Nabors Industries (NBR)

The group of companies that comprise CLSA are affiliates of Calyon Securities (USA) Inc.See important disclosures on page 25.

Riding the Rebound• Nabors Industries currently reigns as the industry's largest provider of

land-based contract drilling services, with a fleet of approximately 550land drilling rigs operating around the globe.

• We believe NBR is well positioned to benefit from the current NorthAmerican land drilling recovery, as well as growing demand for its rigsinternationally.

• We reiterate our BUY rating on the shares of NBR and 12-month pricetarget of $50.

U.S. Land Drilling Rebounding. The U.S. land drilling market is in themiddle of a turnaround. The market has experienced significant firmingover the past few months and we believe that the prospects for anever-improving 2H08 continue. We believe that continued strength in oiland gas prices coupled with a developing interest in shale plays willsustain the U.S. land drilling rebound.

• Strong in Canada and Alaska. We believe the scenario in Canadaand Alaska is improving as well. NBR is ready to capitalize on thistrend led by its sizable fleet in Canada. We believe that the currentincreasing Canadian rig count coupled with improving activity and dayrates bodes well for NBR.

• International Drilling Offers Substantial Growth. NBR continuesto deploy its strategy of extending its presence in the boominginternational market. It has built its international fleet toapproximately 140 units, continues to be the largest land driller inSaudi Arabia, and has been steadily achieving attractive day rates andmargins. We expect NBR to increase operating income in this segmentby 39% in 2008.

• Quality Driving Strong Visibility. Strong demand for NBR's rigs,highlighted by its Pace Rigs, has stemmed from a need for highquality rigs to drill in the various complex shale plays. The emergenceof these shale plays has allowed NBR to achieve earnings visibility andcontinue to win term contracts. In 2Q08 NBR signed more than 20term contracts and has 15 to 20 prospective term contracts in sight.

• 40% Upside Potential. The shares are trading at 8.6x our 2009 EPSestimate, a discount to the peer group average of 9.6x. We believethat the shares of NBR should trade at a 25% premium versus theland drilling group. In our opinion, a 12x P/E applied to the 2009 EPSestimate of $4.15 is a fair valuation for the stock. We are reiteratingour BUY rating on the shares of Nabors Industries with a $50 pricetarget.

FinancialsDec Yr 06A 07A 08E 09EEPS $3.58 $3.17 $3.25 $4.15 --P/E 9.9x 11.2x 11.0x 8.6x NM

CREDIT AGRICOLE GROUP

Nabors Industries$35.60 - BUY

Mark S. [email protected] 408-5683

Shreyans [email protected] 408-5707

Zachary F. [email protected] 261-3485

September 2, 2008 Company Update

USAOil Services & EquipmentReuters NBRBloomberg NBR

Priced on 09/01/2008S&P 1,283

12M hi/lo $50.58/$23.61

12M price target $50.00±% potential +40%Target set on 08/20/2008

Shares in issue (m) 280Free float (est)(m) 274

Market Cap (m) $9,968

3M avg. daily vol.(000) 7,960,470

2 [email protected] 02 September 2008

Oilfield Services & Equipment

Nabors Industries Rating: BUY PT: $50

2 September 2008

USA Oil Services & Equipment

Ticker NBR Price (07/27/08) $37.16 12M hi/lo $23.61 / $50.58

12M price target $50 ±% potential +34% Target set on 27 August 2008

Shares Out. 285.7m Market cap US $10,618m 3M Avg. volume 8,042,730

Stock performance (%) 1M 3M 12M

Absolute -4.7% -13.4% 21.6%Relative -3.6% -4.8% 34.7%

0.0

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98

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NBRSPX

Source: FactSet

Mark S. Urness [email protected]

(212) 408-5683

Shreyans Jain

[email protected] (212) 408-5707

Zachary F. Sadow

[email protected] (212) 261-3485

Financials Year to 31 Dec 05A 06A 07A 08E 09ETotal Revenues ($ Mill) 3,460.9 4,840.7 5,009.3 5,340.8 6,176.9Revenue Growth 45% 40% 3% 7% 16%Operating Income ($ Mill) 879.8 1491.9 1237.3 1259.2 1714.9Net Income ($ Mill) 659.7 1059.0 930.7 943.2 1225.4EPS Operating ($) $2.03 $3.58 $3.17 $3.25 $4.15P/E 18.2x 10.3x 11.7x 11.4x 8.9xCash Flow Per Share ($) 3.08 4.92 4.70 5.32 6.39P/CF 12.1x 7.5x 7.9x 6.9x 5.8xEBIT Margin 25% 31% 25% 24% 28%Source: Calyon Securities (USA) Inc., Bloomberg

in association with

Riding the Rebound Nabors Industries currently reigns as the industry’s largest provider of land-based contract drilling services, with a fleet of approximately 550 land drilling rigs operating around the globe, and a large position in the workover and well-servicing market, with a fleet of approximately 750 well-servicing rigs primarily located in the U.S. and Canada. We believe NBR is well positioned to benefit from the current North American land drilling recovery. We reiterate our BUY rating on the shares of NBR and 12-month price target of $50.

U.S. Land Drilling Rebounding. The U.S. land drilling market is in the middle of a robust recovery. The market has experienced significant firming over the past few months and we believe that the prospects for an ever-improving 2H08 continue. Reflecting the rebound is a steady increase in the U.S. land rig count and an increase in NBR’s working rig count in the U.S. Lower 48. We believe that continued strength in oil and gas prices coupled with a developing interest in shale plays will sustain the U.S. land drilling recovery.

Strong in Canada and Alaska. We believe the scenario in Canada and Alaska is improving as well. NBR is ready to capitalize on this trend led by its sizable fleet in Canada. While Canada and Alaska had a sequentially weak quarter in 2Q08, we see the trend as already improving. We believe that the currently increasing Canadian rig count coupled with improving activity and day rates bodes well for NBR.

International Drilling Offers Substantial Growth. NBR continues to execute its strategy of extending its presence in the booming international markets. It has built its international fleet to approximately 140 units, continues to be the largest land driller in Saudi Arabia and has been steadily achieving attractive day rates and margins. Contributions from new land rigs should support substantial international revenue growth during the next 18 months. We expect NBR to increase operating income in this segment by 39% in 2008.

Quality Driving Strong Visibility. Strong demand for NBR’s rigs, highlighted by its Pace Rigs, stems from a need for high quality rigs to drill in the various complex shale plays. The emergence of these shale plays has allowed NBR to achieve earnings visibility and continue to win term contracts. In 2Q08 NBR signed more than 20 term contracts and has 15 to 20 prospective term contracts in sight.

Over 30% Upside Potential. The shares are trading at 8.9x our 2009 EPS estimate, a discount to the peer group average of 9.6x. In addition, at 5.8x estimated 2009 cash flow/share, the stock is trading at par with comparable land drillers. With its technologically superior fleet of rigs and a diversified business mix, NBR has greater earnings visibility than the average land driller. As a result, we believe that NBR should trade at a 25% premium versus the land drilling group. In our opinion, a 12x P/E applied to the 2009 EPS estimate of $4.15 is a fair valuation for the company. We are reiterating our BUY rating on the shares of Nabors Industries with a $50 price target.

[email protected] September 2008

Riding the Rebound Nabors Industries - BUY

Contents

Executive Summary ............................................................................... 4

Company Snapshot ................................................................................ 5

Riding the Rebound ............................................................................... 6

Attractive Industry Fundamentals.......................................................... 9

Natural Gas Market to Remain Tight in ‘08 ........................................... 11

Strong Financials & Appealing Valuation .............................................. 13

Risks ................................................................................................... 15

Charts & Tables ................................................................................... 16

All prices quoted herein are as at close of business 27th August 2008, unless otherwise stated

Other Recent Reports



Executive Summary We are reiterating our BUY rating on the shares of Nabors Industries with a $50 price target.

U.S. Land Drilling Rebounding. The U.S. land drilling market is in the middle of a robust recovery. The market has experienced significant firming over the past few months and we believe that the prospects for an ever-improving 2H08 continue. Reflecting the rebound is a steady increase in the U.S. land rig count and an increase in NBR’s working rig count in the U.S. Lower 48. We believe that continued strength in oil and gas prices coupled with a developing interest in the shale plays will sustain the U.S. land drilling recovery.

Strong in Canada and Alaska. We believe the scenario in Canada and Alaska is improving as well. NBR is ready to capitalize on this trend led by its sizable fleet in Canada. While Canada and Alaska had a sequentially weak quarter in 2Q08, we see the trend as already improving. We believe that the current increasing Canadian rig count coupled with improving activity and day rates bodes well for NBR.

International Drilling Offers Substantial Growth. NBR continues to execute its strategy of extending its presence in the booming international markets. It has built its international fleet to approximately 140 units, continues to be the largest land driller in Saudi Arabia and has been steadily achieving attractive day rates and margins. Contributions from new land rigs should support substantial international revenue growth during the next 18 months. We expect NBR to increase operating income in this segment by 39% in 2008.

