in mind, notwithstanding current which can activity. in from interest We increased these higher remain benefit environment the have from economy. risks, the drilling the supports commodity in we from challenges increase that operators, signs vigilant of of

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

William Restrepo

morning, from per and was Tony, loss good The continuing net $XXX or you, million Thank everyone. $XX.XX operations share.

energy The after-tax the or compares included purchase in second million This or to loss $XX.XX related a the technology transition quarter. nonrecurring in share quarter of million $XX share the $XXX $X.XX per a expense per of space. third to

in our quarter $XXX The second of and impairment drilling third reserve charges was our results from tax sale taxes, assets the rigs million, quarter compared included of to a International an Canada the for second for segment. on improvement after operations Revenue quarter. the mainly a for of million X% contingencies $XX

termination are in increased to providing by our seeing strong, were segments that drive we constructive has in of $XXX southern by experienced and Recent point continued internationally. expansion customers continued in throughout Canada, lower in commodity XX, rig sequentially. addition from margins in larger the to to rig in the Early in EBITDA U.S. the we and growth Excluding for Latin demand continued X%. In improved than East. in our and U.S. U.S. the to Latin Drilling growing regions price The the international Technologies offset contributions U.S. million and and in expansion additional Total by private revenue markets. of or America Solutions million we addition Drilling awards million and have rig both increased of X% Lower operators. expect the by million Middle the $XX.X all activity America count public increased Internationally, adjusted XX%, was increased X% revenue up XX% of particularly lower with activity or respectively. more Bakken in in environment basin, Rig $X.X steady EBITDA the awards $X strong Mexico.

with rig line margins XX.X the quarter Our quarter. in in the XX.X X.X the second $X,XXX, Daily third prior at in Lower XX by in quarter. came rig to count from increased

improve, utilization continues leading-edge high-spec As to have in rigs day increases significantly. rates for accelerated

higher has for into our the quarterly this momentum average offset crews. increases Although was fleet, improvement revenue by for wage price rig translated resulting

market fourth crews. but average day wage the for continue as rig move rates margin to should quarter. rig the we upward tightens, to expect For third further in expect with we the our Market daily adjustments quarter, line remain

line a quarter within rigs the our increases to increases remained an fourth X stands count from versus Currently, the basis, of average. in quarter. wage U.S. recovered second lag. largely markets the are rig EBITDA XX. forecast from Drilling increase customers, come quarter segment We third a rate the with day our these Although in compensatory On X the our at other net normally with

X the add fourth in Alaska. rig For we expect to quarter,

However, margins almost contracts time $X,XXX margins moves should sequentially million International per International as in $XX,XXX count affect Arabia, revenue by $X The fourth the termination compared average Mexico rig for at fourth $XX,XXX rig between impact compensated early early of downtime to gross rig. idle and the XX with move-related per third X% and some offset moves performance be on increased time expected still offset at XX. Without activity Daily a decrease $X we in by lower increased but $XX,XXX. America. recertifications count quarter second largest in exploration anticipated EBITDA Current but quarter rigs, X-rig between Mexico, the rig $X,XXX in should quarter reflected at the day for fourth million in to the will termination this contract EBITDA our quarter, International than the added daily rig Mexico. in of to quarter. to Early stands reduction came their offset almost to revenue expect termination or a Latin and incremental in margins. by rig margin between more come segment count Saudi count the in International renewal revenue Mexico in idle and improvement. improvement offshore the the related gained in our the day. improve

we Drilling additional into Solutions International the with in rig $XX.X our are increase Arabia as XX margin contributions across daily and in a from and Activity This Drilling per rigs rig count quarter, taking in our combined growing the the all lines, $X.X casing improved, up EBITDA fourth to segment. Solutions running and day solutions or contribution the largest was software Latin Lower $X,XXX. XX% reactivated by of quarter. services generally our coming the drilling globally. U.S. X improved gross to rapidly to from translates rigs million America. performance of product third Turning Saudi Penetration million in expect $X,XXX

generated $X growth Rig for strong third adjusted to primarily in Technologies this million improve to $X fourth sales. segment further The quarter, the of EBITDA equipment improvement. quarter on third higher the EBITDA million results. quarter a adjusted We expect related was

upgrade specific parts, should In and we're repairs addition We rig certification well equipment going see drive starting sales to as rig the forward. drives cycles already higher top spare capital that as for catwalks additional increase for upgrades in sales like revenue, components. believe components and to

