Nabors Industries NBR

NYSE NBR

$90.32 -1.55 (-1.69%)

As of: Sep 9, 2026 · 3:59 PM EDT

Key Stats

Market Cap1.30 Bn

P/E4.02

P/S0.40

Div. Yield0.00

Total Debt (Qtr)2.12 Bn

Revenue Growth (1y) (Qtr)-2.62

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About

Nabors Industries Ltd. owns and operates one of the world’s largest land-based drilling rig fleets and is a provider of offshore platform rigs in the United States and numerous international markets. The company also supplies performance software tubular running services managed pressure drilling services and innovative technologies for both its own rig fleet and those operated by third parties. In addition Nabors Industries Ltd. manufactures advanced drilling equipment and provides drilling rig instrumentation. The company has developed a portfolio of technologies designed to drive energy efficiency and emissions reductions for both itself and third‑party customers. With operations in over 20 countries Nabors Industries Ltd. is a global provider of drilling and drilling‑related services for land‑based and offshore oil and natural gas wells.

Nabors Industries Ltd. generates revenue primarily from daywork contracts for land‑based and offshore drilling rigs. The company earns fees per day when drilling and lower rates when rigs are moving between locations or when operations are interrupted. Additional revenue comes from footage contracts where payment is based on a rate per foot drilled and turnkey contracts where a fixed price is paid for drilling a well to a specified depth. Nabors Industries Ltd. also offers performance enhancing services such as managed pressure drilling directional drilling rotary steering systems and measurement while drilling which are additive to rig charges. The company sells advanced rig components including top drives catwalks wrenches drawworks robotic systems and downhole tools through its Rig Technologies segment. Nabors Industries Ltd. provides tubular running services managed pressure drilling services and specialized drilling technologies through its Drilling Solutions segment.

The company operates through the following segments: U. S. Drilling International Drilling Drilling Solutions and Rig Technologies.

U. S. Drilling operates one of the largest land‑based drilling rig fleets in the United States. The segment is active in major hydrocarbon basins across the Lower 48 market and Alaska as well as offshore in the Gulf of America. As of December 31 2025 the marketed U. S. fleet consisted of 121 land rigs and 13 offshore platform rigs. Nabors Industries Ltd. develops and deploys industry‑leading innovations such as the PACE®‑X Ultra rig an upgrade to the PACE®‑X800 rig designed to enable operators to drill their longest most challenging oil and gas wells. The segment also deployed an upgraded version of its Rig Zone Robotics (RZR) rig floor automation module which fully automates tubular handling on the rig removing rig crew from higher‑risk manual operations.
International Drilling operates in major international oil and gas markets primarily in the Middle East and Latin America most notably Saudi Arabia Kuwait Argentina Colombia and Mexico. Many of the rigs are designed to address challenges of working in specific operating environments such as desert climates mountainous regions and tropical zones. As of December 31 2025 the international fleet consisted of 121 land‑based drilling rigs and 14 actively marketed platform rigs in the international offshore drilling markets.
Drilling Solutions offers specialized drilling technologies such as proprietary drilling‑bit steering systems and rig instrumentation software that enhance drilling performance and reliability as well as wellbore placement. Impactful products and services include ROCKit® a directional steering control system that increases performance while slide drilling through drill string oscillation and precise toolface control SmartNAV™ a collaborative guidance and advisory platform that delivers automated directional drilling information and instructions to drive consistent decision making transparency and improved performance SmartSLIDE™ an advanced directional steering control system that automates slide drilling to consistently deliver high performance and RigCLOUD® a digital infrastructure that integrates applications to deliver real‑time insight into operations across the rig fleet. The segment also offers a full range of tubular running services (TRS) including casing running tubing running and torque monitoring and managed pressure drilling (MPD) services that expand the capabilities of rigs to drill wells in otherwise challenging formations. Nabors Industries Ltd. integrates its TRS and MPD into the rig eliminating the need for third‑party service providers thereby improving efficiencies and reducing costs.
Rig Technologies is primarily comprised of Canrig which manufactures and sells advanced rig components including top drives catwalks wrenches drawworks and other drilling related equipment such as robotic systems and downhole tools which are installed on both onshore and offshore drilling rigs. The segment also provides aftermarket sales and services for the installed base of its equipment. Nabors Industries Ltd. makes NDS and Rig Technologies’ portfolio of services and capabilities available to third‑party customers both in domestic and international markets.

