[Management View]
Nabors Industries Ltd. reported a strong Q2 2025 performance, driven by the full-quarter contribution from Parker Wellbore and improved operations in the U.S. and Saudi Arabia. Key metrics include adjusted EBITDA of $248.5 million and revenue of $833 million. Strategic priorities focus on integrating Parker Wellbore, achieving $40 million in cost synergies by year-end, and expanding the SANA new build program.

[Outlook]
Management provided guidance for Q3 2025, expecting a U.S. Lower 48 average rig count of 57-59 rigs and an international daily gross margin of $17,900. Future plans include allocating all 2025 free cash flow to debt reduction and continuing the SANA new build program with scheduled deployments through 2027.

[Financial Performance]
Revenue increased by 13% sequentially to $833 million, primarily due to the Parker Wellbore acquisition. Adjusted EBITDA rose by $42.1 million to $248.5 million. Free cash flow improved to $41 million, compared to negative $61 million in the previous quarter. Total capital expenditures were $199 million, up from $151 million in Q1 2025.

[Q&A Highlights]
Question 1: Hey, good morning team. Hey. It's great to see sort of the fourth big five rig award from SANA. And just as we think about sort of the growth prospects of '27, could you perhaps speak to maybe how incremental you see these new build rigs? And if you know, any of the suspended or legacy Nabors Industries Ltd. rigs
Answer: Sure. A bunch of them are also Nabors Industries Ltd. own rigs that are leased into the SANA. And I would say that virtually the entire fleet there are rigs that are well suited to anywhere in the region. And so if things did change, there is an opportunity to actually keep work in other countries. But right now, we are right now, I think we're we believe we're we're pretty well suited with what the opportunities are right in the country themselves. The rigs certain rigs are high specifications that could go to Kuwait, for example, for the gas billing there. And obviously, every one of those markets has different attributes. So there would be incremental capital required for some redeployments. But by and large, we're really happy with our fleet in The Middle East in general. Think our positions in Kuwait, Oman, and the rig and UAE well. We're really happy with that as a fleet as a whole. Don't think there's anybody in the marketplace has a better fleet poised for all the opportunities in that in that region.

Question 2: And then as a follow-up, maybe just clarification. When considering sort of the flat $80 million adjusted free cash flow guide, it looks like $30 million lower cash burn at SANA, $60 million less new build CapEx, and I think $10 million lower 48,000,000 and other implied CapEx. You just help us reconcile sort of the unchanged free cash guide in that context?
Answer: So I mean, there's a lot of moving pieces in SANA, by the way. So but in reality, the seven we have a $70 million cut in CapEx, but we also because these cuts come late in the year, we also cut back on the CapEx liabilities. So we have we weren't expecting to pay those by year-end. So in reality, the impact on cash flow is about $50 million, really. We have adjusted, of course, The U.S. Following, the Liberation Day noise, which did have an impact or we think will have an impact in lower 48 rig count. Across segments, I think that is about $15 million one five. In addition, there is still some uncertainty in Mexico, so we took a cautious reduction in our forecast for Mexico of about $10 million. And we think in places like Argentina where we're seeing some reduction in activity, from some clients as well as delays in deployments in and Saudi Arabia, we took a combined $15 million. So roughly $40 million of EBITDA we took off the forecast. And the CapEx is about a $50 million improvement net of the payables.

Question 3: Thank you for taking my question. Well, first of all, I really want to thank William for his friendship all these years. William, I've always enjoyed speaking to you. I've learned a lot from you. And you really will be missed by all the investor community and all the analysts who follow Nabors Industries Ltd. So best of luck in your next chapter and, we I will personally miss you as you move on. Always easy question. Sorry. On the Saudi market, you've seen some rigs being released. You know, what is the know, what are the risks to some of the Nabors Industries Ltd.'s legacy rigs in Saudi Arabia?
Answer: Sure. Well, let's just comment in general what's been going on there. Since the start of 2024, I think 64 land rigs were idled and 35 rigs went back became online. So the net down was about 29 rigs. From about 207 to 178. Since June 30, it looks like there may be an additional four or five rigs. It also suspended. And the I have no secrets of in terms of understanding what the ramp was really doing here. But from what I gather, what they're actually doing is evaluating the current production rate, which is 9.3 to 9.5 barrels a day. Looking at their maximum production of 12 and trying to rightsize their investment should be between those two things and figuring that out. So that's the process that's going on right now. Figure out a resetting of that to make sure that they can fulfill that. And so that's the process, obviously, it's caused a bunch of friction. With us, obviously, during this period, the SANA actually increased the rig count by four rigs, which is obviously due to the new build program. We stand at 52 today. And we also would note that the SANA hasn't been unscathed. As we marked during the past year. We actually had three rigs suspended. So we believe we're very well positioned for obvious reasons with the relationship with Aramco. But also the standard operating fleet has more than 75% of the rigs are gas functioning rigs, and that is where the growing focus has been in the kingdom.

