NBR - Earnings call transcript Q4 2024

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

Operator

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

William Conroy

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

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

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

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

Anthony Petrello

fourth us results. quarter Good our morning. as review joining Thank you for we today

We will our also on XXXX. comment prospects for

and XX fourth Saudi these market million. prior of planned. since EBITDA the same as accelerated market At the in has quarters. on new rigs XX the our significant with businesses Free improved provide Lower of the own The milestone color drilling at the in others generate. Adjusted build drilling XX receivable in fell remain short. X directly rigs both substantial in my cash in sector, pace rigs performance. to this detailed delivery of will and at our further the outstanding will his our rigs. had in businesses, on NDS' solid. reflect remained continues Lower the is $XXX we This quarter Lower more anticipated. disappointing the time, Pricing on third-party has market William performance levels That our NDS, Like with and start markets. I we start a impacts payments year-end not flow Nabors the the than me X Let value in margins remarks. very international these totaled the quarter portfolio remarks Mexico and in that

we the stable past the over recently, international a have Nabors, period growth. More few entered years. markets have For remained robust of

rig rigs. Our total international progressing deployments. XXXX, XX In now are a into of earlier activated awards we

previously we XXXX, announced X For start-ups.

addition, recently reactivate rig a Colombia. expect to In idle in we

another which oil On and markets in production. So strong top of for gas total, key a thresholds. have tenders. our year. this meet These this we XX additional in of They are pipeline also geographies opportunities are deployments financial

year, rig this XXXX. we for which optimistic are awards in We incremental deploy

high-performance the U.S. Turning masks industry at levels, in attractive guidance. leading-edge level relatively The remained Even fourth an of market. quarter pricing to the remained so, stable. elevated rigs our for churn. rig Daily rig rig weekly count line margins with in

Lower was our reduction rig slightly previous global count rig almost compared Our in entirely average to a quarter. declined due XX decrease count. the This to

$XX CapEx-light element from NDS Tech fourth grew from contribution businesses, quarter, EBITDA these segments. more company's EBITDA. of generated the strategy quarter. the their the their contribution previous our EBITDA grow to of to XX.X% than increased the of Together, is total A Rig and In million. Our combined technology-focused key consolidated

results. international key business. we see prospect international drivers opportunities multiple markets, some make additional comments Across drilling a of start I number and tenders large will that the redeploy same deliver. for that Now our market with to I recognize focus the the the to offers on our of will idle on currently the backdrop can us value favorable This At enables strength rigs. rigs. several Nabors broad time, prospects

are drilling international X in part year. business. the our last developments quarter, of In awarded recent X rigs These the the in summarize we deployed Argentina. fourth I'll Now rigs

utilizing are in this demand rigs U.S. the Argentina. development to We for in idle meet unconventional

these content In to expect X deployed quarter. significant on first also first of are be rigs we amount the the rigs. We announced later of previously in providing NDS Kuwait, a the

pricing second We and geographies, number MENA Asia, are see scheduled and supports a the commence rigs additional more second additional Latin including the progression across America. seeking to markets in rig third markets. number This improvements count opportunities Operators operations They our considerable in spread are quarter. for collectively XX of in of The these rigs. than and are opportunities international rigs. own

free target. In approach its to flow newbuild Saudi opportunities a disciplined these our SANAD during deployed ensure Arabia, will maintain We to XXXX fourth ninth quarter. we the meet cash

X Upon the first receive are in this on will all X will Another of new expects more few another one scheduled start total to more at of with the the bring working for make construction That would builds. award, these XX. XXXX. deployments, should beginning and On XX to of of for to X XXXX SANAD. those top these rigs comments a year awards X SANAD on commence. I quarter like

receives contract capital of X-year fourth X in from structured XX it return on followed the for I'll contract in under Saudi award XX XX-year years. know, This SANAD program. as That places a SANAD is rigs you orders SANID the Kingdom year initial from is the built the when the program, contracts. Specifically, X-year The invested ensure by newbuild operator, firm Aramco. at now That's years term a to finishes, an period. entering the manufacturer least program. over rigs rigs is of calls only renewal. When for initial normally address rig a utilization. work the

push the A As total towards ramp-up operator, ahead of continues a to XX.

generate $XX SANID. per million rigs rig each deployed, than significant As units early more EBITDA these are to year. contributed The

the that, approximately $XX primarily produce annually. more reflects as X mix. recent SANID still years. investment some Even its within as expect We inflation recoups This ones million with increase well rig cost to