Nabors Industries Ltd. holds a strong position in the global drilling industry as one of the largest providers of land‑based drilling rigs. The company competes with firms such as Helmerich & Payne Inc. Patterson‑UTI Energy Inc. Cactus Drilling Co. Precision Drilling Corp. and Ensign Energy Services Inc. in the U. S. Drilling segment. In the International segment Nabors Industries Ltd. faces competition from Helmerich & Payne Inc. as well as numerous contractors with regional or local rig operations. The Drilling Solutions segment competes with services provided by NOV Inc. Pason Systems Inc. Baker Hughes Co. Halliburton Co. SLB N. V. Expro Group Holdings NV Weatherford International plc. as well as several of the company’s drilling competitors and smaller specialized service providers. The Rig Technologies segment competes primarily with NOV Inc. Forum Energy Technologies Inc. Helmerich & Payne Inc. and several smaller rig equipment suppliers. Nabors Industries Ltd. believes its ability to deliver rigs with new technology and features and its experience operating in similar environments in certain international markets are significant factors in the selection of its services. The company’s strategy combines advanced drilling rig designs with integrated surface equipment software and downhole tools with operational performance industry‑leading safety and an innovative technology roadmap.

Nabors Industries Ltd. serves major international national and independent oil and gas companies. One customer Saudi Aramco accounted for approximately 30% 31% and 26% of the company’s consolidated operating revenues during the years ended December 31 2025 2024 and 2023 respectively. These operating revenues are primarily included in the results of the International Drilling reportable segment. The contracts with Saudi Aramco are on a per rig basis and are primarily operated through SANAD the joint venture with Saudi Aramco. Nabors Industries Ltd. also works with other major international national and independent oil and gas companies across its global operations.

Investment Thesis

▲ Bull case

Nabors' international diversification provides substantial upside that remains underappreciated by the market, particularly through the SANAD joint venture in Saudi Arabia and growing opportunities in Latin America, which together offer structural growth beyond the volatile US land drilling cycle. While US operators remain cautious amid oil price volatility, Nabors' international footprint continues to expand with SANAD deploying its fifteenth newbuild rig in Q1 and planning four more for 2026, positioning the joint venture to reach 19 newbuilds by year-end and 25 through discussions for a fifth tranche. This expansion is supported by Aramco's steadfast commitment and Nabors' improved market position, where its share of gas work in Saudi Arabia is approximately 40% despite overall market share of 28%, reflecting a strategic pivot toward higher-margin gas-directed drilling that insulates the business from oil price swings. Additionally, Nabors is leveraging its technology leadership, with NDS achieving a record 94% EBITDA-to-free cash flow conversion in Q1 and expanding globally among NOC customers, creating a high-margin, low-capital-intensity revenue stream that is not fully captured in current market expectations. The combination of international rig count growth (up 16% since 2023 versus a 12% decline in Baker Hughes Lower 48 rig count) and technology-driven services provides a durable growth engine that could drive multiple expansion as investors recognize the de-risking of Nabors' earnings profile through geographic and segment diversification.
Nabors' disciplined capital allocation and operational execution in the Lower 48 are creating a foundation for sustained pricing power and margin expansion that the market is underestimating, particularly as rig supply tightens and operator demand for high-spec equipment grows. Despite only adding four rigs in Q1, Nabors outperformed the declining Baker Hughes Lower 48 land rig count (which fell by three rigs year-to-date) by growing its fleet to 66 rigs, demonstrating its ability to win share through superior service quality, pricing discipline, and high-spec rig deployments like the PaceX Ultra. Management highlighted that the PaceX Ultra's 10k PSI mud system and integrated NDS automation are becoming table stakes for complex well programs, with leading-edge daily revenue already in the low-$30,000 range and expectations to reach mid-$30,000s through 2026 and into 2027 as basin dynamics tighten—evidenced by churn cuts in half in South Texas and reduced churn in West Texas. This pricing upside is further supported by Nabors' strong customer portfolio, where the top 44% of Lower 48 operators plan to add approximately 15 rigs through year-end, concentrated among two operators responding to current market conditions, creating visible demand for Nabors' differentiated offerings. Combined with Nabors' commitment to maintaining pricing integrity and cost control, this environment supports progressive margin improvement that could drive earnings leverage beyond current expectations as incremental rigs flow through to higher-margin term contracts.
Nabors' balance sheet strengthening and free cash flow generation outside of SANAD represent an underrecognized catalyst for financial flexibility and shareholder value creation, particularly as debt reduction nears meaningful levels that could unlock alternative capital allocation paths. In Q1, Nabors redeemed the remaining $379 million of 2028 senior guaranteed notes, extending its nearest maturity to June 2029 and leaving only a manageable $250 million maturity at that time, while generating nearly breakeven adjusted free cash flow outside of SANAD despite Q1 typically being the most cash-intensive period due to interest, tax, and bonus payments. This performance was driven by better-than-expected working capital progression and capital expenditures below plan, demonstrating operational discipline that management views as a prerequisite for considering shareholder returns or accelerated investments in PaceX Ultra upgrades or international unconventional opportunities once net leverage approaches its long-term target of one time. The market may be overlooking how quickly this financial flexibility could emerge—especially if international operations normalize post-conflict and Lower 48 pricing improves—potentially enabling Nabors to pursue value-accretive uses of capital such as share buybacks or strategic rig reactivations beyond current plans, which would signal confidence in sustained earnings power and potentially trigger a rerating of the stock.

