Q1 2025 Nabors Industries Ltd Earnings Call

Operator: This is the operator, may I have your first and last name please?

This is the operator may have your first and last name. Please.

Okay.

Yeah.

Operator: You are now rejoining the main conference.

You are now rejoining the main conference.

[music].

William Conroy: [music] Good day and welcome to the first quarter 2025 Nabors Industries Limited Earnings Conference call. All participants will be in listen only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by a zero.

Speaker Change: Good day and welcome to the first quarter 'twenty 'twenty five Nabors Industries Ltd earnings Conference call.

All participants will be in listen only mode.

Speaker Change: Do you need assistance. Please signal a conference specialist by pressing the star key followed by zero.

William Conroy: After today's presentation, there will be an opportunity to ask questions. To join the question queue, you may press star then 1 on your telephone keypad. To withdraw your question, please press star then 2. Please note that the event is being recorded.

Speaker Change: After today's presentation there'll be an opportunity to ask questions.

Speaker Change: He joined the question queue. You May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.

Speaker Change: Please note that the event is being recorded.

William Conroy: I would now like to turn the conference over to William Conroy, Vice President of Corporate Development and Investor Relations. Please go ahead.

Speaker Change: I would now like to turn the conference over to William Conroy, Vice President of corporate development and Investor Relations. Please go ahead good morning, everyone.

William Conroy: Good morning, everyone. Thank you for joining Nabors First Quarter 2025 Earnings Conference Call. Today, we will follow our customary format with Tony Petrello, our Chairman, President and Chief Executive Officer, and William Restrepo, our Chief Financial Officer, providing their perspectives on the quarter's results, along with insights into our markets and how we expect Nabors to perform in these markets.

Speaker Change: You for joining Nabors first quarter 2025 earnings conference call.

Speaker Change: Today, we will follow our customary format with Tony Petrello, Our chairman, President and Chief Executive Officer, and William Restrepo, Our Chief Financial officer, providing their perspectives on the quarter's results along with insights into our markets and how we expect nabors to perform in these markets.

William Conroy: In support of these remarks, the slide deck is available, both as a download within the webcast and in the investor relations section of Nabors.com. Instructions for the replay of this call are posted on the website as well. With us today, in addition to Tony, William, and me, are other members of the senior management team.

Speaker Change: In support of these remarks, a slide deck is available both.

Speaker Change: That's a download within the webcast and in the Investor Relations section of Nabors Dot com.

Speaker Change: Instructions for the replay of this call are posted on the website as well.

Speaker Change: With US today in addition to Tony William and me or other members of the senior management team.

William Conroy: Since much of our commentary today will include our forward expectations, they may constitute forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties as disclosed by neighbors from time to time in our filings with the Securities and Exchange Commission. As a result of these factors, our actual results may vary materially from those indicated or implied by such forward-looking statements.

Speaker Change: Since much of our commentary today will include our forward expectations. They may constitute forward looking statements within the meaning of the Securities Act of $19 33, and the Securities Exchange Act of $19 34.

Such forward looking statements are subject to certain risks and uncertainties as disclosed by Nabors from time to time in our filings with the Securities and Exchange Commission.

Speaker Change: As a result of these factors our actual results may vary materially from those indicated or implied by such forward looking statements.

William Conroy: Also, during the call, we may discuss certain non-GAAP financial measures, such as net debt, adjusted operating income, adjusted EBITDA, and adjusted free cash flow. All references to EBITDA made by either Tony or William during their presentations, whether qualified by the word adjusted or otherwise, mean adjusted EBITDA, as that term is defined on our website and in our earnings release. Likewise, unless the context clearly indicates otherwise, references to cash flow mean adjusted pre-cash flow, as that non-GAAP measure is defined in our earnings report.

Speaker Change: Also during the call we may discuss certain non-GAAP financial measures such as net debt adjusted operating income adjusted EBITDA and adjusted free cash flow.

Speaker Change: All references to EBITDA made by either Tony or William during their presentations, whether qualified by the word adjusted or otherwise mean.

Speaker Change: Adjusted EBITDA as that term is defined on our website and in our earnings release.

Speaker Change: Likewise, unless the context, clearly indicates otherwise references to cash flow adjusted free cash flow as that non-GAAP measure is defined in our earnings release.

William Conroy: We have posted to the investor relations section of our website a reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures.

Speaker Change: We have posted to the Investor Relations section of our website a reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures with that I will turn the call over to Tony to begin.

William Conroy: With that, I will turn the call over to Tony to begin. Good morning. Thank you for joining us today as we review our first quarter results. We will also comment on our acquisition of Parker Oil Board and on the current market environment.

Tony Petrello: Good morning, Thank you for joining us today as we review our first quarter results. We will also comment on our acquisition of Parker Wellbore and on the current market environment.

Anthony Petrello: Let me start with a few remarks on the Parker Acquisition. We completed the transaction on March 11th. Thus far, the Parker operations have performed in line with our expectations. Our efforts to realize synergies are progressing. We are on track to achieve our $40 million target for 2025. In summary, the integration is proceeding with the appropriate importance and speed.

Tony Petrello: Let me start with a few remarks on the Parker acquisition.

Tony Petrello: We completed the transaction on March 11.

Tony Petrello: Thus far the Parker operations have performed in line with our expectations our.

Tony Petrello: Our efforts to realize synergies are progressing well we are on track to achieve our $40 million target for 2025.

Tony Petrello: In summary, the integration is proceeding with the appropriate importance at speed.

Anthony Petrello: Next, let me address the macro environment. Several factors currently weigh on the oil market. In particular, plans announced by OPEC Plus to gradually unwind prior output reductions The potential impact of higher tariffs on the global economy and relatively high production from U.S. shale facilitated by continued efficiency gains.

Tony Petrello: Next let me address the macro environment. Several factors currently way on the oil market in particular plans announced by OPEC plus to gradually unwind prior output reductions.

Tony Petrello: The potential impact of higher tariffs on the global economy, and relatively high production from U S shale facilitated by continued efficiency gains.

Anthony Petrello: On the positive side, natural gas activity in the US appears poised for some recovery over the upcoming quarters. We have already added a few rigs and gas focus spaces. We are prepared to bring multiple rigs back in the event of an acceleration in natural gas activity.

Tony Petrello: On the positive side natural gas activity in the U S appears poised for some recovery over the upcoming quarters. We have already added a few rigs in gas focused basins. We are prepared to bring both the rigs back in the event of an acceleration in natural gas activity.

Anthony Petrello: Our results for the quarter include Nabors Legacy Business plus the contribution of 20 days to Parker post-closing. The international drilling business performed well, especially our San Andres Venture in Saudi Arabia. We received a partial payment on our receivable in Mexico. Nonetheless, we continue to be extremely focused on this issue and expect further progress in the second quarter. Free cash flow in the quarter benefited from lower-than-expected CapEx on the Senate new bills, offsetting the normal heavy seasonal payments at the beginning of the year.

Tony Petrello: Our results for the quarter include neighbors legacy business plus the contribution of 20 days for Parker post closing.

Tony Petrello: The international drilling business performed well, especially our Santa joint venture in Saudi Arabia.

Tony Petrello: We received a partial payment on our receivables in Mexico. Nonetheless, we continue to be extremely focused on this issue and expect further progress in the second quarter.

Tony Petrello: Free cash flow in the quarter benefited from lower than expected capex on the Senate new bells offsetting the normal heavy seasonal payments at the beginning of the year.

Anthony Petrello: In the U.S. lower 48, although our revenue per day held up well, our daily margin fell short. During the quarter, we experienced relatively high levels of churn that caused inefficiencies and increased our operational expenses. The activity churn also affected our NDS business. Total adjusted EBITDA in the first quarter was $206 million. The lower 48 market average quarterly rig count essentially remained at the levels of the prior quarters. Our own rig count varied through the quarter. We entered the quarter at 64 rigs. For a brief time, our count touched 58. We finished the quarter at 62.

Tony Petrello: In the U S lower 48, although our revenue per day held up well our daily margin fell short.

Tony Petrello: During the quarter, we experienced relatively high level of churn that caused inefficiencies and increase our operational expenses.

Tony Petrello: Acuity churn also affected our NDS business.

Tony Petrello: Total adjusted EBITDA in the first quarter was $206 million, the lower 48 market average quarterly rig count essentially you made at the levels of the prior quarters.

Tony Petrello: Our own rig count varied through the quarter, we entered the quarter at 64 rigs for a brief time, our count cut 58, we finished the quarter at 62 now it stands at 63.

Anthony Petrello: Now it stands at 63.

Anthony Petrello: Next I'll discuss the international markets. In Russia, the recent expansion of U.S. sanctions led us to suspend operations there. At this point, we do not expect to restart our activities in that market. In addition, the financial performance of the three rates have become increasingly marginal. Continuing to support the business was becoming challenging.

Tony Petrello: Next I'll discuss the international markets in Russia. The recent expansion of U S sanctions, let us to suspend operations. There at this point, we do not expect to restart our activities in that market. In addition, the financial performance of the three rigs have become increasingly marginal.

Tony Petrello: <unk> to support the business, whereas becoming challenging.

Anthony Petrello: In other markets, we reached the end of our contracts on two rigs, in Papua New Guinea and the UAE. We started up the 10th new build in Saudi Arabia on its initial six-year term contract. We also reactivated a rig in Columbia. However, we received notices to release two rigs by the end of the second quarter. We are working on recontracting both of these rigs. Over the remaining three quarters of 2025, we expect to add 10 rigs. In April, we have already deployed two of those, another new build in Saudi Arabia, and one of the rigs in Kuwait.

Tony Petrello: In other markets, we reached the end of our contracts on two rigs in Papua New Guinea and the UAE.

Tony Petrello: We started off the 10th Newbuild Italia Arabia honest the initial six year term contract. We also reactivated rigs in Colombia. However, we received notices to release two rigs by the end of the second quarter. We are working on re contracting both of these rates.

Tony Petrello: Over the remaining three quarters of 2025, we expect to add 10 rigs in April we have already deployed two of those another newbuild in Saudi Arabia, and one of the rigs in Kuwait.