In EBITDA $XXX liquidity fourth compares the stronger the million. on free cash to the improve with cash sales our should total in expectations. and free flow In $XX third million of continue This higher the flow capital equipment repairs. quarter. quarter, generation line For quarter, cash second reached exceeded and results, to

into strategic reflected The initiatives. third Outside the partly $XX a from namely of several business quarter million transition were of around translates geothermal included XXXX million of total in Canadian $XXX our million. reduction million, energy newbuilds quarter reductions. in $XX cash and transactions, reflected This $XX operational million flow for net million, the of capital other benefit $XX we for $XX SANAD sale $XX roughly forecast million $XX to should the offset by quarter, a the the of for investments the SANAD reach working free for of flow results, including on the newbuilds. capital million disciplined the $XX $XX generation free million spend now SANAD spending strong quarter. for from including expenses cash million The down million in capital third million. expenditures, continued $XX fourth our newbuilds. cash and $XX Free $XX transactions, in progress quarter these fourth lower In Capital second million

for million, $XXX newbuilds. Saudi including for is Our approximately XXXX $XX million capital forecast spending

reduction of $X.X the at debt of on Our the net pandemic, $XXX was billion, At September debt the stood net XX our quarter. million billion. $X.X a in start

despite the challenging We reduced environment. have debt our net materially

leading performance meaningful growth a U.S. year was the of quarter in a for both the third ahead. in Nabors The with operational potential demonstration further internationally, and

also reduce performance cash debt free allowing generation, into strong operational Our robust translating materially. our is to us

With XXXX. stronger relationships profile we introduction, turn with the better much they stronger in never while presented in taking and time. debt to years, capital and industry with believe environment. call fleet the a his and quarter improving considerably that, With have And operationally. across fourth the the positioned in reach long our are are reductions advantage has over Tony a Nabors customers modern in X industry-leading I'll concluding opportunities deleveraging to been debt the remarks. efforts We rapid numerous close leverage by targets of globe, the last than our net structure been our further technology back our expect progress We our for

Anthony Petrello

top my results William. you, of second the conclude conviction These third that in have now our I the will we this with on performance Thank morning following. remarks quarter reinforced quarter We to the significant structure. we to progress time, capital strategies impactful reach goals. the improve our both right of made solutions. and our advanced multiple the technology At same deployment development

are We In transition. progress pursue brought the we Nabors initiatives responsible challenge material support the production committed has the both to energy to demonstrated fronts. face hydrocarbon the by on of as pandemic, along

financial confident for As demonstrating this remarks my global we embedded achieved is in take portfolio we've have will well, that, the that proved am our the far, results resilient, Thank concludes With morning. With your your businesses. attention. to That and come. yet time so value I best questions. all our of you

Operator

Instructions]. [Operator

from question first Holt. Pickering, Tudor, with Our Taylor comes Zurcher

Taylor Zurcher

question is international. on first My

different have you, feels moment, East? to hoping reemerge Saudi I be market now for a mentioned Oman. going regions of Colombia, in certainly you're to Middle which of compare and COVID gaining to the and exclude out Kazakhstan, a XXXX be tenders opportunities. bit. some a like if perspective continued what and Argentina, QX Middle from died You you where contrast to you're some for called and Latin lot seeing for was beyond. backdrop could momentum. in of environment as perspective just are is a seems America excluding and presentation rig both these strong Saudi East kind Latin due of But the we tendering but number America down a in the a of moment, obviously growth And just rig In And both a seeing have maybe COVID, you the some improved starting issues to add delayed Kuwait or be

and compare think could we you contrast as X about if curious those just markets So XXXX.

