UPDATE 1-Nabors eyes debt market, possible acquisitions
* Nabors aims to set up $400-$500 mln revolver
* CEO says now has firepower to do acquisitions
* Shares up 6.7 pct following Q3 results
SAN FRANCISCO, Oct 21 (Reuters) - Oil and gas drilling contractor Nabors Industries Ltd (NBR.N) plans to set up a $400 million to $500 million revolving credit facility in the next few quarters and said it now has the firepower to make acquisitions.
Chief Executive Gene Isenberg said on Wednesday the debt markets are open to Nabors at far more attractive interest rates than the 9.25 percent attached to the $1.125 billion in long-term debt the company raised in January. [ID:nN07495183]
But Isenberg described that capital raising as "insurance" to cover the possibility of the debt markets locking up before the maturing of $1.9 billion in convertible debt in May 2011.
"If you buy life insurance and you don't die, you don't feel terrible about it," he told investors on a conference call to discuss third-quarter results.
On acquisitions, Isenberg said he would consider something along the lines of the recent $480 million purchase by Weatherford International Ltd (WFT.N) of the oilfield services unit of Russia's third-largest oil producer, TNK-BP. [ID:nN29390492]
"I don't have anything specifically in mind except to make the point that we have the firepower now that we didn't have before," he said.
Nabors, which ranks fifth among U.S.-listed rig contractors but first among land drillers, reported late on Tuesday a sharp drop in third-quarter earnings but said the quarter should represent the low point for drilling activity. [ID:nN20444686]
Shares of Nabors jumped 6.7 percent on Wednesday to $23.92, their highest for a year, though analysts at RBC cut their price target to $25 from $30, with a "sector perform" rating. (Reporting by Braden Reddall)