Anthony Petrello: Notwithstanding worldwide recount volatility, current tendering activity continues in several countries across the Middle East and in Latin America. We are focused on opportunities in key geographies that meet our financial thresholds by minimizing our capital requirements.

Tony Petrello: Notwithstanding worldwide rig count volatility current tendering activity continues to several countries across the middle East and in Latin America. We are focused on opportunities in key geographies that meet our financial thresholds, while minimizing our capital requirements.

Anthony Petrello: Now, let me comment on the U.S. market. The Baker Hughes weekly lower 48 rig count was remarkably stable during the quarter. We have noted a shift in this market. Smaller operators have added rigs, while larger ones have reduced their activity. This aggregate performance outstanding, shorn in the quarter, affected downward pressure on our own rig count. Daily margin for our lower 48 rinks was $14,276 per day. Our expenses in this market increased in the first quarter driven by the inefficiencies I mentioned earlier. We are focused on reducing these costs and aligning with the current environment. Our drilling solutions and rig technologies businesses combined generated EBITDA of more than 46 million.

Tony Petrello: Now, let me comment on the U S market. The Baker Hughes weekly lower 48 rig count was remarkably stable during the quarter. We have noted a shift in this market.

Tony Petrello: Our operators have added rigs while larger ones have reduced their activity. This our group performance I was sandy churn in the quarter effected downward pressure on our own rig count.

Tony Petrello: Daily margin for our lower 48 rigs was 14276 per day.

Tony Petrello: Our expenses in this market increase in the first quarter driven by the inefficiencies I mentioned earlier, we are focused on reducing these costs and aligning with the current environment.

Tony Petrello: Our drilling solutions and rig technologies businesses combined generated EBITDA of more than $46 million.

Anthony Petrello: Together, their growth in the previous quarter was due to the addition of Parker. The Parker operations make an immediate impact on our strategy to grow the contribution from our NDS business.

Tony Petrello: Together the growth of the previous quarter was due to the additional Parker the Parker operations make an immediate impact on our strategy to grow the contribution from our NDS business.

Anthony Petrello: Now I will make some comments on the key drivers of our results. I'll start with our international drilling business. The international markets continue to provide opportunities to deploy additional rigs. Several markets appear to be growing and increasingly require our advanced technology. Even in this environment, we see prospects to reactivate a number of currently idle rigs.

Tony Petrello: Now I will make some comments on the key drivers of our results I'll start with our international drilling business the.

Tony Petrello: The international markets continue to provide opportunities to deploy additional rigs several markets appear to be growing and increasingly require our advanced technology. Even in this environment, we see prospects to reactivate a number of currently idle rigs.

Anthony Petrello: Next, I'll summarize the developments in our international drilling business. In the first quarter, we reactivated a recently added ring in Columbia. We were able to rapidly place the ring with a different client, further diversifying our customer base there. We are working to place the two recently added rings as well. In Kuwait, the first rig of the previously announced award sped earlier this month. The second and third rigs are scheduled to commence operations in the second quarter. Kuwait is an important market for our high-performance drilling capabilities. We expect the rigs to materially contribute to our earnings and cash flow over the life of the contract.

Tony Petrello: Next I'll summarize the developments in our international drilling business.

Tony Petrello: In the first quarter, we reactivated our recently at a rate in Colombia, we were able to rapidly close the REIT with a different client further diversifying our customer base. There we're working to place the two recently idled rigs as well.

Tony Petrello: In Kuwait, the first week of the previously announced award spud earlier this month.

Tony Petrello: The second and third rates are scheduled to commence operations in the second quarter.

Tony Petrello: <unk> is an important market for our high performance drilling capabilities, we expect the rigs to materially contribute to our earnings and cash flow over the life of the contracts.

Anthony Petrello: Across international markets, we see a number of opportunities, most of them are concentrated in the Eastern Hemisphere and a limited number are in Latin America. When evaluating tenders, our paramount concerns are cash payout and capital expenditures. We believe that any incremental demand in those markets should help support pricing. In Saudi Arabia, our standard drilling joint venture started up its 10th new build during the first quarter. Number 11 started early in the second quarter. Three more are scheduled for 2025. Another one is slated to start early 2026. That will bring the total number of working new bills to 15 in addition to the 40 legacy rigs currently active.

Tony Petrello: Across international markets, we see a number of opportunities most of them are concentrated in the eastern hemisphere.

Tony Petrello: And a limited number are in Latin America.

Tony Petrello: When evaluating tenders are paramount concerns are cash pay out and capital expenditures, we believe that any incremental demand in those markets should help support pricing.

Tony Petrello: In Saudi Arabia, our Sanish drilling joint venture start up its 10th new builds during the first quarter.

Tony Petrello: Number 11 started early in the second quarter three more scheduled for 2025. Another one is slated to start in early 2026 that would bring the total number of working new bills to 15. In addition to the 40 legacy rigs currently active.

Anthony Petrello: On top of these 15 deployments, SANA and its customer are in discussions on the next five new builds. We expect this process to be concluded over the next couple of quarters. Construction with sorority after the rigs are awarded.

Tony Petrello: On top of these 15 deployments Saturday and its customer discussions on the next five new builds we expect this process to be concluded over the next couple of quarters.

Tony Petrello: Instruction with starting up with the rigs are awarded.

Anthony Petrello: In Saudi Arabia, a number of land rigs have been suspended over the past year. Approximately three quarters of those rigs were supporting conventional oil development. Over the same time period, in addition to the five Senate new bills, a number of rigs have been added in the unconventional natural gas market. I would note that approximately 75% of Saad's fleet works in natural gas. Virtually all of our fleet is capable of operating in the more demanding gas space.

Tony Petrello: In Saudi Arabia, a number of land rigs have been to spend over the past year approximately three quarters of those rigs were supporting conventional oil development.

Tony Petrello: Over the same time period. In addition to the five Senate bills, a number of rigs have been added in the unconventional natural gas market.

Tony Petrello: Note that approximately 75% of SaaS wheat works in natural gas virtually all of our fleet is capable of operating in the more demand the gas faces.

Anthony Petrello: Before I move to our U.S. business, I would like to make some additional comments on SanEd. In March, we published materials illustrating the value and potential for SanEd. This year, SanEd forecasts it will earn a just-in-Ibida of over $300 million. At this level, the business already has scale. On top of that, we project the new build additions at a cadence of five per year will drive annual adjusted EBITDA successfully higher. This combination of material scale and strong embedded growth, along with attractive valuations in the region, comprise the formula for significant potential value creation over the next few years.

Tony Petrello: Before I move to our U S business I would like to make some additional comments on Saturday.

Tony Petrello: In March we published materials illustrate the value potential for Senate. This year SaaS forecast it will earn adjusted EBITDA of over $200 million.

Tony Petrello: At this level the business already has scale on top of that we project. The newbuild additions at a cadence of five per year will drive annual adjusted EBITDA successfully higher.

Tony Petrello: This combination of material scale and in strong embedded growth along with attractive valuations in the region comprised of formula for significant potential value creation over the next few years. Our goal is to realize our share of that value with substantial benefits neighbor shareholders.

Anthony Petrello: Our goal is to realize our share of that value with substantial benefits to neighbors shareholders.

Anthony Petrello: Now I'll discuss our performance in the U.S. Daily rig margins in our lower 48 rig fleet declined more than expected, driven by increased costs. In this market, we continue to experience elevated levels of volatility as our customer mix shifted. This created challenges for our operating efficiencies and margins. The current rate pricing environment has, to date, remained relatively disciplined. It is true, however, that we have seen a slight downward trend in leading-edge pricing. We believe this will have some impact on our average margins over the next few quarters. Industry utilization for high spec rigs has been in a narrow range for some time.

Tony Petrello: Now I'll discuss our performance in the U S.

Tony Petrello: Daily rig margins in our lower 48 rig fleet declined more than expected driven by increased costs. In this market. We continue to experience elevated levels of volatility as our customer mix shifted this created challenges for our operating efficiencies and margins.

Tony Petrello: The current rate pricing environment has to date remained relatively disciplined it is true. However that we have seen a slight downward trend in leading edge pricing. We believe this will have some impact on our average margins over the next few quarters industry utilization for high spec rigs has been done in an hour range for some time.

Anthony Petrello: About two-thirds of the industry's high spec rigs in the lower 48 are currently working. At these levels, there is some pressure on day rates.

Tony Petrello: About two thirds of the industry's high spec rigs in the lower 48 are currently working at these levels. There is some pressure on day rates. We are working to mitigate this pressure taking out costs, where possible and ensuring the field support structure is appropriate for the working fleet.

Anthony Petrello: We are working to mitigate this pressure, taking out costs where possible, and ensuring the field support structure is appropriate for the working fleet.

Anthony Petrello: Next, let me discuss our technology and innovation. In the first quarter, our drilling solutions business did experience some leakage from the churn in the U.S. However, joint solutions remains a significant contributor to consolidated results. NDS's quarterly performance also benefited from the addition of Parker's operations after the acquisition closed in March. The segment's combined gross profit margin was approximately 53%. In the first quarter, NDS's revenue from international markets, excluding the impact of Parker Business, comprised almost half of the segment's revenue. NDS is clearly benefiting from its geographic diversity as the international growth continues to compensate for sluggishness in the U.S.

Next let me discuss our technology and innovation in the first quarter, our drilling solutions business did experience some leakage from the churn in the U S. However, drilling solutions remains a significant contributor to consolidated results.

Tony Petrello: <unk> quarterly performance also benefited from the addition of Parker's operations. After the acquisition closed in March the.

Tony Petrello: The segments combined gross profit margin was approximately 53%.

Tony Petrello: In the first quarter and yes as revenue from international markets, excluding the impact of Parker business comprised almost half of the segment's revenue.

Tony Petrello: He is clearly benefiting from its geographic diversity as the international growth continues to compensate for sluggishness in the U S.

William Restrepo: Next, let me make some comments on our capital structure. Our highest priority remains the reduction of our debt. Early in the second quarter, we took advantage of the market and repurchased $11.4 million phase value of notes at a significant discount. We expect to generate free cash in 2025 to reduce debt despite material cash consumption incentives.

Tony Petrello: Next let me make some comments on our capital structure.

Tony Petrello: Our highest priority remains the reduction of our debt.

