NABORS INDUSTRIES LTD
For the period ended Dec 31, 2025. Filed Feb 13, 2026.
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A company's yearly report to the SEC, with audited financial statements. It is the fullest account a company gives of its business, its finances and the risks it sees.
FY2025 · Filed Feb 13, 2026
NBR$73.20+2.5%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-K
Period ended 2024-12-31; filed 2025-02-13.
0001558370-25-000926
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-K
Period ended 2025-12-31; filed 2026-02-13.
0001104659-26-014997
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 97 previous paragraphs and 105 current paragraphs.
53 unchanged; 30 reworded; 16 added; 13 removed; 1 previous and 6 current paragraphs rearranged.
Tables are not compared: 7 previous and 7 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (16)
Current report
This section of this Form 10-K generally discusses fiscal 2025 and fiscal 2024 items and year-to-year comparisons between fiscal 2025 and fiscal 2024. Discussions of fiscal 2023 items and year-to-year comparisons between fiscal 2024 and fiscal 2023 that are not included in this Form 10-K can be found in “Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations” of the Company’s Annual Report on Form 10-K for the fiscal year December 31, 2024, as filed with the SEC on February 13, 2025, which is available on the SEC’s website at www.sec.gov.
Current report
Since late 2022 and continuing through the fourth quarter of 2025, global energy commodity markets have experienced sustained volatility driven by evolving geopolitical dynamics, and more recently, domestic policy changes. In the U.S., operators generally reacted to these market conditions with caution by reducing their drilling activity – particularly in the natural gas basins. This trend appears to be shifting with the expectation for higher natural gas demand in the future. Meanwhile, a number of operators in oil-driven basins, especially the Permian Basin, have reduced drilling activity as they have realized efficiency gains and achieved their production goals.
Current report
Despite the reduction in overall rig count in the United States, pricing discipline for drilling rigs in this market remained intact, generally supporting rig dayrates and daily rig margins.
Current report
Oil prices have been impacted by recent production actions announced by certain large international oil producers. Natural gas prices, particularly in the United States, have generally increased, in part as demand increased as LNG export facilities ramped throughput.
Current report
On March 11, 2025, Nabors completed its merger with Parker Drilling Company (“Parker”) resulting in Parker becoming a wholly owned subsidiary of Nabors. Parker provides drilling services across global energy markets. Total consideration for the acquisition included cash consideration of $0.6 million and the issuance of 4.8 million shares of our common stock, which based on the closing price of our common stock of $37.50 on March 11, 2025, valued the purchase price consideration of the transaction at approximately $180.6 million.
Current report
Sale of Quail Tools, LLC
Current report
On August 20, 2025, Nabors entered into a definitive agreement to sell Quail Tools to Superior Energy Services, Inc. Quail Tools was part of Nabors’ acquisition of Parker. Net consideration for the sale totals $625.0 million inclusive of a net working capital adjustment. Consideration comprised of cash of $375.0 million and a seller note of $250.0 million. On October 9, 2025, Nabors received prepayment in full of the $250.0 million seller note, including accrued and unpaid interest.
Current report
7.625% Senior Priority Guaranteed Notes due November 2032
Current report
Net income attributable to Nabors totaled $286.6 million for 2025 ($17.39 per diluted share) compared to a net loss attributable to Nabors of $176.1 million ($22.37 per diluted share) in 2024, or a $462.7 million increase in net income. Adjusted operating income (loss) across our operating segments, increased by $54.3 million, or 13%. $113.7 million of the increase is due to the gain on bargain purchase related to the Parker acquisition and $414.0 million was due to the gain on the disposition of Quail Tools. These gains were partially offset by $26.5 million of asset impairments related to assets held in Russia, $24.6 million related to severance and reorganization costs and $19.9 million of transaction related costs. See Segment Results of Operations and Other Financial Information below for additional discussion.
Current report
Operating revenues decreased by $51.5 million or 5% in 2025 compared to 2024. Decreases in the Lower 48 land rig market for both average number of rigs working and dayrates, more than offset the incremental revenue from acquired Parker rig operations in the Alaska and U.S. Offshore markets.
Current report
Operating revenues increased by $151.7 million or 10% in 2025 compared to 2024. Incremental revenue from acquired Parker rig operations in international markets and the contribution of recently deployed rigs in other international markets comprise the majority of the increase.
Current report
Gain on disposition of Quail Tools
Current report
Gain on disposition of Quail Tools for the years ended December 31, 2025 and 2024 was $414.0 million and zero, respectively. The gain on disposition of Quail Tools was related to the sale of Quail Tools in the third quarter of 2025.
Current report
Gain on bargain purchase
Current report
Gain on bargain purchase for the years ended December 31, 2025 and 2024 was $113.7 million and zero, respectively. The gain on bargain purchase was related to the Parker acquisition in the first quarter of 2025.
