Nabors second-quarter net loss; adjusted profit rises
(Reuters) - Nabors Industries Ltd (NBR.N), owner of the world's largest land-drilling rig fleet, reported on Tuesday a second-quarter net loss, but a rise in adjusted profits that were weighed down by the volatile North American drilling market.
Chief Executive Tony Petrello said the recent decline in liquids prices, as with natural gas prices the quarter before, was constraining spending by its customers, even if Nabors was sheltered for now by longer-term contracts.
"These spending reductions, combined with the entry of newly built rigs without term commitments, are resulting in an increasingly competitive land rig market," Petrello said.
The company's profit excluding items rose to $109.7 million, or 38 cents per share, from $70.9 million, or 24 cents per share a year ago. This was in line with estimates that were lowered after a profit warning last week, according to Thomson Reuters I/B/E/S.
Total revenue rose 19 percent to $1.61 billion.
The company also said last week that it would take a $150 million "ceiling test" charge for the drop in the value of its interest in natural gas fields. So for the second quarter, it reported a net loss of $72.8 million, or 25 cents per share.
Nabors has been hit by the U.S. surplus of pressure pumping equipment as drillers pull out of natural gas basins due to low prices.
Nabors acquired its pressure pumping fleet, the sixth-largest, through its acquisition of Superior Well Services in 2010. Larger rivals Halliburton Co (HAL.N) and Baker Hughes Inc (BHI.N) face similar challenges, but both topped forecasts with their quarterly profits.
The Nabors warning last week was accompanied by provisions for a potential takeover battle, which gave a boost to its shares. The stock is down 19 percent so far in 2012, compared with a 2 percent decline in the oil service index .OSX.