[NABORS LETTERHEAD]
[LOGO]
FOR IMMEDIATE RELEASE
NABORS URGES POOL SHAREHOLDERS
TO SEND STRONG MESSAGE TO POOL'S BOARD
Vote FOR The Nabors Resolution On The BLUE Proxy Card
HOUSTON, Texas, December 21, 1998 - Nabors Industries, Inc. (AMEX: NBR)
announced today that it will soon mail a letter to shareholders of Pool Energy
Services Co. (NASDAQ: PESC) in connection with its solicitation of proxies in
favor of a resolution recommending that the Board of Directors of Pool arrange
for the sale of the Company. The complete text of the letter follows:
December 21, 1998
Dear Fellow Shareholder:
Last week, we sent to you proxy materials urging you to adopt a
resolution strongly recommending that the Board of Directors of Pool
Energy Services Co. arrange for the sale of the Company at the highest
available price. As you know, Nabors has proposed a merger to Pool's
Board of Directors that would provide you with a significant premium
for your investment. In response, your Board has said that even if a
majority of Pool's shareholders adopt the Nabors' Resolution, "AT THE
PRESENT TIME, THE BOARD DOES NOT INTEND TO TAKE ANY SPECIFIC ACTION."
In short, they intend to conduct "business as usual" and ignore your
interests. WE STRONGLY URGE YOU -- THE TRUE OWNERS OF POOL -- TO ACT
NOW TO PROTECT THE VALUE OF YOUR INVESTMENT BY SIGNING, DATING, AND
MAILING THE BLUE PROXY CARD TODAY.
Consider the following:
o Absent Nabors' Merger Proposal, it is clear that Pool's stock price
would not be trading at its current level of $11.00 as of December 18,
1998, but at an estimated "normalized current" price of $6.223.
o Nabors' offer represents a significant premium for your investment in
Pool -- both now and at the time of our original offer, and provides
you with the opportunity to participate in the upside potential of a
combined Nabors-Pool.
<PAGE>
o Pool has significantly underperformed both Nabors and the companies
currently comprising the Philadelphia Oil Service Sector Index ("Oil
Service Index") since Pool's IPO and since the implementation of
Pool's "strategic plan."
o The Pool Board is ignoring recent industry trends towards
consolidation which are aimed at increasing operating efficiencies,
leading to enhanced shareholder value despite a tough operating
environment.
We believe Pool's stock price performance since October 9, 1998, the
last day of trading prior to Nabors' initial offer, is a direct result
of Nabors' offer. In the absence of Nabors' offer, it could be
expected that Pool's stock price would have performed similarly to
those companies that Pool considers as its peers.1 Between October 9,
1998 and December 18, 1998, Pool's peer group declined on average
11.9%. As such, were it not for Nabors' current offer for Pool, Pool's
stock price could be expected to trade at a 11.9% discount to its
price on October 9, 1998 of $7.063, or approximately $6.223.
Our proposal represents a win-win opportunity for Pool shareholders.
Nabors' Merger Proposal, 0.481 shares of Nabors common stock and
$6.125 in cash for each share of common stock of Pool, represents an
opportunity to realize a significant premium for your current
investment in Pool, while still retaining the upside potential
inherent in a Nabors-Pool combination. A combination of our two
companies would lead to economies of scale that offer the prospect of
significant purchasing, operating and other efficiencies -- leading to
lower costs, reduced capital expenditure requirements and enhanced
equipment utilization. The combination also offers enhanced growth
opportunities, significant consolidation benefits, benefits from
becoming part of a larger and better-capitalized company and increased
shareholder liquidity.
Nabors has a strong history of shareholder value creation while Pool's
results have lagged far behind. Pool argues that Nabors is
opportunistically attempting to acquire Pool at a bargain price and
cites Pool's all-time highest trading stock price of $40.63 on October
9, 1997, in support of its position. What Pool fails to mention, is
that an equivalent investment in Nabors AT NO PREMIUM at the date of
implementation of Pool's "strategic plan" would have produced a value
of $62.95. IN FACT, AN INVESTMENT IN NABORS ON JUNE 6, 1994 HAS TRADED
AT A HIGHER PRICE THAN AN EQUIVALENT INVESTMENT IN POOL ON EACH AND
EVERY DAY SINCE NOVEMBER 1, 1994.