Current report
Over the term of the facility, we entered into a number of amendments. Most recently, in August 2025, we entered into the First Amendment to the A/R Sales Agreement and the Fifth Amendment to the A/R Purchase Agreement. The First Amendment to the A/R Sales Agreement amends the agreement to, among other things, add certain subsidiaries of Parker Drilling Company, an indirect wholly-owned subsidiary of the Company, as originators (the “Additional Originators”). The Fifth Amendment to the A/R Purchase Agreement amends the agreement to make changes to reflect the joinder of the Additional Originators.
Removed paragraphs (13)
Previous report
Since late 2022 and continuing through the fourth quarter of 2024, global energy commodity markets have experienced high levels of volatility. In the U.S., operators generally reacted to these market conditions by reducing their drilling activity. Recent production actions announced by certain large international oil producers have been supportive of both oil prices and oil-focused activity broadly, especially in international markets. Natural gas prices, particularly in the United States, declined significantly through 2023 and into 2024, to levels which largely persisted into the fourth quarter of 2024 and which have caused operators to reduce natural gas directed activity.
Previous report
In early 2023 economic sentiment was overshadowed by a pervasive concern that a global recession would take hold. The U.S. Federal Reserve’s tightening of interest rates reduced capital availability in the U.S energy market. As these higher interest rates continued, rig counts in the U.S. Lower 48 continued to decline throughout the year. More recently, the U.S. Federal Reserve reduced interest rates. The impact of that decision should become evident in the coming quarters. Despite the reduction in rig count, rig pricing discipline remained intact, generally supportive of rig dayrates and daily rig margins.
Previous report
2024 Credit Agreement
Previous report
On June 17, 2024, Nabors Delaware amended and restated its’ credit agreement (the “2024 Credit Agreement”). Under the 2024 Credit Agreement, the lenders have committed to provide to Nabors Delaware up to $350.0 million in revolving loans, and the issuing banks have committed to provide a standalone letter of credit tranche that permits Nabors Delaware to issue reimbursement obligations under letters of credit in an aggregate principal amount not in excess of $125.0 million. Letters of credit issued will not affect revolving loan capacity and vice versa. The 2024 Credit Agreement contains a $200.0 million uncommitted accordion feature that can be applied to increase the commitments under either the revolving loans or the letter of credit tranche, or both. The facility matures on the earlier of (a) June 17, 2029 and (b) to the extent 10% or more of the respective principal amount of any of the 7.375% Senior Priority Guaranteed Notes due May 2027 or 7.50% Senior Guaranteed Notes due January 2028 or 50% or more of the principal amount of the 1.75% Senior Exchangeable Notes due June 2029 remains outstanding on the date that is 90 days prior to the applicable maturity date for such Indebtedness, then such 90 th day.
Previous report
8.875% Senior Guaranteed Notes due August 2031
Previous report
On October 14, 2024, we and certain subsidiaries of ours entered into a merger agreement (the “Merger Agreement”) to acquire Parker Drilling Company (“Parker”), pursuant to which, upon the terms and subject to the conditions set forth therein, we will acquire Parker for 4.8 million of our common shares, subject to a collar. The precise number of shares to be issued to Parker stockholders will be determined based upon the volume weighted average price of Nabors common shares on the NYSE for the 15 trading days ending the fifth day before the closing of the merger (“Closing Price”) and, if that Closing Price is below $42.70, Parker stockholders will also receive a cash component for their shares of Parker stock. If the volume weighted average price is above $99.62, the merger consideration will consist of the number of shares equal to $478,176,000 divided by the Closing Price.
Previous report
Parker provides drilling services across global energy markets. Through its Quail Tools subsidiary, Parker is the leading rental provider of high-performance downhole tubulars in the U.S. market. Internationally, Parker provides tubular rentals and repair services, with state-of-the-art facilities located in key geographies. Parker offers differentiated, casing and tubular running services in the U.S., the Middle East, Latin America, and Asia. Its portfolio also includes a fleet of 17 drilling rigs in the U.S. and international markets, as well as Operations & Maintenance services primarily in Canada and Alaska.
Previous report
The transaction is expected to close in the first quarter of 2025, subject to customary closing conditions and receipt of required regulatory approvals.
Previous report
Net loss from continuing operations attributable to Nabors common shareholders totaled $176.1 million for 2024 ($22.37 loss per diluted share) compared to a net loss from continuing operations attributable to Nabors common shareholders of $11.8 million ($5.49 loss per diluted share) in 2023, or a $164.3 million increase in the net loss. Adjusted operating income (loss) across our operating segments, declined by $16.9 million, or 2%. A decline in U.S. activity was largely offset by increased activity in international markets, benefiting both our International Drilling and Drilling Solutions segments. Approximately $78.0 million of the increase in net loss is attributable to lower mark-to-market gains related to the common share warrants, which decreased from $54.7 million in 2023 to $16.9 million in 2024, and the impact from gains or losses from debt repurchases, which resulted in a gain of $25.3 million in 2023 and losses of $14.9 million in 2024. In addition, interest expense increased by approximately $25.6 million due to increasing interest rates. See Segment Results of Operations and Other Financial Information below for additional discussion.