Nabors' international diversification provides substantial upside that remains underappreciated by the market, particularly through the SANAD joint venture in Saudi Arabia and growing opportunities in Latin America, which together offer structural growth beyond the volatile US land drilling cycle. While US operators remain cautious amid oil price volatility, Nabors' international footprint continues to expand with SANAD deploying its fifteenth newbuild rig in Q1 and planning four more for 2026, positioning the joint venture to reach 19 newbuilds by year-end and 25 through discussions for a fifth tranche. This expansion is supported by Aramco's steadfast commitment and Nabors' improved market position, where its share of gas work in Saudi Arabia is approximately 40% despite overall market share of 28%, reflecting a strategic pivot toward higher-margin gas-directed drilling that insulates the business from oil price swings. Additionally, Nabors is leveraging its technology leadership, with NDS achieving a record 94% EBITDA-to-free cash flow conversion in Q1 and expanding globally among NOC customers, creating a high-margin, low-capital-intensity revenue stream that is not fully captured in current market expectations. The combination of international rig count growth (up 16% since 2023 versus a 12% decline in Baker Hughes Lower 48 rig count) and technology-driven services provides a durable growth engine that could drive multiple expansion as investors recognize the de-risking of Nabors' earnings profile through geographic and segment diversification.
Nabors' disciplined capital allocation and operational execution in the Lower 48 are creating a foundation for sustained pricing power and margin expansion that the market is underestimating, particularly as rig supply tightens and operator demand for high-spec equipment grows. Despite only adding four rigs in Q1, Nabors outperformed the declining Baker Hughes Lower 48 land rig count (which fell by three rigs year-to-date) by growing its fleet to 66 rigs, demonstrating its ability to win share through superior service quality, pricing discipline, and high-spec rig deployments like the PaceX Ultra. Management highlighted that the PaceX Ultra's 10k PSI mud system and integrated NDS automation are becoming table stakes for complex well programs, with leading-edge daily revenue already in the low-$30,000 range and expectations to reach mid-$30,000s through 2026 and into 2027 as basin dynamics tighten—evidenced by churn cuts in half in South Texas and reduced churn in West Texas. This pricing upside is further supported by Nabors' strong customer portfolio, where the top 44% of Lower 48 operators plan to add approximately 15 rigs through year-end, concentrated among two operators responding to current market conditions, creating visible demand for Nabors' differentiated offerings. Combined with Nabors' commitment to maintaining pricing integrity and cost control, this environment supports progressive margin improvement that could drive earnings leverage beyond current expectations as incremental rigs flow through to higher-margin term contracts.
Nabors' balance sheet strengthening and free cash flow generation outside of SANAD represent an underrecognized catalyst for financial flexibility and shareholder value creation, particularly as debt reduction nears meaningful levels that could unlock alternative capital allocation paths. In Q1, Nabors redeemed the remaining $379 million of 2028 senior guaranteed notes, extending its nearest maturity to June 2029 and leaving only a manageable $250 million maturity at that time, while generating nearly breakeven adjusted free cash flow outside of SANAD despite Q1 typically being the most cash-intensive period due to interest, tax, and bonus payments. This performance was driven by better-than-expected working capital progression and capital expenditures below plan, demonstrating operational discipline that management views as a prerequisite for considering shareholder returns or accelerated investments in PaceX Ultra upgrades or international unconventional opportunities once net leverage approaches its long-term target of one time. The market may be overlooking how quickly this financial flexibility could emerge—especially if international operations normalize post-conflict and Lower 48 pricing improves—potentially enabling Nabors to pursue value-accretive uses of capital such as share buybacks or strategic rig reactivations beyond current plans, which would signal confidence in sustained earnings power and potentially trigger a rerating of the stock.

