Nabors Industries, a provider of oilfield services, will purchase Parker Wellbore

Nabors Industries agreed on Tuesday to purchase drilling services provider Parker Wellbore, as the oilfield service company seeks to expand its drilling business globally.

The company would buy the privately-held Parker for 4.8 millions shares of Nabors common stock. This was subject to a price cap and assuming a net debt of approximately $100 million.

Calculations show that Nabors shares were worth $372.1 Million as of the last close. In morning trading, shares of the company fell 3%.

Oilfield service providers are increasingly looking to merge and acquire as they face operational and pricing challenges, while also catering to clients who have reduced spending on new wells for investor returns.

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The deal will add tubular rental services and repair operations to Nabors’ portfolio. Waqar Syed, ATB Capital Markets analyst in a research report, said that tubular rental services are outpacing the overall market growth.

Syed said that Parker's casing-running business will complement Nabors' business in tubular services and strengthen its drilling solutions division.

The deal, which is expected to close early in 2025, is estimated to add $35 million to Nabors free cash flow and to save the company. Reporting by Vallari Shrivastava, Bengaluru. Editing by Shakesh Kuber

(source: Reuters)