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Nabors Announces Second-Quarter EPS of $0.21 after net charges of $0.03 per share

July 22, 2014

Second-Quarter Highlights Include:

HAMILTON, Bermuda, July 22, 2014 /PRNewswire/ — Nabors Industries Ltd. (NYSE:NBR) today reported its financial results for the second quarter of 2014. Operating revenues and earnings from unconsolidated affiliates for this quarter totaled $1.62 billion, compared to $1.50 billion in the same quarter of the prior year and $1.59 billion in the first quarter of 2014. Net income from continuing operations was $65.7 million or $0.21 per diluted share, compared to $28.1 million or $0.08 per diluted share in the second quarter of 2013 and $49.0 million or $0.16 per diluted share in the first quarter of 2014. The second quarter earnings per share include net charges of $0.03 per share, primarily related to losses on the sale of non-core assets or in unconsolidated businesses in the process of being divested.

Tony Petrello, Nabors’ Chairman, President & CEO, commented, “Operationally, our second quarter represented solid improvement in all of our larger segments, partially offset by the usual seasonal weakness in Canada and Alaska. Our U.S. land operations led the way with improved pricing and a significant increase in rig activity. Completion & Production Services recovered sharply with fewer interruptions and improving pricing and utilization. Our International results also improved as the initial contribution of new rig startups more than compensated for the temporary suspension of several existing rigs.

“Strategically, we achieved a major objective through the signing of a definitive agreement with C&J Energy Services to combine their operations with our Completion & Production Services segment to form a leading oilfield services provider with increased critical mass, broader geographic presence and strong international potential. I view this as one of those rare transactions where both companies’ shareholders stand to benefit in ways other than just strong accretion potential. The combination of this segment of our business with a well-respected management team enables us to better concentrate our resources on bolstering our position as a preeminent global drilling company, while retaining the emerging upside of those operations. Similarly, C&J immediately multiplies the size and breadth of its business, greatly expands its opportunity set, and inherits a highly capable operating team. We anticipate the closing of the transaction to occur in the fourth quarter.

“Notably, in the second quarter we received long-term contract awards for an additional eight PACE(®)-X rigs in the U.S. market. We continue to see strong demand for new rigs, both domestically and internationally, leading us to significantly increase our new rig production schedule. We also completed the sale of four of our non-core U.S. Offshore rigs and entered into a definitive agreement to divest our Alaska oil and gas holdings. In the aggregate these transactions are expected to yield nearly $100 million in cash proceeds.”

Operating cash flow (EBITDA) was $416.3 million for the second quarter, compared to $355.8 million in the same quarter last year and $391.2 million in the first quarter of this year. Adjusted income from operating activities was $133.5 million, compared to $89.6 million in the second quarter of 2013 and $109.0 million in the first quarter of 2014.

Drilling & Rig Services

Operating income in the Drilling & Rig Services business line was down approximately $5.7 million sequentially at $149.8 million. This unit also saw a similar decrease in operating cash flow, which was $376.8 million. These represent modest decreases considering the normal seasonal decrease in Canada and Alaska, approximating $40 million in the second quarter. The quarter’s operating income reflects a 50% increase over the same period of last year, illustrating the strength of demand for rigs across virtually all global regions.

In North America, U.S. Drilling results showed substantial improvement in sequential income at $90.0 million despite seasonally lower results in Alaska. This improvement was largely attributable to increases in both utilization and pricing in the Lower 48 operation that amounted to 11 rigs and $600 in daily rig margins. The outlook remains strong with growing pad rig demand, particularly in the Permian and South Texas, as indicated by the award of eight additional PACE(®)-X rigs. This brings the total number of PACE(®)-X rig commitments to 34 and covers all new-builds scheduled to be deployed into early next year. AC rig utilization remains high at 95% with only one rig on standby revenue versus 11 rigs two quarters ago.

Activity in Alaska is expected to be less seasonal going forward, with increases in year-round work expected through 2016 and further upside from pending new rig awards. Near-term Gulf of Mexico offshore activity is expected to be slower with the onset of hurricane season. However, the intermediate term will benefit from the commencement of a large new deepwater platform drilling rig around the end of this year.