Quality Driving Strong Visibility. Strong demand for NBR’s rigs, highlighted by its Pace Rigs, has stemmed from a need for high quality rigs to drill in the various complex shale plays. The emergence of these shale plays has allowed NBR to achieve earnings visibility and continue to win term contracts. In 2Q08 NBR signed more than 20 term contracts and has 15 to 20 prospective term contracts in sight.

Over 30% Upside Potential. The shares are trading at 8.9x our 2009 EPS estimate, a discount to the peer group average of 9.6x. In addition, at 5.8x estimated 2009 cash flow/share, the stock is trading at par with comparable land drillers. With its technologically superior fleet of rigs and a diversified business mix, NBR has greater earnings visibility than the average land driller. As a result, we believe that NBR should trade at a 25% premium versus the land drilling group. In our opinion, a 12x P/E applied to the 2009 EPS estimate of $4.15 is a fair valuation for the company. We are reiterating our BUY rating on the shares of Nabors Industries with a $50 price target.

The U.S. land drilling market is in the middle

of a recovery.

NBR continues to executeits strategy of extending

its presence in the booming international

markets.

We are reiterating our BUY rating on the shares

of Nabors Industries with a $50 price target.



Company Snapshot Current Operations

Nabors Industries operates the largest land drilling fleet in North America with approximately 550 land rigs and 750 land workover rigs. The company operates a fleet of approximately 140 land rigs in a variety of international markets, highlighted by its incumbent position as the largest land driller in Saudi Arabia. NBR also operates an offshore fleet consisting of 36 platform rigs, 13 jackups and four barge rigs in the Gulf of Mexico and various international locations. NBR’s well servicing segment is comprised of comprehensive oilfield hauling, engineering, construction and project management services as well as manufacturing of top drives and instrumentation systems. In 2007, revenues derived internationally from drilling and related services encompassed 21% of total revenues.

Figure 1

2007 North America Revenue and Operating Income

North America 68%

International 24%

Oil and Gas4%

Manufac, Logistics &

other4%

Operating Income

*Exceludes $136.5 M M deduction for Other

International 21%

Manufac, Logistics &

other12%

Oil and Gas3%

North America 64%

Revenues

*Exceludes $219.4 M M deduction for Other

Source: Company reports

Background Since 1987, NBR has grown into the world’s largest provider of land drilling contract services. NBR has stretched its reach to include operations in most of the major oil and gas producing regions in the world. The company has also increased its scope since 1987 to incorporate offshore drilling, U.S. land well-servicing and workover activities.

Figure 2

2007 Revenue and Operating Income

U.S. Land Well-Servicing

21%

U.S. Offshore6%

Canada16%Alaska

5%

U.S. Land Drilling 52%

Revenues

U.S. Land Drilling 64%

U.S. Land Well-Servicing

17%

U.S. Offshore6%

Alaska4%

Canada9%

Operating Income




Riding the Rebound We believe that NBR is well positioned to capitalize on the firming North American land drilling market.

Land Drilling Nabors has over 550 land drilling rigs, with about 435 units (79%) located in North America, the largest land drilling market in the world. The remaining rigs are spread across South America, Mexico, the Caribbean, the Middle East, Far East, Russia and Africa. Out of the 336 rigs located in the U.S. Lower 48, 242 are actively marketed and 94 are stacked in inventory.

Figure 3

NBR: North American Land Drilling Fleet

Lower 4877%

Alaska4%

Canada19%

Source: Company reports and Calyon Securities (USA) estimates

We believe that land-drilling activity in North America is in the middle of a recovery. The current elevated prices of oil and gas coupled with developing interest in shale plays have stimulated North American drilling activity. The firming U.S. land drilling market is evidenced by the steady increase in the U.S. land rig count and an increase in NBR’s working rig count.

Figure 4

NBR Working Rig Count and Utilization

210

215

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235

240

245

1Q07 2Q07 3Q07 4Q07 1Q08 2Q08

62%

64%

66%

68%

70%

72%

74%

76%

78%

80%

82%

Rigs Working Utilization

Lower 48 Drilling


Nabors has over 550 land drilling rigs.

We believe that land-drilling activity in North America is in the middle

of a recovery.



We expect that land-drilling activity in North America will remain robust over the next year as E&P customers continue to drill more in an effort to capitalize on high oil and gas prices. Volatility in natural gas prices is a cause for some concern, as it relates to customers’ propensity to spend as well as equity valuations in the drilling sector. However, we are seeing evidence that the E&Ps will drill through any near-term price weakness with confidence in the long-term fundamentals.

Our model assumes Nabors will average 248 active rigs in the Lower-48 states this year, another 31 in Canada, and 11 in Alaska. We expect the average size of the fleet in the Lower-48 to move up to 338 while remaining at 81 in Canada and 20 in Alaska.

Figure 5

Total and Active North American Land Drilling Fleet – 2008E

1131

248

19

81

338

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Active Rigs # of Rigs


Workover and Well Servicing NBR has more than 735 workover rigs in North America, primarily located in Texas, California, and Western Canada. Though not as profitable as the land drilling business, the workover and well-servicing business does have high operating margins, which came in at 17.3% in 2Q08 versus U.S. land drilling which came in at 30.6%. Going forward, we see continued strength in well service and workover activity, as sustained high oil prices lead to increased repair and maintenance of mechanically pumped wells. In addition, NBR Well Services continues to expand in the rapidly growing Rocky Mountains region.

Operating in a Fragmented Industry Although the land-drilling industry is more consolidated today than in the past, we continue to characterize it as fragmented. We estimate that the top eight players accounted for roughly half of overall land-drilling revenues in 2007. Nabors, with about 12% of the market by our estimates, is the only company on this list, apart from PTEN, with more than a 10% share. According to Spears & Associates, the total land-based drilling revenues reached $20.4 billion in 2007.

Volatility in natural gas prices is a cause for

some concern.

We see continued strength in the well

service and workover activity.



Figure 6

Top Five U.S. Land Drilling Marketed Rigs

Nabors, 286

Patterson, 262

Helmerich& Payne, 176

Unit, 110

Grey Wolf, 108

Source: Land Rig Newsletter

The sector continues to have a significant number of small regional drillers that have historically benefited from operational and geological expertise in their particular regions. However, vast improvements in drilling processes and rig technology and the intensifying focus on safety and the environment have eroded away any advantage the smaller players have had. In our view, they now operate at a meaningful disadvantage to the larger land drillers.

International Drilling Offers Substantial Growth The international markets continue to offer attractive opportunities. NBR has built its international fleet to approximately 140 units and maintains the largest land drilling presence in Saudi Arabia. We expect NBR to grow its international operating income by 39% in 2008 over last year due to contributions from international jackups and additional land rigs. Strong growth in day rates and margins should support this trend.

Figure 7 Figure 8

International Revenue & Operating Income International Day Rate & Cash Margins

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The international markets continue to offer an

attractive opportunity.



Attractive Industry Fundamentals We believe the current upcycle represents the strongest and longest growth period for the oil service industry since the 1970’s. Our positive investment thesis is formulated based on a number of important fundamental trends in the industry that we believe will remain intact for the foreseeable future.

Robust Upstream Capital Spending After years of strong spending growth in 2006 and 2007, further expansion of upstream capital expenditures is expected to continue into 2008, albeit at a slower rate. Capital spending grew by an estimated 26% in 2006, the largest increase since 2001, driven both by high oil prices and rising costs. Capital spending grew by an estimated 19% in 2007. In 2008, we expect capital spending to increase by close to 20% due to resilient global oil demand and strong oil prices; increased capital requirements for remote deepwater projects; higher oil services costs and the increased difficulty in replacing reserves. Although drilling for unconventional gas in North America remains one of the drivers of increased spending, in our view, oil leveraged companies see more attractive opportunities in lower-cost regions outside North America.

Figure 9

Worldwide Upstream Capital Spending (2008E)

Canada7%

United States24%

Outside NA

69%

U.S. Indep's

14%

National Oil Cos24%

Foreign Cos22%

Canadians 8%

Major Oils32%

Source: Calyon Securities USA estimates

Oil Demand Growth Remains a Key Driver In our view, strong oil demand growth precipitated by the synchronized global economic expansion has been the primary driver of accelerating upstream capital spending growth. In 2006, oil demand growth slowed to 1.0%, due primarily to price-related demand destruction. Importantly, oil demand growth rebounded to 1.8% in 2007 and is expected to average nearly 2.0% per year for the next several years, according to the International Energy Agency (IEA). The global economy is expected to grow at a rate of approximately 4.0% in 2008, which should support oil demand. In particular, the Chinese economy, a key driver of oil demand growth, is expected to grow at a rate of 9-10% over the next two years. The single biggest risk to our positive investment thesis is the potential for global economic weakness and slowing oil demand growth brought on by high prices.

We believe that there is a close correlation between global oil demand and upstream capital spending trends. The finding and development (F&D) costs which have been increasing at 10% per year since the mid-1990s. The escalation in capital requirements puts the oil services industry under pressure to find ways to help customers reduce costs.

