<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000
COMMISSION FILE NUMBER: 1-9245
--------------------
NABORS INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 93-0711613
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
515 W. GREENS ROAD, SUITE 1200
HOUSTON, TEXAS 77067
(Address of principal executive offices) (Zip Code)
281-874-0035
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--- ---
The number of shares of Common Stock, par value $.10 per share,
outstanding as of August 7, 2000 was 146,027,616.
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<PAGE> 2
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Part I Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of
June 30, 2000 and December 31, 1999.........................................2
Condensed Consolidated Statements of
Income for the Three Months and Six Months Ended
June 30, 2000 and 1999......................................................3
Condensed Consolidated Statements of
Changes in Stockholders' Equity for the Six
Months Ended June 30, 2000 and 1999.........................................4
Condensed Consolidated Statements of Cash
Flows for the Six Months Ended June 30,
2000 and 1999...............................................................5
Notes to Condensed Consolidated
Financial Statements........................................................6
Report of Independent Accountants..........................................10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations..................................................................11
Part II Other Information
Item 1. Legal Proceedings.............................................................16
Item 2. Changes in Securities.........................................................17
Item 4. Submission of Matters to a Vote of Security Holders...........................17
Item 6. Exhibits and Reports on Form 8-K..............................................18
Signatures..............................................................................19
</TABLE>
<PAGE> 3
PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 305,312 $ 80,580
Marketable securities 287,214 31,086
Accounts receivable, net 230,275 205,643
Inventory and supplies 22,265 25,758
Prepaid expenses and other current assets 112,204 118,226
----------- -----------
Total current assets 957,270 461,293
Property, plant and equipment, net 1,696,045 1,669,466
Goodwill, net 165,314 169,054
Other long-term assets 115,322 98,190
----------- -----------
Total assets $ 2,933,951 $ 2,398,003
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term obligations $ 4,093 $ 3,599
Trade accounts payable 66,562 80,343
Accrued liabilities 122,730 160,546
Income taxes payable 23,993 20,988
----------- -----------
Total current liabilities 217,378 265,476
Long-term obligations 885,089 482,600
Other long-term liabilities 76,027 86,849
Deferred income taxes 83,632 93,004
----------- -----------
Total liabilities 1,262,126 927,929
----------- -----------
Commitments and contingencies (Note 5)
Stockholders' equity:
Capital stock, par value $.10 per share:
Authorized common shares 400,000;
issued 146,446 and 137,421 14,645 13,742
Capital in excess of par value 1,103,718 958,704
Accumulated other comprehensive income (loss) 8,269 (3,828)
Retained earnings 550,010 506,273
Less treasury stock, at cost, 589 common shares (4,817) (4,817)
----------- -----------
Total stockholders' equity 1,671,825 1,470,074
----------- -----------
Total liabilities and stockholders' equity $ 2,933,951 $ 2,398,003
----------- -----------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
2
<PAGE> 4
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
2000 1999 2000 1999
--------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues $ 291,293 $ 129,636 $ 570,409 $ 279,328
Earnings from unconsolidated affiliates 10,175 303 20,743 3,598
--------- --------- --------- ---------
Total revenues 301,468 129,939 591,152 282,926
--------- --------- --------- ---------
Operating expenses:
Direct costs 196,806 81,295 390,268 174,595
General and administrative expenses 26,619 15,080 52,552 31,379
Depreciation and amortization 37,208 23,764 74,344 45,186
--------- --------- --------- ---------
Operating expenses 260,633 120,139 517,164 251,160
--------- --------- --------- ---------
Operating income 40,835 9,800 73,988 31,766
--------- --------- --------- ---------
Other income (expense):
Interest expense (7,445) (11,237) (16,096) (16,642)
Interest income 1,842 3,516 2,431 4,716
Other income, net 6,325 3,328 12,149 5,180
--------- --------- --------- ---------
Other income (expense) 722 (4,393) (1,516) (6,746)
--------- --------- --------- ---------
Income before income taxes and extraordinary gain 41,557 5,407 72,472 25,020
--------- --------- --------- ---------
Income taxes:
Current 3,492 1,278 8,734 5,062
Deferred 13,962 831 21,704 4,696
--------- --------- --------- ---------
Total income taxes 17,454 2,109 30,438 9,758
--------- --------- --------- ---------
Income before extraordinary gain 24,103 3,298 42,034 15,262
Extraordinary gain, net -- -- 1,703 --
--------- --------- --------- ---------
Net income $ 24,103 $ 3,298 $ 43,737 $ 15,262
--------- --------- --------- ---------
Earnings per share:
Basic:
Before extraordinary gain $ .17 $ .03 $ .30 $ .15
Extraordinary gain -- -- .01 --
--------- --------- --------- ---------
Net income $ .17 $ .03 $ .31 $ .15
--------- --------- --------- ---------
Diluted:
Before extraordinary gain $ .16 $ .03 $ .28 $ .14
Extraordinary gain -- -- .01 --
--------- --------- --------- ---------
Net income $ .16 $ .03 $ .29 $ .14
--------- --------- --------- ---------
Weighted average number of shares outstanding:
Basic 145,643 105,476 142,459 103,139
--------- --------- --------- ---------
Diluted 152,745 110,890 150,798 108,553
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 5
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES
IN STOCKHOLDERS' EQUITY
(IN THOUSANDS)
<TABLE>
<CAPTION>
CAPITAL ACCUMULATED
CAPITAL STOCK IN EXCESS OTHER TOTAL
--------------------- OF PAR COMPREHENSIVE RETAINED TREASURY STOCKHOLDERS'
SHARES PAR VALUE VALUE INCOME (LOSS) EARNINGS STOCK EQUITY
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31, 1998 101,382 $ 10,138 $ 394,562 $(10,983) $ 478,569 $ (4,817) $ 867,469