Let than down million X we construction. for strategic newbuilds earning X Kingdom. X are these SANAD forecast of looking program. expected the the adjusted fleet reflects the of X generate the more in XXXX more the currently current XXXX working, in with fleet of from program just start With XXXX. is to me start scheduled newbuild began drilling should Altogether, under quarter. SANAD EBITDA build X working a break XXXX million the status $XXX will The decision in at X to Arabia's Saudi EBITDA $XXX another builds. in approximately rig in new in XXXX, sizable with

be We effort. are proud of to part this

is in global are the is partner It In industry. investments. for of energy together, rig and Middle companies we SANAD's Our in prudent drilling known the the preeminent case, building long-term largest one the East. player client

most estimates, our drilling approaching industry certainty greater of risk fleet newbuilds. and opportunity investments and aware By this the business. SANAD another the not of in are other returns the We lower than the are the scale on in rig

significant, requirement contractors East. lead distributions valuation see the capture we a That capital cash to to the 'XX recognizing to While should the path the in in partners. aim in to significant frame. the flow term, SANAD to time XXXX, we Longer afforded is drilling free Middle

on that that We free growth would built shareholders. to flow. a which business, top our positive is cash And of very it are important to is continues a confident legacy significant healthy generate this note generate value strong for

our the in Now I'll U.S. discuss performance

to fleet quarter. in remained Strong for margins rig levels XX rigs daily continues Our demand fourth support attractive pricing. Lower rig high-performance in the at the high

there value lateral looking extract marketplace in While more pricing to is Select active assets. generally in order operators the margins, remains disciplined. and resulting well designs are daily on churn an their friction from to longer

to The toward clients capabilities, lengths Nabors already increasing Given lateral drill our wells. continues. several rig the use longest trend

this In even even positioned Our our the environment, well to fleet we free Lower and is flow. operation more utilization, Parker current operation trend cash now generates so close significant acquisition. once on at capitalize this XX

on only Lower of rigs reflect All the themselves. our drilling comments XX results our

addition on significant own. I'll In in elaborate margin NDS to its margin this on moment. generates on our a rigs, the

and NDS a by day. daily Drilling the margin It quarter. XX performance Of line technology NDS's the that, combined of contributed increased third the per validate measure, to contribution exceeded XX% our more in demonstrates our discuss XX approximately in Lower the with This the fourth results innovation. clients. overall day. daily In me from is $XXX margin and quarter. margin once gross average let portfolio our market, again These Next, NDS benefits This the our $XX,XXX Solutions NDS an results. important strategy. per was than quarter, NDS to Drilling the $X,XXX made record. In Lower NDS businesses

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

of by priority our X our debt, main the quarter While reduction factors. fourth our remains was top challenged

approximately Mexico, our payments delays First, from $XX in customer significant million. of in

We are working diligently to rectify the situation.

the to during half XXXX. customer of payments first resume the expect We

new for builds growth Second, This to a remains third, is investment in market. rig lack the The of significant. was in The Lower due Arabia, accelerated. by XX completion U.S. payments manufacturer. Arabia And pace the milestone market the Saudi Saudi faster ongoing sluggish. in of

operators. the earlier intends expected improved to of environment to our Lower of the Reasons rigs. these X quarter, now respond account international number concerns align our XX% by will our X% modest end of working the Outside and improve we performance view bullish. concentrated the XX comments, for mergers, structure. survey efficiency to of and fourth indication E&P covers rig for remains of After XX operators. number include of industry approximately XX Lower At add at the reduce among count with my operators, environment. is the market XXXX. of X Consistent actions to quarter. group decline clients. the These the indicates The the industries We the this clients rigs for its a about with is this the largest end market survey end This a surveyed decline cost latest

X XXXX. Our first rigs in of deployment plan the quarter includes

end we international quarter working. With these XX additions, the with expect rigs to

Parker just XXXX, X both in XX we year Early merger. full Wellbore. fourth we in scheduled I activation an the X have to Arabia, the agreement of X quarter, Argentina Colombia. Kuwait, in X activations rigs approved deployed, total For Shareholders to mentioned, in and in including announced have acquire be companies Saudi newbuild rigs the activation the X

integration in review passed, has of antitrust amount period the While have countries planning. a are pending. the The approvals in a U.S. teams few completed substantial

are realize annualized confident synergies will XXXX. of we $XX in least cost an We million at

to to portfolio to forward financial Parker realizing looking Nabors are benefits. significant the and We and strategic adding

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

William Restrepo

joining Thank us everyone, you, Tony. morning, for Good you thank and today.

