(Reuters) - Nabors Industries Ltd (NBR.N), owner of the world’s largest land-drilling rig fleet, is planning close to $1 billion of disposals in the next year to meet a debt reduction target, despite its recent struggles to offload certain assets.
Chief Executive Tony Petrello, nearly a year into the job, set a target of cutting net debt to 25 percent of total capital by the end of 2013, compared with about 40 percent now.
Due to a weaker earnings outlook, it would take $970 million in divestitures to hit the target, Petrello said. “We’re committed to do that one way or the other,” he told analysts on a call to discuss third-quarter results.
But the selling has gone more slowly than expected. Apart from property in the Eagle Ford basin in southern Texas that should be sold by the end of this year, sales of exploration and production assets are effectively on hold, Petrello said.
Nabors had also decided not to sell its Canadian well services arm, he said, and it was pausing in its effort to dispose of several offshore drilling rigs, given the many other shallow-water rigs currently on the market.
Following the company’s better-than-expected quarterly results, Nabors shares were 0.1 percent higher at $14.27 in early afternoon trading on the New York Stock Exchange, despite a decline of nearly 1 percent in the Philadelphia oil service index .OSX.
Reporting by Braden Reddall in San Francisco