UPDATE 1-Nabors revenue hit by spending cuts, demand recovery slows
* Fourth-quarter EPS from continuing operations $0.44 vs $0.30 last year
* Revenue down 6 percent at $1.63 billion
* Says major customers curtailed spending
* Says rig count bottomed, has begun to increase
Feb 19 (Reuters) - Nabors Industries Ltd, the owner of the world's largest onshore-drilling-rig fleet, reported a 44 percent jump in profit, but revenue fell as its major customers curtailed spending amid the worst slowdown in gas-directed drilling in more than a decade.
Oilfield services companies' pricing power has evaporated as the number of gas-targeted U.S. rigs in operation hovers around the 13-year low it hit last year, creating a glut in supply.
The company said it faced near suspension of pressure pumping work, a hydraulic fracturing method to extract oil and gas from shale rock, in late December that continued into early January.
North American onshore drilling is likely to remain subdued this year as oil and gas companies have forecast exploration budgets in the same range as those of 2012.
"Several major customers with whom we enjoyed an outsized market share sharply curtailed spending, four of which accounted for 41 of our 68 rig decrease," Chief Executive Tony Petrello said in a statement.
However, he said the rig count had recently bottomed and had begun to increase, and Nabors expects the trend to continue over the rest of this quarter. "We remain cautious in predicting the timing and magnitude of activity improvement," Petrello said.
Bermuda-based Nabors has also been under extra scrutiny since its largest shareholder, Pamplona Capital Management, said on Jan. 23 it was concerned about the underperformance of Nabors shares. Pamplona is backed by Russian billionaire Mikhail Fridman's Alfa Group.
However, the stock has risen sharply since and got a further boost on Feb. 14 when Goldman Sachs raised Nabors to its conviction buy list.
Total revenue, including other income, fell 6 percent to $1.63 billion, below the Wall Street estimate of $1.67 billion.
Net profit from continuing operations was $129.3 million, or 44 cents per share, compared with a loss of $89.5 million, or 30 cents per share, a year earlier.
The company's shares closed at $18 on the New York Stock Exchange on Tuesday. They have gained 20 percent in the last month, outpacing the 15 percent growth of the S&P 500 Oil & Gas Drilling index.
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