offset gas Before by in in for in markets. start-up of newbuild the land North would results on was that and expand, commenting Saudi rig conventional which to for traditional Middle rigs we some general projects. remarks previously for more deployed like preparing the financial and on both Kuwait. Arabia, basins Saudi continue make believe X in the In on to for our Arabia, Africa, the X we suspension I quarter, East We're the X global and and natural announced. recent more more We newbuilds in that market activity will the rig

benefit X rigs all coming ongoing Muerta Latin in expansion to XXXX. expect pipelines facilities This to and the benefit and should from This deployed our opportunities natural market during expect Basin the benefit during also from new We recently one MENA In more as gas XXXX. should are add the Vaca export in underway. year. Argentina regional the market America, expansion over in we segments more

continue. In believe the but levels We reduced between capital by loosen budgetary to customer, resuming first decreased this activity expect of That in not in customer. Mexico, effect point should basins. failed the of the over discipline we our Lower operators idle oil-related a current addition, limiting our Argentina operations will our the government downtime some next remain with to take government to the effect but restraints market contracts quarter, we muted drilling gas Drilling had on in our of significant natural It's rigs quarter. announced to In in government years, to XX favorable only the improvement the previously provide market, their fourth continuing on largest XXXX, at revenue. one also rigs and has Colombia, demonstrate at Pemex Solutions more have In clear current for for this delivering potential activity XXXX our in is couple is will expected environment. when challenges. business with materialize XX expected investment while during the reflecting increases Lower continues progress to the In destination actions the

quarter. contracts expire, an continue level to experienced fourth longer-term of churn As we elevated in the

the increased stagnant $XX Drilling drilling first $XXX penetration help reduced margin X drilling fleet deployments rig this Arabia rig At the revenue held indication quarter XX or Revenue average our also the million we own Argentina rig well, rig Solutions by Drilling rigs was Lower X the our in on day limited third-party by reduction. continue We XX. XX we Revenue the suspension recovery than declined of the segment on as that count from weakness offset Aramco the our U.S. in revenue. The as market. has count market. more $XX,XXX. by remained in declining The these the U.S. and daily $X our the this in and Despite XX by driven will rig reduced million in to operations in and million, had activity. per our have trend market general on market Nonetheless, count anticipate us quarter relatively around own see Lower X.X%, impact sequentially expect was compensate up Lower and for of gross Saudi a the headwinds, a near-term from in point, fourth has well sequential for an Lower XXXX. rig

the Our XX at X rigs rig count averaged decreased. in Lower XX

$X.X of market our the ninth day segment X% Saudi in These range. onto $XX East. average day quarter. at we Solutions X.X%. by revenue unaffected. increases $XX,XXX, deliveries by which drop in newbuild $XXX successfully the reimbursable largely million, in $X,XXX Drilling driven the of revenue, $XXX slipped $XXX our the by current affected offset remains well decline same quarter rig, pricing a of decline sequentially somewhat average $XX.X $X.X a was $XX.X rates for was the to remains However, fourth our low million. X by or increase reduction Technologies low-margin barely came additional million, Arabia. At This This of were reached rate deployed the SANA's contracts by Arabia, deployments XX million Lower drilling revenue as of Daily essentially Saudi in third decreased market, million rolled was time, newbuild the while stable. Revenue quarter International cadence driven an started in Rig part to we we million Leading XX.X%, our in robust and the rig up Total EBITDA million adjusted rates. by the In million in replacement On capital only or Middle increase was the for Argentina. per a rigs equipment contracts, decreased. the remains and driven latest sales compared revenue in activity. suspensions mid-$XX,XXX our edge in revenue sequentially.

rig X-rig New sequentially. U.S. SANA in deterioration X margins Lower margins. the $XX,XXX, EBITDA X.X% suspensions. offset slight were by daily a or quarter. around XX by was and decrease $XXX.X strong million market came reflected $X.X from a million reduction in This Rig down a Technologies weakness down the just in deployments in increase and of third $XXX rig and Average under daily drilling

offshore of basis, first approximately expect quarter, For fee of performed total to our quarter, with with daily businesses we our leading-edge the the this approximately average the in market converge XX our count rig fourth be the Alaska in these a projections. $XX,XXX EBITDA daily operations average Lower On as revenue. We $XX.X rates X million. and In combined margins line XX. U.S. was anticipate