Tony Petrello: Early in the second quarter, we took advantage of the market and repurchased 11 4 million face value of notes at a significant discount.

Tony Petrello: We expect to generate free cash in 2025 to reduce debt despite material cash consumption in Senate.

William Restrepo: Next, I will discuss the Global Unit Outlook, starting with our quarterly survey. At the end of the first quarter, we collected the activity plans for the largest lower 48 industry clients. Our survey covers 14 operators. These clients account for approximately 43% of the lower 48 industries working rate count at the end of the quarter. From the latest survey, this group expects to reduce its recount by approximately 4% from the end of the first quarter through the end of 2025. This decline is spread across slightly more than half of the operators.

Tony Petrello: Next I will discuss the global unit outlook, starting with our quarterly survey at the end of the first quarter. We collected the activity plans for the largest lower 48 industry clients Our survey.

Tony Petrello: <unk> 14 operators. These clients account for approximately 42% lower 48 industry is working rig count at the end of the quarter.

Tony Petrello: From the latest survey this group expects to reduce its rig count by approximately 4% from the end of the first quarter through the end of 2025.

Tony Petrello: This decline is spread across slightly more than half of the operators.

William Restrepo: With this outlook, a segment of mainly large public operators is now indicating a total reduction of 7% from the beginning of 2025 through the end of the year. Over the last couple of months, we have seen the impact of these customer plans. But we have managed to replace this drop in activity with a number of contracts. We expect this trend to continue.

Tony Petrello: With this outlook a segment of mainly large hawk operators is now, indicating a total reduction of 7% from the beginning of 2025 through the end of the year.

Tony Petrello: Over the last couple of months, we are seeing the impact of these customer plants.

Tony Petrello: But we have managed to replace this drop in activity with number of contracts. We expect this trend to continue.

William Restrepo: In the international markets, to date the environment remains positive.

In the international markets today, the environment remain positive, including the rigs recently deployed in Kuwait and Saudi Arabia, We have 10 rigs expected squinch work towards the remaining three quarters of 2025.

William Restrepo: Including the rigs recently deployed in Kuwait and Saudi Arabia, we have 10 rigs expected to commence work during the remaining three quarters of 2025. Six of those rigged during the second quarter. We should end the quarter with 87 international rigs working compared to 85 at the end of 2024. After that, in the second half of the year, we have four more rigs scheduled to deploy. Two new builds in Saudi Arabia, one in Argentina, and one in India.

Tony Petrello: Six of those rig during the second quarter, we should end the quarter with 87 international rigs working compared to 85 at the end of 2024.

Tony Petrello: After that in the second half of the year, we are former rigs scheduled to deploy two new builds in Saudi Arabia, one in Argentina, and one in India.

William Restrepo: Before turning the call over to William, I'll wrap up with a few remarks on Parker. As I mentioned, we have already made considerable progress toward our goal of achieving $40 million in cost synergies during 2025. I want to recognize the outstanding efforts of both teams to make this happen. Their collaboration and dedication fuel my confidence in reaching our target.

Tony Petrello: Before turning the call over to William I'll wrap up with a few remarks on Parker as I mentioned, we have already made considerable progress toward our goal of achieving $40 million of cost synergies. During 2025 I want to recognize the outstanding efforts of both teams to make this happen theyre collaboration and dedication during my confidence in reaching our target.

William Restrepo: Now, let me turn the call over to William, who will discuss our financial results. Thank you, Tony.

Tony Petrello: Now, let me turn the call over to William who will discuss our financial results.

William: Thank you Tony Good morning, everyone and thank you for joining us today.

William Restrepo: Good morning, everyone, and thank you for joining us today. I would like to make an initial comment on the Parker Global Acquisition, which closed on March 11. Our first quarter financial statements included 20 days for the acquired business. The Parker numbers are reflected across their segments. The financial results I will provide include the Parker contribution, but I will also provide details on the acquired business.

William: I would like to make an initial comment on the Parker well bore acquisition, which closed on March 11th.

William: Our first quarter financial statements included 20 days for the acquired business.

William: Parker numbers are reflected across our segments. The financial results I will provide includes the partner contribution.

William: He will also provide details on the acquired business.

William Restrepo: During the first quarter, we experienced significant disarray in the equity and debt markets. And we expect more of the same in the second quarter as the current administration continues with this new approach to foreign trade.

William: During the first quarter, we experienced significant disarray in the equity and debt markets and we expect more of the same in the second quarter as the current administration continues with this new approach to foreign trade.

William Restrepo: Given the current financial market volatility, I will provide some comments on the current state of the drilling market. Up to now, we have not seen reductions in drilling activity in the U.S. nor in our international markets as a result of the tariff uncertainty.

William: Given the current financial market volatility I will provide some comments on the current state of the drilling market.

William: Up to now we have not seen reductions in drilling activity in the U S nor in our international markets. As a result of the tariff uncertainty we are experiencing decreased activity in certain international markets, but we believe these reductions.

William Restrepo: We are experiencing decreased activity in certain international markets but we believe these reductions, which started last year, are unrelated to the current recession fears. In Saudi Arabia, we continue to see an acceleration in the shift from oil to gas drilling. And in Mexico, our customer continue to cut spending, a process that started after the elections at the end of last year. Ticketing in Columbia has been affected for some time by the policies of the current government.

William: Which started last year are all related to the current recession fears.

William: In Saudi Arabia, we continue to see an acceleration in the shift from oil to gas drilling and in Mexico, our customer continued to cut spending a process that started after the elections at the end of last year.

William: I've taken in Colombia has been affected for some time by the policies of the current government.

William Restrepo: It is entirely possible that the current political situation could have an impact on our current recount going forward. Elsewhere, we have managed to add several rigs in a lower 48 market since our rig count dropped during the first quarter, and we continue to deploy rigs in other international markets. Consequently, Nabors' results for the first quarter landed close to our expectations. sequentially, as we expected, we experienced reduced activity. This was driven essentially by a five rate reduction in our lower 48 business. higher turnover on contracts with multiple rates moving between customers resulted in idle periods for a working fleet during the quarter.

William: It is entirely possible that the current political situation could have an impact on our current rig count going forward.

William: Elsewhere, we have managed to add several rigs in our lower 48 market since our rig count trough during the first quarter, we continued to deploy rigs and other international markets.

William: Consequently, nabors yourself sort of the first quarter landed close to our expectations.

William: Sequentially as.

William: We expected we experienced reduced activity.

William: This was driven essentially by a five rig reduction in our lower 48 business.

William: Higher turnover on contracts with multiple rigs moving between customers.

William: Also in an idle periods for our working fleet during the quarter.

William Restrepo: I would also highlight that our rig count today of 63 rigs has recovered to the levels we reached at the end of December. We do expect a further slight increase in rent count during the second quarter from where we currently stand. NDS activity was also affected by our lower rate count in the lower 48. International NDS activity held up relatively well during the quarter as we continue to see strength in several markets. Internationally, rate count was stable. We added one new build in Saudi Arabia, but this was offset by a reduction of one rate in our average rate count in Russia.

William: I would also highlight that our rig count today of 63 rigs has recovered to the levels that we reached at the end of December.

William: We do expect a further slight increase in rig count during the second quarter from where we currently stand.

William: And he is activity was also affected by a lower rig count in the lower 48.

International NDS activity held up relatively well during the quarter as we continued to see strength in several markets.

William: Internationally rig count was stable we added one new build in Saudi Arabia, but this was offset by a reduction of one rate and our average rig count in Russia.

William Restrepo: In the month of March, we suspended activity in our three rigs in response to the recently expanded Russian sanctions. We don't expect our activity in this market to resume in the near term. I would point out, though, that our EBITDA for Russia, given the current operational challenges, has been basically breakeven. Two other rigs, one in Papua New Guinea and a second one in the United Arab Emirates, reached the end of the contracts at the end of the first quarter. Given the timing, basically the end of the quarter, these rigs had limited impact on our Q1 rig key.

William: In the month of March we suspended activity in our three race in response to the recently expanded Russian sanctions. We don't expect there are kicking this market to assume in the near term.

William: I would point out, though that our EBITDA for Russia, given the current operational challenges has been basically breakeven.

William: Two other rigs one in Papua New Guinea, and the second one in the United Arab Emirates reached the end of the contracts at the end of the first quarter given the timing basically at the end of the quarter <unk> had limited impact on our Q1 rig count.

William Restrepo: On the plus side, we added a rigging Columbia at the end of Q1.

William: On the plus side, we added a rig in Colombia at the end of Q1. However.

William Restrepo: However, we do expect future recount reductions in that market.

William: However, we do expect future rig count reductions in that market.

William: Okay.

William Restrepo: Looking forward to the second quarter, we expect a slight increase in our average rig count. In the quarter, we expect to deploy two new builds in Saudi Arabia, as well as three rigs in Kuwait, adding three and a half average rigs for the quarter. We also expect the lower 48 to add another three average rigs.

William: Looking forward to the second quarter, we expect a slight increase in our average rig count in the quarter, we expect to deploy two new builds in Saudi Arabia.

William: Well as three rigs in Kuwait, adding three and a half average rates for the quarter.

William: We also expect the lower 48 to add another three average rigs.

William Restrepo: predominantly in the Eagle Ford and Hainesville areas, and mainly for natural gas activity. These increases will be offset by the previously mentioned drop-off in Russia, PNG, the UAE, and Colombia, with a combined impact of five average rates.

William: Predominantly in the Eagle Ford and Haynesville areas and mainly for natural gas activity.

William: These increases will be offset by the previously mentioned drop off in Russia P&G.

William: UAE and Colombia with a combined impact of five average rates.

William Restrepo: Now, I'll detail our financial performance for the first quarter, provide some updates on key strategic initiatives, and share our outlook for the second quarter. Revenue from operations for the first quarter was $736 million dollars compared to $730 million in the prior quarter, an increase of $6 million or 1%. Incremental revenue from our international segment and our partner acquisition compensated for a decline in lower 48 activities.

William: Now as a tailwind for national pro forma for the first quarter provide some updates on key strategic initiatives and share our outlook for the second quarter.

William: Revenue from operations for the first quarter was $736 million.