International operating income of $50.6 million continued to improve sequentially as the initial contribution from several new startups more than compensated for a temporarily lower rig count in a few areas. Jackup rig 660 returned to work mid-quarter, but its contribution was offset by unanticipated downtime on two other smaller jackups which are expected to return to operations in the near future. As anticipated, two platform rigs in India and six land rigs in Mexico were down for most of the quarter but have good prospects to return to work. The Company’s bullish outlook for the near and intermediate term remains intact as new rig deployments accelerate and rates increase with contract renewals, further bolstered by the potential for additional new rig awards.

Rig Services’ operating income was $9.1 million, representing a sizable improvement in Canrig and Ryan which was partially offset by a loss in an unconsolidated affiliate. Canrig’s backlog increased to an all-time high, roughly half of which is third-party related.

Completion & Production Services

The Completion & Production Services business line recorded operating income of $29.3 million, with operating cash flow of $85.9 million. Although the second quarter was still impacted by weather and other utilization interruptions, including sand supply, results rebounded sharply from the weather-induced weakness of the first quarter. The sequential improvements in operating income amount to $33.1 million in completion operations and $2.7 million in U.S. Production Services despite key customer budget reductions in California. These improvements were partially offset by a $3.4 million sequential decrease in Canada due to the spring breakup. The outlook for the completions business has improved markedly in a relatively short time as increases in demand, particularly in West and South Texas, have increased utilization to a high level. Today this operation’s pumping calendar is fully committed into early next year, including a second 45,000 HHP dual-fuel spread which will deploy in early fourth quarter. Price increases are being implemented in the more active markets with further price increases agreed to take effect shortly in all other regions outside of the northeast. These increases, along with continuing cost reductions, suggest a significant improvement over the balance of this year and a strong 2015. The long-term demographics for Production Services continue to indicate a strengthening market despite some near-term pockets of weakness.

Financial Discussion

Earnings per share for the second quarter included several items that had a net impact of $0.03 cents per diluted share. During the quarter the Company disposed of several non-core assets–barges and other rigs–that generated losses of $0.02 per share. In addition, the development of the C&J transaction led the company to redeem at a loss preferred shares relating to the Superior Well Services acquisition, with an unfavorable impact of $0.01 per share. Finally, the unconsolidated Alaska construction business, which is in the process of being divested, yielded a loss of $0.01 during the quarter. These items were all partially offset by income tax benefits related to the filing of 2013 tax returns in a foreign jurisdiction.

SG&A for the second quarter of $133.6 million was in line with the first quarter with a slight sequential reduction of $0.6 million. Higher investment income on the sale of certain financial assets was essentially offset by a similar increase in foreign-exchange losses. The effective tax rate during the quarter was 13.8%, primarily reflecting the above-mentioned benefits. Capital expenditures of $458 million for the quarter were below forecast and largely associated with the construction of new and upgraded rigs. Nonetheless, expenditures for the full-year should reach the upper end of prior guidance of $1.8 billion with the additional PACE(®)-X rigs and the potential for additional international awards yet this year.

William Restrepo, Nabors’ Chief Financial Officer added, “We are pleased with the progress made during this quarter and the confirmation of the trends we highlighted during our first quarter conference call. Specifically, the C&J transaction together with the sale of several rigs and E&P assets clearly demonstrate our commitment to focus our resources on those businesses where we are able to generate attractive returns on capital and that are strategically aligned with our areas of strength. Further, the profitability improvement initiatives are well under way. We are starting to see their impact on our financial results and in the cost of building our rigs. And finally, the market has improved as we expected, with higher fracturing service intensity and incremental demand for higher specification drilling assets. During the second half of the year, we expect these favorable trends to contribute to further improvement and to boost the impact of the expected acceleration in international rig deployments.”

Summary and Outlook

Petrello concluded, “It is becoming increasingly apparent that virtually every element of our business is experiencing improving fundamentals manifested through improving utilization and pricing. Construction of the numerous new rigs we have in progress remains on track and within budget. The contribution of these deployments combined with a favorable pricing environment across every market and the incremental demand for new rigs globally yield a high degree of growth visibility for the foreseeable future. We are particularly optimistic about the growth prospects for our venture with C&J in the Completion & Production Services business.”