EBITDA deterioration rig items. was was First quarter from $XXX of in suspensions businesses Daily essentially deployments $XX,XXX, $X was margin million the stable Arabia. be to driven from Saudi offset The new gross fourth by EBITDA onetime the the by average in the decrease. count XX. quarter by a should $XXX these decreased to similar quarter. International EBITDA fourth million a on approximately

by between the and Drilling Average our delivered and X.X%. first We rig of the forecast restart gross newbuild quarter the range $XX,XXX increase Among rigs margin in first to million from to SANAD product a in XX XX%, NDS the the margin the segment assumes and more first margin in for running. XX% X.X% should rig quarter daily daily on drilling in was third This compared XX pressure to to rigs. for XXth of prior casing Solutions lines, drilling than mix. the in $X,XXX, line better $XX.X in day took in anticipate average Our this of were XXth XX start-up quarter. gross count and in third margin improvements $XX,XXX, quarter. some with managed gross international our Colombia. fourth Lower quarter, XX to rig Gross up than quarter solutions more offset EBITDA the the quarter. a down deterioration per Lower combined the improvement increase increased

activity. For the of NDS Better third-party Rig approximately reduced first million. offset Technologies delivered the $XX on rigs penetration should as quarter, quarter, $X.X EBITDA XX of revenue drilling well we million. Lower as fourth Nabors sequentially expect up in rigs and $X.X million EBITDA from

First for be quarter million. Rig $X EBITDA Tech approximately should

as disappointed the flow our matched EBITDA to XX. the in in free prior cash managed we for But quarter Lower levels decline the Our compensate fourth quarter.

Mexico During of expectations shortfall The delayed as million payments. expected the was quarter, million. generating of the in as largest million lack $XX this component our close to to consumed of approximately $XX we our of client collections compared $XX

we level were million. the full in addition, completion million CapEx newbuilds for quarter, of above was for above the Capital forecast the for newbuilds than quarter. the for target. Saudi started deployment, $XX XXXX Saudi expenditures $XX SANAD the Saudi million, of preceding Outside million $XXX the Capital at $XX targeted $XXX when year. accelerated was $XXX $XX than In $XXX higher $XXX more as about milestones. fourth we what the below year original CapEx construction the million supplier the CapEx was SANAD was CapEx totaled million, of XXXX. spending was million our $XXX beginning million million, newbuilds expected million

closing we quarter million quarter. closing date not $XX to await regulatory known CapEx $XX sometime land The Parker and as Wellbore million $XXX we anticipate For SANAD with the newbuilds. yet million in transaction but the approvals, XXXX, on first $XXX first should million between the for the of is

of on With provide results of the for Parker impact the to release consolidated financials, first we intend company, Wellbore. quarter guidance our the including

year U.S. Saudi and for growth Arabia. the preparing market markets ahead international in are a for in in flat Solutions in continued and We Drilling investment for

XX decline Drilling declines. $XX,XXX. For XX Nabors daily rig to average we of from full year-over-year. Total and expected and to XX of X% Drilling, count range than Technologies the Rig International the offset year the approximately more in gross should XXXX, is offshore anticipate margin and Solutions Alaska combined U.S. Lower EBITDA expected

count deployments Argentina $XX are targeting is SA average we our the as better Reductions drilling, at XX And in million. at at by close the daily Average an Rig or improve $XX,XXX, also at between to international Arabia by XX slightly in rigs million. rig to X.X% margin offset and year of For Technologies in levels. activity rig will to could pricing XXXX deploy Pemex continue rigs. increase partially impact expected of NDS land be $XXX we come Saudi $X,XXX Anticipated to should EBITDA suspensions. should count. X% and improve approximately

Now CapEx. turning to

$XXX roughly rigs the range $XX we spend $XXX last in our to expenses are currently of should increase compared We million XXXX XXXX X X reach to approximately as the of newbuild from an deploy full million. SANAD $XXX million, year. million in forecasting CapEx year capital

flow. we these initiatives breakeven As cash around we measures cash for commitment, in consolidated out we and improve continue expect I opportunities to that free growth Parker our cash Including for flow $XX to to reduce will plan the debt. around XXXX. excludes would SANAD, to our projection flow flow our invest flow approximately cash that million. gross We free free point identify implies be cash Saudi $XXX flow other that of our XXXX free flow million. overhead total SANAD reductions free use this free includes SANAD negative cash cash The approximately $XXX results. This forecast for outside Wellbore outside million,

cash we considerable material business in even generate the expect mentioned. before to flow have synergies We acquired the XXXX,

changes policies by drilling impact projections assume from cash potentially include favorable incremental Lower from drilling, improvement flow. Needless significant new no would in don't in impact center-related data our administration. new drilling Similarly, or XXXX impact a XX demand. driven infrastructure to any the say, Our have by projections on free very gas U.S. on from also U.S.

from with significantly in to very the rig will call incremental higher from count turn as Tony to benefit limited CapEx I and remarks. compared current improved that, our his as We for projections. levels pricing concluding well will the margins With

