In the Q1 2024 earnings call for Nabors Industries Ltd., several points were made regarding the US Lower 48 operations:
- Market Conditions: The US Lower 48 market showed a disappointing activity level, contrary to expectations of a moderate increase. The land rig count declined slightly, with the industry rig count remaining essentially flat during the first quarter.
- Pricing Stability: Despite the slight drop in activity, the pricing for high-performance technology-focused rigs in the Lower 48 remained stable. This stability helped support Nabors’ daily rig margins.
- Expense Control: Nabors achieved outstanding expense control in the Lower 48, which contributed to maintaining healthy daily operating margins despite the broader industry challenges.
- Rig Margins: The daily rig margins in the Lower 48 exceeded expectations, driven by higher-than-expected revenue and lower expenses. This performance underscores Nabors’ operational efficiency in a challenging market.
- Drilling Solutions Performance: The Nabors Drilling Solutions (NDS) segment performed well, contributing significantly to the margins on top of the standard drilling operations. This highlights the added value from Nabors’ technological services in the region.
- Future Expectations: Looking ahead, Nabors expressed caution regarding the US Lower 48 market, noting that clients are remaining cautious about their drilling plans, especially in gas-focused basins.
Overall, the discussion about the US Lower 48 during the earnings call painted a picture of a challenging but stable market where Nabors is leveraging its technological capabilities and operational efficiencies to maintain competitive margins and control costs.