▼ Bear case

Nabors' international operations remain highly vulnerable to prolonged Middle East geopolitical instability, with the company downplaying the severity and persistence of operational disruptions that continue to erode margins and capital efficiency in its most important growth platform, SANAD. Despite management's characterization of only "limited" financial impact from the conflict, CFO Miguel Rodriguez admitted to approximately $3.5 million of adverse EBITDA impact in Q1 directly tied to the Middle East situation across International Drilling and Rig Technologies, with Q2 guidance assuming a continued $6 million to $8 million drag—primarily in International Drilling—due to ongoing inefficiencies in logistics, supply chain, and crew rotations. These challenges are not transient; the detailed operational description revealed severe constraints including unavailable European airlines, reliance on circuitous Red Sea-to-trucking routes adding 850 miles of transport, and the need to cannibalize spare equipment from operating rigs to fill drill pipe gaps, all of which increase costs and reduce equipment utilization. Furthermore, SANAD's decision not to renew low-margin workover contracts—while framed as economically rational—removes a potential source of incremental activity in a market where Nabors' own personnel estimate only up to 20 of 119 suspended rigs (82 onshore, 37 offshore) may return to work, casting doubt on the speed and scale of a post-conflict recovery. The market may be ignoring how these persistent headwinds could delay the full ramp of the SANAD newbuild program and suppress EBITDA margins in the international segment well beyond management's optimistic timeline for a strong second half of the year.
Nabors' apparent strength in the Lower 48 is increasingly dependent on capturing share from a shrinking market rather than benefiting from genuine industry recovery, creating a fragile growth narrative that could reverse if operator discipline persists or oil prices retreat from current levels. While Nabors grew its Lower 48 rig count by four rigs in Q1 to reach 66, the Baker Hughes weekly Lower 48 land rig count declined by three rigs over the same period, indicating that Nabors' gains are coming at the expense of competitors rather than reflecting broad-based market improvement. Management acknowledged that operators, especially majors and public E&Ps, have remained disciplined in activity levels despite higher oil prices, with near-month WTI volatility—exceeding 10% on seven trading days since February—complicating planning and discouraging meaningful capital spending increases. The company's own survey of the largest Lower 48 operators (representing 44% of the market) showed they reduced their rig count in Q1 and only expect to add approximately 15 rigs through year-end, concentrated among just two operators, suggesting limited and uneven demand growth. Furthermore, Nabors' pricing upside to mid-$30,000s is predicated on assumptions of tightening supply and reduced churn, yet East Texas remains flat with churn persisting and utilization under pressure, and the Northeast is flat due to pipeline constraints, indicating basin-specific weaknesses that could undermine nationwide pricing power. If operator caution endures or oil prices decline, Nabors may struggle to maintain its rig count gains without sacrificing margins, exposing the fragility of its US outperformance.
Nabors' capital structure improvements, while positive, are being overstated as a near-term catalyst for shareholder returns, given that the company remains firmly committed to prioritizing debt reduction over all other uses of capital until it achieves its long-term net leverage target of approximately one time—a goal that may be further delayed by persistent international headwinds and incremental capital demands from rig reactivations and technology upgrades. Although Nabors redeemed its 2028 notes in Q1, extending its nearest maturity to 2029, management explicitly stated that serious consideration of shareholder returns, PaceX Ultra upgrade accelerations, or mobilizing stacked rigs for international unconventional opportunities will only occur once net leverage approaches the one-time target, with CFO Miguel Rodriguez emphasizing that shareholders will get better benefit from continued debt reduction than from immediate returns. This stance is reinforced by the company's continued adherence to its full-year CapEx guidance of $730–$760 million, including $360–$380 million for SANAD newbuilds, indicating that incremental spending opportunities in the US will be carefully evaluated against strict return and funding thresholds. The market may be prematurely pricing in expectations for shareholder returns or aggressive growth investments, failing to recognize that Nabors' disciplined framework could keep excess capital locked in debt reduction for an extended period, particularly if international operations do not generate stronger-than-expected free cash flow to offset ongoing Middle East-related inefficiencies.