Anthony Petrello

Thank industry few I William. you, will remarks particular. now conclude on this a morning with in Nabors our and

and our near-term is In characterized for have by At future. a objective As occur you demand value. economics. is the short-term, longer-term in phase already to in its markets. joint in one enabling and while With unique our of fluctuations These and this Nabors often are of Arabia, Nabors, venture know, is against deploy technology. develop and SANAD industry manage investment transformation backdrop generating we we the in sustained volatility long-term our sharp positioning industry's large-scale environment, opportunity currently most we Saudi the important innovation.

significant the generates wellbore are investing generate be toward as it we money On XX a own, are we to laterals in growth significant our business. very merger Drilling free Arabia, Lower drill potential which and its business and adds in time, accretive same have immediately completing working the synergies. addition should We portfolio. high-performance business about cash the widens its It Nabors, in our Thinking Saudi Parker our dovetails offering existing cash meaningful for good free rig a flow. to with with flow has growth dynamics. potential. At own has drilling increases our demand business taking Solutions pipe. rental Parker's neatly Parker. the expands tubular synergy This also footprint,

Arabia our We we strength new our operation would the that million. consolidated masks In large scheduled existing substantial higher. deploying CapEx EBITDA in already flow real is away flow deploy about more And on million from also cash to additional $XXX assets flow today or newbuilds there business. under construction, number $XX be our million power rigs without year. investment that considerable per free in free existing company operation SANAD. $XXX top the is of cash cash from for expanding the of keep of cash generating new than That's shows of Saudi XXXX, at the without flow. excess estimate very the the mind, are this This Nabors generates

of the deliver. inherent flow partner, all profitability contracted to generation world, growth operation, future. potential the in clear committed is are and supports our for Saudi to the This operator that cash to we the long-term cash Given the investment largest continue build plan the reinvesting the

story, I our free our singular our capitalize inside Notwithstanding your that, SANAD has With growth. attention. long-term company, wrapped value you we but continued also time future, your clear for a So we investment this have believe and our growth reporting to to progress. for shareholders. take for on which we cash already only short-term it. on for path growth has not great forward To a value. drive also flow, look pressure consolidated summarize, significant questions. we creates are to positioning the will Nabors Thank

Operator

with Benchmark. first And Hallead Kurt come Instructions]. your will [Operator from today question

Kurt Hallead

intel around clarity very then again get and positive to in the comment expect I cash around reduce to wanted the that -- the helpful. cash especially bit free the press was debt. commentary conference think, you here Saudi And I be free call in substantially more the I front, in guess and gross little your that all on release you Appreciate made and info, a William, flow. flow

substantially kind you help what debt? you of gross by So mean ring-fence just us can reducing

William Restrepo

have within Kurt, pieces So we the few a company.

for fact, the One over cash of the flow is ring-fenced. used them from is SANAD, And going to which, be most in of a course, of that bit growth little years. program is piece coming the

of right? So going flow because about $XXX $XXX generating that on spending in the cash spending free in then fleet current red EBITDA, we're means growth SANAD, in forward. generation be million in but over XXXX, SANAD, in the to in is we're terms million within going the the $XXX CapEx So about million we're million, fleet about $XXX

outside the basis. $XXX that SANAD for legal million on So because breakeven little a are we're other of all entities bit cash roughly going implies, legal a though, be our consolidated is free what that year generating forecasting full a the of to entity,

that debt. for to So and that neighbors going you it, we're to usable is to money do for want whatever reducing allocate with

expect in gross $XXX that reduced outside debt XXXX next we're million So I generate by would the see going our year to approximately SANA. to be

Kurt Hallead

That's overall you to of is great. on? respect year and just international your the complete their outside right? any rig kind SANAD on follow-up Saudi reductions more it with additional as expecting then are again, kind And a goes that Is count of, outlook, releases of maybe read of the rig

Anthony Petrello

respect to it of well a treated and brunt coming. that the at market very Aramco whole, some have what by hit. there over how we be year, releases you as see be past were may the from well But could can With others the I other as we think big

I think Nabors. the person here. to with rigs understand same venture picture it's building The same rigs the is down picture joint the big big important, with Kurt, the is taking person

market the who the so oil long-term view and And best the out has short-term in world market biggest of and the company the that's -- there. the view of

to with continue rig And us want coming short term. so program, the notwithstanding that in the they've down decided they the newbuild

these term, by them the absolute I there's program. newbuild or Now rigs going long answer the term, whether be current of to can't preferred believe to be that. believe they maintain there's market. to that's going uplift commitment the in because are rigs But pace long the they

a there guy investing. rigs who telling come got So And great many rigs decides us you down, to whose they think are want we they're the continue partner. how