After strong spending growth in 2006 and 2007,

further expansion of upstream capital

expenditures is expected to continue into 2008.

Finding & development costs have been rising

rapidly.

Oil demand is expected to grow at approximately

2%/year.



Challenges Replacing Reserves and Growing Production We believe that the oil industry faces serious problems replacing reserves each year and growing production to meet rising global demand. According to the IEA, global oil demand may increase by as much as 50% over the next 25 years. Obviously, if this huge increase in consumption is to be met, the industry faces tremendous challenges. The major oils have begun to adopt more realistic oil price forecasts and raise their upstream spending budgets accordingly. Even after beginning to increase spending, the major oils have yet to achieve the reserve replacement levels desired, and year/year production continues to decline for the major oils as a group. Technologies such as horizontal drilling and advanced well stimulation techniques have resulted in more rapid depletion of oil reserves.

Worldwide Rig Count Continues to Grow We believe worldwide drilling activity will remain solid, with anticipated growth through 2008. Given the strong crude oil and natural gas prices, we expect to see a continued increase in the land drilling activity in the coming quarters. The operators were able to lock in high natural gas prices as the strip near $13/Mcf in June 2008. We forecast a 7% increase in the U.S. land rig count to 1,816 units in 2008 from 1,695 units last year. With the U.S. land rig count averaging at 1,712 units in 1Q08, we believe that this increase to 1,816 for 2008 is easily achievable, given the recent strength in activity. While the newbuilds continue to replace legacy rigs, some older rigs, which were previously stacked, are also being reactivated. This should further help the rig count. Weatherford recently indicated that the Canadian rig count might be 15% higher year/year in 3Q08. We estimate the Canadian rig count will average 300 units in 2008.

We expect international rig count to average 1,094 units in 2008, 9% higher than 2007. The 89-unit increase in international rig count in 2008 is expected to be driven by increased demand from national oil companies such as Pemex, Saudi Aramco and ONGC. We believe that the rig count will continue to grow worldwide in 2009, driven by strong demand from international markets. We expect the North American rig count to grow 7% year/year to 2,340 in 2009. The international rig count is expected to increase more rapidly as new offshore rigs start drilling in the international markets. We expect the international rig count to average 1,190 units in 2009, an increase of 9% year/year.

Figure 10

Worldwide Rig Count (1975-2008E)

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1,000

2,000

3,000

4,000

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6,000

1975

1977

1979

1981

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1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009E

Rig

Co

un

t

U.S. Canada International Average

30 Year Average

Source: Baker Hughes and Calyon Securities (USA) estimates

Global oil demand may increase by as much as

50% over the next 25 years.

We believe worldwide drilling activity will remain solid, with

anticipated growth through 2008.



Natural Gas Market to Remain Tight in ‘08 Natural Gas Price Forecast Our 2008 natural gas price forecast is $10.17/MMBtu and our 2009 forecast is $10.25/MMBtu. A key factor in our thesis is that the oil-to-natural gas price ratio will narrow to the 10-11x level by year-end, driven primarily by limited liquefied natural gas (LNG) imports and greater capital/resource allocation to oil versus natural gas projects.

Despite actual and pending increases to US regasification capacity, we are projecting that US LNG imports will remain essentially flat year-over-year in 2008. This is being driven by higher LNG prices in Asia and Europe, where LNG prices are more closely tied to crude oil. Interestingly, while we believe the oil-to-natural gas fuel switching in the US power-generation sector has been essentially tapped out, there appears to be incremental switching capacity in Asia (particularly Japan and Korea), with high crude oil prices making natural gas the more attractive fuel.

Compounding the problem, there have been start-up delays at a number of key global liquefaction projects, which have significantly reduced the amount of LNG supply expected to reach the market this year. Out of a total 56 MM tons (~7.4 Bcf/d) previously scheduled to be on-line in 2008, less than one-third is expected to make it to market before year-end.

Figure 11

Global Natural Gas Price Comparison

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20

1/5

/2001

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/2001

9/5

/2001

1/5

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/2007

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/2007

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/2007

1/5

/2008

$/M

MBtu

Europe: UK Balancing Point Japan: Japan Crude Cocktail United States: Henry Hub

Source: FactSet

Another important impact of the higher crude oil price (relative to natural gas) is the capital and resource allocations of producing companies. With oil prices running significantly higher on an energy-equivalent basis to natural gas, returns on oil projects look much greater than for natural gas. As a result, companies with limited capital resources and labor have to choose. Several independent producers have already indicated shifts in their capital budgets towards oil projects, and we expect to begin to see a modest natural gas production impact over the next 12 months.

Our 2008 natural gas price forecast is

$10.17/MMBtu and our 2009 forecast is $10.25/MMBtu.

Another important impact of the higher crude oil

price (relative to natural gas) is the capital and resource allocations of producing companies.



Figure 12

US LNG Imports

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Bcf

/d

Source: US Department of Energy

We expect offshore production to increase 10% next year driven by the start-up of Independence Hub (and other projects). Onshore production is expected to increase roughly 3.5% driven by the continued ramp up in drilling (the average nat gas rig count increased 7% in 2007 and we are projecting a 4% increase this year). Overall though, we are still projecting a 3-4% year-over-year increase in total US natural gas production.

Demand to Grow Nearly 2% in 2008 Utilizing a bottoms-up approach to analyze the natural gas supply/demand fundamentals, we estimate that the natural gas market will remain tight in 2008, as demand is projected to slightly outstrip supply. We estimate that natural gas storage on November 1, 2008 will be 3.3-3.4 Tcf, or 5% below the level on November 1, 2007.

We are projecting year-over-year natural gas demand growth of roughly 1.8% in 2008, driven largely by a 3% year-over-year uptick in power generation demand. In addition to an overall 1.5% increase in electricity demand (essentially matching Calyon’s US GDP growth forecast of 1.8%), we expect natural gas will continue to capture market share from fuel oil and coal.

We project natural gas demand will slightly

outstrip supply in 2008.

Demand growth is being driven largely by the

power generation sector.



Strong Financials & Appealing Valuation With strong fundamental trends driving demand for land-based drilling, we believe NBR will post strong revenue and earnings growth in 2008 and 2009. In our view, NBR is well positioned to benefit from the U.S. land drilling rebound and should generate strong and sustained earnings growth in the years ahead. The company has an impressive financial profile. NBR has also shown an ability to bring advances in rig design to market, which should help it grow in the future.

In 2008, we expect revenue to come in at $5.34 billion, advancing to $6.18 billion next year. We estimate that NBR will earn $943.2 million, or $3.25/share, this year, and $1.23 billion, or $4.15/share, in 2009.

Volatile swings in activity in the land-drilling market make earnings stability difficult to achieve. That said, we have seen fundamental improvements in pricing patterns in the sector over the past decade, thanks to industry consolidation and increasing activity from the majors and large independents. In addition, the trend toward long-term commitments should add a meaningful amount of stability to revenue and earnings at Nabors.

We believe the trend toward long-term contracts demonstrates the confidence that E&P customers have in the sustainability of the current upcycle. NBR currently has a significant proportion of its rigs in the Lower-48 on term contracts, and this will continue to trend higher as the newbuilds are added to the fleet.

Strong Balance Sheet Nabors’ balance sheet is strong, with a net-debt-to-total-capital of 37% at the end of 2Q08, and the cash-flow outlook is very positive, thanks in part to the visibility provided by the healthy percentage of term commitments that the company has entered into and the robust outlook towards North American land drilling.

Good Operating Leverage Soft demand and excess supply for land rigs have pushed day rates lower over the past year. The company’s Lower-48 fleet of land rigs saw average day rates decline by 3% in 2Q08, to $19,903, over the year ago period. We expect day rates to continue to trend higher this year and next as the supply for rigs tightens in North America due to the active drilling environment. We expect average day rates to increase by 7% in 2Q09 to $21,300 over 2Q08.

The shares of NBR have advanced more than four-fold over the past 10 years, far outpacing the S&P 500 Index. However, the stock exhibits a fair amount of volatility, with movements to the downside occurring over relatively short periods of time. Since investors are very mindful of this fact, short-term stock price movements are heavily influenced by a number of leading indicators, including natural gas and crude oil prices (the latter to a somewhat lesser degree), the Baker Hughes North American rig count, and reports on E&P spending, particularly from the operators focused on the North American markets.

The shares of NBR have more or less moved in tandem with the Philadelphia Oil Services Index (OSX) over the past several years. The same generally holds true over longer periods of time, although NBR’s upward and downward moves have historically been more pronounced than those of the OSX.

We have seen fundamental

improvements in pricing patterns in the sector over the past decade.

Nabors’ balance sheet is strong, with a net-debt-to-total-capital of 37%.

The shares of NBR have advanced over four-fold over the past 10 years.