---------------------------------------------------------------------------------------
Comprehensive income:
Net income 15,262 15,262
Translation adjustment 732 732
Unrealized gain on marketable
securities, net 15,553 15,553
---------------------------------------------------------------------------------------
Total comprehensive income -- -- -- 16,285 15,262 -- 31,547
---------------------------------------------------------------------------------------
Issuance of common shares in
connection with the Bayard
acquisition 6,167 617 74,230 74,847
Issuance of common shares for stock
options exercised 121 12 1,171 1,183
Tax benefit on stock option deductions 21,166 21,166
Return and retirement of common
shares held in escrow in connection
with the Adcor merger (12) (1) 1 --
Conversion of 5% Notes 6 -- 113 113
---------------------------------------------------------------------------------------
Subtotal 6,282 628 96,681 -- -- -- 97,309
---------------------------------------------------------------------------------------
Balances, June 30, 1999 107,664 $ 10,766 $ 491,243 $ 5,302 $ 493,831 $ (4,817) $ 996,325
---------------------------------------------------------------------------------------
Balances, December 31, 1999 137,421 $ 13,742 $ 958,704 $ (3,828) $ 506,273 $ (4,817) $1,470,074
---------------------------------------------------------------------------------------
Comprehensive income:
Net income 43,737 43,737
Translation adjustment (1,700) (1,700)
Unrealized gain on marketable
securities, net 13,797 13,797
---------------------------------------------------------------------------------------
Total comprehensive income -- -- -- 12,097 43,737 -- 55,834
---------------------------------------------------------------------------------------
Issuance of common shares for
warrants exercised 70 7 1,636 1,643
Issuance of common shares for stock
options exercised 8,955 896 103,746 104,642
Tax benefit on stock option deductions 39,632 39,632
---------------------------------------------------------------------------------------
Subtotal 9,025 903 145,014 -- -- -- 145,917
---------------------------------------------------------------------------------------
Balances, June 30, 2000 146,446 $ 14,645 $1,103,718 $ 8,269 $ 550,010 $ (4,817) $1,671,825
---------------------------------------------------------------------------------------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE> 6
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
2000 1999
--------- ---------
<S> <C> <C>
Net cash provided by operating activities $ 41,805 $ 76,270
--------- ---------
Cash flows from investing activities:
Purchases of marketable securities, trading (511) --
Sales of marketable securities, trading 2,442 --
Purchases of marketable securities, available-for-sale (237,806) (12,544)
Sales of marketable securities, available-for-sale 11,544 --
Cash received from disposition of long-term assets 2,322 12,499
Cash paid for acquisitions of businesses, net -- (5,233)
Capital expenditures (98,534) (26,795)
Distribution from (investment in) affiliates 2,000 (1,425)
--------- ---------
Net cash used for investing activities (318,543) (33,498)
--------- ---------
Cash flows from financing activities:
Increase in restricted cash (268) (1,430)
Proceeds from long-term borrowings 501,941 324,707
Debt issuance costs (7,529) (2,319)
Reduction of long-term borrowings (98,958) (26,666)
Decrease in short-term borrowings, net -- (68,780)
Common stock transactions 106,284 1,183
--------- ---------
Net cash provided by financing activities 501,470 226,695
--------- ---------
Net increase in cash and cash equivalents 224,732 269,467
Cash and cash equivalents, beginning of period 80,580 16,748
--------- ---------
Cash and cash equivalents, end of period $ 305,312 $ 286,215
--------- ---------
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 7
NABORS INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Information
The unaudited condensed consolidated financial statements of Nabors
Industries, Inc. are prepared in conformity with generally accepted accounting
principles, or GAAP. They are not a complete presentation, because all note
disclosures required by GAAP are not included. You should refer to our 1999
Annual Report on Form 10-K for additional note disclosures.
In our management's opinion, the condensed consolidated financial
statements contain all adjustments necessary to present fairly the financial
position of the company as of June 30, 2000, and the results of its operations,
its changes in stockholders' equity and its cash flows for the six month periods
ended June 30, 2000 and 1999 in accordance with GAAP. Interim results for the
six months ended June 30, 2000 may not be indicative of results that will be
realized for the full year ending December 31, 2000.
Earnings Per Share
Basic earnings per share for all periods presented equals net income
divided by the weighted average number of shares of common stock outstanding
during the period, excluding shares of common stock held in treasury. Diluted
earnings per share equals net income divided by the sum of: (1) the weighted
average number of shares of common stock outstanding used for the basic
computation and (2) the net effect of dilutive stock options and warrants. As of
June 30, 2000, 8.9 million shares of common stock associated with the issuance
of the zero coupon convertible senior debentures are excluded from the diluted
earnings per share calculation due to their anti-dilutive effect.
NOTE 2 ACQUISITIONS
During November 1999, we completed our acquisition of Pool Energy
Services Co. Each of the approximately 19.2 million shares of Pool not owned by
the company prior to the merger were exchanged for 1.025 shares of our common
stock (approximately 19.7 million shares). During April 1999, we completed our
acquisition of Bayard Drilling Technologies, Inc. Each of the approximately 18.3
million shares of Bayard common stock were exchanged for .3375 shares of our
common stock and $.30 per share in cash (approximately 6.2 million shares and
$5.5 million in cash in the aggregate).
We accounted for the Pool and Bayard acquisitions using the purchase
method of accounting. Accordingly, Pool's and Bayard's results of operations
each have been included in our consolidated financial statements commencing on
the applicable effective date of the acquisition.