Previous report
Operating revenues decreased by $179.5 million or 15% in 2024 compared to 2023 primarily due to a decrease in activity as reflected by an 13% decrease in the average number of rigs working, while pricing remained stable.
Previous report
Operating revenues increased by $100.8 million or 7% in 2024 compared to 2023. The increase is primarily attributable to an 8% increase in the average rigs working, reflecting increased drilling activity as market conditions and demand for our international drilling services have increased since the prior year.
Previous report
Over the term of the facility, we entered into a number of amendments. Most recently, on April 1, 2024, we entered into the Fourth Amendment to the A/R Purchase Agreement, which among other things, extended the term of the A/R Purchase Agreement to the earliest of (i) April 1, 2027 and (ii) the date that is ninety (90) calendar days prior to the occurrence of the maturity date under and as defined in the 2024 Credit Agreement.
Previous report
For an asset classified as held for sale, we consider the asset impaired when its carrying amount exceeds fair value less its cost to sell. Fair value is determined by calculating the expected sales price less any costs to sell.
Reworded paragraphs (30)
Previous wording
We are a leading provider of advanced technology for the energy industry. With operations in over 15 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and sustainable energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower carbon world.
Current wording
We are a leading provider of advanced technology for the energy industry. With operations in over 20 countries, Nabors has established a global network of people, technology and equipment to deploy solutions that deliver safe, efficient and sustainable energy production. By leveraging its core competencies, particularly in drilling, engineering, automation, data science and manufacturing, Nabors aims to innovate the future of energy and enable the transition to a lower carbon world.
Previous wording
The demand for our services and products is a function of spending by oil and gas companies for exploration, development and production activities. The level of exploration, development and production activities is to a large extent tied to the prices of oil and natural gas, which can fluctuate significantly, are highly volatile and tend to be highly sensitive to factors including supply and demand cycles and geopolitical uncertainties, particularly those impacting large hydrocarbon-producing countries. Certain oil and gas companies may also intentionally limit their capital spending as they focus on generating returns to shareholders as opposed to maximizing hydrocarbon production. Additionally, there has recently been an increasing number of customer consolidations within the industry especially in the United States. In some cases, these transactions may have an impact on overall rig demand, as the acquiring company may apply criteria that results in a different level of demand for drilling rigs than the previous two companies would have had on a stand-alone basis.
Current wording
The demand for our services and products is a function of the level of spending by oil and gas companies for exploration, development and production activities. The level of exploration, development and production activities is to a large extent tied to the prices of oil and natural gas, which can fluctuate significantly, are highly volatile and tend to be highly sensitive to factors including supply and demand cycles and geopolitical uncertainties particularly those impacting large hydrocarbon-producing countries. Certain oil and gas companies may also intentionally limit their capital spending as they focus on generating returns to shareholders as opposed to maximizing hydrocarbon production. Additionally, in recent years significant consolidation among oil and gas companies has taken place, especially in the United States. In some cases, these transactions may have an impact on overall rig demand, as the acquiring company may apply criteria that results in a different level of demand for drilling rigs than the previous two companies would have had on a stand-alone basis.
Previous wording
U.S. oil and gas production has proved resilient throughout 2024 in the face of reduced drilling activity. Internationally, we generally see an expansion of production capacity as well as the widespread development of unconventional resources driving an expected increase in oilfield activity broadly across those markets.
Current wording
Internationally, we generally see an expansion of production capacity as well as the widespread development of unconventional resources driving an expected increase in oilfield activity broadly across those markets. In Saudi Arabia specifically, the operating rig fleet has begun to rebound following the activity suspensions in 2024 of a large number of rigs.
Previous wording
On July 22, 2024, Nabors issued $550.0 million in aggregate principal amount of 8.875% senior guaranteed notes, which are fully and unconditionally guaranteed by Nabors and certain of Nabors’ indirect wholly-owned subsidiaries. Interest on the notes is payable on February 15 and August 15 of each year. The notes have a maturity date of August 15, 2031. Nabors used the net proceeds, along with cash on hand, to redeem all of its 7.25% senior guaranteed notes due January 2026.
Current wording
On November 10, 2025, Nabors issued $700.0 million in aggregate principal amount of 7.625% senior priority guaranteed notes, which are fully and unconditionally guaranteed by Nabors and certain of Nabors’ indirect wholly-owned subsidiaries. Interest on the notes is payable on May 15 and November 15 of each year. The notes have a maturity date of November 15, 2032. Nabors used the net proceeds to redeem all of its 7.375% senior priority guaranteed notes due May 2027.