Figure 13

NBR Relative Performance

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NBROSXSPX

Source: FactSet

Over 30% Upside Potential The shares are trading at 8.9x our 2009 EPS estimate, a discount to the peer group average of 9.6x. In addition, at 5.8x estimated 2009 cash flow/share, the stock is trading at par with comparable land drillers. With its technologically superior fleet of rigs and a diversified business mix, NBR has greater earnings visibility than the average land driller. As a result, we believe that NBR should trade at a 25% premium versus the land drilling group. In our opinion, a 12x P/E applied to the 2009 EPS estimate of $4.15 is a fair valuation for the company. We are reiterating our BUY rating on the shares of Nabors Industries with a $50 price target.

We reiterate our BUY rating on the shares of

Nabors Industries with a $50 price target.



Risks

A Volatile Group with Considerable Risks While we believe that industry fundamentals are strong and that revenue and earnings visibility has reached unprecedented levels, we also acknowledge that oil service stocks are volatile and substantial risks to our investment thesis continue to exist.

By far the greatest risk to our positive investment thesis and the continuation of the current upcycle is the potential for slowing global economic growth. If oil and natural gas prices decline precipitously, the oil service stocks would also fall sharply.

One of the risks to our investment thesis is the scenario in which the E&P companies continue to exercise capital discipline and do not meaningfully increase upstream capital spending.

Another risk is that of external factors such as warm winter weather impacting oil and natural gas demand. We estimate an average natural gas price of $10.17/Mcf and crude oil price of $120.43/Bbl will prevail in 2008, which should support the estimated level of drilling and exploration and production. However, adverse weather conditions and decreased demand for crude oil and natural gas may impact the company’s operations adversely.

Another substantial risk to our positive investment thesis is the threat of oversupply in the land drilling markets. Newbuild construction may create an oversupply and lead to declining pricing and utilization.

NBR has operations in parts of the world that have had unsettled political conditions, wars, strikes, terrorism, etc. Continued uncertainty in such countries could adversely impact oil service activity.

The greatest risk to our positive investment thesis

is the potential for slowing global economic

growth.


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Charts & TablesFigure 14

Land Drilling Companies: Comparative Valuation Table

Mark S. Urness(212) [email protected]

Price Price Cash Flow per Share Price/Cash FlowCompany Symbol Rating Target 08/27/08 2007A 2008E 2009E 2007A 2008E 2009E 2007A 2008E 2009E 2007A 2008E 2009ELand Drillers (7)Bronco Drilling BRNC Neutral $17 $15.82 $1.44 $1.30 $1.85 11.0 12.2 8.5 $3.14 $3.13 $3.86 5.0 5.1 4.1Grey Wolf GW NR NR $8.84 0.76 0.66 0.80 11.6 13.4 11.1 1.19 1.20 1.23 7.4 7.4 7.2Helmerich & Payne HP Add $67 $58.27 3.97 4.30 5.15 14.7 13.6 11.3 5.66 6.24 7.27 10.3 9.3 8.0Nabors Industries NBR Buy $50 $37.16 3.17 3.25 4.15 11.7 11.4 8.9 4.70 5.32 6.39 7.9 7.0 5.8Patterson-UTI PTEN NR NR $29.55 2.52 2.27 2.85 11.7 13.0 10.4 4.24 4.00 4.95 7.0 7.4 6.0Pioneer Drilling PDC NR NR $17.79 1.04 1.44 2.00 17.1 12.4 8.9 2.74 3.17 3.89 6.5 5.6 4.6Unit Corporation UNT Buy $90 $70.77 5.71 7.75 8.85 12.4 9.1 8.0 11.63 15.96 17.94 6.1 4.4 3.9Average 12.9 12.2 9.6 7.2 6.6 5.7

Mkt Firm% Ch. 52-Week Book Price/ Debt/ Shares Cap Value

Company Symbol YTD Low High Value Book Cap Out ($MM) ($MM) 2007A 2008E 2009E 2007A 2008E 2009ELand Drillers (7)Bronco Drilling BRNC 6.5% $11.21 $18.69 14.05 1.13 15.5% 26.1 413 479 108 96 119 4.4 5.0 4.0Grey Wolf GW 65.9% 4.85 9.65 3.70 2.39 29.4% 178.3 1576 1,603 351 290 323 4.6 5.5 5.0Helmerich & Payne HP 45.4% 29.49 77.24 18.98 3.07 19.2% 106.1 6182 6,571 746 895 1,046 8.8 7.3 6.3Nabors Industries NBR 35.7% 23.61 50.58 15.80 2.35 47.0% 285.7 10618 14,093 1,675 1,859 2,375 8.4 7.6 5.9Patterson-UTI PTEN 51.4% 17.40 37.45 12.32 2.40 2.6% 153.9 4548 4,580 860 745 795 5.3 6.1 5.8Pioneer Drilling PDC 49.7% 8.95 20.75 9.17 1.94 0.0% 49.7 883 817 184 196 237 4.4 4.2 3.4Unit Corporation UNT 53.0% 43.30 88.24 30.94 2.29 8.3% 46.4 3282 3,411 1,675 1,859 2,375 2.0 1.8 1.4Average 43.9% 2.22 17.4% 5.4 5.4 4.5

NR: Not Rated; First Call & Calyon Securities estimates used.

Earnings per Share Price/Earnings

EBITDA EV/ EBITDA



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Figure 15

CSI Oil Services Universe: Comparative Valuation Table

Mark S. Urness

(212) 408-5683

[email protected] Price

Company Symbol Rating Target 08/27/08 2006 2007 2008E 2009E 2006 2007 2008E 2009E 2006 2007 2008E 2009E 2006 2007 2008E 2009ELarge Cap Service (6)Baker Hughes BHI Buy $104 $81.91 $4.17 $4.73 $5.40 $6.50 19.7 17.3 15.2 12.6 $5.47 $6.36 $7.50 $8.91 15.0 12.9 10.9 9.2Halliburton HAL Buy $59 45.77 1.42 2.54 2.90 3.70 32.3 18.0 15.8 12.4 2.19 3.49 3.97 4.77 20.9 13.1 11.5 9.6National Oilwell Varco NOV Buy $96 76.68 1.95 3.74 5.00 6.00 39.3 20.5 15.3 12.8 2.40 4.34 6.18 7.23 31.9 17.7 12.4 10.6Schlumberger SLB Buy $114 98.52 3.01 4.18 4.90 6.00 32.7 23.6 20.1 16.4 4.24 5.83 6.74 7.86 23.2 16.9 14.6 12.5Smith International SII Add $83 72.97 2.47 3.17 3.95 4.90 29.6 23.0 18.5 14.9 3.23 4.09 5.04 6.15 22.6 17.8 14.5 11.9Weatherford Intnl. WFT Buy $50 39.15 1.27 1.67 2.10 2.95 30.8 23.4 18.7 13.3 1.94 2.45 2.78 4.11 20.2 16.0 14.1 9.5Average 30.7 21.0 17.3 13.7 22.3 15.7 13.0 10.6Mid Cap Service (8)BJ Services BJS Buy $32 $28.02 $2.52 $2.55 $2.05 $2.50 11.1 11.0 13.7 11.2 $3.05 $3.25 $2.93 $3.41 9.2 8.6 9.6 8.2Cameron International CAM Buy $60 48.50 1.44 2.15 2.70 3.35 33.8 22.5 18.0 14.5 1.79 2.64 3.26 4.01 27.1 18.4 14.9 12.1FMC Technologies FTI Buy $66 54.15 1.51 2.30 2.95 3.50 35.9 23.5 18.4 15.5 2.00 2.89 3.48 3.89 27.1 18.7 15.6 13.9Global Industries GLBL Add $10 9.80 1.63 1.36 0.80 1.00 6.0 7.2 12.3 9.8 1.96 1.72 1.19 1.43 5.0 5.7 8.2 6.8McDermott Intnl. MDR Buy $45 35.11 1.42 2.66 2.90 3.45 24.7 13.2 12.1 10.2 1.81 3.38 3.93 4.55 19.4 10.4 8.9 7.7Oceaneering International OII Buy $74 63.29 2.26 3.24 3.65 4.60 28.0 19.6 17.4 13.8 3.72 4.92 5.64 6.92 17.0 12.9 11.2 9.2Oil States International OIS Add $61 56.72 3.67 3.83 4.90 5.50 15.5 14.8 11.6 10.3 4.74 5.21 6.86 7.77 12.0 10.9 8.3 7.3Willbros Group WG Add $45 41.90 (0.98) (1.66) 1.90 2.50 NM NM 22.1 16.8 (4.29) (1.92) 3.04 3.86 NM NM 13.8 10.9Average 22.1 16.0 15.7 12.7 16.7 12.2 11.3 9.5Drillers (11)Bronco Drilling BRNC Neutral $17 $15.82 $2.43 $1.44 $1.30 $1.85 6.5 11.0 12.2 8.5 $3.66 $3.14 $3.13 $3.86 4.3 5.0 5.1 4.1Diamond Offshore DO Buy $139 112.35 5.09 6.54 10.05 12.50 22.1 17.2 11.2 9.0 6.54 7.79 12.13 14.81 17.2 14.4 9.3 7.6ENSCO International ESV Add $80 70.22 4.97 6.74 8.40 9.15 14.1 10.4 8.4 7.7 6.12 7.99 9.78 10.70 11.5 8.8 7.2 6.6Helmerich & Payne HP Add $67 58.27 2.77 3.97 4.30 5.15 21.1 14.7 13.6 11.3 3.72 5.66 6.24 7.27 15.7 10.3 9.3 8.0Hercules Offshore HERO Buy $35 23.18 3.67 2.33 1.50 3.35 6.3 9.9 15.5 6.9 4.66 4.16 3.71 5.90 5.0 5.6 6.2 3.9Nabors Industries NBR Buy $50 37.16 3.58 3.17 3.25 4.15 10.4 11.7 11.4 8.9 4.92 4.70 5.32 6.39 7.6 7.9 7.0 5.8Noble Corporation NE Buy $73 51.74 2.67 4.52 6.05 7.55 19.4 11.5 8.5 6.8 4.04 6.31 8.28 10.15 12.8 8.2 6.3 5.1Pride International PDE Add $51 40.10 1.70 2.77 3.60 4.35 23.6 14.5 11.2 9.2 3.20 4.22 5.64 5.59 12.5 9.5 7.1 7.2Rowan Companies RDC Add $50 38.50 2.94 4.08 4.40 5.50 13.1 9.4 8.8 7.0 3.58 4.43 4.51 5.41 10.8 8.7 8.5 7.1Transocean RIG Buy $187 130.47 2.99 9.13 14.40 17.30 43.6 14.3 9.1 7.5 4.54 11.99 19.21 22.26 28.7 10.9 6.8 5.9Unit Corporation UNT Buy $90 70.77 6.72 5.71 7.75 8.85 10.5 12.4 9.1 8.0 11.67 11.63 15.96 17.94 6.1 6.1 4.4 3.9Average 17.3 12.4 10.8 8.3 12.0 8.7 7.0 5.9Overall Average 22.1 15.6 13.9 11.0 15.9 11.5 9.8 8.2Philadelphia OSX OSX 303.36

