Oct 28, 2026 earnings call — International expansion and Lower 48 rig growth
Adjusted EBITDA totaled $246 million, exceeding expectations and supporting $75 million adjusted free cash flow in the quarter.
Revenue $0.9B (est $0.9B) · EPS $-1.24 (est $-0.14)
Key quotes
"SANAD ended the third quarter with 56 rigs working in the Kingdom. Three rigs have since suspended operations, bringing the current count to 53."
"Turning to Nabors, we expanded our rig count by three units in the third quarter. Our Lower 48 rig count is up 12 rigs or 19% year-to-date."
"Turning to adjusted free cash flow, we generated $75 million of consolidated adjusted free cash flow in the third quarter, materially exceeding our guidance."
Analyst Q&A 6
Saudi rig suspensions and margins
Q (Joe Laetsch · Morgan Stanley): He asked what changed in Saudi that led to recent suspensions and how to think about activity into 2027. He also asked what drove higher international daily margins and whether those margins are sustainable.
A: SANAD had 53 rigs and Nabors expects its net working rigs there to fall by one to 52 because of five suspensions; the company said the Jafurah drilling program is ahead of completions, which explains some suspensions. Management said Saudi rig counts remain healthy overall and that newbuilds are scheduled into early 2027. They also said international margins rose because demand is strong across geographies, U.S. utilization is above 90%, and NDS services like MPD and TRS are adding higher-margin revenue.
"The net count for us goes down by one from where we are today, down to 52." — Tony Petrello (CEO·CHAIR)
Q4 cash impact and capital to restore rigs
Q (Derek Podhaizer · Piper Sandler): He asked how much the five suspended startup rigs will affect fourth-quarter cash flow and how long the suspensions might last. He also asked which Lower 48 rigs would need more capital to return and what contract terms would be required.
A: Management said the five suspensions are expected to reduce Q4 cash flow by around $5 million-$6 million and that this impact is already included in guidance. They said the suspensions are likely short-term but they cannot say exactly when rigs will return. For the Lower 48, a handful of rigs can be redeployed with modest capital, while the next 10-12 rigs would need materially more work costing about $4 million-$8 million per rig and would typically require at least three-year contracts to make economic sense.
"Derek, I think we mentioned in our remarks that the impact in Q4 of these five suspensions will be around $5 million-$6 million of cash flow, considering not only savings on CapEx, but also on cost." — Miguel Rodriguez (CFO)
2027 EBITDA and newbuild timing
Q (Keith MacKey · RBC): He asked whether Q4 (about $260 million EBITDA) is a good starting point for 2027 and for puts and takes on EBITDA and CapEx for next year. He also asked timing for the next tranche of newbuild rigs.
A: Management said they are running at about a $1 billion run rate for next year as the base heading into 2027 and that second-half growth is about 18% versus the first half. They said CapEx will be higher next year as they continue Kingdom and other growth investments, and they expect a meaningful step up in cash flow. On newbuilds, they said rigs 19 and 20 should arrive in early 2027 and the fifth tranche rigs are expected to deploy in the second half of 2027, with about five SANAD rigs expected in 2027 in total.
"I think we have been very clear that we are right now at a run rate of $1 billion for next year as the base as you get into 2027." — Miguel Rodriguez (CFO)
Geothermal progress and US rig demand
Q (Eddie Kim · Barclays): He asked how many rigs Nabors is currently drilling for geothermal and how quickly they could reach double-digit geothermal rigs. He also asked whether larger public U.S. E&Ps will add rigs next year and the basin outlook.
A: Management said they currently have two geothermal rigs and expect double-digit geothermal deployment further out, likely in 2028 or 2029, as developers need to scale up. On the Lower 48, they described basin-by-basin demand: West Texas strongest, South Texas competitive for higher-spec rigs, North Dakota a bright spot, East Texas uncertain pending gas markets, and they have exited the Northeast. They also noted small operators are more squeezed and larger operators remain disciplined.
"Right now we only have two, I would say." — Tony Petrello (CEO·CHAIR)
Venezuela redeployment plans
Q (Jason Kim · JPMorgan): He asked how quickly and capital-efficient Nabors can put additional rigs to work in Venezuela and how they decide between sending idle U.S. rigs to Venezuela versus keeping them in the Lower 48. He also asked how Venezuela economics compare to other Latin America operations.
A: Management said the disclosed rig will start early next year and that they can redeploy or restart rigs in Venezuela fairly quickly based on customer schedules. They said some restarts could occur in the latter part of next year and that they kept a local footprint to maintain rigs. On economics, they would not give rig-level detail but said they expect Venezuela operations to be accretive to international gross margin.
"I think we will be in a position to redeploy or restart rigs in country fairly quickly based on the customer's schedule." — Miguel Rodriguez (CFO)
Argentina market and technology role
Q (Jeff LeBlanc · TPH): He asked for the company's latest thoughts on Argentina and how Nabors could benefit if proposals (RIGI) are approved.
A: Management said Argentina is a key growth market where they operate 14 rigs plus an O&M contract and have nearly 33% market share. They noted around 10 active bid opportunities and that success there has been driven by technology like MPD and TRS, with broad customer buy-in. They described Argentina as more investable now and a very attractive market for Nabors.
"Well, obviously, it's a key growth market for us and we now operate 14 rigs there, plus an O&M contract, and we're almost at 33% market share." — Tony Petrello (CEO·CHAIR)