William: Compared to the $730 million in the prior quarter, an increase of $6 million or 1% in.

William: Incremental revenue from our international segment, and our partner acquisition compensated for a decline in lower 48 activity.

William Restrepo: U.S. earnings revenue at $231 million declined by $11 million dollars sequentially, or 4.5%. Included in these numbers, Parker revenue was $5.3 million. Our rate count in the lower 48 averaged 61, a 5 rate decrease from the fourth quarter. As mentioned, this reduction was partially related to idle time from bricks moving between concrete. We exited Q1 with 62 rigs operating the Lord 48. And we are running 63 rigs today. Our average daily revenue improves sequentially. Daily revenue in the lower 48 came in at $34,546. which is $1,150 higher than the fourth quarter. Although we have encountered some market driven pressure on base day rates in certain regions.

William: U S revenue at $231 million declined by $11 million sequentially or four 5%.

William: Included in this numbers Parker revenue was $5 3 million.

William: Our rig count in the lower 48 averaged 61.

William: Five rate decrease from the fourth quarter.

William: As mentioned this reduction was partially related to idle time from rigs moving between contracts.

William: We exited Q1 with 62 rigs operating in the lower 48.

William: We are running 63 rigs today.

William: Our average daily revenue improved sequentially.

William: <unk> revenue in the lower 48 came in at $34546.

William: Which is $1150 higher than the fourth quarter.

William: Although we have encountered some market driven pressure on base day rates in certain regions.

William Restrepo: This was more than offset by performance based bonuses. by an uptick in ancillary services provided to clients and by revenue related to reimbursable moves. On our latest contracts, revenue per day is now in the $30,000 range with some exceptions still around the mid $30,000 level. The international earnings segment generated a revenue of $382 million, an increase of 10.3 million, or 3% from the prior quarter, driven by active increases in key markets. Parker contributed $3.8 million to this increase. Rate count increased from 84.8 to 85 rates during the quarter. The slight increase came from the 20-day impact of Parker's two operating rates in Casa.

William: This was more than offset by performance based bonuses.

William: By an uptick in ancillary services provided to clients.

William: And by revenue related to Reimbursable moves.

William: On our latest contracts revenue per day is now in the $30000 range with some exception still around $30000 level.

William: The International Brewing segment generated revenue of $382 million, an increase of $10 3 million or 3% from the prior quarter driven by activity increases in key markets.

William: Parker contributed $3 8 million to this increase.

William: The rig count increase from $84 eight till 85 rigs during the quarter.

William: A slight increase came from the 20 day impact of Parker's two operating rates and Catholics time.

William Restrepo: Drain Solutions revenue was $93.2 million, an increase of $17.2 million or 22.6%. Parker Revenue for the quarter was $21.7 million, more than upsetting the 4.5 million or 6% reduction in our legacy NDS business. Our rate technology segment generated revenue of $44.2 million, a $12 million decline sequentially. driven primarily by lower capital equipment deliveries in the Middle East, and a decrease in parts sales and repairs in the US. Total adjusted EBITDA for the quarter was $206.3 million compared to $220.5 million in the fourth quarter. The $14 million sequential decline mainly reflected lower recount and higher operational expenses in lower $48 trillion.

Drilling solutions revenue was $93 $2 million, an increase of $17 2 million or 22, 6%.

William: Partner revenue for the quarter was $21 $7 million more than offsetting the $4 5 million or 6% reduction in our legacy <unk> business.

William: On our rig technology segment generated revenue of $44 $2 million at $12 million declined sequentially.

William: Driven primarily by lower capital equipment deliveries in the middle East and a decrease in part sales and repairs in the U S.

William: Total adjusted EBITDA for the quarter was $206 3 million compared to 225 million in the fourth quarter.

William: The 14 million sequential decline, mainly reflected lower rig count and higher operational expenses and lower 48 drilling.

William Restrepo: Decreased cedar die and rig technologies and our NDS legacy business also contributed to the sequential reduction. These negatives were partially upset by improved international results and a $7.8 million contribution by Parker to our first quarter EBITDA. US running EBITDA of $92.7 million was down by $13 million or 12.3% sequential. This deterioration reflected a five rate reduction, roughly 8% and some erosion in daily margins in our lower 48 drilling business. Average daily rig margin came in just under $14,300, which is down $660, or 4% from the fourth quarter. This deterioration was essentially related to the increased churn in our rig count, which made it challenging to align compensation costs with activity levels.

William: Decrease EBITDA in rig technologies, and our N E. S. Legacy business also contributed to the sequential reduction. These negatives were partially offset by improved international results and the $7 $8 million contribution by Parker to our first quarter EBITA.

William: You are starting EBITDA of $92 $7 million was down by $13 million or 12, 3% sequentially.

William: This deterioration reflected a five rig reduction roughly 8% and some erosion in daily margins in our lower 48 drilling business.

William: Average daily rig margins came in just under $14300, which is down $660 or 4% from the fourth quarter.

William: This deterioration was essentially related to the increased churn in our rig count, which made it challenging to align compensation costs with activity levels.

William Restrepo: We are actively focused on right-sizing expenses to our activity level and expect our rig operational expenses to fall back somewhere. For the second quarter, we forecast lower 48 daily margins of approximately 14,100. We expect some decline in average daily revenue, largely mitigated by cost reduction. We anticipate our average rig count in this market to be between 63 and 64 rigs.

William: We are we are actively focused on right sizing expenses for activity level and expect our rig operational expenses to fall back somewhat.

William: For the second quarter, we forecast lower 48 daily margins of approximately 14100.

William: We expect some decline in average daily revenue largely mitigated by cost reductions.

We anticipate our average rig count in this market to be between 63% and 64 rigs.

William Restrepo: On a combined basis, Alaska and the U.S. offshore businesses generated EDA of $20.5 million in the first quarter. Parker Wellborg contributed approximately $800,000 to this total. Second quarter EBITDA from these businesses should be approximately $26 million including an expected $5.3 million contribution from Parker. Recount is expected to increase to 9 rigs, including the contribution from the Parker acquisition. EBITDA from our international segment at $115.5 million, increased by 3.5 million or 3.1% sequentially. This improvement was in a slightly higher average income of $85, including 20 days of contribution from Parker Region. The increase reflected an additional deployment in Saudi Arabia and strong results in other international markets.

William: On a combined basis.

William: Oscar in the U S offshore businesses generated EBITDA of $25 million in the first quarter.

William: Parker Wellbore contributed approximately $800000 to this total.

William: Second quarter EBITDA from these businesses should be approximately $26 million, including unexpected $5 3 million contribution from Parker.

William: Rig count is expected to increase to nine rigs, including the contribution from the Parker acquisition.

William: EBITDA from our international segment at $115 5 million.

William: Increased by $3 5 million or three 1% sequentially.

William: This improvement was in a slightly higher average rate kind of 85, including 20 days of contribution from Parker rigs.

William: The increase reflected an additional deployment in Saudi Arabia, and strong results in other international markets.

William Restrepo: Daily gross margin was approximately $17,400. A $734 increase. broader operational improvement for oil discharge. For the second quarter, we expect improved Zika data driven by deployments in Saudi Arabia and Kuwait. The 11th Saudi Arabia new build rig commenced operations earlier this month, and the 12th new build is expected to start later this quarter. In Kuwait, three rates are returning to service and are forecast to be progressively deployed during the quarter. As mentioned before, Russia, UAE, PNG, and Colombia will decrease their income by a combined 5 rigs on the average. We forecast average daily gross margin to increase to $17,700 in the second quarter.

William: Daily gross margin was approximately $17400.

William: $734 increase.

William: Operational improvements drove this result.

William: For the second quarter, we expect improved EBITDA driven by deployments in Saudi Arabia and Kuwait.

William: Saudi Arabia Newbuild rig commenced operations earlier this month.

William: In the 12, new build is expected to start later this quarter.

William: In Kuwait three rates are returning to service and are forecast to be progressively get probably during the quarter.

William: As mentioned before Russia, UAE, PNG, and Columbia will decrease our rig count by a combined five rigs on the average.

We forecast average daily gross margins increased to $17700 in the second quarter.

William Restrepo: Average recount should range between 85 and 86 ribs, including two partner ribs in caskets. Drain Solutions delivered EBITDA of $40.9 million in the first quarter, up $7 million. These results include a $9.6 million contribution from Parker Wells. Without Parker, our NDS business fell by 7.7%, mainly driven by a decreased recount in the lower 48. Our NDS segment comprises 16% of the total EBITDA from operation. Gross margin for this segment continues to be strong, coming in at a healthy 53% this quarter, including the contribution from Parker. For the second quarter, we expect NDSCBDA of approximately $75 million, supported by an increased LOR48 rate count and by expansion in international markets.

William: Average rig count should range between 85, and 86 rigs, including two Parker rigs empathic sense.

William: Drilling solutions delivered EBITDA of $40 $9 million in the first quarter up 7 million. These.

William: These results include a $9 6 million dollar contribution from Parker Wellbore.

William: Without Parker, our NDS business fell by seven 7%.

William: <unk> driven by a decrease rig count in the lower 48.

William: Our <unk> segment comprised 16% of the total EBITDA from operations.

William: Gross margin for this segment continues to be strong coming in at a healthy 53% this quarter.

Speaker Change: Clothing, the contribution from Parker.

Speaker Change: For the second quarter, we expect NDS EBITDA of approximately $75 million supported by an increase in lower 48 rig count and by expansion in international markets.

William Restrepo: We expect continued international growth in our performance software, rig cloud and managed pressure drilling offerings, as well as casing running profitability improvement in the U.S. Additionally, the Parker-Welber acquisition will contribute a full quarter of EBITDA, or about $43 million, to our NDS for sale. Rake Technologies delivered EBITDA of $5.6 million in the first quarter, down sequentially from $9.2 million. Second quarter Ibidapo-Ritzit should be similar to the first quarter.

Speaker Change: We expect continued international growth and our performance software.

Speaker Change: Cloud and managed pressure drilling offerings as well as casing running profitability improvement in the U S. Additionally.

Speaker Change: Additionally, the Parker Wellbore acquisition will contribute a full quarter of EBITDA or about $43 million to our NDS results.