Anthony Petrello

right hit all you think on. I it

seeing see and next increases there. COVID markets particular. right. similarly does and absolutely X the there. this particular, same. Obviously, factor the suggesting you're in next we're seeing in think activity year Colombia, Colombia are both additions for on going that in think our of has everyone's example, year in I into as And big the - we're as that rig steps see Latin in during America, count Hemisphere In to in taken for talking for the in some think terms we're rigs real I well. we solid Argentina, some in But right some tenders. Kazakhstan rig East, Middle visibly actually course a at we several been now. Eastern Argentina market was well, years I Kuwait, Argentina, of visibility But again,

at can't and - And in think you think people and of just quarter, and in Saudi in the we each the we are of on are they're rigs. those is areas. X way have year. going given full view say given I next clear terms plans our quarter the quarter, robust I additional - remarks, the tenor for third seeing will visibility said of X have the COVID we I rigs those things work. of happen where international as ever of externality, position the changed, course, in is the fourth so - will So think - top a in us but the existing full That end has a of making of X what started for steps rigs that, concrete - the their the gives market very to back X rigs And quarters

the about on first of the that That's quarter, of in million. run $XX is the And newbuild and add with by about rate illustration of top that that the So $XXX number get million XXXX, roughly half is XXXX. $XX EBITDA of potential And by quarter $XX starts million the the a XXXX activity should pretty the million. newbuilds count last our XX rig in will the second increase. of to healthy plus that

following when that almost XX% the $XX in in up alone. goes roughly increase year, market rigs additional by hitting it's that And million. XXXX, have So you the market bit a a

clear double-digit extraordinary of visibly position Arabia, million barrels to about is think the growth in to have all desire going internationally, pretty happen. about. obviously, why is Obviously, XX That's it's - control. the it $XX - Saudi depends none million in been right $XX And markets second capacity be their going there in we up to international Aramco to their the to to increase on million control on what But other fast you barrels. now is I XX clear. - think So right signs million talked think, has Aramco direction. given point pretty top we and not the our things and that our it's to pace actually how I

Taylor Zurcher

Thanks All Good on that NDS. to for follow-up gain continues hear. And strong momentum. is It's that. my right. business to a

strategy is which third-party you strong. number sequentially, And Analyst be XX% think up the of it pretty a was at outlined rigs ago, said out to well. playing revenue from really you Day years seems I the

about opportunities one, the growth the So current question international we my com, is, think on portfolio. question is as but on obviously growth

that portfolio I on or Tony, of comment, the to you're the your digital continuing improve think made call sort you capability.

rig? two, whether side in that growth just Are of see types you of being the one, or be on today digital things. construction you're whether in for you curious, not other services that on can in today so And or And organically the good it services of offer well color more or the within XXXX portfolio that opportunities inorganically parts there and NDS? you're small that beyond,

Anthony Petrello

That's a mouthful question. of

me follow take So way. it, let

for remarks, the a I there's in not in but think penetration, U.S. we said of the First room all, of only as prepared lot internationally. additional

double to pipeline If that you actually we some And $X,XXX terms day. is margins existing per penetration. existing the content portfolio, the we're two, a the $X,XXX rig are a - those stick equivalent move One point into U.S. of with And one. focused is that Internationally, additional number could content now, That's Point in the in on increased that now. technologies right our U.S. hockey even with today. the some services international, combination number have stuff of have is additional margin the we take in in additional right expanding there's two, is what available so per what double here. other portfolio. And that's day

on the we've us out, no came with automated front, directional automation Analyst do everyone decision talked And a general, we then, today, in about, invested trying imitate you lot. think is what Day, back we as one we in about think to I this talking were when knew I back drilling pointed it. and the