Nabors' international operations remain highly vulnerable to prolonged Middle East geopolitical instability, with the company downplaying the severity and persistence of operational disruptions that continue to erode margins and capital efficiency in its most important growth platform, SANAD. Despite management's characterization of only "limited" financial impact from the conflict, CFO Miguel Rodriguez admitted to approximately $3.5 million of adverse EBITDA impact in Q1 directly tied to the Middle East situation across International Drilling and Rig Technologies, with Q2 guidance assuming a continued $6 million to $8 million drag—primarily in International Drilling—due to ongoing inefficiencies in logistics, supply chain, and crew rotations. These challenges are not transient; the detailed operational description revealed severe constraints including unavailable European airlines, reliance on circuitous Red Sea-to-trucking routes adding 850 miles of transport, and the need to cannibalize spare equipment from operating rigs to fill drill pipe gaps, all of which increase costs and reduce equipment utilization. Furthermore, SANAD's decision not to renew low-margin workover contracts—while framed as economically rational—removes a potential source of incremental activity in a market where Nabors' own personnel estimate only up to 20 of 119 suspended rigs (82 onshore, 37 offshore) may return to work, casting doubt on the speed and scale of a post-conflict recovery. The market may be ignoring how these persistent headwinds could delay the full ramp of the SANAD newbuild program and suppress EBITDA margins in the international segment well beyond management's optimistic timeline for a strong second half of the year.
Nabors' apparent strength in the Lower 48 is increasingly dependent on capturing share from a shrinking market rather than benefiting from genuine industry recovery, creating a fragile growth narrative that could reverse if operator discipline persists or oil prices retreat from current levels. While Nabors grew its Lower 48 rig count by four rigs in Q1 to reach 66, the Baker Hughes weekly Lower 48 land rig count declined by three rigs over the same period, indicating that Nabors' gains are coming at the expense of competitors rather than reflecting broad-based market improvement. Management acknowledged that operators, especially majors and public E&Ps, have remained disciplined in activity levels despite higher oil prices, with near-month WTI volatility—exceeding 10% on seven trading days since February—complicating planning and discouraging meaningful capital spending increases. The company's own survey of the largest Lower 48 operators (representing 44% of the market) showed they reduced their rig count in Q1 and only expect to add approximately 15 rigs through year-end, concentrated among just two operators, suggesting limited and uneven demand growth. Furthermore, Nabors' pricing upside to mid-$30,000s is predicated on assumptions of tightening supply and reduced churn, yet East Texas remains flat with churn persisting and utilization under pressure, and the Northeast is flat due to pipeline constraints, indicating basin-specific weaknesses that could undermine nationwide pricing power. If operator caution endures or oil prices decline, Nabors may struggle to maintain its rig count gains without sacrificing margins, exposing the fragility of its US outperformance.
Nabors' capital structure improvements, while positive, are being overstated as a near-term catalyst for shareholder returns, given that the company remains firmly committed to prioritizing debt reduction over all other uses of capital until it achieves its long-term net leverage target of approximately one time—a goal that may be further delayed by persistent international headwinds and incremental capital demands from rig reactivations and technology upgrades. Although Nabors redeemed its 2028 notes in Q1, extending its nearest maturity to 2029, management explicitly stated that serious consideration of shareholder returns, PaceX Ultra upgrade accelerations, or mobilizing stacked rigs for international unconventional opportunities will only occur once net leverage approaches the one-time target, with CFO Miguel Rodriguez emphasizing that shareholders will get better benefit from continued debt reduction than from immediate returns. This stance is reinforced by the company's continued adherence to its full-year CapEx guidance of $730–$760 million, including $360–$380 million for SANAD newbuilds, indicating that incremental spending opportunities in the US will be carefully evaluated against strict return and funding thresholds. The market may be prematurely pricing in expectations for shareholder returns or aggressive growth investments, failing to recognize that Nabors' disciplined framework could keep excess capital locked in debt reduction for an extended period, particularly if international operations do not generate stronger-than-expected free cash flow to offset ongoing Middle East-related inefficiencies.

Peer group

Peer Comparison

Companies in the Land Drilling

S.No.	Ticker	Company	match	Market Cap	P/E	P/S	Total Debt (Qtr)
1	PTEN	Patterson Uti Energy Inc	primary	4.92 Bn	-54.99	1.05	1.23 Bn
2	HP	Helmerich & Payne, Inc.	primary	4.42 Bn	-34.43	1.11	1.87 Bn
3	NBR	Nabors Industries Ltd	primary	1.30 Bn	4.02	0.40	2.12 Bn
4	PDS	PRECISION DRILLING Corp	primary	1.20 Bn	-128.51	0.86	0.45 Bn
5	SLB	Slb Limited/Nv	secondary	85.07 Bn	28.95	3.03	12.80 Bn
6	BKR	Baker Hughes Co	secondary	63.03 Bn	20.18	2.27	16.25 Bn
7	HAL	Halliburton Co	secondary	31.08 Bn	18.95	1.39	7.16 Bn
8	FTI	TechnipFMC plc	secondary	30.87 Bn	25.68	2.96	0.81 Bn

Nabors Industries NBR

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