Speaker Change: Rig technologies delivered EBITDA of $5 6 million in the first quarter down sequentially from $9 2 million set.

Speaker Change: Second quarter EBITDA for Richard should be similar to the first quarter.

William Restrepo: As a result of the large annual payments that normally fall in the first quarter and a heavier interest payment, the beginning of the year normally consumes cash. Nonetheless, our adjusted free cash flow for the first quarter was somewhat better than the $80-90 million free cash consumption we expected. Our Nabors business, excluding Parker, consume an approximately $61 million in free cash. Senate cash balances fell by only $2 million, as some of the new-build CapEx milestones were delayed into the second quarter. Santa did pay roughly $47.5 million in new-build capex during the first quarter. Excluding Parker, CapEx for the quarter was some $70 million below expectations, but collections were $32 million below our forecast.

Speaker Change: As a result of the large annual payments that normally fall in the first quarter.

Speaker Change: And a heavier interest payments at the beginning of the year normally consumes cash Nonetheless, our adjusted free cash flow for the first quarter was somewhat better than $80 million to $90 million free cash consumption, we expected.

Speaker Change: Our neighbours business, excluding Parker consumer approximately $61 million in free cash flow.

Speaker Change: Net of cash balances fell by only $10 million as some of the noodles capex milestones were delayed into the second quarter.

Speaker Change: Some of them pay roughly $47 $5 million in Newbuild capex during the first quarter.

Speaker Change: Excluding Parker Capex for the quarter was some $70 million below expectation, but collections were 32 million beat our forecast, although we collected 20 million in Mexico. During the quarter, we were still 20 million below our target.

William Restrepo: Although we collected $20 million in Mexico during the quarter, we're still $20 million below our target. We currently expect another large payment from our customers in the quarter. Collections in the U.S. were also selected.

Speaker Change: We currently expect another large payment from a customer during the quarter.

Speaker Change: Collections in the U S were also sluggish.

William Restrepo: In the first quarter, we incurred approximately $14 million in costs related to the Parker transaction. including legal fees and severance costs. We have made significant progress on capturing our plant synergies from the equity. The Parker Business can consume free cash of about $10 million post-closure. This mainly included $5 million in accrued interest that was prepaid on the redemption of the Parker Terminal and $6 million in capital expenditures. CapEx for the first quarter was $144 million excluding parking. compared to $241 million in the prior quarter. This includes $47.5 million for the San Andredo program. Excluding Parker, we maintain our target for 2025 capital expenditures in a range between $710 and $720 million, including Santa Nobile CapEx of approximately $360 million.

Speaker Change: In the first quarter, we incurred approximately 14 million in costs related to the Parker transaction.

Speaker Change: Legal fees and severance costs, we have made significant progress on capturing our planned synergies from the acquisition.

Speaker Change: The partner business consumer free cash of about $10 million post closing.

Speaker Change: This mainly include a $5 million in accrued interest that was prepaid on the redemption of the Hartford terminal.

Speaker Change: $6 million in capital expenditures.

Speaker Change: Capex for the first quarter was $144 million excluding partner.

Speaker Change: First with $241 million in the prior quarter.

Speaker Change: This includes $47 5 million for the Senate Newbuild program.

Speaker Change: Excluding Parker, we maintain our target for 2025 capital expenditures in a range between seven and 10 and $720 million.

Speaker Change: <unk> San of Newbuild capex of approximately $360 million.

William Restrepo: In addition to these legacy expenditures, we expect Parker Catharist of $60 million. For the second quarter, we are currently targeting capital expenditures of approximately $230 million. including Parker Wilber Catholics of 35 Nations. At closing, we took on Parker's gross debt of $178 million. We have since retired that high interest rate obligation by drawing on a revolving credit facility, resulting in immediate interest savings. Our plan is to refinance this debt with a new terminal.

Speaker Change: In addition to these legacy expenditures, we expect Parker Catholics and $60 million.

Speaker Change: For the second quarter, we are currently targeting capital expenditures of approximately $230 million.

Speaker Change: Including park near Wellbore Capex of $35 million.

Speaker Change: At closing we took on Parker's gross debt of 178 million. We have since retired that high interest rate obligation by drawing on our revolving credit facility we.

Speaker Change: Resulting in immediate interest savings our plan is to refinance its debt within the term loan.

William Restrepo: We have launched this transaction and have received positive feedback from several participating At this point, we maintain our annual guidance for both our Nabors Legacy business and for the newly acquired Parker Portfolio. We expect Parker to generate approximately $150 million of his job during the full year of 2025. About $130 million of this EBITDA will be part of Nabors consolidated results for 2025.

Speaker Change: We have launched this transaction and have received positive feedback from several participating banks.

Speaker Change: At this point, we maintained our annual guidance for both our neighbors legacy business and for the newly acquired Parker portfolio.

Speaker Change: We expect Parker to generate approximately $150 million of EBITDA during the full year of 2025.

Speaker Change: How about 130 million of this EBITDA will be part of Nabors consolidated results for 2025.

William Restrepo: as $20 million was realized before close. In addition, we expect to capture approximately $40 million of synergy gain in Nabors 2025 consolidated results.

Speaker Change: As 20 million was realized before closing.

Speaker Change: In addition, we expect to capture approximately $40 million synergy gains and neighbors climbed 25 consolidated results are.

William Restrepo: Our targeted synergy savings in the fourth quarter are approximately $15 million, which translates into at least $60 million in synergy savings for 2020.

Speaker Change: Our targeted synergy savings in the fourth quarter, or approximately 15 million, which translate into at least $60 million in synergy savings for 2026.

Anthony Petrello: With that, I will turn the call to Tony for his concluding remarks. Thank you, William. I will finish this morning with a few points on our last earnings call. I concluded with remarks on industry volatility. I mentioned our objective is to execute through short-term disruptions while keeping neighbors poised to thrive in the future. We have constructed a strong portfolio of diversified businesses reaching major energy markets around the globe. This structure enables us to capitalize on opportunities across markets. Our international reconditions already in hand inform our outlook. With those we have the capability to offset challenges in other markets.

Tony Petrello: With that I will turn the call to Tony for his concluding remarks.

Tony Petrello: Thank you William I will finish this morning with a few points on our last earnings call I conclude with remarks on industry volatility.

I mentioned, our objective is to execute through short term disruptions, while keeping neighbors poised to thrive in the future.

Tony Petrello: We have constructed a strong portfolio of diversified businesses, reaching major energy markets around the globe. This structure enables us to capitalize on opportunities across markets. Our international rig additions already in hand inform our outlook with those we have the capability to offset challenges in other markets I believe we have the right.

Anthony Petrello: I believe we have the right strategy in place, both for today's environment and for the future. I look forward to reporting our progress.

Tony Petrello: Strategy in place both for chase environment and for the future I look forward to reporting our progress. Thank you for your time. This morning, we'll now take your questions.

Anthony Petrello: Thank you for your time this morning.

Operator: We'll now take your questions. We will now begin the question and answer session. To join the question queue, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing any keys. If you wish to withdraw your question, please press star then 2.

Tony Petrello: Yeah.

Speaker Change: We will now begin the question and answer session to join the question queue. You May Press Star then one on your telephone keypad, if you're using a speakerphone. Please pick up your handset before pressing any case.

Tony Petrello: If you wish to withdraw your question. Please press Star then two.

Waqar Syed: The first question is from Waqar Syed with ATB Capital Markets. Please go ahead. Thank you for taking my question. Good morning. Yeah, good morning.

Speaker Change: The first question is from Waqar Sayed with ATB capital markets. Please go ahead.

Tony Petrello: Okay.

Tony Petrello: And thank you for taking my question.

Tony Petrello: Yeah good morning.

Anthony Petrello: The question is, on Sanath, have you started accruing any debt in that JV right now or no, not yet?

Tony Petrello: But the question is on on Salads have you started accruing any debt and debt to JV like no no not yet.

Anthony Petrello: No, and we don't plan to for now, Waqar. There's no need.

Tony Petrello: No and we don't plan to for now Waqar, there's no need.

Anthony Petrello: Okay, and secondly, do you know if Saudi Aramco is finished with the rig releases or do you expect there's still some more to come this quarter?

Tony Petrello: Okay.

Tony Petrello: And secondly.

Tony Petrello: Do you know if Saudi Aramco is a it is finished with the rig releases or you expect are there still some more to come this quarter.

Tony Petrello: So let's.

Anthony Petrello: So let's back up a little bit in terms of what's happened. And let me give you just a thumbnail of where we are right now. So you had last year. You had, on the offshore, you had 32 rigs suspended, and one in this quarter on offshore. And on land, last year you had 31, and this quarter you had eight. So that's 39 total. Now, you also have to bear in mind that on the offshore, there were some additions, only three. But on land, last year, there were 21 additions and seven additions in the first quarter.

Tony Petrello: Let's back up a little bit in terms of what's happened and let me give you just a thumbnail of where we are right now so you had.

Tony Petrello: Last year.

Tony Petrello: You had a.

Tony Petrello: On the offshore you had 2032 rigs suspended and one in this quarter on offshore and unplanned last year, you had 31 and this quarter you had a.

Tony Petrello: So it's 39 total.

Tony Petrello: Now yeah.

Tony Petrello: You also have to bear in mind that on the offshore there was some addition to only three but on land last year. There were 21 additions and seven additions in the first quarter that's 28.

Anthony Petrello: That's 28. So the net result of the delta change was 11 rigs, okay, on land. Obviously, all this activity is on the oil in terms of the reductions, and I think what's underappreciated is the amount of condensate Aramco is generating on their gas production, and that's driving some of this reassessment things in terms of the numbers, in addition to the sort of global oil demand issues. So that's where it sits now, and obviously, in this environment, there's... Everyone has contingency plans, and obviously, Rancho has contingency plans. If things drop, there will be more suspensions. But they haven't called on them yet, given where things are still.

Tony Petrello: So the net result of the outcome of the Delta change was 11 rigs okay on.

Tony Petrello: On land and.

Tony Petrello: Obviously.

Tony Petrello: All of this activity is on the oil in terms of the reductions and I think what's underappreciated.

Tony Petrello: Is that.

Tony Petrello: Is the amount of condensate.