About Nabors

The Nabors companies own and operate approximately 496 land drilling rigs throughout the world and approximately 544 land workover and well servicing rigs in North America. Nabors’ actively marketed offshore fleet consists of 36 platform rigs in the United States and multiple international markets. In addition, Nabors is one of the largest providers of hydraulic fracturing, cementing, nitrogen and acid pressure pumping services with approximately 800,000 hydraulic horsepower currently in service. Nabors also manufactures top drives and drilling instrumentation systems. Nabors participates in most of the significant oil and gas markets in the world.

The information above includes 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 Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, Nabors’ actual results may differ materially from those indicated or implied by such forward-looking statements. The projections contained in this release reflect management’s estimates as of the date of the release. Nabors does not undertake to update these forward-looking statements.

MEDIA CONTACT:

Dennis A. Smith, Director of Corporate Development & Investor Relations, +1 281-775-8038. To request investor materials, contact Nabors’ corporate headquarters in Hamilton, Bermuda at +441-292-1510 or via e-mail at mark.andrews@nabors.com

                                                             NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                                                            CONSOLIDATED STATEMENTS OF INCOME (LOSS)

                                                                           (Unaudited)

                                     Three Months Ended                            Six Months Ended
                                     ------------------                            ----------------

                                     June 30,             March 31,                                  June 30,
                                     --------             ---------                                  --------

    (In thousands, except per
     share amounts)                                  2014                   2013                                    2014       2014        2013
                                                     ----                   ----                                    ----       ----        ----

    Revenues and other income:

       Operating revenues                      $1,616,981             $1,457,966                              $1,589,618 $3,206,599  $2,993,444

       Earnings (losses) from
        unconsolidated affiliates                   (576)                 1,360                                 (2,445)   (3,021)      4,255

       Investment income (loss)                     7,066                 14,821                                     980      8,046      94,242

          Total revenues and other
           income                               1,623,471              1,474,147                               1,588,153  3,211,624   3,091,941
                                                ---------              ---------                               ---------  ---------   ---------

    Costs and other deductions:

       Direct costs                             1,066,495                972,310                               1,061,739  2,128,234   1,967,302

       General and administrative
        expenses                                  133,630                131,202                                 134,266    267,896     262,080

       Depreciation and amortization              282,820                266,210                                 282,127    564,947     535,575

       Interest expense                            46,303                 60,273                                  44,810     91,113     120,284

       Losses (gains) on sales and
        disposals of  long-lived
        assets and other expense
        (income), net                              16,504                  9,242                                   1,476     17,980      68,979

          Total costs and other
           deductions                           1,545,752              1,439,237                               1,524,418  3,070,170   2,954,220
                                                ---------              ---------                               ---------  ---------   ---------

    Income (loss) from continuing
     operations before income
     taxes                                         77,719                 34,910                                  63,735    141,454     137,721
                                                   ------                 ------                                  ------    -------     -------

    Income tax expense (benefit)                   10,756                  6,032                                  14,008     24,764      15,886

    Subsidiary preferred stock
     dividend                                       1,234                    750                                     750      1,984       1,500
                                                    -----                    ---                                     ---      -----       -----

    Income (loss) from continuing
     operations, net of tax                        65,729                 28,128                                  48,977    114,706     120,335

    Income (loss) from
     discontinued operations, net
     of tax                                       (1,032)              (26,873)                                  1,515        483    (19,862)
                                                   ------                -------                                   -----        ---     -------

    Net income (loss)                              64,697                  1,255                                  50,492    115,189     100,473

         Less: Net (income) loss
          attributable to
          noncontrolling interest                   (253)               (5,616)                                  (573)     (826)    (5,713)

    Net income (loss) attributable
     to Nabors                                    $64,444               $(4,361)                                $49,919   $114,363     $94,760
                                                  -------                -------                                 -------   --------     -------

    Earnings (losses) per share:
     (1)

       Basic from continuing
        operations                                   $.21                   $.08                                    $.16       $.37        $.41

       Basic from discontinued
        operations                                      -                 (.09)                                    .01          -      (.09)
                                                      ---                  ----                                     ---        ---       ----

       Basic                                         $.21                 $(.01)                                   $.17       $.37        $.32

       Diluted from continuing
        operations                                   $.21                   $.08                                    $.16       $.37        $.41