% Ch. Book Price/ Debt/ Shares Mkt Cap FirmValueCompany Symbol YTD Low High Value Book Cap Out ($MM) ($MM) 2006 2007 2008E 2009E 2006 2007 2008E 2009ELarge Cap Service (6)Baker Hughes BHI 1.0% $62.65 $100.29 $21.16 3.87 19.9% 308.4 $25,261 $25,811 $2,428 $2,800 $3,049 $3,649 10.6 9.2 8.5 7.1Halliburton HAL 20.7% 30.00 55.38 7.50 6.11 28.9% 916.0 41,925 42,865 3,204 4,061 4,571 5,327 13.4 10.6 9.4 8.0National Oilwell Varco NOV 4.4% 49.44 92.70 18.57 4.13 9.0% 404.0 30,979 29,589 1,280 2,259 3,371 4,198 23.1 13.1 8.8 7.0Schlumberger SLB 0.2% 72.30 114.84 12.05 8.18 25.5% 1,240.0 122,165 127,080 6,630 8,784 9,916 11,542 19.2 14.5 12.8 11.0Smith International SII -1.2% 53.39 88.40 50.85 1.44 22.2% 202.3 14,761 17,575 947 1,200 1,549 2,004 18.6 14.7 11.3 8.8Weatherford Intnl. WFT 14.1% 25.92 49.98 10.62 3.69 34.1% 697.3 27,300 30,970 1,361 1,629 2,060 2,743 22.8 19.0 15.0 11.3Average 6.5% 4.57 23.3% $43,732 $45,648 17.9 13.5 11.0 8.9Mid Cap Service (8)BJ Services BJS 15.5% $19.30 $34.94 $9.64 2.91 19.1% 295.9 $8,291 $8,904 $1,338 $1,359 $1,149 $1,346 6.7 6.6 7.7 6.6Cameron International CAM 0.8% 37.00 58.53 9.92 4.89 40.4% 235.0 11,398 11,447 594 811 1,050 1,261 19.3 14.1 10.9 9.1FMC Technologies FTI 0.6% 41.47 78.96 7.70 7.03 23.4% 132.7 7,186 7,368 372 552 642 707 19.8 13.3 11.5 10.4Global Industries GLBL -54.2% 7.81 28.00 7.32 1.34 31.6% 116.6 1,143 814 191 160 91 115 4.3 5.1 8.9 7.1McDermott Intnl. MDR -40.5% 32.36 67.14 0.42 NM 86.5% 229.8 8,067 7,683 385 704 799 934 20.0 10.9 9.6 8.2Oceaneering International OII -6.0% 54.37 85.88 17.27 3.66 20.2% 56.0 3,543 3,757 271 371 427 526 13.8 10.1 8.8 7.1Oil States International OIS 66.2% 30.36 64.84 21.27 2.67 31.2% 51.0 2,892 3,354 352 368 499 562 9.5 9.1 6.7 6.0Willbros Group WG 9.4% 26.37 47.93 11.53 3.64 NM 32.1 1,346 1,043 (3) 20 201 255 NM NM 5.2 4.1Average -1.0% 3.73 36.1% $5,483 $5,546 13.3 9.9 8.7 7.3Drillers (11)Bronco Drilling BRNC 6.5% $11.21 $18.69 $14.05 1.13 15.5% 26.1 $413 $479 $131 $108 $96 $119 3.7 4.4 5.0 4.0Diamond Offshore DO -20.9% 97.90 149.30 20.69 5.43 15.0% 139.0 15,620 15,489 1,141 1,459 2,240 2,770 13.6 10.6 6.9 5.6ENSCO International ESV 17.8% 45.94 83.24 26.06 2.69 7.6% 144.0 10,112 9,793 1,197 1,400 1,655 1,796 8.2 7.0 5.9 5.5Helmerich & Payne HP 45.4% 29.49 77.24 18.98 3.07 19.2% 106.1 6,182 6,571 519 746 895 1,046 12.7 8.8 7.3 6.3Hercules Offshore HERO -2.5% 20.00 39.47 22.46 1.03 31.6% 89.5 2,076 2,794 190 341 461 737 14.7 8.2 6.1 3.8Nabors Industries NBR 35.7% 23.61 50.58 15.80 2.35 47.0% 285.7 10,618 14,093 1,893 1,675 1,859 2,375 7.4 8.4 7.6 5.9Noble Corporation NE -8.4% 40.40 68.99 15.99 3.24 15.4% 269.5 13,944 14,568 1,170 1,784 2,333 2,860 12.5 8.2 6.2 5.1Pride International PDE 18.3% 28.35 48.86 19.39 2.07 25.6% 179.0 7,178 7,479 815 1,022 1,087 1,248 9.2 7.3 6.9 6.0Rowan Companies RDC -2.4% 30.49 47.94 20.86 1.85 17.1% 112.6 4,335 4,536 576 853 891 1,061 7.9 5.3 5.1 4.3Transocean RIG -8.9% 105.77 163.00 49.47 2.64 57.9% 254.0 33,139 49,155 1,637 3,454 7,285 8,189 30.0 14.2 6.7 6.0Unit Corporation UNT 53.0% 43.30 88.24 30.94 2.29 8.3% 46.4 3,282 3,411 656 615 811 922 5.2 5.5 4.2 3.7Average 12.1% 2.53 23.7% $9,718 $11,670 11.4 8.0 6.2 5.1Overall Average 6.6% 13.6 9.9 8.1 6.7Philadelphia OSX OSX 0.6%NR: Not Rated; First Call estimates used.

Firm Value/EBITDAEBITDA

Price/Cash Flow

52-Week

Earnings per Share Price/Earnings Cash Flow per Share



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Figure 16

Nabors Industries: Earnings ModelNABORS INDUSTRIESMark Urness (212) 408-5683Financial Model8/28/08 9:09 AM

20082001 2002 2003 2004 2005 2006 2007 1QA 2QA 3QE 4QE 2008E 1QE 2QE 3QE 4QE 2009E

RevenuesU.S. Land Drilling $1,007.3 $374.7 $476.3 $749.0 $1,307.0 $1,890.3 $1,711.0 $407.1 $438.8 $475.2 $502.2 $1,823.4 $501.7 $523.3 $544.0 $560.3 $2,129.3U.S. Land Well-Servicing 345.8 294.4 312.3 360.0 491.7 704.2 715.4 171.1 182.2 181.5 186.6 721.5 190.4 194.2 195.7 199.6 779.8U.S. Offshore 226.1 105.7 101.6 132.8 158.9 221.7 212.2 51.5 65.7 68.8 76.0 262.1 79.2 84.9 90.9 91.9 346.9Alaska 133.6 118.2 112.1 83.8 85.8 110.7 152.5 54.4 45.1 40.7 59.2 199.4 67.8 62.0 56.9 69.7 256.4Canada 86.3 141.5 322.3 412.5 572.9 686.9 545.0 178.9 67.8 95.5 108.1 450.2 175.3 80.9 127.6 127.4 511.2