you available, I today Canrig. the industry think the our to And application we which and is rigs. have a And stuff, process caused to we're to but robotic to growth. automation our with Similar including Turtle to people, that that has competitors. on it engine, project spin-off process make had helped develop automation an rigs, committed the third-party which with to that develop today moon extraordinary needs rig that sequencing NASA, you heard this happens view actually about what lot us the us a on philosophy actually which therefore, driving goal some is actually may sound to making to crazy our available of that robotic

compare top to drive the top As the when none. vertically that, we size-wise, out Today, market, I parties. to drive breed leading in the is commit to because manufacturer, integrated, equipment even competition. leading us challenges my have by is I in that best the beat demonstrate I to can second say my third think ours view be know, And Canrig we doing that we though to provide you we're to

driver, top we're rolling drive. the newest out In new our fact, in marketplace beats as hands I think, the down top everybody

about philosophy. growth that And we've in third-party some is that. everybody own. Street, creating all need our maybe work And conversations operators, bad And growing automation. similarly, coloring we to we've see So this expand which opposed philosophy it where better it's historically you had realize their Orange can as people to been NDS to with together

would and Apple you industry industry, Apple, seem compare as we on committed that. our reluctant or try they see as we're own things If do Microsoft the be Microsoft, competitors problem market as to Office us as to In their works our Word like to - have well. But no to well platform, technology like to to the that you try that. third-party base grow doing

that, So gives of that's a opportunity. great we part And strategy. the think,

Taylor Zurcher

Thanks it. Very the helpful. for Got response.

William Restrepo

of think That's I to X/X in sales mean outside So not Technology Nabors. our I add I'll are Rig the in our NDS. today that. segment, case

potential the the outside rig. is Nabors think enormous we So

to within as mentioned, Nabors. So penetration Tony increase we're going

we're new is rigs, the So our Nabors biggest really that's And continue but going introducing strategy. of a to - products. part and big outside market

Anthony Petrello

Yes. I one operator, technology solely time, at And drilling the sole-source don't that there's obviously, with customers all with needs. they and mean have one same needs contractor. automation to robust rigs the focus want

in And there getting so that big journey, to knows for is strategy. those customers, in and particular, bidding that a a it's do everyone hard

they're to available, operator available drilling because market contractors us whole So the And by well competitor terms we partners gain that's efficient helps more stuff the make rigs their the advance automation logic regard And using standardizing iron. out be we some are. those making people to technology desires helps can But our share. know will terms here part because helps get quickly help along be we frankly, everybody. can only the of that haven't choosing NDS what not create to even that if It we're third-party as made they'll that helps own of rollout. to rigs more it investments action of the It in not We going that. in them though of help rigs. think that Nabors

So that's the concept.

Taylor Zurcher

of there. Lots going on things Awesome. interesting

to Thanks the that's answers it So tuned for me. you stay moving for are forward.

Operator

Connor from Stanley. comes question next Morgan Our Lynagh with

Connor Lynagh

raise I of structure? labor was about of could would pricing Or pricing think wondering talk de also the cost an pass talking how pricing. if would much great. you But that thoughts do to dynamics stand offset just you I that? we you U.S. sort And be do global through raise the where broadly address appreciate internationally? you're Specifically, about? just to things Obviously, a to is the to level, in your need a at around inflation facto your need contract understanding

Anthony Petrello

Well, the cost I'll William yes. stuff, let pass-through address

William Restrepo

for Yes. I U.S. in contracts our have of mean adjustment which are kind automatic. clauses the the vast labor, majority of

of we're we're - dynamic in higher increases of automatic We accepted but on there in same practice miss right? the lag much, the bit U.S. and what X or part have Internationally, U.S. is a a compensation ask you X not internationally months seeing of increases, of course, is that kind them, for is not and of but But seeing to versus than so the the so cost

compensation we think a our somewhat have So we and think we kind because this I behind think environment year, industries. we - of fell for over have been in COVID distressed other

don't So now. catch-up on going mean, there's Nabors, And I a a the I mean drilling industry. bit of our in ours