Previous wording
Operating revenues in 2024 totaled $2.9 billion, representing a decrease of $75.9 million, or 3%, from 2023. For a more detailed description of operating results see Segment Results of Operations, below.
Current wording
Operating revenues in 2025 totaled $3.2 billion, representing an increase of $254.6 million, or 9%, from 2024. For a more detailed description of operating results see Segment Results of Operations, below.
Previous wording
General and administrative expenses in 2024 totaled $249.3 million, representing an increase of $5.2 million, or 2% from 2023. This is reflective of increases in workforce costs, general operating costs and inflationary pressures as market conditions have changed.
Current wording
General and administrative expenses in 2025 totaled $304.6 million, representing an increase of $55.3 million, or 22% from 2024. This is reflective of increases in workforce costs and general operating costs as a result of the Parker acquisition, along with inflationary pressures as market conditions have changed.
Previous wording
Depreciation and amortization expense in 2024 was $633.4 million, representing a decrease of $11.9 million, or 2%, from 2023. The decrease is a result of a higher amount of older assets reaching the end of their useful lives.
Current wording
Depreciation and amortization expense in 2025 was $649.2 million, representing an increase of $15.8 million, or 2%, from 2024. The increase is a result of the additional assets obtained in the Parker acquisition.
Previous wording
Management evaluates the performance of our reportable segments using adjusted operating income (loss), which is our segment performance measure, because we believe that this financial measure reflects our ongoing profitability and performance. In addition, securities analysts and investors use this measure as one of the metrics on which they analyze our performance. Adjusted operating income (loss) represents income (loss) before income taxes, interest expense, earnings (losses) from unconsolidated affiliates, investment income (loss), and other, net. A reconciliation of adjusted operating income to net income (loss) from continuing operations before income taxes can be found in Note 17—Segment Information in Part II, Item 8.—Financial Statements and Supplementary Data.
Current wording
Management evaluates the performance of our reportable segments using adjusted operating income (loss), which is our segment performance measure, because we believe that this financial measure reflects our ongoing profitability and performance. In addition, securities analysts and investors use this measure as one of the metrics on which they analyze our performance. Adjusted operating income (loss) represents income (loss) before income taxes, interest expense, earnings (losses) from unconsolidated affiliates, investment income (loss), gain on disposition of Quail Tools, gain on bargain purchase and other, net. A reconciliation of adjusted operating income to net income (loss) before income taxes can be found in Note 17—Segment Information in Part II, Item 8.—Financial Statements and Supplementary Data.
Previous wording
Operating revenues increased by $12.3 million or 4% in 2024 compared to 2023 as an increase in demand for our international and third-party services offset a decline in results in the U.S. markets, which was driven by the reduction in drilling activity.
Current wording
Operating revenues increased by $199.2 million or 63% in 2025 compared to 2024. The increase in revenue is related to acquired Parker operations. This increase from Parker operations was slightly offset by a decline in results in the U.S. markets, which was driven by the reduction in drilling activity.
Previous wording
Operating revenues decreased by $41.1 million or 17%in 2024 compared to 2023 due to the overall decline in activity in the U.S. as mentioned previously. Adjusted operating income was relatively flat despite the 17% drop in operating revenues, due to a change in mix of business focusing more on the higher margin product lines.
Current wording
Operating revenues decreased by $47.6 million or 24%in 2025 compared to 2024 due to the overall decline in activity as mentioned previously.
Previous wording
Interest expense for 2024 was $210.9 million, representing an increase of $25.6 million, or 14%, compared to 2023. The increase was primarily due to an increase in our effective interest rate levels on our outstanding debt throughout 2024 as compared to 2023.
Current wording
Interest expense for 2025 was $215.4 million, representing an increase of $4.5 million, or 2%, compared to 2024. The increase was primarily due to an increase in our effective interest rate levels and an increase in our average outstanding debt balance throughout 2025 as compared to 2024.
Previous wording
Other, net for the year ended December 31, 2024 was a loss of $106.8 million, compared to a gain of $0.7 million during 2023. During 2024, this loss was from $28.1 million in foreign currency losses, $14.9 million for losses on debt buybacks, $26.4 million from loss on sale of assets and $26.1 million from other than temporary impairment of securities. This loss was offset by $16.9 million of gain from mark-to-market gains related to the common share warrants. In comparison, during 2023, $54.7 million of the gain was from mark-to-market gains related to the common share warrants and $25.3 million was from gains on debt repurchases. The 2023 gain was offset by $37.3 million in foreign currency losses, $26.5 million for litigation reserves and $13.9 million from loss on sale of assets. (See Note 11 — Shareholders’ Equity in Part II, Item 8.—Financial Statements and Supplementary Data for discussion of the common stock warrants).
