Nabors cuts earnings estimate

Allen Baker

Petroleum News contributing writer

Nabors Industries Ltd. has cut its earnings estimate for the second quarter to 27 or 28 cents per share, 20 percent below the First Call mean estimate of 35 cents for each diluted share. And Nabors executives said July 1 that full-year profits will likely be 10 to 15 cents a share below previous forecasts. The second quarter will still come in well above 2003’s 19 cents per share.

The company says its Alaska businesses are running slightly ahead of forecasts, and the same is true for U.S. well servicing operations. Rig counts and margins are up in the Lower 48 market, the company says. Canadian prospects suffered recently, though, with heavy rain dampening what started out as a rapid recovery from the spring thaw.The big negatives are in the international operations of Nabors, nominally based in Barbados. Bad weather meant higher rig-moving expenses in Mexico, and there were also problems in Colombia, Kenya and Trinidad. A jack-up operating in the Arabian Gulf had 25 days of downtime.

U.S. offshore operations aren’t improving as quickly as company executives expected, due to a weak market for workover jack-ups. Nabors expects the second half to be better in this area, but still below prior forecasts. Oil and gas operations are performing well, says Gene Isenberg, Nabors’ CEO, with success in three of five recent exploration wells.