tremendously think see high. you'll impact per the So compensation our we levels day where But I compensation rate us in an - somewhere We across increases. those are quarter, saw a to of offset make the range kicked that the bit numbers in little increases And day actual yet. bring in don't on haven't we which pricing - those probably with third competitive industries. of the $XXX we that

the contracts of is which the those when are gone - terms pricing and tell rates best $XX,XXX pricing I'm not can can in I'm are we that I tell you, environment. our to have cautious on all we come forward in. in the now So The pricing, but actually signed the referring outcome, try will the And look has that in to always you I U.S., I up. based I'm assuming solidly lately,

above quarter, get of it kind was hard to $XX,XXX. second the Before

contracts, latest $XX,XXX and asking we're for not flinching. are the customers Now

has I it's pricing So of changed. saw changed the favor as much our It's Internationally, did changed environment think as the contractors. in the drilling what U.S. we fall materially, and nearly not the in

In the fact, throughout $XX,XXX, you can margins see remain where today. $XX,XXX downturn that they the our stayed really range around

- it's really the really saw dynamic the really not materially as are not same in increases fall didn't really because pricing So U.S. pricing we

Anthony Petrello

will as as as well rigs, also depend on margins size mix International the well et cetera. lot think depending I a of rigs on

day crossing $XXX, are you'll the look of represents the was is up edge if see leading the that - rates The other the that I'd make at fact point which it rate, you average the average fleet.

in quarter starts estimates And that will XX%, the pricing. XX get we rigs, the in that is, And hockey as our affecting be about super-spec said, to to right William the when stick if so fleet. if intend XX% of you we know, point now. the you well pushing close our that's below industry as - are XXs As exit are correct, to

et operators, very where stuff in By for So record about But But facing year. record up measured probably next Obviously, way working however, next said, best are. I way, macro, have the right is quarter, the here. that's been looking same it's everybody the environment think obviously, and obviously, XX we year, probably be a terms compensation years this to now. through, a - will all time, reporting I that's super incentive the as William in a great has constructive of there's to you're majors the its nicely. be think constructive I very that At we cetera. think

capital terms dividend think being a emphasize necessarily commitment. with you've here. variable go it's with that all. don't seen of I their emphasize immediately operator I away operators And structures. innovative came think fixed to in going new some discipline particularly One up and is at to

ways to to I well. as think trying that are operators reinforce out other figure

up indicated talking about plans environment in for already. to all of like of half them, that And it talked constructive sets think So that going them we with that looks I forward. terms have have a

still next their that their going terms acquisitions, are on having a the Others deliberate all modest. acquisition - for for sets year, through next they're are I of what up, rollout are think plans of doing But year. given macro. digesting that share effect increased Some for in increase

Connor Lynagh

that the Was a increase helpful is just debt is in increase Maybe in think drove we needs your quarter? the spite a how just X-part simple levels should to balance But then to turning which thinking question, the to revolver in XXXX, question clarifying draw just Got sort it. of part about here. what first delever CapEx? a or context. of through sheet, And ability the That's what?

Anthony Petrello

cash which first million. debt I'll question, up also was you - $XXX that the saw total million, went the up went answer $XXX Okay. but the the

down energy went Canada $XXX million, and in free quarter deficit flow debt the net cash and It investments. because was transition that's So was XXx $XXX million.

I balance the see it end is the occurred. number now X.XX% that - you'll down quarter. occurred that think was issues. That Q X.XX%, exactly you There the the was in what pointed was basically a at debt that revolver revolver to of drawdown out and is so number on management

William Restrepo

quarter. middle down closed entities do around October, So we cycles out was this the between Normally, legal move and week comes the the had first halfway that ended a move of time-sensitive we million. cash and cash in. $XXX back of by in revolver during on the again balance We the

September down debt and the - quarter, important in the million down million maturities. fourth of in the it did So is $XX the continue went pay to we part and reducing by $XXX net the quarter, expect we

Anthony Petrello

- $XXX $X quarter. understand was Mexico to we we're termination number One clarify this the net comments of just - reported the add-on I'd seeing international EBITDA our number The that. some given million. actually like termination sure to is to that want make I other a items want The positive in is, million. early of what make net onetime you for for and

out, that million above the is about quarter ex the was back actually $XXX onetime adjusted actually item the consensus. million, $XXX $X you if number which So for

number, by - I $X that it's confused net number people think was a thinking the the but net a is gross reference $X actually that got million, to was the some all - million.

ex actually for $XXX onetime was numbers number ongoing the So the those quarter, million.

