2024-02-19 04:22:55 ET
Summary
- Nabors is as much an international as a U.S. company, and that implies better growth prospects in the near future.
- While already undervalued, NBR sold off on the news that Saudi Arabia is canceling its oil production capacity expansion plans.
- The Saudi news will be largely a non-event for Nabors as the company isn't exposed to the impacted projects.
- Most of the Company's land rigs in the Kingdom are tied to the unconventional gas program that isn't going away any time soon.
Investment thesis
Nabors Industries ( NBR ) didn't have a good 2023, similar to other onshore oilfield services (or OFS) providers ( OIH ) with exposure to the U.S. oil and gas basins. Lower prices led to rig count reductions, and U.S. rigs are now down year-on-year by approximately 20% on both the oil and gas side:
Nabors, however, is as much an international company as it is a U.S. one. For a couple of quarters now, the "big fish" in the OFS space, Schlumberger ( SLB ), Halliburton ( HAL ) and Baker Hughes ( BKR ), have been highlighting the ongoing bifurcation in energy services markets. Namely, U.S. activity has been flat to modestly declining while international growth remains steady....
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Nabors Industries Is A Buy Despite The Saudi Announcement