Oilfield services firm Nabors Industries to buy Parker Wellbore (updated)

Nabors Industries

15/10/2024 15:25

(Adds shares in paragraph 3; analyst comments in paragraphs 6 &
7)
    By Vallari  Srivastava 
       Oct 15 (Reuters) - Nabors Industries  NBR.N  on Tuesday
agreed to buy drilling services provider Parker Wellbore as the
oilfield services company aims to expand its global drilling
business.
    The company would acquire the privately held Parker for 4.8
million shares of Nabors' common stock, subject to a share price
collar, and the assumption of net debt of about $100 million.
    As of Nabors' last close, the 4.8 million shares translate
to $372.1 million, as per Reuters calculation. Shares of the
company were down 3% in morning trade.
    Oilfield service providers are increasingly pursuing mergers
and acquisitions, as they navigate operational and pricing
challenges while catering to customers who have cut spending on
new wells in favor of investor returns.
    A collar refers to an options strategy to protect against
significant losses amid short-term volatility in the market.
However, this strategy can also limit potential profits.
    "The deal adds tubular rental and repair services operations
to Nabors' portfolio. With well lateral lengths continuing to
increase, demand for tubular rental services exceeds overall
market growth," said ATB Capital Markets analyst Waqar Syed in a
research note.
        Parker's casing running business complements Nabors'
tubular services business, and should strengthen its drilling
solutions segment, Syed added.
    The deal is expected to close in early 2025 and is estimated
to be immediately add to Nabors' free cash flow along with
savings of $35 million.

 (Reporting by Vallari Srivastava in Bengaluru; Editing by
Shailesh Kuber)
 ((Srivastava.Vallari@thomsonreuters.com;))