The following unaudited pro forma summary financial information
presents our consolidated results of operations as if the acquisitions of Pool
and Bayard had occurred at the beginning of the period presented, after
including the impact of certain adjustments including: (1) the elimination of
nonrecurring merger-related costs, (2) reduced depreciation expense reflecting
the reduction in value assigned to property, plant and equipment, (3) increased
amortization of goodwill, (4) reduced interest expense associated primarily with
the elimination of certain financing costs and (5) the related income tax
effects of these adjustments.
6
<PAGE> 8
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, 1999
--------------------------------
AS REPORTED PRO FORMA
------------- -------------
<S> <C> <C>
Revenues $ 282,926 $ 453,080
------------- -------------
Net income $ 15,262 $ 7,067
------------- -------------
Net income per diluted share $ .14 $ .05
------------- -------------
Weighted average number of
diluted shares outstanding 108,553 129,861
------------- -------------
</TABLE>
The pro forma financial information does not purport to indicate: (1)
what the combined results of operations would have been had the acquisitions
occurred at the beginning of the period presented or (2) the results of
operations that may be obtained in the future. Additionally, the pro forma
financial information does not reflect any anticipated cost savings resulting
from the integration of Nabors', Pool's and Bayard's operations.
NOTE 3 LONG-TERM OBLIGATIONS
During June 2000, we completed a private placement of zero coupon
convertible senior debentures due 2020. The aggregate principal amount of the
debentures at maturity will be $825 million. The debentures were issued at a
discount with net proceeds to Nabors, after expenses, totaling approximately
$494 million. The yield to maturity of the debentures is 2.5% compounded
semi-annually with no periodic cash payments of interest. At the holder's
option, the debentures can be converted at anytime, prior to maturity or their
earlier redemption, into Nabors common stock at a conversion rate of 10.738
shares per $1,000 principal amount at maturity. Instead of delivering shares of
common stock upon conversion of any debentures, we may elect to pay the holder
cash for all or a portion of the debentures. The debentures can be put to us on
June 20, 2003, June 20, 2008 and June 20, 2013 for a purchase price equal to the
issue price plus accrued original issue discount to the date of repurchase. We
may elect to pay all or a portion of the purchase price in common stock instead
of cash. We cannot redeem the debentures before June 20, 2003. On and after June
20, 2003, we may redeem all or a portion of the debentures for cash at anytime
at their accreted value. The proceeds from the issuance of the debentures will
be used for general corporate purposes, including but not limited to, working
capital, investment in subsidiaries and possible future business acquisitions.
As of June 30, 2000, the proceeds are recorded in cash and marketable securities
on our balance sheet.
Nabors Holding Company, the successor by merger to Pool, completed a
mandatory change of control cash tender offer to purchase the Pool 8-5/8% Senior
Subordinated Notes due 2008 at a redemption price of 101% in February 2000. In
addition, during the quarter ended March 31, 2000, Nabors Holding purchased
additional notes in the open market at prices ranging from 100.5% to 101.75%. A
total of $96.2 million of the Pool notes were acquired as a result of these
transactions leaving $53.8 million outstanding as of June 30, 2000. We
recognized a $1.7 million ($.01 per share) extraordinary gain during the first
quarter resulting from the repurchase of the notes at less than the amount
recorded on our books. As of February 14, 2000, Nabors guaranteed the
obligations under the notes.
NOTE 4 CAPITAL STOCK
During the six months ended June 30, 2000, various employees and
directors exercised options to acquire 9.0 million shares of Nabors common stock
at prices ranging from $1.07 to $31.04 per share. This amount includes 7.5
million shares of common stock exercised by three senior officers of the company
in March 2000. Our proceeds from these option exercises totaled $104.6 million.
Additionally, various holders exercised Bayard warrants to purchase .07 million
shares of Nabors common stock at prices ranging from $22.81 to $28.74 per share.
We received proceeds totaling $1.6 million from these warrant exercises.
At the June 6, 2000 annual meeting of stockholders of Nabors
Industries, Inc., the stockholders approved an increase in Nabors' authorized
common stock from 200 million to 400 million shares.
7
<PAGE> 9
NOTE 5 COMMITMENTS AND CONTINGENCIES
Capital Expenditures
As of June 30, 2000, we had outstanding capital expenditure purchase
commitments of approximately $52.0 million, including $19.8 million for the
construction of two supply vessels. We also had a $3.7 million deposit with the
manufacturer of the vessels, that will be applied against the purchase
commitment.
Contingencies
The only material pending litigation involving Nabors or one of its
subsidiaries is Yuan v. Bayard Drilling Technologies, Inc. et al., which has
been previously reported in Nabors' Annual Report on Form 10-K for the year
ended December 31, 1999. There were no material developments in the Yuan case
during the first six months of 2000.
Nabors and its subsidiaries are defendants or otherwise involved in a
number of other lawsuits in the ordinary course of their business. In the
opinion of management, Nabors' ultimate liability with respect to these pending
lawsuits or the Yuan case is not expected to have a significant or material
adverse effect on Nabors' consolidated financial position, cash flows or results
of operations. We are not able, however, to predict the outcome of the Yuan case
or any other case or the costs to be incurred in connection with the defense and
there can be no assurance that the litigation will be resolved in the company's
favor.
NOTE 6 SUPPLEMENTAL INCOME STATEMENT INFORMATION
We recorded realized gains on sales of equity securities totaling $8.3
million and unrealized holding gains on equity securities classified as trading
totaling $1.6 million for the six month period ended June 30, 2000. During the
six month period ended June 30, 1999, we recorded unrealized holding gains on
equity securities classified as trading, totaling $2.6 million.