privileged this to we're think have partner. I

had think build I'd with that $XXX a like where new the It's like payouts builds payouts I my druthers, people And a basis, a people is for opportunity flow look share down on. X-year But new payouts break these they the million take for absolute unique maybe deal announced XX- would. them are in cash And take industry. have do to my If and so Other them basis. that. understand X-year with and XX-year we're on here really take have year debt, in and which in unparalleled. on the to -- don't pay I This a XX-year supporting some an contracts. going what's EBITDA to deals I free

the at the you flow billion which an to SANAD look know flow in you any on metrics what stopped either with from enterprise just new for multiples are and anywhere the valuation the do $X.X builds, EBITDA $X.X cash a region, at using today basis, with you'll and where the you basis today. numbers we cash we're get SANAD or stuff If billion

right those opportunity, So hope what's some given because they're understand here gives said, the guiding pressure. basically the like want they importance we're but We hand it's do. appreciate unique people I ramp the I us I don't the understanding we to think compelling. of think decision. strategic guiding making that why And and what happening think of you short-term we

Argentina include rigs the rigs think also there, just happening, had elsewhere, in what's in in good and the have clear it the from deployments, outside rigs referred press saw announcements for Latin Argentina. Colombia's that comment which maybe announced I but on seen remarks contracts you've that good XXXX, news success notwithstanding from release, not term the XX And America Colombia, We've other wasn't Saudi. to. going our you with our we is additional that given William negative X and we've

in going relocated with for in Asia a robust, X MENA rig One of in as XXXX. It's to opportunities in is few additional pipeline and in and additional them that's be ones the pretty America both And is working XXXX. the Latin well. current

story. So actually I this is supporting supporting all growth stuff a and think pricing

other look increased international, that again, reflecting actually this we're the seeing has is if from to at XX% share of NDS, XX% growth EBITDA The happening. thing fact its from coming NDS you

realizing some the getting, new these the portfolio. of like MPD people projects of value rig, are the And we're part of things which has Nabors with putting

So I comfortable the all, story. feel very think we international about all in

William Restrepo

and international, on I'll Aramco Saudi add the increase the and government improve to Yes, gas. very on we're to course. Arabia the and specifically. Arabia, in Tony's production Saudi is natural focus comment of bullish of But

And Our in fallen favorably that's many rigs down. drilling by the been natural is we've for fleet in Saudi part Arabia have of reason of our gas. terms predominantly treated how client

count. don't on further reductions of expect rig in lot any a So movement we

and our very gas all our helpful. again, assessment. almost rigs But of this really rigs opinion Of are of course, fact our that is the most for and is drilling natural our now

Kurt Hallead

don't of you you if kind just how And I is out more great. you one on international. appreciate laying just going mind, also follow-up additional That's the year guys the think evolve. to

averaging So with XX.X%. you're but international cash I'm XX% over the not year a any mathematical stretch, margin wiz by and starting at

that quarter for progression? get a kind be progression is rate step of very on to that year? run in particular kind So going function a Or to to kind of stair average obviously, of Is there any going steady there. one a the favorable

Anthony Petrello

various improving international we're the the I XX in and markets. are coming rigs year think as and at in times they're adding in prices

So yes. coming gradual are average, in our are to priced better going progression the see new we year, than rigs a our over

Operator

from question next Citigroup. today Gruber Scott Your with will come

Scott Gruber

William, that's Mexican you for one the about breakeven delays? I what continued are working in appreciate thinking What's all embedded the guide it? capital do Is for outlook for pre-Parker? incorporate or taxes How collections? your you. and And cash catch-up you there color. cash a free

William Restrepo

a right? like question, That's X-part Okay.

Scott Gruber

Sure. all Throw out it there.

William Restrepo

Mexico, going So We like are to those -- half. told think more with we've but been it's going quarter, Mexico the the out that be would first the happen I'll collections. sorted in I start say, first in to

and see be on reduction assuming they cautious and issues to to They're being going there. again, it's our deliver, then we'll also Mexico. takes pay -- a an in on If is we're upside part So still have of happen, maintain it again, that always working bit if our little Mexico is they doesn't we a always The some of the But a government activity. it it. our can forecast sometimes they budgetary but catch-up. while. in always and That's working But gave. guidance assumptions

the of a for ended year capital we partially the XXXX, at and kind high-ish of working Mexico. terms because of DSO In

go So go sort a under that the amount capital higher revenue help to large control is the given year, that not full DSO revenue, impact, us a will some Mexico few will is for and that U.S. believe we but and very keep days since There down the including we up going overall working this think of year. trajectory the in

third working So growth piece we And in capital. don't huge then expect the again? was what

Scott Gruber

taxes. Cash

William Restrepo

Cash taxes. Yes.