Current wording
Other, net for the year ended December 31, 2025 was a loss of $65.8 million, compared to a loss of $106.8 million during 2024. During 2025, this loss was from $26.5 million in asset impairments related to assets held in Russia, $19.9 million of transaction related costs, $24.6 million related to severance and reorganization costs, $15.5 million for losses on debt buybacks, and $15.2 million in other than temporary impairment of securities which was offset by $8.4 million of mark-to-market gains on the common share warrants and $46.9 million in gain on sales of assets. In comparison, during 2024, the loss was from $28.1 million in foreign currency losses, $14.9 million for losses on debt buybacks, $26.4 million from loss on sale of assets and $26.1 million from other than temporary impairment of securities. This loss was offset by $16.9 million of gain from mark-to-market gains related to the common share warrants.
Previous wording
Our worldwide income tax expense for 2024 was $56.9 million compared to $79.2 million for 2023. The decrease in tax expense was primarily attributable to tax expense of $11.8 million in 2023 related to an audit settlement, as well as changes in the amount and the geographic mix of our pre-tax earnings (losses) in the jurisdictions in which we operate.
Current wording
Our worldwide income tax expense for 2025 was $163.1 million compared to $56.9 million for 2024. The increase in tax expense was primarily attributable to the Parker acquisition and sale of Quail Tools, as well as the change in amount and geographic mix of our pre-tax earnings (losses).
Previous wording
Our primary sources of liquidity are cash and investments, availability under the 2024 Credit Agreement and cash generated from operations. As of December 31, 2024, we had cash and short-term investments of $397.3 million and working capital of $427.6 million. As of December 31, 2023, we had cash and short-term investments of $1.1 billion, which included proceeds from our offering of $650.0 million in aggregate principal of 9.125% senior priority guaranteed notes due 2030 that were used primarily to retire certain outstanding indebtedness during the first quarter of 2024 and working capital of $431.7 million.
Current wording
Our primary sources of liquidity are cash and investments, availability under the 2024 Credit Agreement and cash generated from operations. As of December 31, 2025, we had cash and short-term investments of $940.7 million and working capital of $558.6 million. As of December 31, 2024, we had cash and short-term investments of $397.3 million and working capital of $427.6 million.
Previous wording
At December 31, 2024, we had no borrowings outstanding and $51.6 million of letters of credit outstanding under the 2024 Credit Agreement, which has a total borrowing capacity of $350.0 million and a separate letter of credit tranche that permits us to issue letters of credit with total reimbursement obligations not to exceed $125.0 million. Letters of credit issued will not affect revolving loan capacity and vice versa.
Current wording
At December 31, 2025, we had no borrowings outstanding and $69.8 million of letters of credit outstanding under the 2024 Credit Agreement, which has a total borrowing capacity of $350.0 million and a separate letter of credit tranche
Previous wording
The 2024 Credit Agreement requires us to maintain an interest coverage ratio (EBITDA/interest expense of 2.75:1.00) and a minimum guarantor value, requiring the guarantors (other than the Company) and their subsidiaries to own at least 90% of the consolidated property, plant and equipment of the Company. Additionally, the Company is subject to certain covenants (which are subject to certain exceptions) and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $150.0 million, among other exceptions), (b) a covenant restricting its ability to pay dividends or make other distributions with respect to its capital stock and to repurchase certain indebtedness, and (c) a covenant restricting the ability of the Company’s subsidiaries to incur debt (subject to the grower debt basket of up to $100.0 million). The facility matures on the earlier of (a) June 17, 2029 and (b) to the extent 10% or more of the respective principal amount of any of the 7.375% Senior Priority Guaranteed Notes due May 2027 or 7.50% Senior Guaranteed Notes due January 2028 or 50% or more of the principal amount of the 1.75% Senior Exchangeable Notes due June 2029 remains outstanding on the date that is 90 days prior to the applicable maturity date for such Indebtedness, then such 90 th day.
Current wording
The 2024 Credit Agreement requires us to maintain an interest coverage ratio (EBITDA/interest expense of 2.75:1.00) and a minimum guarantor value, requiring the guarantors (other than the Company) and their subsidiaries to own at least 90% of the consolidated property, plant and equipment of the Company. Additionally, the Company is subject to certain covenants (which are subject to certain exceptions) and include, among others, (a) a covenant restricting our ability to incur liens (subject to the additional liens basket of up to $150.0 million, among other exceptions), (b) a covenant restricting its ability to pay dividends or make other distributions with respect to its capital stock and to repurchase certain indebtedness, and (c) a covenant restricting the ability of the Company’s subsidiaries to incur debt (subject to the grower debt basket of up to $100.0 million). The facility matures on the earlier of (a) June 17, 2029 and (b) to the extent 10% or more of the respective principal amount of any of the 7.50% Senior Guaranteed Notes due January 2028 or 50% or more of the principal amount of the 1.75% Senior Exchangeable Notes due June 2029 remains outstanding on the date that is 90 days prior to the applicable maturity date for such indebtedness, then such 90 th day.
