The Company also made public its intention to move the listing of its shares to the New York Stock Exchange (NYSE) by way of its filing today of a listing application with the NYSE. Trading of the shares is expected to commence on November 3, 2005 under the existing ticker symbol NBR. Until then Nabors stock will continue to trade on the American Stock Exchange.
Gene Isenberg, Nabors' Chairman and Chief Executive Officer commented on the results, "Our third quarter results were impressive particularly considering they include hurricane related net charges of approximately $0.03 per share. Nearly every one of our businesses contributed meaningfully to both the year-over-year and sequential quarterly improvement. Every sign, across all of our businesses, continues to reinforce our long-held conviction that this cycle will be more powerful and enduring than previous energy cycles. We are still seeing a surprisingly strong pricing environment across our North American land markets and the beginning of similar pricing momentum internationally as global rig demand substantially exceeds the industry's ability to add capacity. Our forward optimism is underpinned by our customer's powerful returns, as demonstrated by their willingness to commit to three-year term contracts for new rigs with deliveries as far away as 2007. The strength and breadth of demand for new higher specification rigs worldwide is warranting substantial capacity expansion. Nabors is utilizing its inherent cost and infrastructure advantages to capture a disproportionate share of this incremental demand with an increasing proportion of new built rigs and a significant but diminishing capacity for reactivating and upgrading existing rigs.
"Over the last two years our various subsidiaries have completed and deployed 14 new built drilling rigs and secured term commitments underwriting an additional 47 new rigs for a total of 61 new rigs. This puts us well on our way to fulfilling our expectation of deploying 100 incremental newly constructed rigs by mid-2007, as stated in last quarter's earnings release. We have a large number of pending proposals and ongoing discussions regarding further new rig commitments in all of our North American and international units. The majority of the rig commitments-to-date will be deployed by our U.S. Lower 48 Land Drilling unit but the magnitude of new rigs internationally is likely to become much larger over the next year. We are also continuing to add rig capacity with reactivated rigs, having completed 90 since the beginning of last year, with another 6 currently in process.
"The average gross margin per rig day in our U.S. Lower 48 Land Drilling unit increased more than expected to $7,603 in the quarter and are continuing to increase. We averaged 244 rigs operating during the quarter and expect to average over 250 in the fourth quarter. Canada posted better than expected results, despite a couple of weeks of adverse weather, illustrating that market's strong demand. Plans by our customers continue to show increased activity and longer duration contract commitments. Canada's Academy entity is constructing a total of 15 new drilling rigs and 20 coiled tubing / stem drilling rigs with most of the near-term drilling rig capacity dedicated to the U.S. Lower 48 Land Drilling operation.
"Our International business is beginning to show its potential with large increases in drilling programs planned in virtually every market where we operate or are pursuing. The largest potential exists in our Middle East and North Africa markets but sizeable programs are also being planned in several Latin American and other countries. Long lead times and bureaucratic bid processes make precise timing of these projects difficult to predict but we can uniquely provide our customers the greatest number of rigs in the shortest time. Our international unit currently has 8 new rigs and one existing Jackup (Dolphin 111) in various stages of construction or deployment in fulfillment of term contract commitments. These rigs are committed for work in multiple venues including Saudi Arabia, Venezuela, Algeria, Australia, Gabon and Angola. Over the last twelve months this unit's working rig count has increased by nearly 20 rigs (30%) and average rig margins have increased by approximately $800 per day over the same period. We expect to report even more significant increases in both rigs working and pricing over the next four quarters as this market further materializes.
"Our U.S. Offshore results were good considering the impact of two severe hurricanes during the quarter. This unit's fourth and first quarter results will reflect a small diminution of income as repairs to Barge Rig 300 and two jackups are completed. We did incur a total loss on one rig, SSD XII and are commencing construction on a replacement rig SSD XX as well as one additional rig SSD XXI, given the near 100% utilization this class of rig has achieved over the last several years. Likewise, given the strong demand for shallow water deep shelf drilling we are building another ultra-deep drilling Barge Rig 301. We are able to do so at a favorable capital costs by utilizing an existing posted barge hull and some components from our equipment inventory. The outlook for this unit is much improved and the net impact of the hurricanes is likely to be more than offset in future periods as we are seeing substantial increases in the demand and pricing for both our working and stacked Jackups and platform rigs in light of the reduced Jackup fleet and rapidly escalating rates.
"Our U.S. Land Well-Servicing unit continues to see strong market conditions and anticipates further pricing increases for the next several quarters as demand for rigs continues unabated. During the quarter we received the first three of 41 new 500 HP PLC Millennium workover rigs which should continue at 4 per month increasing to six per month over the next few quarters. This unique rig has been so well received by current and prospective customers that we have exercised our option for an additional 40 rigs. We are also proposing a number of these rigs for international customers. This unit also has 20 new truck mounted 200 HP rigs on order with the first deliveries to commence before the end of 2005 as well as a large quantity of trucks and trailers for increased capacity in its fluid hauling and disposal business. During the quarter we renamed this unit, Nabors Well Servicing, replacing the previous Pool name style, in order to better align the identity and synergies between this unit and our other businesses. All of our other units were in-line with our expectations and anticipate improving results from both pricing and volume as we move into 2006.
"While strong pricing improvement across all of our units will continue to be the largest component of our growth in the intermediate term, dramatic increases from new capacity should be the dominant factor in the longer-term. There appears to be no end to the opportunities we have at hand and for the first time in my tenure we can exercise a high degree of selectivity in evaluating the projects we pursue based upon the risk adjusted returns."
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