“`html
Nabors Industries Ltd. (NBR), one of the largest land-drilling contractors globally, has seen its stock price decline by 56% over the past year, considerably underperforming peers like Transocean Ltd. (RIG), Helmerich & Payne, Inc. (HP), and Patterson-UTI Energy, Inc. (PTEN). This downturn can be attributed to challenges such as falling U.S. drilling margins, high operational costs, and exposure to geopolitical risks, particularly in Russia, where it incurred non-cash charges of $28.6 million due to suspended operations from U.S. sanctions.
In first-quarter 2025, Nabors’ U.S. Drilling segment reported a drop in adjusted EBITDA to $92.7 million from $105.8 million the previous quarter, with lower margins due to rig churn. Additionally, the company’s net debt reached $2.28 billion, exacerbated by a lack of free cash flow, which was a negative $71 million in the same quarter. Moreover, reliance on the SANAD joint venture for future growth, alongside integration challenges arising from the Parker Wellbore acquisition, further complicates Nabors’ operational outlook.
Nabors’ lower 48 rig count fell from 66 in fourth-quarter 2024 to 61 in the first quarter of 2025, and customer payment delays, particularly $20 million related to collections in Mexico, have increased financial strain. With its share price decline outpacing the average drop in the drilling oil and gas sector, investors are advised to approach NBR stock cautiously amid persistent operational and financial challenges.
“`
