Nabors Industries Ltd. (NBR – Free Report) has finalized the acquisition of Parker Wellbore, a prominent provider of drilling and rental services. This acquisition, valued at approximately $372 million, positions Nabors to expand its market presence and service offerings across key global regions.
Strategic Rationale Behind the Acquisition
The integration of Parker Wellbore aligns with Nabors’ strategic objectives to broaden its operational footprint and diversify service offerings. Parker Wellbore’s established presence in the United States, Middle East, Latin America and Asia complements Nabors’ existing operations, providing a platform for expanded service delivery and market penetration.
Financial Implications and Synergy Expectations
The company projects that Parker Wellbore’s operations will contribute approximately $150 million in annualized adjusted EBITDA for 2025, prior to realizing expense synergies. These synergies are estimated to reach $40 million by the end of 2025, primarily caused by reductions in duplicate overhead, operational expenses and procurement savings.
After completing the acquisition, the company expects the Drilling Solutions segment to generate $170 million in adjusted EBITDA for 2025, while U.S. Drilling and International Drilling are expected to increase $16 million and $12 million, respectively. The company anticipates that synergies will be offset by $80 million in capital expenditures during the same period. Factoring in overhead costs, Parker’s annualized EBITDA is expected to be $190 million, including synergies, and $110 million after CAPEX.
Expansion of Drilling Solutions Portfolio
A key highlight of this acquisition is the inclusion of Quail Tools, a subsidiary of Parker Wellbore, renowned as the leading rental provider of high-performance downhole tubulars in Lower 48 and offshore markets of the United States. Quail Tools offers an extensive inventory of equipment, including drill pipes, heavy-weight drill collars and work strings, catering to deepwater, drilling, completion, workover and production applications.
Global Operational Footprint
Parker Wellbore’s global operations cover a fleet of 17 drilling rigs and a comprehensive suite of services, including casing and tubular running services. The company’s presence in critical markets such as the Middle East, Latin America and Asia enhances Nabors’ ability to serve a diverse client base and capitalize on emerging market opportunities.
Leadership Perspectives of NBR
Anthony Petrello, chairman, president and CEO of Nabors, expressed enthusiasm about the acquisition, stating, “With the successful completion of the Parker transaction, we are accelerating the growth of our Drilling Solutions business across several important markets, while bolstering our global drilling business.” He further noted the excitement of welcoming a strong and talented organization to the Nabors team.
Operational Integration and Outlook
The integration of Parker Wellbore’s operations is expected to enhance Nabors’ service offerings and operational efficiencies. By combining resources and leveraging complementary strengths, Nabors aims to deliver superior value to clients and stakeholders. The company remains committed to executing the integration plan effectively, with a focus on realizing the projected synergies and expanding its global market presence.
Conclusion
The acquisition of Parker Wellbore represents a key step in Nabors Industries’ strategy to enhance its drilling solutions capabilities and global reach. By integrating Parker’s assets and expertise, Nabors is well-positioned to capitalize on growth opportunities across diverse markets, delivering innovative and efficient solutions to meet the evolving needs of the energy sector.
NBR’s Zacks Rank & Key Picks
Currently, NBR has a Zacks Rank #4 (Sell).
Investors interested in the energy sector might look at some better-ranked stocks like Archrock (AROC – Free Report) and Antero Resources (AR – Free Report) , each sporting a Zacks Rank #1 (Strong Buy) and and Coterra Energy (CTRA – Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
AROC is valued at $4.22 billion. In the past year, its shares have risen 29.1%. Archrock is a provider of natural gas contract compression services as well as a supplier of aftermarket services of compression equipment.
AR is valued at $11.16 billion. In the past year, its shares have risen 38.2%. Antero Resources, based in Denver, CO, is an independent exploration company focused on acquiring and developing natural gas, natural gas liquids and oil resources in the Appalachian Basin.
CTRA is valued at $20.54 billion. In the past year, its shares have risen 2.1%. CTRA is an independent upstream operator engaged in the exploration, development and production of natural gas, crude oil and natural gas liquids.
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