8
<PAGE> 10
NOTE 7 SEGMENT INFORMATION
The following table sets forth financial information with respect to
our operating segments:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
2000 1999 2000 1999
--------- --------- --------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Revenues:
Contract drilling (1) $ 280,766 $ 124,100 $ 547,656 $ 267,160
Manufacturing and logistics (2) 35,157 7,662 70,088 19,686
Other (3) (14,455) (1,823) (26,592) (3,920)
--------- --------- --------- ---------
Total revenues $ 301,468 $ 129,939 $ 591,152 $ 282,926
--------- --------- --------- ---------
Operating income (loss):
Contract drilling (1) $ 40,291 $ 14,494 $ 72,055 $ 35,778
Manufacturing and logistics (2) 7,521 (476) 15,618 3,839
Other (4) (6,977) (4,218) (13,685) (7,851)
--------- --------- --------- ---------
Total operating income $ 40,835 $ 9,800 $ 73,988 $ 31,766
Interest expense (7,445) (11,237) (16,096) (16,642)
Interest income 1,842 3,516 2,431 4,716
Other income, net 6,325 3,328 12,149 5,180
--------- --------- --------- ---------
Income before income taxes and
extraordinary gain $ 41,557 $ 5,407 $ 72,472 $ 25,020
--------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
2000 1999
---------- ----------
<S> <C> <C>
Total assets:
Contract drilling (5) $1,944,600 $1,920,129
Manufacturing and logistics (6) 318,589 286,501
Other (4) 670,762 191,373
---------- ----------
Total assets $2,933,951 $2,398,003
---------- ----------
</TABLE>
(1) Includes earnings from unconsolidated affiliates, accounted for by the
equity method of $4.30 million, $.39 million, $7.80 million and $.40
million for the three months ended June 30, 2000, June 30, 1999 and the six
months ended June 30, 2000 and June 30, 1999, respectively.
(2) Includes earnings (losses) from unconsolidated affiliates, accounted for by
the equity method of $5.90 million, $(.09) million, $12.90 million and
$3.20 million for the three months ended June 30, 2000, June 30, 1999 and
the six months ended June 30, 2000 and June 30, 1999, respectively.
(3) Elimination of inter-segment manufacturing and logistics sales.
(4) Includes the elimination of inter-segment transactions and unallocated
corporate expenses and assets.
(5) Includes $35.3 million and $33.2 million of investments in unconsolidated
affiliates, accounted for by the equity method, at June 30, 2000 and
December 31, 1999, respectively.
(6) Includes $27.4 million and $20.9 million of investments in unconsolidated
affiliates, accounted for by the equity method, at June 30, 2000 and
December 31, 1999, respectively.
9
<PAGE> 11
Report of Independent Accountants
To the Stockholders and Board of Directors
of Nabors Industries, Inc.:
We have reviewed the accompanying condensed consolidated balance sheet of Nabors
Industries, Inc. and Subsidiaries as of June 30, 2000, and the related condensed
consolidated statements of income and changes in stockholders' equity and cash
flows for the six-month periods ended June 30, 2000 and 1999. These financial
statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in accordance
with generally accepted auditing standards, the objective of which is the
expression of an opinion regarding the financial statements taken as a whole.
Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the accompanying condensed consolidated interim financial statements
for them to be in conformity with generally accepted accounting principles.
We previously audited, in accordance with generally accepted auditing standards,
the consolidated balance sheet as of December 31, 1999, and the related
consolidated statements of income, changes in stockholders' equity and of cash
flows for the year then ended (not presented herein), and in our report dated
February 9, 2000 we expressed an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the
accompanying condensed consolidated balance sheet as of June 30, 2000, is fairly
stated in all material respects in relationship to the consolidated balance
sheet from which it has been derived.
PricewaterhouseCoopers LLP
Houston, Texas
July 24, 2000
10
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS AND SIX MONTHS ENDED JUNE 30, 2000 COMPARED TO THREE MONTHS AND SIX
MONTHS ENDED JUNE 30, 1999
Revenues for the second quarter of fiscal year 2000 totaled $301.5
million, representing an increase of $171.5 million, or 132%, as compared to the
prior year period. Current quarter operating income and net income totaled $40.8
million and $24.1 million ($.16 per diluted share), respectively, representing
increases of 317% and 631% compared to the prior year period. Revenues for the
first six months of fiscal year 2000 totaled $591.2 million, representing an
increase of $308.2, or 109%, compared to the prior year period. Operating income
and net income totaled $74.0 and $43.7 ($.29 per diluted share), respectively,
representing increases of 133% and 187% compared to the prior year period. The
results for the current quarter and first six months of 2000 include the
operating results of Pool, which was acquired on November 24, 1999.
Our operating results increased due to continued improvement in
essentially all of our business units and the addition of the Pool operations
acquired in November 1999. The Pool acquisition was accounted for using the
purchase method of accounting and, accordingly, Pool's results of operations
have been included in our financial statements commencing on the effective date
of the acquisition. Therefore, Pool's operating results were not included in the
prior year period results. The improvement in our business units performance
reflects a continuation of a positive trend that began in the third quarter of
1999 in response to higher average oil and natural gas prices. Natural gas
prices, which averaged $1.94 per mcf during the first six months of 1999, have
increased steadily during the past year and averaged $3.05 per mcf during the
first six months of 2000. Oil prices have increased by an even greater
percentage during this period with average prices totaling $28.93 per barrel
during the first six months of 2000, up from $15.45 per barrel during the first
six months of 1999. The increase in oil and natural gas prices has resulted in
increased capital spending by our customers for services provided by Nabors.
This increased spending has been especially evident in Canada, the US Lower 48
and the Gulf of Mexico for natural gas-related drilling and workover activities.
The increase in North American land drilling activity is illustrated by the
increase in the total US active land rig count which averaged 663 working rigs
during the six months ended June 30, 2000 compared to 418 working rigs during
the six months ended June 30, 1999.