       Diluted from discontinued
        operations                                      -                 (.09)                                      -         -      (.09)
                                                      ---                  ----                                     ---       ---       ----

       Diluted                                       $.21                 $(.01)                                   $.16       $.37        $.32

     Weighted-average number of
      common shares outstanding:
      (1)

       Basic                                      297,984                294,747                                 296,210    297,097     293,217
                                                  -------                -------                                 -------    -------     -------

       Diluted                                    300,981                297,119                                 299,050    300,016     295,644
                                                  -------                -------                                 -------    -------     -------

    Adjusted EBITDA (2)                          $416,280               $355,814                                $391,168   $807,448    $768,317
                                                 ========               ========                                ========   ========    ========

    Adjusted income (loss) derived
     from operating activities (3)               $133,460                $89,604                                $109,041   $242,501    $232,742
                                                 ========                =======                                ========   ========    ========

    (1)              See "Computation of Earnings (Losses)
                     Per Share" included herein as a
                     separate schedule.

    (2)              Adjusted EBITDA is computed by
                     subtracting the sum of direct costs
                     and general and administrative
                     expenses from the sum of Operating
                     revenues and Earnings (losses) from
                     unconsolidated affiliates. There are
                     limitations inherent in using
                     adjusted EBITDA as a measure of
                     overall profitability because it
                     excludes significant expense items.
                     However, management evaluates the
                     performance of our business units
                     and the consolidated company based
                     on several criteria, including
                     adjusted EBITDA and adjusted income
                     (loss) derived from operating
                     activities, because we believe that
                     these financial measures accurately
                     reflect our ongoing profitability.
                     These amounts should not be used as
                     a substitute for the amounts
                     reported in accordance with GAAP. To
                     compensate for the limitations in
                     utilizing adjusted EBITDA as an
                     operating measure, management also
                     uses GAAP measures of performance,
                     including income from continuing
                     operations and net income, to
                     evaluate performance, but only with
                     respect to the Company as a whole
                     and not on a segment basis.  A
                     reconciliation of this non-GAAP
                     measure to income (loss) from
                     continuing operations before income
                     taxes, which is a GAAP measure, is
                     provided in the table set forth
                     immediately following the heading
                     "Reconciliation of Non-GAAP
                     Financial Measures to Income (loss)
                     from Continuing Operations before
                     Income Taxes".

    (3)              Adjusted income (loss) derived from
                     operating activities is computed by
                     subtracting the sum of direct costs,
                     general and administrative expenses
                     and depreciation and amortization
                     from the sum of Operating revenues
                     and Earnings (losses) from
                     unconsolidated affiliates. These
                     amounts should not be used as a
                     substitute for those amounts
                     reported in accordance with GAAP.
                     However, management evaluates the
                     performance of our business units
                     and the consolidated company based
                     on several criteria, including
                     adjusted income (loss) derived from
                     operating activities, because it
                     believes that these financial
                     measures accurately reflect our
                     ongoing profitability.  A
                     reconciliation of this non-GAAP
                     measure to income (loss) from
                     continuing operations before income
                     taxes, which is a GAAP measure, is
                     provided in the table set forth
                     immediately following the heading
                     "Reconciliation of Non-GAAP
                     Financial Measures to Income (loss)
                     from Continuing Operations before
                     Income Taxes".

                                    NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                                     CONDENSED CONSOLIDATED BALANCE SHEETS

                               (Unaudited)
                               ----------

                                June 30,                                    March 31,             December 31,

    (In thousands, except
     ratios)                                     2014                                        2014                     2013
                                                 ----                                        ----                     ----

    ASSETS

    Current assets:

    Cash and short-term
     investments                             $486,344                                    $424,767                 $507,133

    Accounts receivable,
     net                                    1,448,511                                   1,454,368                1,399,543

    Assets held for sale                      233,163                                     231,880                  243,264

    Other current assets                      642,620                                     580,253                  603,890
                                              -------                                     -------                  -------

         Total current assets               2,810,638                                   2,691,268                2,753,830

    Long-term investments
     and other receivables                      2,724                                       2,915                    3,236

    Property, plant and
     equipment, net                         8,832,966                                   8,690,759                8,597,813