Question 4: And then obviously, the new build program, which you can see from this announcement, I know there was some concern that this was going to be delayed or revisited. But Aramco seems to be very committed to this long term new build program, which is an agenda item for their Vision 2030 as well. So a lot of other factors go into it. And so they've been very supportive of it, and that's given us a really good confidence in what we're doing right now. So I think all in all, that puts us in a pretty good position going forward. And you know, what we're focused on is building a great company right now. And Ricardo's rigs were suspended last year. Yep. For us. Those three rigs. Yeah. And then on The US low 48 drilling margins, 13,300, that's the guidance for Q3. Do you think margins kind of bottom here based on what you know? Or did it could be more downside as additional rigs mark to market?
Answer: Well, Karl, one thing that encourages us is that for now multiple quarters, the actual revenue per day, on a leading edge basis has stayed fairly consistent and above the 30,000 level. So that is encouraging, because we've had a significant stability now for three plus quarters. I would say that the fact that level though is maybe a thousand a little bit over a thousand dollars lower than our average for the fleet. Means that's why we're dialing in 13,300 for the third quarter because we will continue to, to erode a little bit. But once we get there, we're very, very close then to where the leading edge is. And, yes, I do think that we should be able to ourselves above the 13,000 level.

Question 5: Hi. Good morning. Good morning. Good morning, Keith. Can we I know it's I know it's early to do so, but thinking about 2026, potential CapEx levels, can you maybe just run through some of the drivers of how you'd build up the CapEx budget for 2026? Or any notable pieces that would make CapEx in 2026 different from the 700,000,000 to $710,000,000 you would expect to spend in 2025?
Answer: So it's a good question, Keith. We the way we build it definitely SANA is very easy because we have milestones all the way through 2027 in terms of payments and deployments. So that piece, the new builds, is very, very fairly easy to do. And probably will be somewhere in the mid 300 range. For 2026. Given the recent awards. I would say that the rest is just average CapEx, sustaining CapEx for a fleet, which is gonna be a bit bigger next year than this year, we think. So in The US, we know what the average is, and then in the international market, it's a little bit higher than in The U.S. So based on those numbers, we construct the what we expect to be our you know, our well-known CapEx. Then we have other issues like, for instance, in places like Saudi Arabia, we have recertification CapEx. And, again, we know what that is going to be because that is all that it has specific dates. So that adds a little bit to the to the cost. And then if we win contracts internationally in particular areas, and we estimate how much of many of those wins are going to be, then we add a little bit more CapEx for the recontracting requirements of the client. So based on that, I can tell you with quite a quite a bit of certainty that we will be a little bit higher next year than this year just because the fleet is gonna be larger. And so that's our estimate at this point. We haven't started the process yet, but we think the CapEx is gonna be a bit higher next year than this year.

Question 6: Got it. Appreciate that color there, William. Maybe just on Mexico, can you talk a little bit more about the collections? I noted you're a little bit behind where you expected or hoped to be in Q2. Can you just talk about sort of the process there? And any potential actions or methods you can to increase the collections. I know you know, might be sensitive to get into too many specifics, but any color you can give around that would be helpful in terms of what you can do in the amounts and all that sort of stuff.
Answer: Sure. I'll let William give you the details. But I just want to make one comment, which is I think Nabors Industries Ltd.'s position there is a very great position in the sense that the rigs that we have there are viewed as really core to the ongoing production that Pemex has. They're unique because of their unique capabilities of fitting out platforms and moving cost-effectively. So I think one of the things we got going for us is that Pemex does really value Nabors Industries Ltd. as a vendor and wants us to continue in the country. So that is one thing that we're we think is a real attribute of our position there. Yeah. So they come from Tony. In reality, most of these rigs end up being direct negotiations with the client because they absolutely want to keep them. So on the on the collection side, whereby they take on the receivable and pay us the money or in payments bonds or whatever mechanism they, they create without recourse. So we've done that in the past, and we thought in the second quarter that's what was going to happen. But towards the middle of the second quarter, I think the government decided to take the bull by the horns, and take direct control of this process. And in reality, I mentioned during the call that 7 to $10 billion, but, you know, just I just saw some news know, a second ago that in reality, it was $12 billion what they issued or they put in place to reduce the vendor the overdue vendor invoices. We think this should move very quickly, the process, and somewhere over the next couple weeks, three weeks or so. We will be able to make very substantial collections. We are assuming somewhere in the range of 40 plus million dollars during the third quarter.