Operator

JPMorgan. with Our next question from Arun Jayaram

Arun Jayaram

Tony, your seeing from increasing go the on of some engagement Jayaram comments to to want some I you're companies. back JPMorgan. Arun from public of

could so and we wanted to on, XXXX in the publics next just are thoughts into wanted but sense we're prices. CapEx And do But thoughts have strong the land mid-XX% year? market publics I increase obviously, despite the kind next on the get I XXXX in changed evolving how I very modeling as of think you see been kind your very, really disciplined activity, what to your your U.S. a get year? of commodity haven't get

Anthony Petrello

I toward I think said, I of seeing that, modest quite a conversations, improving I when obviously, their don't the think a probably sheet pedal mean, in I based to but to - - on put you number balance point box. the the range think increases. we're is bit, situation going from view, I of as look like past. And think the they're out foot upper And our is that I think

now. So they what I to are be going people right think of terms do deliberate in

quality. to work, better. priorities X be, want I execute their think existing first on a people got are to of you Tier going for big I operations to execute be now operators when one think of to quality back And People all you in of aware is part are your these the better, focus general now. to as come going to thinking

in lot necessarily opposed want high the a their going to of existing think pipeline, some terms contractors think of to I grade fleets. So our to we're them immediately operations looking at as basically I in of increasing

that. pick for with on the focus they partner table seeing operators as you're They're replacement so be a and can want upgrade person decide some a at to to And pick that automation, strategic them. more a to going partner

that's of the a going that create want take is they'll year. the to be think then the journey. But more speed depending going And the dramatically. - gun on success I the then the tout not to step first rocket off to pedal to I even environment the first rollout, in don't on foot this I'm put

William Restrepo

it either. understate not let's But

the I are insignificant. year, of which somewhere range is for activity think next not in we XX% looking growth

Arun Jayaram

from year-end the or exit XX% rate year-over-year?

William Restrepo

Yes, yes, correct.

Anthony Petrello

Yes. Yes.

Arun Jayaram

Fair enough. Fair enough.

just Okay. other Great. And question. my then

wanted rates equipment? highlighted between eclipsing leading-edge are sense have spec rig high bifurcation get from how in kind demand to of per a how And patterns do you characterize of Are day. I classes? rates standard more seeing different You versus guys a $XX,XXX you

Anthony Petrello

quality for I therefore, prop us, least is that's Well, the and the I market commodity-oriented our I from value to if we're in prop upgrades that's people, value think in drive their where more at high on so fleet, just all economics. the And you getting what's focused as And spec. out particular. working focus is. at of XXX% that's going it's - think. to dynamics and and clear, are those their of Obviously, privates said, best want on, I Particularly operations. returns existing where look that's the they I the different terms mean is things, that the think

not That's always to I to be going the today ours other Other high-spec they those be we utilized. think going rigs a or are rigs the in never overall are where disappear but growth legacy to fully see go There's thing. an market so of tail rigs, And have. there's going the forward.

