Contract Driller Nabors' Revenue Rises On US Shale Spending
Oct 22 (Reuters) - Contract driller Nabors Industries Ltd reported a 17 percent rise in revenue, its highest increase in nine quarters, as it benefited from strong spending in U.S. shale fields.
The company, owner of the world's largest land-drilling rig fleet and a major provider of fracking services, said the recent fall in oil prices could affect customer spending but it was well positioned to weather any downturn.
Nabors' shares rose about 2 percent in extended trading on Tuesday.
"We are acutely aware of the potential for further weakness in crude oil prices and the associated impact on our customers' spending plans, particularly in North and Latin America," Chief Executive Tony Petrello said.
However, he said Nabors was "much better positioned" to deal with - and even capitalize on - any cuts in spending after undertaking cost-cutting intiatives of its own.
Onshore drillers such as Nabors are expected to be less affected by falling oil prices than offshore drillers, whose customers need higher prices to break even.
Nabors said its adjusted income from drilling and rig services in the United States rose about 26 percent to $117.2 million in the quarter, thanks to higher activity in the Bakken shale field in North Dakota and Permian Basin in Texas.
Its U.S. business also benefited from the receipt of a previously announced $30 million contract termination payment.
The increased drilling activity also boosted demand for pressure pumping, a market that is recovering after being oversupplied over the past two years.
Pressure pumping is used in hydraulic fracking for extraction of oil and gas from the shale wells.
Nabors' revenue rose to $1.81 billion from $1.55 billion a year earlier, beating the average analyst estimate of $1.72 billion, according to Thomson Reuters I/B/E/S.
The company reported net income from continuing operations of $57.4 million, or 19 cents per share.
That compared with a loss of $90.5 million, or 30 cents per share, a year earlier when it was hit by a payment associated with bond redemptions and asset impairment charges.
Excluding items, earnings were 39 cents per share, exceeding the average estimate of 36 cents.
Nabors shares were trading at $19 after the bell, up from $18.65 at the close on the New York Stock Exchange.
Up to the close the stock has risen 10 percent this year, compared with a 2 percent fall in the Dow Jones U.S. oil equipment and services index.
(Reporting By Kanika Sikka in Bangalore; Editing by Ted Kerr)
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