Previous wording
As of the date of this report, we were in compliance with all covenants under the 2024 Credit Agreement, including those regarding the required interest coverage ratio and minimum guarantor value, which were 4.40:1.00 and 99.79%, respectively, as of December 31, 2024. If we fail to perform our obligations under the covenants, the revolving credit commitments under the 2024 Credit Agreement could be terminated, and any outstanding borrowings under the facilities could be declared immediately due and payable. If necessary, we have the ability to manage our covenant compliance by taking certain actions including reductions in discretionary capital or other types of controllable expenditures, monetization of assets, amending or renegotiating the revolving credit agreement, accessing capital markets through a variety of alternative methods, or any combination of these alternatives. We expect to remain in compliance with all covenants under the 2024 Credit Agreement during the twelve-month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our
Current wording
As of the date of this report, we were in compliance with all covenants under the 2024 Credit Agreement, including those regarding the required interest coverage ratio and minimum guarantor value, which were 4.16:1.00 and 99.8%, respectively, as of December 31, 2025. If we fail to perform our obligations under the covenants, the revolving credit commitments under the 2024 Credit Agreement could be terminated, and any outstanding borrowings under the facilities could be declared immediately due and payable. If necessary, we have the ability to manage our covenant compliance by taking certain actions including reductions in discretionary capital or other types of controllable expenditures, monetization of assets, amending or renegotiating the revolving credit agreement, accessing capital markets through a variety of alternative methods, or any combination of these alternatives. We expect to remain in compliance with all covenants under the 2024 Credit Agreement during the twelve-month period following the date of this report based on our current operational and financial projections. However, we can make no assurance of continued compliance if our current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable.
Previous wording
We are a holding company and therefore rely exclusively on repayments of interest and principal on intercompany loans that we have made to our operating subsidiaries and income from dividends and other cash flows from our operating subsidiaries. There can be no assurance that our operating subsidiaries will generate sufficient net income to pay us dividends or sufficient cash flows to make payments of interest and principal to us. See Part I., Item 1A.—Risk Factors—As a holding company, we depend on our operating subsidiaries and investments to meet our financial obligations.
Current wording
We are a holding company and therefore rely exclusively on repayments of interest and principal on intercompany loans that we have made to our operating subsidiaries and income from dividends and other cash flows from our operating subsidiaries. There can be no assurance that our operating subsidiaries will generate sufficient net income to pay us dividends or sufficient cash flows to make payments of interest and principal to us. See Part I., Item 1A.—Risk
Previous wording
The amount available for purchase under the A/R Agreements fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after excluding excess concentrations and certain other ineligible receivables. The maximum purchase commitment of the Purchasers under the A/R Agreements is $250.0 million and the amount of receivables purchased by the third-party Purchasers as of December 31, 2024 was $130.0 million.
Current wording
The amount available for purchase under the A/R Agreements fluctuates over time based on the total amount of eligible receivables generated during the normal course of business after excluding excess concentrations and certain other ineligible receivables. The maximum purchase commitment of the Purchasers under the A/R Agreements is $250.0 million and the amount of receivables purchased by the third-party Purchasers as of December 31, 2025 was $137.0 million.
Previous wording
Purchase commitments outstanding on December 31, 2024 totaled approximately $323.8 million, primarily for rig-related enhancements, sustaining capital expenditures, operating expenses, and purchases of inventory. $323.6 million of the outstanding commitments are expected to be paid in 2025. Purchase commitments include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable pricing provisions; and the approximate timing of the transaction. We can reduce planned expenditures if necessary or increase them if market conditions and new business opportunities warrant it. The level of our outstanding purchase commitments and our expected level of capital expenditures for 2024 represent a number of capital programs that are currently underway or planned.
Current wording
Purchase commitments outstanding on December 31, 2025 totaled approximately $410.7 million, primarily for rig-related enhancements, sustaining capital expenditures, operating expenses, and purchases of inventory. $371.4 million of the outstanding commitments are expected to be paid in 2026. Purchase commitments include agreements to purchase goods or services that are enforceable and legally binding and that specify all significant terms, including fixed or minimum quantities to be purchased; fixed, minimum or variable pricing provisions; and the approximate timing of the transaction. We can reduce planned expenditures if necessary or increase them if market conditions and new business opportunities warrant it. The level of our outstanding purchase commitments and our expected level of capital expenditures for 2026 represent a number of capital programs that are currently underway or planned.
Previous wording
As of December 31, 2024, we had approximately $2.5 billion of net book value of long-term debt outstanding with $2.5 billion in aggregate principal. We have expected aggregate future interest payments of $894.5 million related to the outstanding debt with $193.3 million due in the next twelve months. See Note 9—Debt in Part II, Item 8.—Financial Statements and Supplementary Data for additional details. Our obligations for operating leases total $34.6 million with $8.6 million of the obligations coming due in the upcoming year. See Note 19—Leases in Part II, Item 8.—Financial Statements and Supplementary Data for additional details.