William Restrepo

will be in bit of There's there that first the still increases non-high-spec as that to super may general. out well. But see market the capacity pool starts sign And idle in there's tighten, that as rigs still to the to more clients in a in that's specs going up. enough rigs the high-spec we try

Arun Jayaram

reactivation you those to a how guys you sense XXX, And XX, reactivation gauge do from costs if of just costs? XX to XX go

Anthony Petrello

staking great stacking our procedures, our job of rate. out I out now, think Right a we've done

I to big work hurdle. So costly not is be to or us going very to back disruptive that. We return as don't a that for do the think see being

William Restrepo

there's and a earlier, this discussing were we of lot So demand.

rigs. the are shape. rigs have The great in We

industry be If to to I fine. will think. be the going think at the should the the all trying else increase be same time, challenge bottleneck I we're right? that's for Everything accruals, the

Operator

with next Blunden Our Karl from question comes Sachs. Goldman

Karl Blunden

up the sheet. balance I to just wanted follow on

liability the it in quarters? increase. time, priorities over cash about management flexibility on connection And have mentioned the which think there from any give potential some and the interested, I and you've the was revolver goals there on more that? some at and think provided end the reduction the coming you might as you you some and with issues is management progressing debt draw of color I been debt debt you you quarter

William Restrepo

had beginning a No. there's said, I movements But to I happen at the net QX. in QX, We entities. of legal of we lot usually a middle do circular quarter. the that was like of X. transaction we had in the the and And it between mean, they time-sensitive is have one the - the transaction of half

So that's there. really nothing really there's -

Karl Blunden

Got Understood. you.

progress flow. had on free You've cash good

there standpoint do XXXX? of been be a from from I'd and Is you can capital that's in Some then into more working working interested. XQ also capital.

William Restrepo

of that's only really the think on team on proud I'm low-hanging what job has collections. in I is putting extremely of a We more much we've on the - the of extremely better do terms ideas last now done because have motivated we're of lot a from incentives lot have and still what fruit. our years X the some not being working of come great guys some the over have truce. But ideas, working we seen capital processes a have and on and automating management. done the

that the by we So fruit continue are growth will see will to lot largely that's in already point will that XXXX. XXXX of to that offset to those continue initiatives bear and in started, that coming a be think in the activity we

Karl Blunden

the more So squeeze one cash front. on if could I just

growth from generated from that's in cash terms funding flow free other plus you that's could plan the is SANAD still organically ways fund the In the SANAD, their just at of approach CapEx Or needs region? be the cash base the it there strategy at to entity? the

William Restrepo

bunch not rigs pace stressed ability allow rigs out and that there's rigs the more the managed really think pay of to realistic being Arabia shareholders. accumulate and by today. new we if enough only not SANAD, fund with generate but to SANAD of of legacy dividends will plus sort of to organically. is to I several given next mean, a potential a the delays SANAD suck the the terms financing to within cash but around I that's not will cards SANAD, over Obviously, in the there that to are by doing of fact new that XXXX, cash due of And in also forecast think for rigs years, of cash for built, turn some to I the they the really Saudi additions

Operator

question Bank of next Gregg Your Brody America. comes with from

Gregg Brody

was stands I what address terms are it? could you revolver your It's the in for right Brody. the if where Gregg and now process just renewing wondering plans of

William Restrepo

So to We things early. always under that process like do is discussion.

that's times, you options needed. are with obviously, sure do But top the can to the So screen, amended and on right radar as at the to because, we've it's my we revolver telegraph of my we'll going continue could on not screen. revolver. there be and multiple that it's what do radar something now I'm already so obviously, multiple

as far I'll as that's So go.

Gregg Brody

won't quarter. it. we'll I'm about any Got there. hear in next push sure I more the

Just the in the debt numbers - saw presentation. I

debt if Just that for if any with how exercises much seen date? curious if reduction? were to you were can - tell was warrants paid of us that there the Or debt that part of you've the

William Restrepo

Well, the their I to specific and warrants those arbitrage opportunity warrant conditions create think yet the for requirements the debt. has exercise to met. submit some bondholders And those haven't been

them we X% days. a is another X certain the of But trade One improvement share over a past one, price. to of with have level

So those conditions met need simultaneously. to be

met yet. haven't We them

are compressed demand But is the trading bonds to yet. high that exercises at seen exchange do the are haven't for very, levels, indicates the that. we eligible there are that very - fact that So that

they because And opportunities. a the some those to - bonds have of the bondholders lot arbitrage on see piled

of conditions those we'll think lot movement. see I met, are once a So

Anthony Petrello

a test to structure. by been I bondholders exercises unique think process there it's the has obviously some because

But have where you're area, you we or said, the now in had that very trade William that So makes a if the in so minor with for bonds. at the incentive $XXX you attractive debtholders $XXX and the shares, in as was the the convert. some is amount area testing stock process range of qualify to combination

William Restrepo

think We a point. $XXX is trigger

Anthony Petrello

Yes.

