Oil and land drilling contractor Nabors Industries Ltd. (NBR) Tuesday said that it expects its fourth quarter profit to exceed current street estimates.
The company anticipates its fourth quarter earnings to top street estimates of $0.16 per share, excluding estimated non-cash, pre-tax charges of about $274 million or $0.65 per share.
Hamilton, Bermuda-based Nabors oil and gas segment incurred about $255 million of the non-cash, pre-tax charges, the majority of which resulted from year-end ceiling-test adjustments in unconsolidated joint venture entities that use the full-cost method of accounting .The ceiling tests were applied using a twelve-month trailing-average natural gas price of $3.87 per million cubic feet or mcfe in the US and $2.67 in Canada.
The company noted that the writedowns in oil and gas segment reduce to less than $700 million, the carrying value of both joint venture companies and wholly owned oil and gas interests. The impairments occurred in largest joint venture, NFR Energy comprise about 80% of shale gas, with total carrying value to $112 million for nearly 50% share of 1.0 tcfe in gross proved reserves and an equal amount of probable reserves.
The present value of Nabors' future earnings from just these gross proved reserves, utilizing the NYMEX forward strip at a 10% discount, is about $1 billion. The implied market value of the gross reserves in this one entity is $2 billion using a price of $2.00 per mcfe for proved reserves, which is a commonly used valuation methodology for similar properties.
Gene Isenberg, chairman and CEO said, "The remaining $19 million charge represents the year-end value of one of our three significant marketable security holdings. Accounting rules require us to impair an available-for-sale security when its market value remains below our basis for some duration, even though any appreciation cannot be recognized until the security is eventually sold. The aggregate market value of the three securities is approximately $145 million, which results in an unrecognized gain of approximately $53 million net of this charge."
The Nabors companies own and operate about 542 land drilling and about 730 land workover and well-servicing rigs in North America. Nabors' also actively marketed offshore fleet consists of 40 platform rigs, 13 jackup units and 3 barge rigs in the United States and multiple international markets.
NBR is currently trading at $22.55, up $1.02 or 4.74% on a volume of 3.74 million shares on the NYSE.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.