Question 7: Good morning, Tony and team. Thank you for taking my question. I just wanted to see if you could comment on Lower 48 daily drilling costs moving forward and where you think they'll ultimately stabilize long term as I believe you previously mentioned it was going to be a focus area moving forward? Thank you.
Answer: Obviously, that's been a focus of ours to rightsize the operation. You noticed in the first quarter where we paid a price with churn on the cost structures. But I think we have it pretty well under control. We're not we don't see a lot of inflation right now. In our costs and just trying to optimize against our rig count not only the direct costs, and obviously, there, it's a deal of having purchasing group supply chain get the best deals, given this environment, but also rightsize our support structure for the existing rig count. So think there's, you know, more good things to happen there, but that remains a focus of ours.

Question 8: Yeah. Thanks, guys. Just going back to the reduction in CapEx related to this and add new builds this year. Does that does the push from 25 to 26 for that $60 million push the 26 spend to 27, i.e., is the whole schedule pushed out? Or is there, at least for now, increased amount in '26 to be further negotiated out? I just think the more flexibility investors understand you guys have, I think, the better. Curious if you could comment on the schedule for basically all through 20 rigs now that they've been awarded.
Answer: The schedule is the driver. It's not really I mean, we're gonna be spending the amount because it's the rigs are the same number. It's just that some of those milestones shifted somewhat into 2026. And I would assume that will mean that 2026 milestones will shift a little bit into 2027. The impact on revenue is not dramatic because really mostly milestones of uncompleted rigs. It's not really rig deployments. We did have some delays in 2025 on the deployment of the Saudi rigs. Maybe a month per rig or something like that. But it's not a massive impact on revenue. Maybe I think probably Saudi Arabia, the impact has been about $5 million in revenue. Or in EBITDA, I guess, in 2025. But, again, it's more a slippage than a reduction in CapEx.

Question 9: Hey. Thank you for including me, William. Congrats on retirement. If your next chapter turns out to be boring, give us a call. We're a safe space for the double AARP community. Tony, just one question for you. Do you ever have any interest in sort of looking at more productions oriented services? And I hate to bring up, you know, the past, but would you ever consider revisiting, say, something like the well service sector or something along those lines?
Answer: Obviously, I think as the industry gets to the point where the goal is to maximize EUR, I think the notion of having something in our portfolio that gives some benefits along those lines makes sense. And so one of the things that we are doing actually within our existing downhole fleet is putting more emphasis on some of our tools that actually can survey the wellbore in the lateral give an operator a better idea of how to extract value in the UR with intelligent fracking. And so that is one area to do that. Things that would complement that, yes, we would be open to it because we think long term as the industry moves into this more mature environment, you need to get on the mill to help them address the quest for lower BOE. So things that would make logical sense that would be contiguous to what Nabors Industries Ltd. does, I think and would fit that would be of interest to us, I would say. It's unlikely we'll get back into pressure pumping.

[Sentiment Analysis]
The tone of the analysts was generally positive, with appreciation for the company's strategic moves and future outlook. Management's responses were detailed and confident, addressing concerns about market conditions and operational adjustments.

[Quarterly Comparison]
| Metric | Q2 2025 | Q1 2025 |
|-------------------------------|------------------|------------------|
| Revenue | $833 million | $736 million |
| Adjusted EBITDA | $248.5 million | $206.3 million |
| Free Cash Flow | $41 million | -$61 million |
| Total Capital Expenditures | $199 million | $151 million |
| U.S. Drilling Revenue | $255 million | $230 million |
| International Drilling Revenue| $385 million | $381.7 million |
| Drilling Solutions Revenue | $170.3 million | $93.2 million |
| Rig Technologies Revenue | $36.5 million | $44.1 million |

[Risks and Concerns]
- Continued sluggishness in U.S. Lower 48 oil basins.
- Collections on receivables in Mexico were below target.
- Softer drilling market expected in the U.S. for Q3.
- Decline in Saudi Arabia's land rig count.

[Final Takeaway]
Nabors Industries Ltd. delivered a strong Q2 2025 performance, significantly benefiting from the Parker Wellbore acquisition and improved operations in key markets. The company remains focused on debt reduction and strategic growth through the SANA new build program. While there are some concerns about market conditions and receivables in Mexico, management's detailed responses and strategic initiatives provide confidence in the company's future outlook.