Current wording
As of December 31, 2025, we had approximately $2.5 billion of net book value of long-term debt outstanding with $2.5 billion in aggregate principal with $379.1 million in aggregate principal to be repaid in the next twelve months. We have expected aggregate future interest payments of $911.8 million related to the outstanding debt with $180.1 million due in the next twelve months. See Note 9—Debt in Part II, Item 8.—Financial Statements and Supplementary Data for
Previous wording
Operating Activities. Net cash provided by operating activities totaled $581.4 million during 2024, compared to net cash provided of $637.9 million during 2023. Operating cash flows are our primary source of capital and liquidity. Cash from operating results (before working capital changes) totaled $682.7 million during 2024, a decrease of $27.8 million when compared to $710.5 million in 2023. This was due to the decrease in activity across our business in 2024 compared to 2023. Changes in working capital items such as collection of receivables, other deferred revenue arrangements and payments of operating payables are significant factors affecting operating cash flows and can be volatile in periods of increasing or decreasing activity levels. Changes in working capital items used $101.2 million in cash flows during 2024 and used $72.6 million in cash flows during 2023.
Current wording
Operating Activities. Net cash provided by operating activities totaled $693.3 million during 2025, compared to net cash provided of $581.4 million during 2024. Operating cash flows are our primary source of capital and liquidity. Cash from operating results (before working capital changes) totaled $620.7 million during 2025, a decrease of $61.9 million when compared to $682.7 million in 2024. This was due to the decrease in activity across our business in 2025 compared to 2024. Changes in working capital items such as collection of receivables, other deferred revenue arrangements and payments of operating payables are significant factors affecting operating cash flows and can be volatile in periods of increasing or decreasing activity levels. Changes in working capital items provided $72.5 million in cash flows during 2025 and used $101.2 million in cash flows during 2024.
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Investing Activities. Net cash used for investing activities totaled $555.5 million during 2024 compared to net cash used of $570.4 million in 2023. Our primary use of cash for investing activities is for capital expenditures related to rig-related enhancements, new construction and equipment, and sustaining capital expenditures. During 2024 and 2023, we used cash for capital expenditures totaling $567.9 million and $540.9 million, respectively. We received $15.5 million in proceeds from sales of assets during 2024 compared to $14.1 million in 2023. We also invested $7.7 million in companies that focus on energy transition related technologies in 2024 compared to $21.3 million in 2023.
Current wording
Investing Activities. Net cash provided by investing activities totaled $97.1 million during 2025 compared to net cash used of $555.5 million in 2024. Our primary use of cash for investing activities is for capital expenditures related to rig-related enhancements, new construction and equipment, and sustaining capital expenditures. During 2025 and 2024, we used cash for capital expenditures totaling $715.9 million and $567.9 million, respectively. We received $98.6 million in proceeds from sales of assets and insurance proceeds during 2025 compared to $15.5 million in 2024. During 2025, we received $84.4 million in cash acquired in the Parker acquisition, net of cash paid and $622.9 million from the sale of Quail Tools.
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Net cash provided by financing activities totaled $592.6 million during 2023. During 2023, we received net proceeds of $881.7 million from issuance of long-term debt and repaid $298.5 million of outstanding long-term debt. We received $305.0 million from the public offering of NETC II and made distributions of $286.4 million from the Trust Account to NETC stockholders. Cash in these trusts can only be used in connection to the business combination or winding down of the SPAC and is not available to us for general operations.
Current wording
Financing Activities. Net cash used for financing activities totaled $566.8 million during 2025. During 2025, we received net proceeds of $700.0 million from issuance of long-term debt, repaid $0.9 billion of outstanding long-term debt. Also, we made distributions of $342.4 million from the Trust Account to NETC II stockholders. Cash in the Trust Account can only be used in connection to the SPAC and is not available to use for general operations. Net cash used for
Previous wording
Financing Activities. Net cash used for financing activities totaled $662.1 million during 2024. During 2024, we received net proceeds of $539.0 million from issuance of long-term debt and repaid $1.2 billion of outstanding long-term debt.
Current wording
financing activities totaled $662.1 million during 2024. During 2024, we received net proceeds of $539.0 million from issuance of long-term debt and repaid $1.2 billion of outstanding long-term debt.
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Depreciation of Property, Plant and Equipment. The drilling and drilling services industries are very capital intensive. Property, plant and equipment represented 63% of our total assets as of December 31, 2024, and depreciation and amortization constituted 21% of our total costs and other deductions in 2024.
Current wording
Depreciation of Property, Plant and Equipment. The drilling and drilling services industries are very capital intensive. Property, plant and equipment represented 61% of our total assets as of December 31, 2025, and depreciation and amortization constituted 24% of our total costs and other deductions in 2025.