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1 Pool's Tier 1 and Tier 2 peer group, as reported in its definitive additional
materials, includes: Key Energy Group, Inc., Parker Drilling Company, Patterson
Energy, Inc., Pride International, Inc. and UTI Energy Corp.
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<PAGE>
Moreover, Pool shareholders will have the opportunity to participate
in the upside benefits of the combination through ownership of Nabors
common stock. Nabors' stock price has historically and consistently
outperformed Pool's during both positive and negative industry
environments. From April 17, 1990, the date of Pool's IPO, through
October 9, 1998, the day of trading prior to Nabors' initial offer,
Pool's stock price declined 31.1% from $10.250 to $7.063, while
Nabors' stock price increased 211.8% from $4.250 to $13.250 and the
stock prices for the companies currently comprising the Oil Service
Index increased 83.9%. From June 6, 1994, the date of Nabors' initial
investment in Pool and Pool's subsequent implementation of its
"strategic plan," through October 9, 1998, Pool's stock price fell
22.6% from $9.125 to $7.063, while Nabors' stock price grew 96.3% from
$6.750 to $13.250 and the stock prices for the companies currently
comprising the Oil Service Index increased 87.5%.
POOL'S BOARD AND MANAGEMENT ARE ATTEMPTING TO DELAY WHAT OTHERS IN THE
INDUSTRY ARE CLEARLY EMBRACING. Consolidation, in the face of
deteriorating industry conditions, has become a consistent strategy
recently implemented by both oilfield service companies as well as our
customers (both independent and major exploration and production
companies). These companies have recognized economies of scale which
have led to significant cost savings and efficiencies which are
crucial to competitive survival in the current environment.
POOL'S MANAGEMENT IS ALSO ENTRENCHING ITSELF AT THE EXPENSE OF
SHAREHOLDERS. While the Pool Board has refused to negotiate with
Nabors, it indicated that it is implementing lucrative "golden
parachute" agreements for 17 senior executives and amended Pool's
Bylaws. As Pool's proxy statement acknowledges, the Bylaw amendment
"may, under certain circumstances, have anti-takeover implications."
Simply put, the Board's actions make it more difficult for Nabors, or
any other qualified bidder, to acquire the Company. Pool's Board,
which collectively owns less than 0.3% of the outstanding common stock
excluding options, is unilaterally determining the future of our
Company. What's next?
You should ask yourself, "How long must I wait to achieve a return on
my investment in Pool?" A vote FOR the Nabors "Sale Of Pool"
Resolution represents the best opportunity to realize a significant
premium for your shares and the opportunity to participate in the
future upside of a stronger combined company.
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<PAGE>
THE FUTURE OF YOUR INVESTMENT IS AT STAKE
In your own self interest, you can send a strong message to Pool's
Board indicating that continued lackluster performance is no longer
acceptable. WE STRONGLY URGE YOU TO SIGN, DATE AND RETURN THE BLUE
PROXY CARD TODAY IN THE ENCLOSED, POSTAGE PAID ENVELOPE. As the
largest single shareholder of the Company, Nabors believes that
communicating our message loud and clear to the Pool Board will be a
critical first step in effecting change in our Company.
We continue to urge Pool's Board to discuss this powerful
combination with us. As we have consistently stated, if Pool can
demonstrate additional value, we are prepared to offer a higher price.
We remain committed to effecting a transaction with Pool. We believe
that together Nabors and Pool will outperform Pool's "strategic plan"
and will maximize value for Pool shareholders over the near- and
long-term.
Thank you very much for your support,
NABORS INDUSTRIES, INC.
Nabors actively markets over 400 land drilling rigs worldwide. Offshore, the
Company operates 25 platform rigs, six jack-ups and two barge drilling rigs. The
Company participates in most of the significant oil, gas and geothermal drilling
markets in the world. Nabors also manufactures top drives and drilling
instrumentation systems and provides comprehensive oilfield engineering, civil
construction, logistics and facility maintenance and project management
services.
# # #
Contacts: Nabors Industries, Inc. Abernathy MacGregor Frank
Dennis A. Smith Dan Katcher / Matt Sherman
(281) 874-0035 (212) 371-5999
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