    Goodwill                                  512,897                                     512,391                  512,964

    Investment in
     unconsolidated
     affiliates                                60,509                                      63,069                   64,260

    Other long-term assets                    216,265                                     226,671                  227,708

         Total assets                     $12,435,999                                 $12,187,073              $12,159,811
                                          ===========                                 ===========              ===========

    LIABILITIES AND EQUITY

    Current liabilities:

    Current debt                                 $207                                      $5,296                  $10,185

    Other current
     liabilities                            1,319,379                                   1,232,846                1,301,239
                                            ---------                                   ---------                ---------

         Total current
          liabilities                       1,319,586                                   1,238,142                1,311,424

    Long-term debt                          3,956,290                                   3,812,476                3,904,117

    Other long-term
     liabilities                            1,078,201                                   1,095,998                  893,905
                                            ---------                                   ---------                  -------

         Total liabilities                  6,354,077                                   6,146,616                6,109,446

    Subsidiary preferred
     stock (1)                                      -                                     69,188                   69,188

    Equity:

    Shareholders' equity                    6,071,426                                   5,960,469                5,969,086

    Noncontrolling
     interest                                  10,496                                      10,800                   12,091
                                               ------                                      ------                   ------

         Total equity                       6,081,922                                   5,971,269                5,981,177

         Total liabilities and
          equity                          $12,435,999                                 $12,187,073              $12,159,811
                                          ===========                                 ===========              ===========

    (1)              Represents subsidiary
                     preferred stock from
                     acquisition in September
                     2010.  All 75,000 outstanding
                     shares were redeemed in June
                     2014.

                                                                                                                NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                                                                                                                           SEGMENT REPORTING

                                                                                                                              (Unaudited)

    The following tables set forth certain information with respect to our reportable segments and rig activity:

                                                                Three Months Ended                                                 Six Months Ended
                                                                ------------------                                                 ----------------

                                                                 June 30,                                     March 31,                                 June 30,
                                                                 --------                                     ---------                                 --------

    (In thousands, except rig
     activity)                                                                   2014                                          2013                                    2014         2014         2013
                                                                                 ----                                          ----                                    ----         ----         ----

    Reportable segments:

    Operating revenues and
     Earnings (losses) from
     unconsolidated affiliates:

        Drilling and Rig Services:

          U.S.                                                               $532,894                                      $467,129                                $510,476   $1,043,370     $951,902

          Canada                                                               54,861                                        64,789                                 111,621      166,482      191,656

          International                                                       391,251                                       351,421                                 375,069      766,320      672,937

          Rig Services (1)                                                    161,740                                       118,120                                 143,726      305,466      252,351
                                                                              -------                                       -------                                 -------      -------      -------

           Subtotal Drilling and Rig
            Services (2)                                                    1,140,746                                     1,001,459                               1,140,892    2,281,638    2,068,846

        Completion and Production
         Services:

          Completion Services                                                 276,639                                       254,016                                 227,899      504,538      516,154

          Production Services                                                 258,378                                       244,602                                 275,400      533,778      496,173
                                                                              -------                                       -------                                 -------      -------      -------

           Subtotal Completion and
            Production Services (3)                                           535,017                                       498,618                                 503,299    1,038,316    1,012,327

        Other reconciling items (4)                                          (59,358)                                     (40,751)                               (57,018)   (116,376)    (83,474)
                                                                              -------                                       -------                                 -------     --------      -------

          Total operating revenues and
           earnings (losses) from
           unconsolidated affiliates                                       $1,616,405                                    $1,459,326                              $1,587,173   $3,203,578   $2,997,699
                                                                           ==========                                    ==========                              ==========   ==========   ==========

    Adjusted EBITDA: (5)

        Drilling and Rig Services:

          U.S.                                                               $206,061                                      $178,799                                $187,637     $393,698     $363,658

          Canada                                                               14,216                                        18,067                                  40,119       54,335       63,598

          International                                                       139,336                                       117,491                                 137,991      277,327      224,005

          Rig Services (1)                                                     17,176                                         2,273                                  16,491       33,667       11,607
                                                                               ------                                         -----                                  ------       ------       ------

           Subtotal Drilling and Rig
            Services (2)                                                      376,789                                       316,630                                 382,238      759,027      662,868