to similar this year, it range million in so. somewhere $XX a So or will be the of level

Scott Gruber

Okay. And the how forward just assets you a that you quick large guys been has going have follow-up. improving? country? resource as extraction an a The business climate down The in add Or obviously, issue Argentina, that addressing historically. obviously are improving. And Is base. cash they

William Conroy

Yes.

been a put the operating where the have we extract and we've the working on that's foot dollars. pedal And model our that we've We U.S. in new there reasons one and profits customer reception can we it's why actually what's cash to able good the in denominated in in had place because this far. to so that's have well a and pretty very Argentina And bit of model, already. place, using

Anthony Petrello

leasing has us which have control to do are country. split bit rigs money central a trapped out little -- control we made the that the a new some in transferring rules that exchange So helps using government changes getting in cash -- the And for the flexibility coming to our mechanisms. more allow in, the not with secondly,

the helping things all quicker past. us in converging are So those clear than much cash and

Operator

question today Stanley. will from come Morgan Kutz next Your Dan with

Daniel Kutz

see if together to the you you me year gave. 'XX help could the put pieces wanted that on full Just guidance

of I is flat and and EBITDA line of just year-over-year. coming from X G&A this angles. guess assume the I X other international item at If that U.S. So reconciling kind

I of million me ballpark of in think year. this Nabors give stand-alone that $XXX the EBITDA will

you and So share or the guys reconciling item that would line if for endorse year 'XX. on you the there's wondering anything if G&A alternatively, could outlook full

Anthony Petrello

the lot to a your I'm sure to year, and next Dan. try you're to I Listen, doing great question, a get number That's pieces the mean, we of homework. gave

In R&D find those costs. diligently working items, terms of are those and efficient become and trying and more reduce the to to we of SG&A some ways

So were terms NDS rest, you somewhat we XXXX. could higher confidence assume And of -- lower in those obviously, in pieces, the U.S., I XXXX, and going XXXX with to than and the the improvement be have think we and a they to be are in ups all in in going could be Tech. international Rig lot we're than that downs, reduction in of operational

So we're assume some you margin. all by beat XXXX in that going to all, can

Daniel Kutz

rigs builds are about Like comment Was a missed the that that's was other part the of then yes, $XX if Great. budget, mix Or that by the this, what And margin comment. triangulate you builds factor really could oil what trying versus the That's gas-directed new And the recent I kind $XXX for million and EBITDA just for are the rigs the made of on and in on wanted meant where see you is but gas rigs comment? somewhere to mix the sorry there. SANAD X or a was build versus million oil -- higher between? X new rigs? whether comment to newbuild SANAD per cost new or now. helpful. Just guys you

William Restrepo

Sure.

listening. you're glad I'm So

number includes XXX the So is -- a milestone number.

numbers And equate with had X rig the not on of reason cash rigs sequencing like accepted fourth the why the according flow a the That's the actually rigs because just the when getting the way we Actually, because for shortfall, it's necessarily of the an have total one fourth overall And rigs X don't that the XXX. that the that's count. milestones to you're of in under these quarter committed accelerates, So sync quarter in of which sequencing that's is to with mission we've works. schedule. causes issues. in out strain what

at the is all. and higher -- behind a point is because that such was the adjust, part ever Aramco of this done. inflation. actually No it's unheard changes supporting for that deal. there's other the it Aramco, deal. specs deciding number when had to changes. is you X cost and to talking two, here else is an One, rigs; with initial was et approves -- about the number and and originally than paying account But because Aramco In cetera, numbers the technical that deal XXX. to rigs, of has for gas numbers issues done planning, they're all is ones rates for it some and it meantime, the things initial adjust, contracts X paybacks again, which It the Aramco the like is But rigs the the one they're were when which issues of been XXX, the close So deal important

we are X-year a strongly deals feel So return those because that's why Nabors -- those for them that makes sector. of and unheard a sense the we efforts kinds XX-year when in with their think numbers contract, great in supporting of

Anthony Petrello

milestones, joint being pretty And of They improving been supplier, have with now delivering our a is rigs happy milestones. performance by NOV. time. rig performance the those They're means are enormously delivered on of which we're way, the venture which the in meeting

because are number. NOV that be on catching year. to on they performance whatever completed big on going And some get It's is so price. the when was that going milestones it we're not we X pretty milestones But their to the in rigs. X And the in of we're happy only about the sense rigs delivered up the saw those deliveries, XXX all XXXX, X improve again, next XXXX calculation is as in that rigs of

in we go So down a X XXXX, more number real expect rigs range. for of in run a number rate in, the XXX year would low would more year which somewhat on to XXX that out, be

