Nabors Industries Ltd. (NBR) filed Quarterly Report for the period ended 2009-09-30.
Nabors Industries Inc. is one of the largest land drilling contractors. Nabors conducts oil gas and geothermal land drilling operations in the U.S. and internationally. Nabors also is one of the largest land well-servicing and workover contractors in the United States. To further supplement its primary business it offers a number of ancillary well-site services including oilfield management engineering transportation construction maintenance well logging and other support services in selected domestic and international markets. Nabors Industries Ltd. has a market cap of $6.34 billion; its shares were traded at around $22.33 with a P/E ratio of 11.4 and P/S ratio of 1.2. Nabors Industries Ltd. had an annual average earning growth of 26.2% over the past 10 years. GuruFocus rated Nabors Industries Ltd. the business predictability rank of 4.5-star.
Highlight of Business Operations:
Natural gas prices are the primary drivers of our U.S. Lower 48 Land Drilling and Canadian Contract Drilling operations, while oil prices are the primary driver in our Alaskan, International, U.S. Offshore (Gulf of Mexico), Canadian Well-servicing and U.S. Land Well-servicing operations. The Henry Hub natural gas spot price averaged $4.45 per million cubic feet (mcf) during the period from October 1, 2008 through September 30, 2009, down from $9.03 per mcf average during the period from October 1, 2007 through September 30, 2008. West Texas intermediate spot oil prices averaged $57.67 per barrel during the period from October 1, 2008 through September 30, 2009, down from a $107.84 per barrel average during the period from October 1, 2007 through September 30, 2008.
Beginning in the fourth quarter of 2008, there was a significant reduction in the demand for natural gas and oil that was caused, at least in part, by the significant deterioration of the global economic environment including the extreme volatility in the capital and credit markets. Weaker demand throughout 2009 has resulted in sustained lower natural gas and oil prices. The average price of $3.17 per mcf during the third quarter of fiscal year 2009 included a low of $1.88 per mcf in September 2009 and represented the lowest quarter average price for the periods presented. The significant drop in the price of oil reached a low of $31.41 per barrel in December 2008 and remains depressed at the current quarter average price of $68.14 per barrel when compared to the third quarter of fiscal year 2008 average price of $118.23. These reduced prices for natural gas and oil have led to a sharp decline in the demand for drilling and workover services. Continued fluctuations in the demand for gas and oil, among other factors including supply, could contribute to continued price volatility which may continue to affect demand for our services. The following table sets forth natural gas and oil price data for each quarter over the past two years:
Operating revenues and Earnings (losses) from unconsolidated affiliates for the three months ended September 30, 2009 totaled $805.4 million, representing a decrease of $657.1 million, or 45%, as compared to the three months ended September 30, 2008, and $2.8 billion for the nine months ended September 30, 2009, representing a decrease of $1.2 billion, or 31%, as compared to the nine months ended September 30, 2008. Adjusted income derived from operating activities and net income (loss) for the three months ended September 30, 2009 totaled $112.8 million and $29.5 million ($.10 per diluted share), respectively, representing decreases of 69% and 85%, respectively, compared to the three months ended September 30, 2008. Adjusted income derived from operating activities and net income (loss) for the nine months ended September 30, 2009 totaled $385.3 million and ($38.3) million (($.14) per diluted share), respectively, representing decreases of 58% and 107%, respectively, compared to the nine months ended September 30, 2008.
Third Avenue Management, Martin Whitman of Third Avenue Value Fund, Kenneth Fisher of Fisher Asset Management, LLC, Chris Davis of Davis Selected Advisers.