        Completion and Production
         Services:

          Completion Services                                                  27,614                                        33,479                                 (6,654)      20,960       80,203

          Production Services                                                  58,267                                        48,036                                  60,056      118,323       99,154
                                                                               ------                                        ------                                  ------      -------       ------

           Subtotal Completion and
            Production Services (3)                                            85,881                                        81,515                                  53,402      139,283      179,357

        Other reconciling items (6)                                          (46,390)                                     (42,331)                               (44,472)    (90,862)    (73,908)
                                                                              -------                                       -------                                 -------      -------      -------

          Total adjusted EBITDA                                              $416,280                                      $355,814                                $391,168     $807,448     $768,317
                                                                             ========                                      ========                                ========     ========     ========

    Adjusted income (loss) derived
     from operating activities:
     (7)

        Drilling and Rig Services:

          U.S.                                                                $89,977                                       $69,813                                 $72,494     $162,471     $147,408

          Canada                                                                  225                                         3,895                                  26,160       26,385       34,413

          International                                                        50,583                                        32,481                                  48,119       98,702       53,950

          Rig Services (1)                                                      9,059                                       (5,383)                                  8,728       17,787      (4,096)
                                                                                -----                                        ------                                   -----       ------       ------

           Subtotal Drilling and Rig
            Services (2)                                                      149,844                                       100,806                                 155,501      305,345      231,675

        Completion and Production
         Services:

          Completion Services                                                   (581)                                        6,870                                (33,635)    (34,216)      24,626

          Production Services                                                  29,889                                        23,471                                  30,591       60,480       49,485
                                                                               ------                                        ------                                  ------       ------       ------

           Subtotal Completion and
            Production Services (3)                                            29,308                                        30,341                                 (3,044)      26,264       74,111

        Other reconciling items (6)                                          (45,692)                                     (41,543)                               (43,416)    (89,108)    (73,044)
                                                                              -------                                       -------                                 -------      -------      -------

       Total adjusted income (loss)
        derived from operating
        activities                                                           $133,460                                       $89,604                                $109,041     $242,501     $232,742
                                                                             ========                                       =======                                ========     ========     ========

    Rig activity:

    Rig years: (8)

       U.S.                                                                     215.3                                         195.8                                   206.6        211.0        192.8

       Canada                                                                    21.6                                          17.4                                    43.8         32.6         28.6

       International (9)                                                        127.3                                         125.2                                   129.8        128.6        124.0

          Total rig years                                                       364.2                                         338.4                                   380.2        372.2        345.4
                                                                                =====                                         =====                                   =====        =====        =====

    Rig hours: (10)

       U.S. Production Services                                               210,750                                       224,681                                 209,982      420,732      436,979

       Canada Production Services                                              28,671                                        28,802                                  41,540       70,211       76,829

          Total rig hours                                                     239,421                                       253,483                                 251,522      490,943      513,808
                                                                              =======                                       =======                                 =======      =======      =======

    (1)                 Includes our drilling technology and
                        top drive manufacturing, directional
                        drilling, rig instrumentation and
                        software services. These services
                        represent our other companies that
                        are not aggregated into a reportable
                        operating segment.

    (2)                 Includes earnings (losses), net from
                        unconsolidated affiliates, accounted
                        for using the equity method, of
                        ($.8) million, $1.2 million and
                        ($2.5) million for the three months
                        ended June 30, 2014 and 2013 and
                        March 31, 2014, respectively and
                        ($3.3) million and $4.0 million for
                        the six months ended June 30, 2014
                        and 2013, respectively.

    (3)                 Includes earnings (losses), net from
                        unconsolidated affiliates, accounted
                        for using the equity method, of $.2
                        million, $.2 million and $.1 million
                        for the three months ended June 30,
                        2014 and 2013 and March 31, 2014,
                        respectively and $.3 million for
                        each of the six months ended June
                        30, 2014 and 2013.

    (4)                 Represents the elimination of inter-
                        segment transactions.