William Restrepo

need condition trading. of the you then the meet X% to But

I think these likely a that forward, warrants become as very So it's that's will we - move factor.

Operator

Our comes Pressprich. from Andrew Ginsburg with question R.W. next

Andrew Ginsburg

some this as automated about I better idea of Do some so large labor services you demand being a some talking you of we One wanted the are are of get and a guys on call, that inflation bottlenecks. providing? see thing labor the to driver being of a lot pool the of

Anthony Petrello

change missing, the a the rig one in skill to industry, the drill automation chair priority think rig, is people be make of profession so a an think, a we're talent just accident they well labor a the operate these our skills on some and rigs a set rigs the long-term a in job upgrade actually like these GX. required change well, interesting to and job a for goal to make it and as of what's That's here pilot to as a mindset at heavy work to ours. not making Well, or had a and one very that's available removing of person that more interested by women people speaking the covered actually things frankly, in of industry so covered drilling mud why with I to being and a driller the right? And attract to has frankly of in of change that and reasons obviously, with is our when finger sitting to think

that's our So logic behind automation. drive part of the to

William Restrepo

we So I floor, on rather people be incremental hole, value equipment stuff hauling other right? think doing a just vision. rig that the those the and than around iron deck of stuff that provide today, will That's you see the pushing add revenue other into and services that the lot on like moving instead,

something not mean, I but yes, So happen will help overnight. that's to going it's think I compensation

have. something think we I it's that

over the In in only the a are rigs not that you be developing that a addition And automate the I like future. RMP industry. to to drive, the drill rigs what - top will That can as we modular requirement be of equipment time, the see that's but will well. rig, a think in the piece will

Andrew Ginsburg

Okay.

talent is going Or So point getting demand to the that that there is bit of that be meet both? - already kind is it of pool then drive little kind and of that higher the a demand? labor just help help will

Anthony Petrello

think it both. little a I is bit

get on pool haven't the in of at opens to ameliorated a think rig the pool move by existing I enhancing people then at this to in. floor. terms had industry be management work we site. safety, up on the value their zone make red attractive of the rig Obviously, access historically it about people And ability more the existing the ability for to concerns make productive site an that the to and -

say. things, I So would it's those both of

Andrew Ginsburg

on a pivoting know the And helpful. maybe the about address perspective a sheet. really towards trying I just guys the you just how of the of guys revolver capital in bit the some balance are the structure. really notes kind in or That's remaining talked the there of little unsecured the of you back Is the preference Okay. then above balance issues looking cost to from priority some tackle higher maturities securities of debt highest first the are sheet that? to the or front-end terms in

William Restrepo

profiles, I Listen, maturity tactical very And list. is focused just time. revolver, my obviously, the all that's debt management those whole usual. debt team That's mean, top of just business that issues as again, the walls, are we the do on maturities,

conditions. and it - many So depends on

those E gives from we're structure. D no B, cost, these answer the X I all at to depending last global. plan what where our everything looking your that's tactically That environment yes, of different we're managing will and pieces years strategically And at the C, have we've but on We as question, high capital us. continue. yes, been a mean A, and looking

yet, intend in shareholders so don't or I think we future. our and bondholders we disappointed do the to haven't

Operator

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

William Conroy

joining for you us Thank morning. this

please have call there, you us. you. We'll Sarah. end wish If follow to Thank or contact the additional questions any up,

Operator

now concluded. for has conference presentation. Thank The you attending today's

now disconnect. may You

Nabors Industries (NBR) 27 Oct 212021 Q3 Earnings call transcript