Looking forward, we anticipate continued improvement in all areas of
our operations. Our optimistic outlook is based on the positive supply and
demand fundamentals for oil and natural gas that are currently in place and
expected to continue for the next several quarters. Our operations that perform
natural gas drilling and workover services should continue to benefit first
followed by those operations that drill for oil. As a result, in the near term,
we expect the significant, recent increases in utilization and dayrates in our
US Lower 48 drilling operations and our Gulf of Mexico offshore workover
operations to continue. In Canada, we expect our results to improve as the
seasonal spring break-up ends. Our offshore transportation business is expected
to improve, with two new boats entering the market and additional price
improvement among the older boats. We expect more moderate but steady increases
in our drilling operations in Alaska, international land, offshore, and in our
US Lower 48 well-servicing operations. Our Alaska construction and logistics
joint venture's operations will be down significantly for the remainder of the
year as the recent high level of infrastructure construction for new drilling
programs in the North Slope of Alaska winds down.
11
<PAGE> 13
The following tables set forth certain financial information with
respect to our operating segments and rig activity and certain industry data:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
INCREASE INCREASE
2000 1999 (DECREASE) 2000 1999 (DECREASE)
--------- --------- ----------------- -------- -------- -----------------
(IN THOUSANDS, EXCEPT PERCENTAGES)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Revenues:
Contract drilling (1) $ 280,766 $ 124,100 $ 156,666 126% $547,656 $267,160 $ 280,496 105%
Manufacturing and
logistics (2) 35,157 7,662 27,495 359% 70,088 19,686 50,402 256%
Other (3) (14,455) (1,823) (12,632) 693% (26,592) (3,920) (22,672) 578%
--------- --------- ----------- -------- -------- ----------
Total revenues $ 301,468 $ 129,939 $ 171,529 132% $591,152 $282,926 $ 308,226 109%
--------- --------- ----------- -------- -------- ----------
Operating income (loss):
Contract drilling (1) $ 40,291 $ 14,494 $ 25,797 178% $ 72,055 $ 35,778 $ 36,277 101%
Manufacturing and
logistics (2) 7,521 (476) 7,997 N/M 15,618 3,839 11,779 307%
Other (4) (6,977) (4,218) (2,759) 65% (13,685) (7,851) (5,834) 74%
--------- --------- ----------- -------- -------- ----------
Total operating income $ 40,835 $ 9,800 $ 31,035 317% $ 73,988 $ 31,766 $ 42,222 133%
--------- --------- ----------- -------- -------- ----------
</TABLE>
(1) Includes earnings from unconsolidated affiliates, accounted for by the
equity method of $4.30 million, $.39 million, $7.80 million and $.40
million for the three months ended June 30, 2000, June 30, 1999 and the six
months ended June 30, 2000 and June 30, 1999, respectively.
(2) Includes earnings (losses) from unconsolidated affiliates, accounted for by
the equity method of $5.90 million, $(.09) million, $12.90 million and
$3.20 million for the three months ended June 30, 2000, June 30, 1999 and
the six months ended June 30, 2000 and June 30, 1999, respectively.
(3) Elimination of inter-segment manufacturing and logistics sales.
(4) Includes the elimination of inter-segment transactions and unallocated
corporate expenses.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
(IN THOUSANDS, EXCEPT PERCENTAGES)
2000 1999 INCREASE 2000 1999 INCREASE
---------- ---------- ------------------ ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Rig activity (1):
Rig years (2) 227.3 121.0 106.3 88% 226.9 127.4 99.5 78%
Rig utilization 42% 24% 18% 75% 42% 28% 14% 50%
</TABLE>
(1) Excludes labor contracts, land well-servicing rigs and rigs owned by joint
ventures.
(2) Rig years represents a measure of the number of equivalent rigs operating
during a given period. For example, one rig operating 182.5 days during a
365-day period represents 0.5 rig years.
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
2000 1999 INCREASE 2000 1999 INCREASE
---------- ---------- ------------------ ---------- ---------- -----------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Industry data:
Average West Texas
intermediate
crude oil spot
price ($/bbl) (1) $28.95 $17.66 $11.29 64% $28.93 $15.45 $13.48 87%
Average US natural gas
spot price ($/mcf) (1) $3.55 $2.14 $1.41 66% $3.05 $1.94 $1.11 57%
Average US land rig
count (2) 694 405 289 71% 663 418 245 59%
Average International
land rig count (2) 453 405 48 12% 435 411 24 6%
</TABLE>
(1) Source: Bloomberg
(2) Source: Baker Hughes
12
<PAGE> 14
Contract drilling. This segment includes our drilling, workover and
well-servicing operations, on land and offshore. Second quarter 2000 revenues
for the contract drilling segment totaled $280.8 million and operating income
totaled $40.3 million, representing increases of 126% and 178%, respectively,
compared to the prior year quarter. Equivalent rig years (excluding labor
contracts, land well-servicing rigs and rigs owned by joint ventures) increased
to 227.3 years during the second quarter of 2000 from an average of 121.0 years
during the prior year quarter. For the six months ended June 30, 2000, contract
drilling revenues totaled $547.7 million and operating income totaled $72.1
million, representing increases of 105% and 101%, respectively, compared to the
prior year period. Equivalent rig years increased to 226.9 years from an average
of 127.4 years during the prior year period. Most of our contract drilling
operations recorded higher revenues as compared to the prior year periods as a
result of increased drilling and workover activity due to higher oil and natural
gas prices and the addition of the Pool rigs.
Alaskan revenues increased during the current quarter and year-to-date
due to higher equivalent rig years resulting from the addition of working Pool
rigs.
Canadian revenues were higher during the current quarter due to higher
equivalent rig years, and year-to-date due to higher equivalent rig years and
dayrates associated with continued strong demand for natural gas drilling
services throughout the Canadian market.