    (5)                 Adjusted EBITDA is computed by
                        subtracting the sum of direct costs
                        and general and administrative
                        expenses from the sum of Operating
                        revenues and Earnings (losses) from
                        unconsolidated affiliates. There are
                        limitations inherent in using
                        adjusted EBITDA as a measure of
                        overall profitability because it
                        excludes significant expense items.
                        However, management evaluates the
                        performance of our business units
                        and the consolidated company based
                        on several criteria, including
                        adjusted EBITDA and adjusted income
                        (loss) derived from operating
                        activities, because we believe that
                        these financial measures accurately
                        reflect our ongoing profitability.
                        These amounts should not be used as
                        a substitute for the amounts
                        reported in accordance with GAAP. To
                        compensate for the limitations in
                        utilizing adjusted EBITDA as an
                        operating measure, management also
                        uses GAAP measures of performance,
                        including income from continuing
                        operations and net income, to
                        evaluate performance, but only with
                        respect to the Company as a whole
                        and not on a segment basis.  A
                        reconciliation of this non-GAAP
                        measure to income (loss) from
                        continuing operations before income
                        taxes, which is a GAAP measure, is
                        provided in the table set forth
                        immediately following the heading
                        "Reconciliation of Non-GAAP
                        Financial Measures to Income (loss)
                        from Continuing Operations before
                        Income Taxes".

    (6)                 Represents the elimination of inter-
                        segment transactions and unallocated
                        corporate expenses.

    (7)                 Adjusted income (loss) derived from
                        operating activities is computed by
                        subtracting the sum of direct costs,
                        general and administrative expenses
                        and depreciation and amortization
                        from the sum of Operating revenues
                        and Earnings (losses) from
                        unconsolidated affiliates. These
                        amounts should not be used as a
                        substitute for the amounts reported
                        in accordance with GAAP. However,
                        management evaluates the performance
                        of our business units and the
                        consolidated company based on
                        several criteria, including adjusted
                        income (loss) derived from operating
                        activities, because it believes that
                        these financial measures accurately
                        reflect our ongoing profitability. A
                        reconciliation of this non-GAAP
                        measure to income (loss) from
                        continuing operations before income
                        taxes, which is a GAAP measure, is
                        provided in the table set forth
                        immediately following the heading
                        "Reconciliation of Non-GAAP
                        Financial Measures to Income (loss)
                        from Continuing Operations before
                        Income Taxes".

    (8)                 Excludes well-servicing rigs, which
                        are measured in rig hours.  Includes
                        our equivalent percentage ownership
                        of rigs owned by unconsolidated
                        affiliates.  Rig years represent a
                        measure of the number of equivalent
                        rigs operating during a given
                        period.  For example, one rig
                        operating 182.5 days during a 365-
                        day period represents 0.5 rig years.

    (9)                 International rig years includes our
                        equivalent percentage ownership of
                        rigs owned by unconsolidated
                        affiliates, which totaled 2.5 years
                        during each of the three months
                        ended June 30, 2014 and 2013 and
                        March 31, 2014 and 2.5 years for
                        each of the six months ended June
                        30, 2014 and 2013.

    (10)                Rig hours represents the number of
                        hours that our well-servicing rig
                        fleet operated during the period.


                                                            NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                                                       RECONCILIATION OF NON-GAAP FINANCIAL MEASURES TO

                                                 INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES

                                                                          (Unaudited)

                             Three Months Ended                                Six Months Ended
                             ------------------                                ----------------

                              June 30,                      March 31,                                         June 30,
                              --------                      ---------                                         --------

    (In thousands)                          2014                           2013                                              2014        2014          2013
                                            ----                           ----                                              ----        ----          ----

    Adjusted EBITDA                     $416,280                       $355,814                                          $391,168    $807,448      $768,317

    Less: Depreciation and
     amortization                        282,820                        266,210                                           282,127     564,947       535,575

    Adjusted income (loss)
     derived from operating
     activities                          133,460                         89,604                                           109,041     242,501       232,742
                                         -------                         ------                                           -------     -------       -------

    Interest expense                    (46,303)                      (60,273)                                         (44,810)   (91,113)    (120,284)

    Investment income (loss)               7,066                         14,821                                               980       8,046        94,242

    Gains (losses) on sales
     and disposals of long-
     lived assets and other
     income (expense), net              (16,504)                       (9,242)                                          (1,476)   (17,980)     (68,979)