North America $1,799.1 $1,034.5 $1,324.5 $1,738.1 $2,616.2 $3,613.8 $3,336.1 $862.9 $799.7 $861.8 $932.1 $3,456.4 $1,014.4 $945.4 $1,015.0 $1,048.8 $4,023.6International 282.4 320.2 396.9 444.3 552.7 746.5 1,094.8 303.6 342.9 355.3 369.8 1,371.6 384.4 399.1 407.3 418.7 1,609.4Subtotal Contract Drilling $2,081.5 $1,354.7 $1,721.4 $2,182.4 $3,168.9 $4,360.2 $4,430.9 $1,166.5 $1,142.6 $1,217.1 $1,301.9 $4,828.0 $1,398.8 $1,344.4 $1,422.3 $1,467.5 $5,633.0Manufacturing and Logistics 259.3 174.8 201.7 205.6 331.2 626.8 645.5 165.8 172.9 172.9 177.2 688.7 180.7 184.3 188.0 191.8 744.9Oil and Gas 5.5 7.2 16.9 65.3 62.9 59.4 152.3 14.0 11.4 10.0 13.0 48.4 15.0 17.0 17.0 20.0 69.0Other (118.3) (55.4) (49.8) (69.4) (102.1) (205.8) (219.4) (50.9) (48.4) (60.0) (65.0) (224.3) (65.0) (65.0) (70.0) (70.0) (270.0)Total Revenue $2,228.1 $1,481.2 $1,890.2 $2,383.9 3460.9 $4,840.7 $5,009.3 $1,295.4 $1,278.4 $1,339.9 $1,427.1 $5,340.8 $1,529.5 $1,480.8 $1,557.3 $1,609.3 $6,176.9

Operating IncomeTotal EBIT $535.7 $170.0 $212.7 $329.7 $879.8 $1,491.9 $1,237.3 $287.2 $265.9 $324.3 $381.9 $1,259.2 $425.7 $398.5 $425.9 $464.7 $1,714.9

Interest Expense ($60.7) ($67.1) ($70.7) ($48.5) ($44.8) ($46.6) ($53.7) ($18.1) ($21.7) ($22.0) ($22.0) ($83.8) ($39.0) ($40.0) ($41.0) ($41.0) ($161.0)Interest/Inv Income 54.0 34.1 27.8 38.1 85.4 102.0 (15.9) 26.2 25.1 20.0 20.0 91.2 20.0 20.0 20.0 20.0 80.0Gain on Sale of LT Assets 0.0 0.0 0.0 0.0 0.0 0.0 39.5 (8.1) (3.2) 0.0 0.0 (11.3) 0.0 0.0 0.0 0.0 0.0Other Income, net 28.7 3.7 4.9 16.6 (31.4) (24.9) (50.7) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Pretax Income $557.6 $140.8 $174.6 $335.8 $889.0 $1,522.5 $1,156.6 $287.1 $266.1 $322.3 $379.9 $1,255.4 $406.7 $378.5 $404.9 $443.7 $1,633.9

Tax Rate 36% 14% -10% 11% 26% 30% 21% 20% 27% 27% 26% 25% 25% 25% 25% 25% 25%Taxes - Current 83.7 10.2 8.5 28.2 30.5 231.9 237.0 99.3 39.8 69.6 77.5 286.2 81.3 75.7 81.0 88.7 326.8Taxes - Deferred 116.4 9.2 (26.1) 10.0 198.8 215.9 11.1 (42.7) 32.0 17.4 19.4 26.1 20.3 18.9 20.2 22.2 81.7

Total Taxes $200.2 $19.4 ($17.6) $38.2 $229.4 $447.8 $248.1 $56.6 $71.8 $87.0 $96.9 $312.3 $101.7 $94.6 $101.2 $110.9 $408.5Reported Net Income (Loss) $357.5 $121.4 $192.3 $297.7 $659.7 $1,074.7 $908.4 $230.5 $194.4 $235.2 $283.0 $943.2 $305.1 $283.9 $303.7 $332.8 $1,225.4Operating Net Income $357.5 $121.4 $192.3 $307.6 $659.7 $1,059.0 $930.7 $230.5 $194.4 $235.2 $283.0 $943.2 $305.1 $283.9 $303.7 $332.8 $1,225.4

EBITDA $725.6 $365.4 $447.8 $630.1 $1,218.3 $1,893.0 $1,674.8 $428.2 $414.9 $479.3 $536.9 $1,859.2 $587.2 $562.5 $591.9 $633.2 $2,374.9Shares Outstanding 337.6 300.0 313.8 328.1 324.4 300.0 286.4 283.4 291.5 293.0 293.0 290.2 295.0 295.0 295.0 295.0 295.0

EPS Operating $1.12 $0.40 $0.61 $0.94 $2.03 $3.58 $3.17 $0.81 $0.67 $0.80 $0.97 $3.25 $1.03 $0.96 $1.03 $1.13 $4.15EPS Reported $1.12 $0.40 $0.61 $0.97 $2.03 $3.53 $3.25 $0.81 $0.67 $0.80 $0.97 $3.25 $1.03 $0.96 $1.03 $1.13 $4.15Cash Flow per Share $1.97 $1.06 $1.36 $1.87 $3.08 $4.92 $4.70 $1.31 $1.18 $1.33 $1.50 $5.32 $1.58 $1.52 $1.59 $1.70 $6.39

2009



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Nabors Industries: Balance SheetNABORS INDUSTRIESMark Urness (212) 408-5683Balance Sheet8/28/08 1:43 PM

2008E 2009E2001 2002 2003 2004 2005 2006 2007 1Q08A 2Q08A 3Q08E 4Q08E 2008E 1Q09E 2Q09E 3Q09E 4Q09E 2009E

Cash and Equivalents $198.4 $414.1 $579.7 $384.7 $565.0 $700.5 $531.3 $1,094.3 $903.8 $618.0 $403.4 $403.4 $278.2 $143.8 $225.0 $212.0 $212.0Short-Term Investments 343.2 457.6 339.9 428.3 858.5 439.5 235.7 355.9 332.7 332.7 332.7 332.7 332.7 332.7 332.7 332.7 332.7Accounts Receivable, Net 361.1 277.7 410.5 540.1 822.1 1,109.7 1,039.2 1,112.2 1,083.7 1,105.5 1,116.5 1,116.5 1,175.0 1,225.6 1,280.0 1,298.2 1,298.2Rig Inventory and Supplies 18.5 20.5 23.3 28.7 51.3 100.5 133.8 129.6 128.9 128.9 128.9 128.9 128.9 128.9 128.9 128.9 128.9Prepaids & Other Current 109.7 200.0 162.2 199.2 320.4 154.6 265.0 262.7 281.2 281.2 281.2 281.2 281.2 281.2 281.2 281.2 281.2Total Current Assets $1,030.9 $1,369.9 $1,515.6 $1,581.0 $2,617.3 $2,504.8 $2,205.1 $2,954.7 $2,730.3 $2,466.3 $2,262.7 $2,262.7 $2,196.0 $2,112.2 $2,247.8 $2,253.0 $2,253.0Property, Plant & Equipment 2,433.2 2,781.1 2,990.8 3,275.5 3,886.9 5,410.1 6,689.1 6,758.5 7,020.9 7,515.9 8,010.9 8,010.9 8,349.4 8,685.4 9,019.4 9,350.9 9,350.9Goodwill 199.0 306.8 336.0 327.2 341.9 362.3 368.4 360.7 363.2 363.2 363.2 363.2 363.2 363.2 363.2 363.2 363.2Marketable Securities 377.0 459.1 612.4 439.5 222.8 513.3 236.3 310.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9 239.9Other Long-Term Assets 111.6 147.0 147.8 239.5 161.4 351.8 604.5 520.3 550.3 550.3 550.3 550.3 550.3 550.3 550.3 550.3 550.3Total Assets $4,151.9 $5,063.9 $5,602.7 $5,862.6 $7,230.4 $9,142.3 $10,103.4 $10,905.2 $10,904.6 $11,135.6 $11,427.0 $11,427.0 $11,698.8 $11,951.0 $12,420.6 $12,757.3 $12,757.3