Tony Petrello: <unk> is generating under guess production and that that's driving some of this reassessment things in terms of the numbers.

Tony Petrello: In addition to the sort of global oil demand issues. So that's where it's at now and obviously in this environment there's.

Tony Petrello: Everyone has contingency plans and obviously your grandfather has contingency plans if things drop and it.

Tony Petrello: It will be more more suspensions, but they haven't they haven't called on them, yet given where things are still so everybody is in a wait and see attitude and as we said with respect to sand. It ourselves. We think we're well positioned because number one our existing rigs are basically in the gas play supermajority of that and all our rigs are guests guests capable.

Anthony Petrello: So everyone's in a wait-and-see attitude.

Anthony Petrello: And as we said, with respect to Senate ourselves, we think we're well-positioned because, number one, our existing rigs are basically in the gas play, supermajority of that, and all our rigs are gas-capable. So that's a real benefit we have compared to other people. Great, yeah, that's a great answer.

Tony Petrello: So that's a real benefit we have compared to other people.

Tony Petrello: Okay.

Tony Petrello: Great Yeah, that's helpful and then.

Anthony Petrello: And then, you know, I see in your presentation you expect a restart of a rig in Mexico. Do you have an indication from PEMEX that that's gonna happen or is that just your expectation? Yes, Pemex is keen to get that rig restarted and obviously, as William talked about, we continue to have the dialogue with the customer about payment issues, so that remains an issue, but yes, their plans are still to restart that rig.

Tony Petrello: In your presentation, you expect restart before Reagan Mexico.

Tony Petrello: Do you have an indication from Pemex that that's going to happen or is that just your expectation.

Tony Petrello: Yes, yes, Pemex is keen to get that restarted.

Tony Petrello: And obviously we.

Tony Petrello: <unk> talked about.

Tony Petrello: We continue to have to do.

Tony Petrello: Dialogue with the customer about payment issues, so that remains an issue but yes.

Tony Petrello: Their plans are still to restart that rig.

Anthony Petrello: Waqar, it's in their schedule and we believe it's going to start because it's in their plan already. We obviously need to continue.

Waqar Sayed: Waqar, it's in their schedule.

Tony Petrello: And.

Speaker Change: We believe we believe it's going to start because it's it's in your plan already.

Tony Petrello: We obviously need to continue we had some.

Anthony Petrello: We had some positive news in the first quarter. We did manage to collect roughly the same amount we invoiced, so we stayed in place. But we are working on another transaction now to get a larger payment in the future.

Tony Petrello: Positive news in the first quarter, we did manage to collect so roughly the same amount we invoiced. So we stayed in place.

Tony Petrello: But we are we are working on another transaction now to get a larger payment in the second quarter.

William Restrepo: Great, and Williams you provide some good guidance on the tariffs, which business segment gets hit the most with the tariffs, is it RIC technology or also drilling with the drill pipe and other items? I don't think drill pipe is the biggest hit on our drilling business, it's more like spares, pumps, things like that that over the years we have started to acquire from China, but we have alternate vendors, so the number you saw there is 10 to 20 million, that's a mitigated number, that's a number that we feel we can get down to if we get alternate vendors and we also change our logistics a little bit, today we're very centralized, a lot of the stuff coming even from China comes to the U.S.

Speaker Change: Okay and Williams you provided some good guidance on the tariffs.

Speaker Change: Which business segment get hit the most with the status of that rig technology or other OXXO drilling, but the pipe and others are items I don't think drill pipe is the biggest hit on our drilling business. It's more like spares pumps things like that that are over the year. So we have started to oh.

Speaker Change: Quire from China, but we have alternate vendors and so the number you saw there is $10 million to $20 million. That's a that's a mitigated number that's a number that we feel we can get down to if we.

Speaker Change: I get alternate vendors and we also changed our logistics a little bit today, we're very centralized a lot of the stuff coming even from China comes to the U S. First and then is distributed across our operations for efficiency reasons.

William Restrepo: first and then is distributed across our operations for efficiency reasons, that obviously would change in the scenario that we put in place, which was 145% tariffs. Both of the scenarios, or the range of those scenarios that we said, 10 to 20, assume 145% tariff in China. Were that to change, that number will fall dramatically, of course, because most of that tariff impact is coming from China.

Speaker Change: That obviously would change in the scenario that we put in place, which was 145% tariffs with China both of us in areas with a range of those 10 years, and you said, 10% to 20, and so on 145% tariffs in China.

Speaker Change: Were that to change that number little falls dramatically of course, because most of that tariff impact is coming from China.

David Smith: The next question is from David Smith with Pickering.

Speaker Change: The next question is from David Smith with Pickering. Please go ahead.

David Smith: Please go ahead.

David Smith: Hey, good morning, and thank you for taking my question. I completely agree that Senad stands out as a rare high-return investment in the land rig space with exceptional long-term visibility. And just given your deleveraging priorities, how do you think about the potential to accelerate the value realization from Senad, potentially via an IPO? And should we view that as one of the potential levers you could pull if market conditions deteriorate in the next year or two? I think you can assume that that's paramount on both Aramco and our agenda item. It's the obvious path. When you look at valuations, in the Middle East in particular, you notice there how the reward for the drillers is radically different than what it is here in terms of multiples.

David Smith: Hey, good morning, and thank you for taking my question.

Speaker Change: Good morning to complete.

David Smith: Completely agree that that's an add stands out is that a rare high return on investment and behind her experience with exceptional long term visibility.

David Smith: And just given your deleveraging priorities, how do you think about the potential to accelerate the value realization from San adds potentially via an IPO and should we view that as one one of the potential levers you could pull if market conditions deteriorate in the next year or two.

David Smith: I think you could assume that's paramount on both Aramco NR agenda item.

It's the obvious it would be obvious path when you look at valuations in the middle East in particular, you noticed there how the reward for the drillers is radically different than what it is here in terms of multiples and.

Anthony Petrello: And we think Senate is the most attractive company in the region. It could be in such a scenario. Obviously, we have some preparatory work to do. be done in the meantime and and both parties are looking at that as an option, obviously, so It's pretty clear that is one path to realize value and create enormous share of the value. If you look at our last investor cost slide deck, we put a pro forma valuation of Nabors in it and in it there we do some of the parts analysis and you can see there an analysis for https://www.kenhub.com Perfect.

David Smith: We think is the most attractive company in the in the region it could be in such a scenario obviously, we have some.

David Smith: It's hard work to do.

David Smith: Be done in the meantime.

David Smith: And and.

David Smith: And both parties are looking at that as an option obviously so.

David Smith: It's pretty clear that that is.

David Smith: One path to realize value and create enormous shareholder value. If you look at our last investor call Slide deck, we put our pro forma valuation of neighbors in it and we do a sum of the parts analysis that you see there and analysis for <unk>.

David Smith: Assuming you get you can extract that kind of multiple and the uplift of course is enormous and that unfortunately, one of the long range potentials in stock over the next few years because of it we can pull that off.

David Smith: I appreciate it. And follow up if I may.

David Smith: Perfect I appreciate it and a follow up if I may William.

William Restrepo: William, thank you for the detailed comments on the synergies expected from the Parker acquisition, including the $15 million run rate for Q4. Can you give any color on what these additional synergy opportunities that you're seeing are in excess of the $35 million that was originally guided when the acquisition was So obviously when we gave the guidance initially we did not have our hands on the company yet and a lot of the information was in a clean room so we didn't have some of the data that later came when we assumed control of the company indicated that corporate cost reductions would be a bit higher and we had more overlap in particular areas of overhead costs that would be taken out as we integrate our operations.

Speaker Change: William Thank you for the detailed comments on the synergies expected from the Parker acquisition, including the $15 million run rate for Q4.

Speaker Change: Can you give any color on what these additional synergy opportunities that you're seeing.

Speaker Change: <unk> in excess of the $35 million that was originally guided when the acquisition was announced.

Speaker Change: So obviously when we gave the.

Speaker Change: Guidance initially we did not have our hands on the company, yet and a lot of information with in a clean room. So we didn't have.

Speaker Change: Some of the data that later came when we are when we assumed control of the company.

Speaker Change: Indicated that the corporate corporate cost reductions would be a bit higher and we had more overlap in particular areas.

Speaker Change: Overhead costs that could be taken taken out as we integrate our operations. So that's where that is mostly coming from other improvement in terms of real estate another.

William Restrepo: So that's where that mostly is coming from. There's other improvements in terms of real estate and other particular contracts that we also can get out of and now we have more certainty of. So, so those are the main components.

Speaker Change: Particular contracts that we also can get out of and now we have more certainty of that so so those are the main components.

David Smith: Thank you very much.

Speaker Change: Okay. Thank you very much.

Arun Jayaram: The next question is from Arun Jayaram with J.P. Morgan. Please go ahead. Good morning. Good afternoon, gentlemen. Good morning.

Jerry Allen: The next question is from Iran. Jerry Allen with J P. Morgan. Please go ahead.

Jerry Allen: Good morning, good afternoon gentlemen.

Jerry Allen: Morning.

Arun Jayaram: I really appreciate the deck that you put out in mid-March, which highlighted the inner workings around SONOD, so that was really, really helpful. Tony, I want to get your perspective. You have, obviously, 15 new builds thus far under the 50-rig award, which have been either in the field or under construction. What is your sense on the timing of the next five new build awards? And I just wanted to confirm that you are still on track for over $300 million of adjusted EBITDA from SONOD for 2025. Yes. There has been no change in the schedule, and as we said in the prepared remarks, the next group is working its way through the system right now.

Speaker Change: I really appreciate the deck that you put out in mid March which highlight or are the innerworkings around sadat. So that was really really helpful.

Speaker Change: Tony wanted to get your perspective, you have obviously 15.

Speaker Change: New builds are thus far under the 50 rig award, which had been you know either in the field or are under construction. What's your sense on the timing of the next five Newbuild origin I just wanted to confirm that you're still on track.

Speaker Change: For over $300 million of adjusted EBITDA from from Sun odd for 2025.

Speaker Change: There's been no change in the in the schedule or in essence.

Speaker Change: You said there in the prepared remarks. The next the next group is working its way through the system right now so right now we haven't seen.

