Gene Isenberg, Nabors' Chairman and CEO commented, "The largest variance to our outlook at the end of March is in our international operations where we experienced 25 days of downtime on a jackup operating in the Persian Gulf, higher rig moving expenses in Mexico, mostly due to adverse weather, start-up deferrals in Colombia and absorbed demobilization cost of rigs in Kenya and Trinidad. Our oil and gas operations are performing very well with recent successes on three of five exploration wells which when developed, are expected to generate overall returns well in excess of 20% per annum including dry hole costs. We will however, expense approximately $2.1 million in dry hole costs this quarter related to a second dry hole. Canadian expectations also are down, as what started out to be a rapid recovery from the spring thaw was reversed by excessive rain over the last few weeks. Our US well servicing and Alaskan businesses are expected to be slightly ahead of our previous forecast as is our other income, primarily from our interest rate cap / floor contract. Our US offshore operations are improving but at a slower pace than expected because of a weak market for our workover jackups. We do expect this market to contribute more significantly in the second half albeit not as much as previously expected. Our US Lower 48 operations are up materially compared to first quarter but improvements in rig count and margins are substantially offset by the previously anticipated cost related to rig relocation and start- ups as well as training."
"The outlook for all of our businesses is improving despite the second quarter interruptions, with a tightening rig market in the US Lower 48 and our anticipation of a significant increase in international land drilling demand. The impact of this quarter's events has caused us to lower our expectations for the full year 2004 by $0.10 - $0.15 per share."
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