US Lower 48 drilling revenues increased significantly during the
current quarter and year-to-date as a result of increased demand for drilling
services. The continued strength of the North American natural gas market has
resulted in a significant increase in equivalent rig years and a more modest
increase in dayrates.
International revenues increased during the current quarter and
year-to-date due to the addition of Pool operations in South America and the
Middle East, and rigs working in Colombia, Kenya and Qatar under new contracts.
This was partially offset by decreased revenues due to lower activity in certain
areas, such as Venezuela, Bolivia, Kazakhstan and the United Arab Emirates.
Additionally, effective January 1, 2000, our Saudi Arabia rigs began operating
as part of Pool Arabia, Ltd., Nabors' 51% owned joint venture. The joint venture
is accounted for using the equity method of accounting.
Offshore revenues increased during the current quarter and year-to-date
both in the Gulf of Mexico and internationally. The increase in revenues in the
Gulf of Mexico resulted from the addition of the active Pool rigs and increased
platform, jack-up and barge workover activity. This increase was partially
offset by reduced drilling activity. Internationally, revenues increased due to
the addition of the active Pool rigs. These increases were partially offset by
lower drilling revenues in Trinidad due to the expiration of a contract during
the first quarter. This contract was subsequently renewed at the end of the
second quarter.
US land well-servicing operations improved during the current quarter
and year-to-date due to increased activity and rates per hour resulting from
higher oil and natural gas prices. Because this unit was acquired in November
1999, its operations were not included in the comparable prior year period.
Manufacturing and logistics. This segment includes our supply vessel,
top-drive manufacturing, rig instrumentation and software, and construction and
transportation operations. Manufacturing and logistics revenues were $35.2
million during the current quarter, representing an increase of 359% compared
with the prior year quarter. Operating income increased to $7.5 million compared
to an operating loss of $.5 million in the prior year quarter. For the six
months ended June 30, 2000, manufacturing and logistics revenues totaled $70.1
million and operating income totaled $15.6 million, representing increases of
256% and 307%, respectively, compared to the prior year period. Increases in
this segment resulted from increased top-drive sales, and a strong construction
season on the North Slope of Alaska by our joint venture construction entity.
Additionally, the inclusion of our US Lower 48 trucking operations which became
100% owned by Nabors in November 1999, and our supply vessel operation acquired
as part of the Pool transaction, contributed to the increase.
13
<PAGE> 15
The following table sets forth selected consolidated financial
information of the company expressed as a percentage of total operating
revenues, excluding earnings from unconsolidated affiliates:
<TABLE>
<CAPTION>
THREE MONTHS ENDED JUNE 30, SIX MONTHS ENDED JUNE 30,
2000 1999 2000 1999
------------- ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues 100.0% 100.0% 100.0% 100.0%
Direct costs 67.6% 62.7% 68.4% 62.5%
------------- ------------ ------------ ------------
Gross margin 32.4% 37.3% 31.6% 37.5%
General and administrative expenses 9.0% 11.7% 9.3% 11.2%
Depreciation and amortization 12.8% 18.3% 13.0% 16.2%
------------- ------------ ------------ ------------
Operating income 10.6% 7.3% 9.3% 10.1%
Other income (expense) 0.2% (3.4%) (.3%) (2.4%)
------------- ------------ ------------ ------------
Income before income taxes 10.8% 3.9% 9.0% 7.7%
Income taxes 6.0% 1.6% 5.3% 3.5%
------------- ------------ ------------ ------------
Income before extraordinary gain 4.8% 2.3% 3.7% 4.2%
Extraordinary gain - - 0.3% -
------------- ------------ ------------ ------------
Net income 4.8% 2.3% 4.0% 4.2%
------------- ------------ ------------ ------------
</TABLE>
Generally, Nabors' gross margin percentage is affected by changes in
the mix of revenues derived from its various areas of operations. For example,
contracts in the US Lower 48 typically earn a lower gross margin percentage than
Alaska, international and offshore contracts. The gross margin percentage
decreased in the second quarter and the six month period ended June 30, 2000 due
to a higher percentage of revenues being generated from US Lower 48 operations
than in the comparable prior year periods. As a result of the addition of Pool's
US land well-servicing operations and the increase in activity in the US Lower
48 drilling operations, combined revenues from the US Lower 48 drilling and
well-servicing operations, as a percentage of total revenues, equaled 54% in the
current quarter and 53% year-to-date compared to 39% and 35%, respectively, in
the comparable prior periods for the US Lower 48 drilling alone.
General and administrative expenses and depreciation expense as a
percentage of revenues decreased during the second quarter and six months ended
June 30, 2000 due to the increase in our revenues, as these expenses were spread
over a larger revenue base.
Interest expense decreased during the current quarter due to lower
average debt levels and lower interest rate debt, and year-to-date due to lower
interest rate debt. Interest income decreased during the current quarter and
year-to-date due to lower average cash balances.
Other income increased during the current quarter and year-to-date due
to higher gains on sales of marketable equity securities owned by Nabors. We
recorded realized gains on sales of equity securities totaling $4.9 million and
unrealized holding gains on equity securities classified as trading totaling
$.25 million during the second quarter. For the first six months ended June 30,
2000, we recorded realized gains on sales of equity securities totaling $8.3
million and unrealized holding gains on equity securities classified as trading
totaling $1.6 million.
The effective tax rate increased to 42% during the current quarter and
year-to-date as compared to an effective tax rate of 39% in the comparable prior
year periods. This increase was caused by higher foreign taxes (including
Canada) and the amortization of non-deductible goodwill that was recorded as
part of the Pool acquisition and the acquisition of Bayard Drilling
Technologies, Inc. in April 1999.
LIQUIDITY AND CAPITAL RESOURCES
We generate significant cash from operations over the course of a
twelve-month period. We also have substantial borrowing capacity under various
credit facility arrangements, and have access to public debt and equity capital
markets. Our senior unsecured debt ratings as provided by Moody's Investor
Service and Standard & Poor's are "A3" and "A-", respectively.
