Nabors' drilling activity is increasing, but revenue is declining
In the second quarter, Nabors Industries increased its drilling activity, but overall revenue declined due to lower earnings in the digital and automation segments. Despite the growth in the number of rigs, the company's shares fell by 3.8%.
Petrus
Growth in Nabors Industries Drilling Activity and Second Quarter Financial Results
In the second quarter, Nabors Industries increased its drilling operations across all markets, although the company’s total revenue declined compared to the same period last year. The decrease in revenue was primarily due to lower earnings in the digital and automated solutions segment.
Financial Highlights
- The company’s revenue for the second quarter reached $814.8 million, which is 2% less than the previous year.
- Adjusted EBITDA amounted to $221.7 million.
- A net loss of $22 million was recorded, an improvement compared to the $31 million loss in the same period last year.
Segment Performance
Despite revenue growth in the U.S. and international drilling segments, the drilling solutions division—which includes digital and automated services—saw a 35% drop in revenue, down to $170 million.
Operational Metrics
The average number of Nabors drilling rigs increased by 13 units year-over-year, reaching 171 in the second quarter. This growth was observed in both the U.S. and international segments. The company expects this figure to rise further in the third quarter.
Middle East Operations and Joint Ventures
Nabors continued its activities in the Persian Gulf markets despite regional instability. The joint venture with Saudi Aramco, Sanad, commissioned a new drilling rig in Saudi Arabia during the second quarter, with three more rigs planned to be launched by year-end. Additionally, one previously suspended rig was reactivated.
Stock Performance
On Tuesday, Nabors shares fell by 3.8%.