Current Portion of LT Debt $2.5 $493.0 $299.4 $804.6 $767.9 $0.0 $700.0 $700.0 $588.8 $588.8 $588.8 $588.8 $588.8 $588.8 $588.8 $588.8 $588.8Short Term Borrowings 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Accts Pay & Accrued Liabs 299.8 242.6 289.6 382.8 560.9 754.1 697.0 637.2 641.8 620.1 609.1 609.1 550.6 500.0 445.6 427.4 427.4Income Taxes Payable 27.8 15.9 9.4 11.9 23.6 100.2 97.1 148.9 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0 135.0Total Current Liabilities $330.1 $751.5 $598.4 $1,199.3 $1,352.5 $854.4 $1,494.1 $1,486.1 $1,365.7 $1,343.9 $1,332.9 $1,332.9 $1,274.4 $1,223.8 $1,169.5 $1,151.2 $1,151.2Long-Term Debt 1,567.6 1,614.7 1,985.6 1,201.7 1,251.8 4,004.1 3,306.4 3,881.6 3,822.3 3,855.6 3,888.9 3,888.9 3,922.2 3,955.6 4,189.0 4,222.4 4,222.4Other Long-Term Liabilities 110.9 137.3 155.7 146.3 151.4 162.7 246.7 258.9 270.1 270.1 270.1 270.1 270.1 270.1 270.1 270.1 270.1Deferred Income Taxes 285.4 402.1 372.8 385.9 716.6 584.5 542.0 490.8 513.0 530.4 549.7 549.7 570.1 589.0 609.2 631.4 631.4Total Liabilities $2,294.0 $2,905.4 $3,112.4 $2,933.2 $3,472.3 $5,605.7 $5,589.3 $6,117.4 $5,971.0 $5,999.9 $6,041.6 $6,041.6 $6,036.8 $6,038.4 $6,237.8 $6,275.1 $6,275.1Stockholders' Equity $1,857.9 $2,158.5 $2,490.3 $2,929.4 $3,758.1 $3,536.6 $4,514.1 $4,787.8 $4,933.7 $5,135.6 $5,385.4 $5,385.4 $5,662.0 $5,912.6 $6,182.8 $6,482.2 $6,482.2Total Liab. and Stckhldrs' Eq. $4,151.9 $5,063.9 $5,602.7 $5,862.6 $7,230.4 $9,142.3 $10,103.4 $10,905.2 $10,904.6 $11,135.6 $11,427.0 $11,427.0 $11,698.8 $11,951.0 $12,420.6 $12,757.3 $12,757.3Source: Company Reports and Calyon Securities (USA) estimates


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Figure 18

Nabors Industries: Cash Flow StatementNABORS INDUSTRIESMark Urness (212) 408-5683Cash Flow Statement8/28/08 1:43 PM

2008 2009E2000 2001 2002 2003 2004 2005 2006 2007 1Q08A 2Q08A 3Q08E 4Q08E 2008E 1Q09E 2Q09E 3Q09E 4Q09E 2009E

Net Income $137.4 $357.5 $121.5 $192.3 $307.6 $648.7 $1,059.0 $930.691 $230.5 $194.4 $235.2 $283.0 $943.2 $305.1 $283.9 $303.7 $332.8 $1,225.4Depreciation and Amortization 152.4 189.9 195.4 235.1 300.4 338.5 409.7 544.259 149.2 155.4 155.0 155.0 614.5 161.5 164.0 166.0 168.5 660.0Deferred Income Taxes 72.8 116.4 9.1 (26.1) 12.5 194.7 218.3 (24.7) (42.7) 32.0 17.4 19.4 26.1 20.3 18.9 20.2 22.2 81.7Other, net (28.1) (3.2) 25.3 27.3 (17.5) 7.1 9.9 50.5 9.9 12.4 0.0 0.0 22.2 0.0 0.0 0.0 0.0 0.0Changes in Working Capital (115.0) 34.4 21.2 (32.7) (34.9) (159.6) (210.7) (130.5) (66.5) (51.0) (43.5) (22.0) (182.9) (117.0) (101.2) (108.7) (36.4) (363.4)Cash Flow from Oper. Activities $219.4 $695.1 $372.4 $395.9 $568.1 $1,029.5 $1,486.2 $1,370.2 $280.4 $343.1 $364.2 $435.4 $1,423.1 $369.9 $365.6 $381.3 $487.0 $1,603.7

Investing Activities:Purchases of Marketable Securities ($325.3) ($804.1) ($745.4) ($1,429.5) ($919.9) ($745.7) ($1,135.5) ($378.3) ($105.7) ($84.8) $0.0 $0.0 ($190.5) $0.0 $0.0 $0.0 $0.0 $0.0Maturities of Marketable Securities 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Sales of Marketable Securities 42.5 431.5 542.1 1,393.6 908.6 749.6 1,325.9 860.4 151.7 247.9 0.0 0.0 399.7 0.0 0.0 0.0 0.0 0.0Cash Paid for Acquisition, Net 0.0 (66.4) (135.7) 0.0 0.0 (82.2) (46.6) (8.4) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Capital Expenditures (300.6) (701.2) (316.8) (353.4) (544.4) (907.3) (1,927.4) (2,014.5) (327.9) (415.4) (650.0) (650.0) (2,043.4) (500.0) (500.0) (500.0) (500.0) (2,000.0)Proceeds from Sale of LT Assets 7.5 15.1 34.9 10.5 6.9 27.5 17.6 356.4 12.3 4.7 0.0 0.0 17.0 0.0 0.0 0.0 0.0 0.0Other 0.0 0.0 (8.7) (29.5) (0.2) 0.0 (2.4) (278.1) (15.6) (31.9) 0.0 0.0 (47.5) 0.0 0.0 0.0 0.0 0.0Cash Flow from Investing Activities ($576.0) ($1,125.0) ($629.5) ($408.3) ($549.1) ($958.2) ($1,768.5) ($1,462.5) ($285.2) ($279.4) ($650.0) ($650.0) ($1,864.7) ($500.0) ($500.0) ($500.0) ($500.0) ($2,000.0)

Financing Activities:Decrease (Increase) in Restricted Cash $1.6 $0.7 $0.2 $1.9 $0.1 ($0.0) $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0 $0.0Short-Terrm Borrowings 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Long-Term Borrowings 501.9 840.3 495.9 700.0 0.0 10.8 2,587.6 0.0 571.4 (168.0) 0.0 0.0 403.4 0.0 0.0 200.0 0.0 200.0Decrease in LT Borrowings, Net (136.4) (156.0) (30.8) (544.5) (302.4) (0.4) (769.8) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0Other (6.8) (12.9) (5.3) (12.3) 9.9 (2.7) (22.4) (36.3) 5.3 15.2 0.0 0.0 20.5 0.0 0.0 0.0 0.0 0.0Stock Repurchases (248.0) (2.5) 0.0 0.0 (99.5) (1,402.8) (104.3) (13.8) (148.0) 0.0 0.0 (161.8) 0.0 0.0 0.0 0.0 0.0Other Changes in Equity 113.0 8.2 12.9 26.3 71.2 194.5 25.7 61.6 6.8 42.4 0.0 0.0 49.1 6.8 0.0 0.0 0.0 6.8Cash Flow from Fin. Activities $473.3 $432.4 $470.4 $171.5 ($221.2) $102.6 $418.3 ($78.9) $569.7 ($258.4) $0.0 $0.0 $311.3 $6.8 $0.0 $200.0 $0.0 $206.8Effect of exchange rate changes on cash (0.1) (1.4) 2.3 6.7 12.0 6.4 (0.5) 2.0 (1.8) 4.148 0.0 0.0 2.3 (1.8) 0.0 0.0 0.0 (1.8)

Change in Cash $116.7 $1.1 $215.6 $165.7 ($190.1) $180.3 $135.5 ($169.2) $563.0 ($190.5) ($285.8) ($214.6) ($127.9) ($125.2) ($134.4) $81.3 ($13.0) ($191.3)Beg. Cash $80.6 $197.3 $198.4 $414.0 $579.7 $384.7 $565.0 $700.5 $531.3 $1,094.3 $903.8 $618.0 $531.3 $403.4 $278.2 $143.8 $225.0 $403.4End Cash $197.3 $198.4 $414.0 $579.7 $389.6 $565.0 $700.5 $531.3 $1,094.3 $903.8 $618.0 $403.4 $403.4 $278.2 $143.8 $225.0 $212.0 $212.0Free Cash Flow ($81.2) ($6.1) $55.7 $42.4 $23.7 $122.2 ($441.2) ($644.3) ($47.5) ($72.3) ($285.8) ($214.6) ($620.3) ($130.1) ($134.4) ($118.7) ($13.0) ($396.3)Source: Company Reports and Calyon Securities (USA) estimates



Notes



IMPORTANT DISCLOSURES

Analyst Certification

I, Mark Urness, hereby certify that the views expressed in this research report accurately reflect my own personal views about the securities and/or the issuers and that no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views contained in this research report. In addition, the analysts included herein attest that they were not in possession of any material, non-public information regarding the subject company at the time of publication of the report.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from BJ Services Company for non-investment banking products/services in the past 12 months.

Calyon or its affiliates participated in a public offering of Bronco Drilling Company Inc.'s securities or received compensation for investment banking services from Bronco Drilling Company Inc. in the past 12 months. Calyon or its affiliates managed or co-managed a public offering of Bronco Drilling Company Inc.'s securities in the past 12 months. The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Bronco Drilling Company Inc. for non-investment banking products/services in the past 12 months.

Calyon Securities (USA) Inc. receives or has received compensation from Cameron for non-investment banking services (i.e., brokerage services) in the past 12 months. The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Cameron for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Diamond Offshore for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from ENSCO International Inc. for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from FMC Technologies Inc. for non-investment banking products/services in the past 12 months.