14
<PAGE> 16
During June 2000, we completed a private placement of zero coupon
convertible senior debentures due 2020. The aggregate principal amount of the
debentures at maturity will be $825 million. The debentures were issued at a
discount with net proceeds to Nabors, after expenses, totaling approximately
$494 million. The yield to maturity of the debentures is 2.5% compounded
semi-annually with no periodic cash payments of interest. At the holder's
option, the debentures can be converted at anytime, prior to maturity or their
earlier redemption, into Nabors common stock at a conversion rate of 10.738
shares per $1,000 principal amount at maturity. In lieu of delivering shares of
common stock upon conversion of any debentures, we may elect to pay the holder
cash for all or a portion of the debentures. The debentures can be put to us on
June 20, 2003, June 20, 2008 and June 20, 2013 for a purchase price equal to the
issue price plus accrued original issue discount to the date of repurchase. We
may elect to pay all or a portion of the purchase price in common stock instead
of cash. We cannot redeem the debentures before June 20, 2003. On and after June
20, 2003, we may redeem all or a portion of the debentures for cash at anytime
at their accreted value. The proceeds from the issuance of the debentures will
be used for general corporate purposes, including but not limited to, working
capital, investment in subsidiaries and possible future business acquisitions.
As of June 30, 2000, the proceeds are recorded in cash and marketable securities
on the balance sheet.
During the six months ended June 30, 2000, various employees and
directors exercised options to acquire 9.0 million shares of Nabors common stock
at prices ranging from $1.07 to $31.04 per share. This amount includes 7.5
million shares of common stock exercised by three senior officers of the company
in March 2000. Our proceeds from these option exercises totaled $104.6 million.
Additionally, various holders exercised Bayard warrants to purchase .07 million
shares of Nabors common stock at prices ranging from $22.81 to $28.74 per share.
We received proceeds totaling $1.6 million from these warrant exercises.
As a result of the Pool acquisition, Nabors Holding Company, the
successor by merger to Pool, completed a mandatory change of control cash tender
offer to purchase the Pool 8-5/8% Senior Subordinated Notes due 2008 at a
redemption price of 101%. During the first quarter, a total of $96.2 million of
the notes were purchased pursuant to the offer and in the open market at prices
ranging from 100.5% to 101.75%. As of June 30, 2000, $53.8 million of the notes
remained outstanding. As of February 14, 2000, we guaranteed the obligations
under the Pool notes.
We had working capital of $739.9 million as of June 30, 2000,
representing a $544.1 million increase as compared to December 31, 1999. The
increase in working capital is primarily attributable to our receipt of proceeds
from the issuance of the zero coupon debentures as well as an increase in
accounts receivable resulting from the increase in rig activity. In addition,
accrued liabilities were lower due to the payment of Pool merger expenses during
the first quarter.
Our ratio of funded debt to funded debt plus stockholders' equity,
commonly referred to as the funded debt to capital ratio, was 0.35:1 as of June
30, 2000, as compared to 0.25:1 as of December 31, 1999. This increase is
primarily due to the issuance of the zero coupon debentures.
Net cash provided by operating activities totaled $41.8 million during
the six months ended June 30, 2000, compared to $76.3 million during the prior
year period. During the six month period, net income was increased for non-cash
items such as depreciation and deferred taxes and decreased for equity in
earnings from affiliates. Cash was used by changes in the company's working
capital accounts. During the prior year period, net income was increased for
non-cash items such as depreciation and deferred taxes and cash was provided by
changes in the company's working capital accounts.
Net cash used for investing activities totaled $318.5 million during
the current six month period, compared to $33.5 million during the prior year
period. We used cash primarily for purchases of commercial paper during the
current period and for capital expenditures during both the current period and
the prior year period. The sale of equity securities during the current period
and the disposition of long-term assets during both the current period and the
prior year period provided our cash.
Financing activities provided cash totaling $501.5 million during the
current six month period compared to $226.7 during the prior year period. During
the current period, cash was primarily provided by our issuance of the zero
coupon convertible senior debentures during June 2000 and payment of the
exercise prices in connection with the exercise of options to acquire 9.0
million shares of common stock, partially offset by cash used for the repurchase
of approximately $96.0 million of the 8-5/8% notes. During the prior year
period, cash was provided by the issuance of our 6.80% notes and cash was used
to reduce long-term and short-term borrowings.
15
<PAGE> 17
Our cash and cash equivalents and investments in short-term marketable
securities totaled $592.5 million as of June 30, 2000. We currently have credit
facility arrangements with various banks with total availability of $231.5
million. As of June 30, 2000 remaining availability, after borrowings on the
facilities and outstanding letters of credit, totaled approximately $207.6
million.
As of June 30, 2000, we had outstanding capital expenditure purchase
commitments of approximately $52.0 million, including $19.8 million for the
construction of two supply vessels. We also had a $3.7 million deposit with the
manufacturer of the vessels, that will be applied against the purchase
commitment.
The current cash equivalents, short-term investments, credit facility
position, and projected cash flow generated from current operations are expected
to adequately finance our sustaining capital and debt service requirements for
the next twelve months.
OTHER MATTERS
FORWARD-LOOKING STATEMENTS
The statements in this document that relate to matters that are not
historical facts are "forward-looking statements" within the meaning of Section
27A of the Securities Exchange Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. When used in this document, words such as "anticipate",
"believe", "expect", "plan", "intend", "estimate", "project", "will", "should"
"could", "may", "predict" and similar expressions are intended to identify
forward-looking statements. Future events and actual results may differ
materially from the results set forth in or implied in the forward-looking
statements. Factors that might cause such a difference include:
o fluctuations in worldwide prices of oil and natural gas and demand for
oil and natural gas;
o fluctuations in levels of oil and gas exploration and development
activities;
o fluctuations in the demand for contract drilling and workover services;
o the existence of competitors, technological changes and developments in
the industry;
o the existence of operating risks inherent in the contract drilling
industry;
o the existence of regulatory uncertainties;
o the possibility of political instability in any of the countries in
which we do business; and
o general economic conditions.