Daniel Kutz

Great. comment million increasing... cited. per rig, think That's guys mix a is what helpful. I $XX factor to as then Was EBITDA And relates also the on of just you sorry, all it that

Anthony Petrello

of calculation. If return cost That's guarantee day the just more, that the is higher X-year a to factor paid rate rig the more, on the investment. get we

and because the is, it So the EBITDA rigs rig the reason the horsepower whatever or doing the rate recover X,XXX up. on goes in we're up we goes if more cost

Operator

from come will today question next your Keith RBC. MacKey with And

Keith MacKey

or out along Maybe the line questioning. on just of continue to start SANAD

free So grow and 'XX that Would of 'XX. the or the $XXX on basis a million said next for commensurately? I you X-rig cash likely think couple in it spend build EBITDA year assume new years a you continues? expect you effectively at cadence a could roughly breakeven

William Restrepo

Correct.

then rigs going your that existing reach cash is stuff got cadence number What the right. you you then then forward. rigs get cumulative once baseload of level, number a happens and You excess certain flow that at fund and is

it here why doing breakeven to quest with think now. And to try the get I pace So the wants Aramco right number. we're continue that's that to is to

Keith MacKey

going follow decision just the X on on to you Got know more that, do and a in terms Like next for And X the to like it. can. you happen, if are what like points sounds think you likely It of up X of they're about those rigs that, comment when but sort little awarded? that? getting after just the curious

William Restrepo

we -- know. the would we'll even is. So those first We of half typically, months, investors maybe sometime XX or of as how because construct to awards, months would our big right? XX these the rigs on some this soon take batch the depending rigs, for next year let about to in as rig maybe awards cases, X And be in the get get expect

Keith MacKey

it. Got Yes.

that of And about? me. for have Mexico? count Roughly, kind many do year-end one you one rig in that sort talked last the And of operating you what just into you rigs Okay. cushion maybe that have baked is how

Anthony Petrello

Okay.

that disclose on We platforms. needle transparent be have did do I'll X These on -- operating. are on fairly we big because offshore So that. These rigs big rigs movers. are

million, the right? XXXX $XX the full our in EBITDA that million number were Mexico so. considerable. million $XX we we the reduction some in in full EBITDA assuming about rigs a So year are If so or is is at in reduction. $XX X And the pace, if And operating are reduction dialing versus

Operator

question will Arun with Jayaram come today from next Your JPMorgan.

Arun Jayaram

Yes.

regarding just EBITDA the you XXXX, that newbuild question First you'd SANAD mentioned program from XX expect rigs. million in is of the $XXX

rigs? include run the per does rig fair is call that next, additional So new about that of be $XX builds? the X will the million the Or rate from for tranche it, million $XXX EBITDA

Anthony Petrello

XX We're listen, now. X No, right operating not operating we're rigs.

Arun Jayaram

I'm pardon talking me. about No, XXXX,

Anthony Petrello

million be range somewhere anything if use saying $XX rigs, that. average about want But not per rig, XX to we're will you the No, in the XXXX.

Arun Jayaram

EBITDA generate 'XX. program that could heard around SANAD newbuild I the Okay. $XXX in million of

Travis Purvis

in remember, year, every XXXX. adding was that more. we're No, But

Arun Jayaram

Understood.

would you've million be, new CapEx, follow-up of CapEx, over for And a Okay. little SANAD of Can breakdown $XXX us to? you going the a where call of that's the bit just $XXX to give for million a program, little $XXX the million remaining, buckets build. it, for the guided

Anthony Petrello

we is So -- midpoint guided about $XXX the million.

million $XXX sustaining those for of range the would CapEx million the X the at includes recertifications. Category remainder million- And some $XXX of $XXX year. about somewhere million. excluding $XXX have CapEx That in we So be in the midpoint,

$X higher And require Then just contracts $XX going that's prior but only and the little and some million. going Argentina not have bit about we to requires year, than drips in it's So the rest be NDS so. is Kuwait that CapEx, be to then drafts. million. terribly international about a

$X Last very And so where licenses even goes So corporate, number IT little maybe outside year, to $XXX that's bit on R&D you and a about $XXX -- indeed inclusion That that's we all is to million license then million. like prototypes, million light. spent $XXX That's this the CapEx that get the investment. million. year.

mainly it's of force I because that's So up, $XX before. million about the mentioned and category

Operator

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

William Conroy

today. joining us for you, everyone, Thank

that, care call. you to reach we'll Nick, If And in with IR conclude follow here to please up, out us Nabors. the at

Operator

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

You disconnect. now may

Nabors Industries (NBR) 13 Feb 252024 Q4 Earnings call transcript