Anthony Petrello: So right now, we haven't seen any rethinking or backtracking on the new build program at all, and ARAMCO has been pretty clear about it. And obviously, we're following their lead, and I can never say never, but as far as we know right now, there's been no change in schedule at all.

Speaker Change: And a re rethinking or backtracking on the Newbuild program at all.

Speaker Change: Aramco has been pretty clear about it and you know obviously, we're following their lead and I can never say never but as far as we know right now there's been no change the schedule at all.

Anthony Petrello: So initially, Arun, just to give a little bit more color, we have discussions with Aramco on what their needs are, which are heavily oriented towards natural gas right now. And once that is determined, then we order the rig from the local provider based on an award. So the award comes first, and then we make appeal for the rig, and then we start building the rig. So that's how it works.

Speaker Change: So initially Arun just to give a little bit more color.

Speaker Change: We have discussions with aramco.

Speaker Change: What their needs are which are heavily oriented towards natural gas right now and once that is determined then we order the rig.

Speaker Change: From.

Tony Petrello: From the local provided provider based on an award. So the award comes first and then we already make appeal for the rigor and then we start building the right. So that's how it works. If you look at the last year and a half or Tony was talking about these suspensions and additions.

Anthony Petrello: If you look at the last year and a half, when Tony was talking about the suspensions and additions, we have had three rigs suspended, and mainly oil-type rigs and smaller rigs, and we've added six new builds for Sana. Nabors is net plus three over that period. Understood. Great.

Tony Petrello: We have had three rigs to spend it and mainly oil type rigs in smaller rigs and we've added six new builds.

Tony Petrello: So nave versus net plus three over that period.

Speaker Change: Understood Great and my follow up so a bit of a housekeeping question in the in the slide deck you guys highlighted how and this is on slide 25, just for reference you gave us.

William Restrepo: And my follow up is a bit of a housekeeping question. In the in the slide deck, you guys highlighted how, and this is on slide 25, just for reference, you gave us, you know, pretty detailed EBITDA, Outlook for 2Q by segment. Could you give us a sense of what the corporate line item could look like in 2Q with the full quarter of contribution from Parker. I believe the previous guide that you had in the March deck was about $48 million in annual corporate costs for Parker, but I know there's some Synergy cash. We're just trying to get what a good corporate run rate would be for the second quarter.

Tony Petrello: Pretty detailed EBITA.

Tony Petrello: Our outlook for two Q by segment can you give us a sense of what the corporate line item could look like in.

Two Q with a with a full quarter of contribution from Parker I believe the previous guide was.

Tony Petrello: That you had in the March <unk> was about 40 million 48 million and annual corporate cost for Parker, but I know theres. Some synergy capture just trying to get what a good corporate run rate would be for the second quarter.

Tony Petrello: I think for the second quarter of course, we will not have captured the full synergies.

William Restrepo: I think for the second quarter, of course, we will not have captured the full synergies. so that the Parker contribution should increase throughout the remainder of the year. I think we've given sufficient guidance to construct what the EBITDA would be. And obviously it'll be a very large increase given the Parker full quarter contribution, but we also think the legacy business will increase somewhat as well. And I think that the Parker contribution as a whole for the company, though, we gave you some components, but I think the EBITDA for Parker alone should be in the mid 40s.

Tony Petrello: So some of that.

Tony Petrello: <unk> contribution should increase throughout the remainder of the year I think we've we've given sufficient guidance to construct what the EBITDA would be.

Tony Petrello: And obviously it'll be a very large increase given.

Tony Petrello: Given the Parker full quarter contribution, but we also think the legacy business.

Tony Petrello: It will increase somewhat as well so.

Tony Petrello: Okay, and I think that the Parker contribution as a whole for the company, though we gave you some components, but I.

Tony Petrello: I think the EBITDA for Parker alone should be.

Tony Petrello: And the mid Forty's or.

William Restrepo: for the for the company. Okay. Great. Thanks a lot, William.

Tony Petrello: Finally, the company Okay.

Tony Petrello: Okay.

Tony Petrello: Great. Thanks, a lot for him.

Keith Mackey: The next question is from Keith MacKey with RBC, please go ahead. Hey, good morning. Thanks for taking my questions. I just wanted to start out on the survey that you talked about of your 14 or 14 customers with the recount going down 4% through the end of the year. Just curious on the timing on that. Was that after the tariff announcements or during or before? And so therefore, do you think that that impact would be reflected in that 4% or is there likely some additional thinking that needs to be done based on that announcement on April 2nd?

Speaker Change: The next question is from Keith Mackey with RBC. Please go ahead.

Keith Mackey: Hey, good morning, and thanks for taking my questions.

Speaker Change: Just wanted to start out either.

Speaker Change: Just wanted to start out on the survey that you talked about one of your 14 or 14 customers.

Speaker Change: Our rig count going down 4% through the end of the year. Just curious if you know on the timing on that was that after the impact of the REIT was that after the tariff announcements or during or before and so therefore do you think that that impact it would be reflected in that 4% or is there likely some.

Speaker Change: Some additional thinking that needs to be done based on that announcement on April.

Anthony Petrello: Yes, it was after. The question is does any of that get rethought if things reverse itself obviously is one outstanding issue or the other way things get worse then does it get reassessed even more given that it happened right after the announcement but it was after. So people...that was taken into account by people which... I think that, in part, reflects in the numbers that you heard about. The interesting thing for us is that... You know, if you look at our mix of customer. You know, in the first quarter, we had a huge, a huge shift in activity.

Speaker Change: Yes, it was after so.

Speaker Change: It was after.

Speaker Change: Okay. The question question is does any of that get rethought, if things reverse itself obviously.

Speaker Change: It's one one outstanding issue.

Speaker Change: Or and or the other way if things get worse than that to get reassessed, even more given that it happened right. After right. After the announcement, but it was after so people that was taken into account by people, which.

Speaker Change: I think that in part reflects in the numbers that you see that you heard about the interesting thing for us is that.

Speaker Change: If you look at our mix of customer.

Speaker Change: Okay.

Speaker Change: In the first quarter, we had a huge a huge shift in activity. We entered I think we entered the quarter and year ended 64.

Anthony Petrello: You know, we entered the, I think we entered the quarter at the year end at 64. And then we hit low of 58 and then we exited at 62. And that, that mixed was a mix where we shifted part of our customer base from the large, the large.

Speaker Change: And then we hit low of 58 and that we exited at 62 and that that mix was a mix, where we shifted part of our customer base from the large the large.

Anthony Petrello: of Douglas Goldstein, CFP®, is the director of Profile Investment Services and the host of the Goldstein on Gelt radio show. If you look at our mix of customers, I think even relative to our competitors, we're dominated by the large customers in our basic mix, which I think does give us a little stability going forward because they tend to stick with it. Although you can't make generalizations because some large independents in this market have aggressively moved to respond to things. So it's hard to get one generalization. But I would note we had a little bit of a shift in the customer mix to privates, but even with that, we're still dominated by the large public.

Speaker Change: Publix and base.

Speaker Change: Basically two private is a little bit, but even with that mix. If you look at our mix of customers say.

Speaker Change: Think even relative.

Speaker Change: To our competitors, we still have a were dominated by the large customers in our in our basic mix, which.

Speaker Change: I think does give us a little stability going forward because they tend to stick stick with it although you can't make generalizations, but some large independents in this market have aggressively moved to respond to things. So it's hard to get one generalization, but I would note we had a little bit of shift in the customer mix to privates, but even with that.

Speaker Change: We're still dominated by the large publics.

Anthony Petrello: Thanks for the color and just on the international side guiding to margins well above 17k per day Can you just talk to us a little bit more about the mix of the rigs you're adding in international versus the rigs that are going down in international and, you know, are all of the, say, rigs you'd be adding... a creative two-year average margin not just the San Ed rigs or maybe help us think through that a little bit so we can get a better sense of where the margin could ultimately go through the year would be appreciated I think, directionally, there's no question that it should be accretive in the sense that the Senate new bills, obviously, are much higher day rate margins than are averaged today.

Speaker Change: Makes sense, thanks for the color and just on the international side.

Speaker Change: Guiding to margins well above 17 K per day.

Speaker Change: Uh huh.

Speaker Change: Can you just talk to us a little bit more about the mix of the rigs youre, adding in international versus the rigs that are.

Speaker Change: Going down in international and and you know our or all of the say rigs you'd be adding.

Speaker Change: Accretive to your average margin not just the San add rigs or maybe help us think through that a little bit. So we can get a better sense of where the margin could ultimately go through the year would be appreciated.

Speaker Change: I think directionally, there's no question that it should be accretive in the sense that the sad decided a new builds obviously our <unk>.

Speaker Change: Much higher day rate margins than our average today and even the Kuwait rigs of course are also higher so.

Anthony Petrello: And even the Kuwait rigs, of course, are also higher. So, you know, in the second quarter, for example, you got five of those rigs are the Senate new bills and three are Kuwait. So that right there, that should all be directionally accretive. And in Latin America, you know, It's somewhat accretive. I think it depends exactly on the type of rig, but rigs redeployed from the U.S. down there are typically also going to be accretive. So the ones that are going down are Russia, basically where negative cash flow and zero EBITDA kind of, so that's certainly going to be good for margins going forward on an average basis.

Speaker Change: In the second quarter. For example, you got five of those rigs are besides new builds and three or Kuwait.

Speaker Change: Alright there.

Speaker Change: It will be Directionally accretive.

Speaker Change: In Latin America.

Speaker Change: Got it.

Speaker Change: It's somewhat accretive I think it depends exactly on the type of rig or rigs redeployed from the U S down they're typically also going to be accretive.

Speaker Change: So the ones that are going down or in Russia, basically were negative cash flow and zero EBITDA kind of [laughter].

Speaker Change: So that's certainly going to be good for margins going forward on an on year on an average basis.

Anthony Petrello: Of the ones that are going down, the one that was meaningful was the one in Papua New Guinea. But on the other hand, we also have a Mexico rate coming up, which is also high margins. So I think all in all, high margins for the rigs coming on and low margins for most of the rigs that are going down. Got it.

Speaker Change: Of the ones that are going down to one that was a meaningful was the one in Papua New Guinea.