Our businesses depend, to a large degree, on the level of spending by
oil and gas companies for exploration, development and production activities.
Therefore, a sustained increase or decrease in the price of oil or natural gas,
which could have a material impact on exploration, development and production
activities, could also materially affect the company's financial condition,
results of operations and cash flows.
PART II OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The only material pending litigation involving Nabors or one of its
subsidiaries is Yuan v. Bayard Drilling Technologies, Inc. et al., which has
been previously reported in Nabors' Annual Report on Form 10-K for the year
ended December 31, 1999. There were no material developments in the Yuan case
during the first six months of 2000.
Nabors and its subsidiaries are defendants or otherwise involved in a
number of other lawsuits in the ordinary course of their business. In the
opinion of management, Nabors' ultimate liability with respect to these pending
lawsuits or the Yuan case is not expected to have a significant or material
adverse effect on the Nabors' consolidated financial position, cash flows or
results of operations. We are not able, however, to predict the outcome of the
Yuan case or any other case or the costs to be incurred in connection with the
defense and there can be no assurance that the litigation will be resolved in
the company's favor.
16
<PAGE> 18
ITEM 2. CHANGES IN SECURITIES
At the June 6, 2000 annual meeting of stockholders of Nabors
Industries, Inc., the stockholders approved an increase in Nabors' authorized
common stock from 200 million to 400 million shares. On June 7, 2000, Nabors
filed an amendment to its restated certificate of incorporation reflecting the
increase in common stock. A copy of the amendment is filed as an exhibit to
Nabors' current report on Form 8-K filed with the Commission on June 22, 2000,
and is incorporated in this report by reference.
On June 20, 2000, Nabors issued $825 million principal amount at
maturity of Zero Coupon Convertible Senior Debentures due 2020 pursuant to an
Indenture entered into with Bank One, N.A., as trustee. The debentures were
issued in a private placement pursuant to Rule 144A under the Securities Act of
1933, as amended, to an initial purchaser who immediately sold them to qualified
institutional buyers, as defined in Rule 144A. The issue price was $608.41 for
each $1,000.00 in face value, which provided net proceeds to Nabors of
approximately $494 million. The initial purchaser received an aggregate
commission of $7.5 million in the offering.
The issue price represents a yield-to-maturity of 2.5%. The conversion
provision is at a fixed ratio of 10.738 shares per $1,000.00 face value, subject
to adjustment in certain circumstances. The debentures can be put to us on the
third, eighth and thirteenth anniversaries of the issue date at the issue price
plus the accrued original issue discount, and can be paid in cash or stock at
Nabors' option. The bonds are callable by Nabors any time after the third
anniversary of the issue at the issue price plus accrued original issue
discount. Nabors has agreed to register for resale the debentures and the common
stock issuable upon conversion or repurchase of the debentures, pursuant to a
Registration Rights Agreement dated as of June 15, 2000 between Nabors
Industries, Inc. and the initial purchaser of the debentures.
Copies of the Indenture and Registration Rights Agreement are filed as
exhibits to Nabors' current report on Form 8-K filed with the Commission on June
22, 2000 and are incorporated in this report by reference. This discussion is
not, and is not to be deemed, an offer to sell the Zero Coupon Convertible
Senior Debentures or the common stock underlying such securities to any party.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the 2000 Annual Meeting of Shareholders held on June 6, 2000,
123,597,233 shares were present in person or by proxy, constituting 84.9% of the
outstanding common stock of Nabors entitled to vote. The matters voted upon at
the annual meeting were:
Election of Directors: The stockholders elected two Class III directors
to the Board of Directors of Nabors to serve for a three-year term, until 2003:
Eugene M. Isenberg
Votes cast in favor: 122,599,286
Votes withheld: 997,947
Jack Wexler
Votes cast in favor: 122,599,185
Votes withheld: 998,048
Class I Directors, James L. Payne, Hans W. Schmidt and Richard A. Stratton,
continued in office with terms expiring in 2001. Class II Directors, Anthony G.
Petrello, Myron M. Sheinfeld and Martin J. Whitman, continued in office with
terms expiring in 2002.
Amendment of Certificate of Incorporation to Increase Authorized
Shares: The stockholders approved an amendment to the Restated Certificate of
Incorporation of Nabors to increase the number of shares of common stock from
200 million to 400 million shares:
Votes cast in favor: 118,865,624
Votes cast against: 4,602,230
Abstentions: 129,379
17
<PAGE> 19
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
15.1 Awareness Letter of Independent Accountants
27 Financial Data Schedule
(b) Reports on Form 8-K
o Report on Form 8-K filed with the Commission on June 22, 2000,
with respect to (1) an increase in Nabors' authorized common
stock from 200 million to 400 million shares and (2) the
issuance by Nabors of $825 million principal amount at
maturity of zero coupon convertible senior debentures due
2020.
18
<PAGE> 20
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NABORS INDUSTRIES, INC.
/s/ Anthony G. Petrello
----------------------------------------------
Anthony G. Petrello
President and Chief Operating Officer
/s/ Bruce P. Koch
----------------------------------------------
Bruce P. Koch
Vice President - Finance (principal financial
and accounting officer)
Dated: August 14, 2000
19
<PAGE> 21
INDEX TO EXHIBITS
15.1 Awareness Letter of Independent Accountants
27 Financial Data Schedule
