Nabors Industries is a Bermuda-domiciled land driller that spent the last year selling a rental-tool unit and redeeming near-term notes so the residual claim could sit behind a cleaner coupon stack. The second-quarter print shows the operating side of that recut beginning to work. Sequential revenue rose and every reporting segment cleared the April outlook. What the market still has to decide is whether SANAD, the equally owned Saudi Aramco joint venture that already supplies roughly a third of revenue, converts its remaining newbuild program into residual cash for common holders, or whether that program keeps absorbing the cash the deleveraging story is supposed to free.
Adjusted earnings before interest, taxes, depreciation and amortization, the cash-earnings proxy management uses, reached $222 million and beat the prior outlook across all four segments. Consolidated adjusted free cash flow, cash from operations after capital spending as management defines it, flipped to $12 million from a first-quarter use. That swing is real, but it still sits next to more than two billion of remaining debt. The full-year free-cash outlook is only $20 million to $30 million. SANAD is still expected to consume $60 million to $80 million of cash inside that figure.
International daily margin expanded and Lower 48 leading-edge dayrates moved into the low-to-mid thirty-thousand range as utilization tightened. Common equity still posted a $22 million attributable loss because interest, the Aramco noncontrolling interest, and depreciation continue to sit above operating income. The next several quarters either convert that earnings beat into residual cash after Aramco's share and the coupon stack, or the residual claim stays a call option on a still-levered fleet.