    Income (loss) from
     continuing operations
     before income taxes                 $77,719                        $34,910                                           $63,735    $141,454      $137,721
                                         =======                        =======                                           =======    ========      ========


                                                                                                   NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                                                                                                 COMPUTATION OF EARNINGS (LOSSES) PER SHARE

                                                                                                                 (Unaudited)

    A reconciliation of the numerators and denominators of the basic and diluted earnings (losses) per share computations is as follows:

                                                            Three Months Ended                                        Six Months Ended
                                                            ------------------                                        ----------------

                                                              June 30,                              March 31,                               June 30,
                                                              --------                              ---------                               --------

    (In thousands, except per
     share amounts)                                                       2014                                    2013                                   2014       2014        2013
                                                                          ----                                    ----                                   ----       ----        ----

    Net income (loss) attributable
     to Nabors (numerator):

    Income (loss) from continuing
     operations, net of tax                                            $65,729                                 $28,128                                $48,977   $114,706    $120,335

       Less: Net (income) loss
        attributable to
        noncontrolling interest                                          (253)                                (5,616)                                 (573)     (826)    (5,713)

       Less: Earnings allocated to
        unvested shareholders                                            (974)                                  (814)                                 (733)   (1,707)          -

       Less: Redemption of preferred
        shares                                                         (1,688)                                      -                                     -   (1,688)          -
                                                                        ------                                     ---                                   ---    ------         ---

    Adjusted income (loss) from
     continuing operations -basic
     and diluted                                                       $62,814                                 $21,698                                $47,671   $110,485    $114,622

    Income (loss) from
     discontinued operations, net
     of tax                                                            (1,032)                               (26,873)                                 1,515        483    (19,862)

                                                                       $61,782                                $(5,175)                               $49,186   $110,968     $94,760
                                                                       -------                                 -------                                -------   --------     -------

       Earnings (losses) per share:

         Basic from continuing
          operations                                                      $.21                                    $.08                                   $.16       $.37        $.41

         Basic from discontinued
          operations                                                         -                                  (.09)                                   .01          -      (.09)

    Total Basic                                                           $.21                                  $(.01)                                  $.17       $.37        $.32
                                                                          ----                                   -----                                   ----       ----        ----

         Diluted from continuing
          operations                                                      $.21                                    $.08                                   $.16       $.37        $.41

         Diluted from discontinued
          operations                                                         -                                  (.09)                                     -         -      (.09)

    Total Diluted                                                         $.21                                  $(.01)                                  $.16       $.37        $.32
                                                                          ----                                   -----                                   ----       ----        ----

    Shares (denominator):

       Weighted-average number of
        shares outstanding-basic                                       297,984                                 294,747                                296,210    297,097     293,217

         Net effect of dilutive stock
          options, warrants and
          restricted stock awards based
          on the if-converted method                                     2,997                                   2,372                                  2,840      2,919       2,427

       Weighted-average number of
        shares outstanding - diluted                                   300,981                                 297,119                                299,050    300,016     295,644
                                                                       -------                                 -------                                -------    -------     -------

    For all periods presented, the
     computation of diluted earnings
     (losses) per share excluded
     outstanding stock options and
     warrants with exercise prices
     greater than the average market
     price of Nabors' common shares
     because their inclusion would
     have been anti-dilutive and
     because they were not
     considered participating
     securities. The average number
     of options and warrants that
     were excluded from diluted
     earnings (losses) per share
     that would have potentially
     diluted earnings (losses) per
     share were 5,782,273 and
     11,578,175 shares during the
     three months ended June 30,
     2014 and 2013, respectively;
     7,853,509 shares during the
     three months ended March 31,
     2014; and 6,817,891 and
     12,015,219 shares during the
     six months ended June 30, 2014
     and 2013, respectively. In any
     period during which the average
     market price of Nabors' common
     shares exceeds the exercise
     prices of these stock options
     and warrants, such stock
     options and warrants are
     included in our diluted
     earnings (losses) per share
     computation using the if-
     converted method of accounting.
      Restricted stock is included
      in our basic and diluted
     earnings (losses) per share
     computation using the two-
     class method of accounting in
     all periods because such stock
     is considered a participating
     security.

SOURCE Nabors Industries Ltd.


Source: PR Newswire



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