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There have been no factors related to the performance of our portfolio of assets, changes in technology or other factors indicating that these estimates do not continue to be appropriate. Accordingly, for the years ended December 31, 2024, 2023 and 2022, no significant changes have been made to the depreciation rates applied to property, plant and equipment, the underlying assumptions related to estimates of depreciation, or the methodology applied. However, certain events could occur that would materially affect our estimates and assumptions related to depreciation. Unforeseen changes in operations or technology could substantially alter management’s assumptions regarding our ability to realize the return on our investment in operating assets and therefore affect the useful lives and salvage values of our assets.
Current wording
There have been no factors related to the performance of our portfolio of assets, changes in technology or other factors indicating that these estimates do not continue to be appropriate. Accordingly, for the years ended December 31, 2025, 2024 and 2023, no significant changes have been made to the depreciation rates applied to property, plant and equipment, the underlying assumptions related to estimates of depreciation, or the methodology applied. However, certain events could occur that would materially affect our estimates and assumptions related to depreciation. Unforeseen changes in operations or technology could substantially alter management’s assumptions regarding our
Previous wording
Audit claims of approximately $122.3 million attributable to income tax have been assessed against us. We have contested, or intend to contest, these assessments, including through litigation if necessary, and we believe the ultimate resolution, for which we have not made any accrual, will not have a material adverse effect on our consolidated financial statements. Tax authorities may issue additional assessments or pursue legal actions as a result of tax audits and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions.
Current wording
Audit claims of approximately $142.1 million attributable to income tax have been assessed against us. We have contested, or intend to contest, these assessments, including through litigation if necessary, and we believe the ultimate resolution, for which we have not made any accrual, will not have a material adverse effect on our consolidated financial statements. Tax authorities may issue additional assessments or pursue legal actions as a result of tax audits and we cannot predict or provide assurance as to the ultimate outcome of such assessments and legal actions.
Previous wording
Litigation and Self-Insurance Reserves. Our operations are subject to many hazards inherent in the drilling and drilling services industries, including blowouts, cratering, explosions, fires, loss of well control, loss of or damage to the wellbore or underground reservoir, damaged or lost drilling equipment and damage or loss from inclement weather or natural disasters. Any of these and other hazards could result in personal injury or death, damage to or destruction of equipment and facilities, suspension of operations, environmental and natural resources damage and damage to the property of others. Our offshore operations are also subject to the hazards of marine operations including capsizing, grounding, collision and other damage from hurricanes and heavy weather or sea conditions and unsound ocean bottom conditions. Our operations are subject to risks of war or acts of terrorism, civil disturbances and other political events.
Current wording
Litigation and Self-Insurance Reserves. Our operations are subject to many hazards inherent in the drilling and drilling services industries, including blowouts, cratering, explosions, fires, loss of well control, loss of or damage to the wellbore or underground reservoir, damaged or lost drilling equipment and damage or loss from inclement weather or natural disasters. Any of these and other hazards could result in personal injury or death, damage to or destruction of equipment and facilities, suspension of operations, environmental and natural resources damage and damage to the property of others. Our offshore operations are also subject to the hazards of marine operations including capsizing,
Previous wording
During 2024, 2023 and 2022, no significant changes were made to the methodology used to estimate insurance reserves. For purposes of earnings sensitivity analysis, if the December 31, 2024 reserves were adjusted by 10%, total costs and other deductions would change by $7.8 million, or 0.26%.
Current wording
During 2025, 2024 and 2023, no significant changes were made to the methodology used to estimate insurance reserves. For purposes of earnings sensitivity analysis, if the December 31, 2025 reserves were adjusted by 10%, total costs and other deductions would change by $7.2 million, or 0.27%.
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U.S. oil and gas production has proved resilient in the face of reduced drilling activity aided by efficiency gains.
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that permits us to issue letters of credit with total reimbursement obligations not to exceed $125.0 million. Letters of credit issued will not affect revolving loan capacity and vice versa.
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Factors—As a holding company, we depend on our operating subsidiaries and investments to meet our financial obligations.
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additional details. Our obligations for operating leases total $49.0 million with $12.6 million of the obligations coming due in the upcoming year. See Note 19—Leases in Part II, Item 8.—Financial Statements and Supplementary Data for additional details.
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ability to realize the return on our investment in operating assets and therefore affect the useful lives and salvage values of our assets.
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grounding, collision and other damage from hurricanes and heavy weather or sea conditions and unsound ocean bottom conditions. Our operations are subject to risks of war or acts of terrorism, civil disturbances and other political events.
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Previous report — wording carried elsewhere
current projections or material underlying assumptions prove to be incorrect. If we fail to comply with the covenants, the revolving credit commitment could be terminated, and any outstanding borrowings under the facility could be declared immediately due and payable.