Speaker Change: But on the other hand, we also have in Mexico rig coming up which is also high high margin. So I think all in all.

High margins for the rigs coming on.

Speaker Change: And.

Speaker Change: Low margin for most of the rigs that are going down.

Speaker Change: Got it and one more if I could sneak it in just on the on the <unk>.

Anthony Petrello: And one more, if I could sneak it in, just on the SANAD new build timing from, say, award to delivery or award to when they start drilling, what roughly is that timing now? Like, how long would it take if you got an award, say, today to get a rig built in the field? about one year from award to deliver. And by the way, we think over the next couple months, we will get the POs, the awards and consequently over the rig. Okay, thanks very much. I'll just qualify that though. It takes one year from award to delivery, but obviously we do.

Speaker Change: Dan add.

Speaker Change: Newbuild timing from say.

Speaker Change: Award to delivery or award to when they start drilling what what roughly.

Speaker Change: Is that timing now like how long would it take if you got an award say today to get to to get a rig built in in the field.

Speaker Change: About one year from award to delivery.

Speaker Change: And by the way, we think over the next a.

Speaker Change: A couple of months.

Speaker Change: We will get the fields.

Speaker Change: The awards and consequently order the rigs.

Speaker Change: Okay.

Speaker Change: Got it okay. Thanks very much.

Speaker Change: Yes.

Speaker Change: I'll I'll just.

Speaker Change: Quantify that though it takes one year from award to delivery, but obviously, we do.

Anthony Petrello: We do order the rigs for deliveries that are a little bit phased, so we don't have all five rigs arriving on the same day. That would be not manageable in terms of bringing five rigs up at the same time.

Speaker Change: We do we do order the rigs for deliveries that are a little bit.

Speaker Change: Phased or so we don't have all five rigs are running on the same day that would be.

Speaker Change: Not not manageable in terms of bringing five weeks up at the same time.

Jeff LeBlanc: The next question is from Jeff LeBlanc with TPH. Please go ahead. Good morning, Tony and team. Thank you for taking my question.

Speaker Change: The next question is from Jeff Leblanc with T. P. H. Please go ahead.

Jeff LeBlanc: Good morning, Tony and team. Thank you for taking my questions.

Speaker Change: Sure.

William Restrepo: I just wanted to see if you could talk about Quayle's exposure to the steel tariffs and how any tariffs are considered in the outlook for Quayle and then Parker more broadly. Thank you. some impact but we think the impact with logistics as we refer to in terms of our sourcing capabilities as well as customer negotiations it should be a limited impact on Quail and you know I know NOV's comments about the tariffs in terms of their ability to deal with it so they're obviously one supplier but not our only one and you know some of the stuff has already been pre-planned so I think all in all we think between customer responses and and the other logistics aspects we can we can handle it pretty well.

I just wanted to see if you could talk about the <unk> exposure the steel tariffs and how.

Speaker Change: Any tariffs or considered and your outlook for quail in Parker more broadly.

Speaker Change: Thank you.

Speaker Change: I think I think there's going to be.

Speaker Change: Some impact, but we think the impact.

Speaker Change: Logistics.

Speaker Change: Referred to in terms of our sourcing capabilities as well as customer negotiations it should be a limited impact on coil.

Speaker Change: And I know <unk> comments about the tariffs in terms of their ability to deal with it so they're obviously, one supplier, but not our only one and.

Speaker Change: Some of the stuff that's already been pre plan. So I think all in all we think between customer.

Speaker Change: Responses in <unk> and the other logistics aspects, we can we can handle it pretty well.

Speaker Change: That's the way to go.

William Restrepo: The majority is not coming from China. We also are getting some deliveries from Europe and some from the U.S. So the part that's from China needs to be mitigated. And, you know, obviously conversations with clients will be very important in getting that. that part mitigated. Thank you very much for the call.

Speaker Change: The majority is not coming from China. We we also are getting some deliveries from Europe and some from the U S. So so the part that's from China needs to be mitigated and you know obviously.

Speaker Change: Conversations with clients will be very important in getting that Oh.

Speaker Change: That part mitigated.

Speaker Change: Okay. Thank you very much for the color I'll hand, the call back to the operator. Thank you.

Operator: I'll hand the call back to the operator.

John Daniel: And the final question is from John Daniel with Daniel Energy Partners. Please go ahead. Morning, John. Good morning, guys. Thanks for including me. I just have two quick ones.

Speaker Change: And the final question is from Jeff John Daniel with Daniel Energy Partners. Please go ahead.

Speaker Change: Good morning.

Good morning, guys. Thanks for including me I just have two quick ones first Tony if the tariffs conundrum persist would you expect to see any pushback from international operators on U S service providers.

John Daniel: First, Tony, if the tariff conundrum persists, would you expect to see any pushback from international operators on U.S. service providers? No. Okay, and I mean, I think the yeah. The amount of multi-directional transfers of stuff, I think, mitigates everything in the international court. And then when you all did this survey. I think me and John that we're going to have a negative thing for U.S. providers because. The clients are set at the U.S. or did you mean the cost? I'm just saying if they're pissed off, you know, our policies and they want to push back on our industry, that's all.

Speaker Change: No.

Speaker Change: Okay.

Speaker Change: And then [laughter] I mean, I think the yeah.

Speaker Change: Yeah.

Speaker Change: I think Thats fine I was just curious how does humana.

Speaker Change: Not directly Batman multi directional transfers of stuff I think mitigates everything in the Internet part yes.

Speaker Change: And then when you all did this sorry, John that we're gonna had a negative change for U S providers because the clients are set at the U S or the domain of cost wise.

Speaker Change: I'm, just saying that they're pissed off you know our policy they want to push back on our industry. That's all.

Anthony Petrello: I don't think so. We have a lot of other problems for people to push back on. I don't think translating that one problem to all the other jurisdictions is something that... is happening right now. Fair enough. I was just curious.

Speaker Change: No I don't.

Speaker Change: So we have a lot of other problems.

Speaker Change: For people to push back on I don't think translating that one problem to all the other jurisdictions is something that.

Speaker Change: It's happening right now.

Speaker Change: Fair enough I was just curious the second one when you all did this survey this quarter would you re positively or negatively surprised by their responses.

Anthony Petrello: The second one, when you all did the survey this quarter, were you positively or negatively surprised by the response? I was, I was actually I was positively surprised in the sense that with all the negativity out there, I was looking to see that the numbers, especially given the timing that was going to be falling off the cliff, it would be falling off the cliff, but it wasn't, which that's why I gave you some comments about our customer base as well. But, yeah, I think from my own personal point of view, I don't know what speaking for the other operating guys, what they all thought, but from my own personal point of view, I was more pleasantly surprised because I thought given what happened, what, right after we did this thing that panic would have been set in, but it had not happened yet.

Speaker Change: I was.

Speaker Change: I was actually.

Speaker Change: Positively surprised in the sense that with all the negativity out there I was just I was looking to see that.

Speaker Change: Especially given the timing that was going to be falling off a cliff.

Speaker Change: It will be falling off the cliff, but it wasn't which that's why I gave you some comments about our customer base as well, but yeah I think from my own personal point of view I don't know what speaking together pretty guys, what they thought but my own personal point of view I was.

Speaker Change: Pleasantly surprised because I thought given given what happened what right. After we did this thing that kind of equity.

Speaker Change: But it had not happened yet so whether that's again when theres a delayed reaction that at work I can't tell you and obviously like reaching $60 or $60. Today say is that the kind of call. It say I want to have this kind of conference call on but.

Anthony Petrello: So, whether that, again, whether there's a delayed reaction at work, I can't tell you, and obviously, like, we're breaching $60 today, $60 today, saying I want to have this kind of conference call on, but, you know, leaving those things aside, I think I was positively impacted. And by the way, you know, I was even more positively impressed by the fact that our customer base tends to be a little bit skewed. We have a lot of majors and big guys, which are some of the guys in cutting because of the consolidation and that number seems really mitigated, but more impressive to me is what the team has done because in the first quarter, we saw a lot of that as well.

Speaker Change: Maybe those things aside I think it was probably impacted and by the way you know I was even more positively impressed by the fact that our customer base tends to be a little bit skewed we have a lot of majors and big guys, which is it sounds like the hiring because of the consolidation and.

Speaker Change: And that number seems really mitigated, but more impressive to me is what the team has done.

Speaker Change: Because in the first quarter, we saw a lot of that as well right, but they have managed to replace the rigs with other clients that are not necessarily in our survey and theres been some growth in other clients that have not been traditional clients for us over the past year or so and we have and we've gained some ground with those clients to the.

Anthony Petrello: Right? But they have managed to replace the rigs with other clients that are not necessarily in our survey and there's been some growth in other clients that have not been traditional clients for us over the past year or so and we've gained some ground with those clients to the point that our recount went up quite a bit from our trough in the first quarter to what we're standing today. Yeah, we are at sixty. We are at sixty four today. So before we just got an email. Yeah. So we just get there you go. Anyway, but like I said, but I get it all in the context of what's happening in the world today.

Speaker Change: Point that our rig count went up quite a bit from our trough in the first quarter to what where we're standing today.

Speaker Change: Yes.

Speaker Change: At <unk>, we are at 64 today. So just before we just got an email yeah I was just going to be very good.

Speaker Change: But like I said.

Speaker Change: But again, it's small in the context of what's happening in the world. Today. So there is absolutely no guarantees about rig count given what's happening in the world. That's for sure Yeah totally got it all right Hey, guys. Thanks for including me.

John Daniel: So, there's absolutely no guarantees about recount given what's happening in the world. That's for sure. Yeah. Totally get it. Hey, guys, thanks for including me. Thank you John.

Tom: John It's Tom.

Operator: This concludes our question and answer session. I'd like to turn the conference back over to Mr. Conroy for any closing remarks. Thank you everyone for joining us today. If you care to follow up, please reach out to us and Gaylene with that, we will conclude the call. Thank you. The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Tom: This concludes our question and answer session I'd like to turn the conference back over to Mr. Conroy for any closing remarks.

Speaker Change: Thank you everyone for joining us today, if you care to follow up please reach out to us some gay lane with that we will conclude the call.

Speaker Change: Thank you. The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker Change: [music].