Calyon or its affiliates participated in a public offering of Global Industries, Ltd.'s securities or received compensation for investment banking services from Global Industries, Ltd. in the past 12 months. Calyon or its affiliates managed or co-managed a public offering of Global Industries, Ltd.'s securities in the past 12 months. Calyon Securities (USA) Inc. receives or has received compensation from Global Industries, Ltd. for non-investment banking services (i.e., brokerage services) in the past 12 months. The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Global Industries, Ltd. for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Halliburton for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Hercules Offshore, Inc. for non-investment banking products/services in the past 12 months.



The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Helmerich & Payne for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from McDermott International for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Nabors Industries Ltd. for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Noble Corporation for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Oceaneering International Inc. for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Oil States International Inc. for non-investment banking products/services in the past 12 months.

Calyon Securities (USA) Inc. receives or has received compensation from Pride International, Inc. for non-investment banking services (i.e., brokerage services) in the past 12 months. The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Pride International, Inc. for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Rowan Companies Inc. for non-investment banking products/services in the past 12 months.

Calyon or its affiliates participated in a public offering of Transocean Inc.'s securities or received compensation for investment banking services from Transocean Inc. in the past 12 months. Calyon or its affiliates managed or co-managed a public offering of Transocean Inc.'s securities in the past 12 months. The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Transocean Inc. for non-investment banking products/services in the past 12 months.

Calyon or its affiliates participated in a public offering of Smith International, Inc.'s securities or received compensation for investment banking services from Smith International, Inc. in the past 12 months. Calyon or its affiliates managed or co-managed a public offering of Smith International, Inc.'s securities in the past 12 months. Calyon Securities (USA) Inc. receives or has received compensation from Smith International, Inc. for non-investment banking services (i.e., brokerage services) in the past 12 months. The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Smith International, Inc. for non-investment banking products/services in the past 12 months.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Schlumberger, Ltd. for non-investment banking products/services in the past 12 months.



The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Unit Corporation for non-investment banking products/services in the past 12 months. Jeb Armstrong assumed coverage of Unit Corp. on March 31, 2008. Carin Dehne Kiley covered Unit Corp from April 5, 2007 until March 31, 2008.

The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Weatherford International Inc. for non-investment banking products/services in the past 12 months.

Calyon or its affiliates participated in a public offering of Willbros Group, Inc.'s securities or received compensation for investment banking services from Willbros Group, Inc. in the past 12 months. Calyon or its affiliates managed or co-managed a public offering of Willbros Group, Inc.'s securities in the past 12 months. Calyon Securities (USA) Inc. receives or has received compensation from Willbros Group, Inc. for non-investment banking services (i.e., brokerage services) in the past 12 months. The member and/or analyst(s) involved in the preparation of this report have reason to know that an affiliate of Calyon Securities (USA) Inc. received compensation from Willbros Group, Inc. for non-investment banking products/services in the past 12 months.

RATING RECOMMENDATIONS (based on anticipated returns over a 12-month period): BUY, above 20%; ADD, 10%-20%; NEUTRAL, +/-10%; REDUCE, negative return, but by less than 20%; SELL, negative return of more than 20%. OVERALL RATING DISTRIBUTION for Calyon Securities (USA) Inc., Equity Universe: BUY/ADD - 68%, HOLD - 29%, REDUCE/SELL - 3%, Restricted - 0%. Data as of June 30, 2008. INVESTMENT BANKING CLIENTS as a % of rating category: BUY/ADD - 20%, HOLD - 3%, REDUCE/SELL - 0%, Restricted - 0%. Data for 12-month period ending June 30, 2008. FOR A HISTORY of the recommendations and price targets for companies mentioned in this report, please write to: Calyon Securities (USA) Inc., Compliance Department, 1301 Avenue of the Americas, 15th Floor, New York, New York 10019-6022.

CALYON SECURITIES (USA) INC. POLICY: Calyon Securities (USA) Inc.'s policy is to only publish research that is impartial, independent, clear, fair, and not misleading. Analysts may not receive compensation from the companies they cover. Neither analysts nor members of their households may have a financial interest in, or be an officer, director or advisory board member of companies covered by the analyst. ADDITIONAL INFORMATION on the securities mentioned herein is available upon request.

DISCLAIMER: The information and statistical data herein have been obtained from sources we believe to be reliable but in no way are warranted by us as to accuracy or completeness. We do not undertake to advise you as to any change in our views. This is not a solicitation or any offer to buy or sell. We, our affiliates, and any officer director or stockholder, or any member of their families may have a position in, and may from time to time purchase or sell any of the above mentioned or related securities. This material has been prepared for and by Calyon Securities (USA) Inc. This publication is for institutional client distribution only. This report or portions thereof cannot be copied or reproduced without the prior written consent of Calyon Securities (USA) Inc. In the UK, this document is directed only at Investment Professionals who are Market Counterparties or Intermediate Customers (as defined by the FSA). This document is not for distribution to, nor should be relied upon by, Private Customers (as defined by the FSA).

© 2008 Calyon Securities (USA) Inc. All rights reserved.


IMPORTANT DISCLOSURESAnalyst CertificationI, Mark Urness, hereby certify that the views expressed in this researchreport accurately reflect my own personal views about the securities and/orthe issuers and that no part of my compensation was, is, or will be directlyor indirectly related to the specific recommendation or views contained inthis research report. In addition, the analysts included herein attest thatthey were not in possession of any material, non-public informationregarding the subject company at the time of publication of the report.The member and/or analyst(s) involved in the preparation of this reporthave reason to know that an affiliate of Calyon Securities (USA) Inc.received compensation from Nabors Industries Ltd. for non-investmentbanking products/services in the past 12 months.

Q3 Q1 Q2 Q3 Q1 Q2 Q3 Q1 Q216

24

32

40

48

56

2006 2007 2008

05/25/06I:A:$41

07/26/06A:$44

12/04/06A:$46

01/03/07N:$32

03/29/07N:$30

05/10/07N:$35

05/18/07A:$40

09/21/07A:$38

10/05/07A:$34

10/24/07A:$32

02/07/08A:$33

03/06/08A:$37

04/09/08A:$42

05/21/08A:$46

06/25/08A:$54

08/20/08B:$50

Rating and Price Target History for: Nabors Industries Ltd. (NBR) as of09-01-2008

Created by BlueMatrix

Valuation MethodologyOur pice target of $50 corresponds to a 12x P/E multiple applied to our 2009 EPSestimate of $4.15.

Risk to TargetRisks to our price target include the potential for global economic weakness, whichwould lead to slower oil demand growth, lower oil prices and reduced upstream capitalexpenditures.

RATING RECOMMENDATIONS (based on anticipated returns over a12-month period): BUY, above 20%; ADD, 10%-20%; NEUTRAL, +/-10%;REDUCE, negative return, but by less than 20%; SELL, negative return ofmore than 20%. OVERALL RATING DISTRIBUTION for Calyon Securities(USA) Inc., Equity Universe: BUY/ADD - 68%, HOLD - 29%, REDUCE/SELL -3%, Restricted - 0%. Data as of June 30, 2008. INVESTMENT BANKINGCLIENTS as a % of rating category: BUY/ADD - 20%, HOLD - 3%,REDUCE/SELL - 0%, Restricted - 0%. Data for 12-month period ending June30, 2008. FOR A HISTORY of the recommendations and price targets forcompanies mentioned in this report, please write to: Calyon Securities(USA) Inc., Compliance Department, 1301 Avenue of the Americas, 15thFloor, New York, New York 10019-6022.CALYON SECURITIES (USA) INC. POLICY: Calyon Securities (USA) Inc.'spolicy is to only publish research that is impartial, independent, clear, fair,and not misleading. Analysts may not receive compensation from thecompanies they cover. Neither analysts nor members of their householdsmay have a financial interest in, or be an officer, director or advisory board

Nabors Industries Ltd. - BUY


member of companies covered by the analyst. ADDITIONAL INFORMATIONon the securities mentioned herein is available upon request.

DISCLAIMER: The information and statistical data herein have beenobtained from sources we believe to be reliable but in no way are warrantedby us as to accuracy or completeness. We do not undertake to advise you asto any change in our views. This is not a solicitation or any offer to buy orsell. We, our affiliates, and any officer director or stockholder, or anymember of their families may have a position in, and may from time to timepurchase or sell any of the above mentioned or related securities. Thismaterial has been prepared for and by Calyon Securities (USA) Inc. Thispublication is for institutional client distribution only. This report or portionsthereof cannot be copied or reproduced without the prior written consent ofCalyon Securities (USA) Inc. In the UK, this document is directed only atInvestment Professionals who are Market Counterparties or IntermediateCustomers (as defined by the FSA). This document is not for distribution to,nor should be relied upon by, Private Customers (as defined by the FSA).

© 2008 Calyon Securities (USA) Inc. All rights reserved.

Nabors Industries Ltd. - BUY

Nabors Industries (NBR)

Business

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