Dennis A. Smith - Director-Investor Relations Anthony G. Petrello - Chairman, President & Chief Executive Officer William J. Restrepo - Chief Financial Officer Siggi Meissner - President, Global Drilling Operations, Nabors Industries Ltd.

Marshall Adkins - Raymond James & Associates, Inc. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc. Robin E. Shoemaker - KeyBanc Capital Markets, Inc. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker) James Wicklund - Credit Suisse Securities (USA) LLC (Broker) Bradley P. Handler - Jefferies LLC Michael Urban - Deutsche Bank Securities, Inc. John Matthew Daniel - Simmons & Company International Sean C. Meakim - JPMorgan Securities LLC

Good morning, and welcome to the Nabors Industries' Second Quarter 2015 Earnings Conference Call. All participants will be in a listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note this event is being recorded. I would now like to turn the conference over to Denny Smith. Please go ahead, sir. Dennis A. Smith - Director-Investor Relations: Good morning everyone and thank you for joining Nabors earnings teleconference. Today, we will follow our customary format with Chairman, President, and Chief Executive Officer, Tony Petrello; and William Restrepo, our Chief Financial Officer, providing our perspectives on the quarter's results, along with some insight into what we are seeing in our markets and how we expect Nabors to perform in these markets. In support of these remarks, we have posted some slides to our website, which you can access to follow along with the presentation if you desire. They are accessible in two ways. One, if you are participating by webcast, they are available as a download within the webcast. Alternatively, you can download the slides from within the Investor Relations section of nabors.com under the Events Calendar submenu, where you will find them listed in Supporting Materials under the conference call listing. Instructions for the replay are posted on the website. With us today, in addition to Tony, William and myself are Laura Doerre, our General Counsel; Siggi Meissner, our head of Global Drilling Operations, and Chris Papouras, our President of the newly-formed Nabors Drilling Solutions. Since much of our commentary today will concern our expectations of the future, they may constitute forward-looking statements within the meaning of the Securities and Exchange Act of 1933, and the Securities Exchange Act of 1934. Such forward-looking statements are subject to certain risks and uncertainties, as disclosed by Nabors from time to time in its filings with the Securities and Exchange Commission. As a result of these factors, our actual results may differ materially from those indicated or implied by such forward-looking statements. Also during the call, we will discuss certain non-GAAP financial measures such as adjusted EBITDA and adjusted income. We have posted to the Investor Relations website a reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures. Now I will turn the call over to Tony to begin. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Good morning everyone. Welcome to the call. We appreciate your participation as we review our results for the second quarter of 2015. As Denny mentioned, we have posted the accompanying presentation slides on our website. I will begin with a brief summary and then comment on our performance in the quarter. William will follow with a financial review of the second quarter. I will then wrap up to take some questions. For the second quarter, Nabors reported revenue of $862 million, adjusted EBITDA for the quarter was $288 million and income before taxes was $25 million. Fully diluted earnings per share from continuing operations was a loss of $0.14, which included income tax expense of $0.23 per share. The income tax rate in the second quarter is not representative of our estimated full-year effective rate. William will discuss the income taxes in his remarks. Moving to C&J: C&J filed the registration statement for the shares Nabors received of consideration. That was a pro forma filing required pursuant to the merger agreement. These shares are subject to a lockup through September. As for our attention beyond the lockup period, we entered the transaction with C&J with the intent of realizing the full value of our C&P assets over the long-term through our ownership of C&J shares. Since the close of the merger, the C&J management team has focused intently on realizing synergies from the transaction. We're fully supportive of these efforts during this transition period. We continue to believe the merger will unlock real value and create a new leader in the space. We are committed to helping the C&J realize that goal and to realize long-term value for our shareholders. Now to the details: Our segment results for the quarter demonstrate the value of our portfolio. For those declining from the record-setting performance in the first quarter, EBITDA in our International business exceeded that as the rest of the segments combined. I think it is noteworthy that second quarter EBITDA for that unit was still higher than in any quarter during 2014. Results of U.S. Drilling especially in the Lower 48 reflected a downturn in the U.S. rig count. Our Alaska business was resilient even though it was down seasonally. The Canadian market remains exceedingly challenged, as our results illustrate. Finally, decreased demand and lower pricing impacted numbers in Other Rig Services. Before I detail each segment, I will mention a few significant points. Since the last conference call, we have deployed the first of the previously announced X rigs into Colombia. All three new rigs for Saudi Arabia are now in country. These newbuild programs are on time and on budget, a testament to our expertise to large scale newbuild programs. The X rigs and the rigs in the Kingdom should generate revenue and income in the second half of the year. The remaining new build rigs destined for Kazakhstan and the rig for Alaska are still under construction; again, on time and on budget. The testing of our new rotary steerable tool is progressing well. We anticipate the first field test in the U.S. will commence by the end of the third quarter. We remain excited about the potential for this tool as we broaden our capabilities in downhole technology. Towards the end of the second quarter, we purchased our partner's interest in our joint venture in Saudi Arabia for $106 million. This transaction demonstrates our sustained, long-term commitment to the Kingdom of Saudi Arabia as well as to our relationship with Saudi Aramco. Now to the performance review: For the entire company second quarter revenue of $862 million declined sequentially by approximately a $193 million. This comparison excludes the impact of our Completion and Production Services segment in the March quarter. Most of our businesses posted lower results due primarily to the rapid decline in North American rig counts. Adjusted EBITDA in the second quarter totaled $288 million. This was down from $379 million in the first quarter, again without the C&P business. EBITDA in each segment declined in the quarter. Pricing and volume declines along with seasonality impacted second quarter profitability. I will now cover the key performance metrics in the second quarter and then focus on our outlook. First, the U.S. Drilling business: The quarterly average Baker Hughes land rig count declined by 472 rigs, or 35%. Our Lower 48 rig year declined to 103, or 31%. Daily gross margin in the Lower 48 increased to $11,205 from $11,134 in Q1. Both of these figures included some level of lump sum early termination revenue attributable to future periods. Normalized, there was a sequential decline in daily rig margin of $334. Results in the U.S. Offshore and Alaska businesses declined seasonably. Compared to the same quarter of last year, we picked up almost two full rig years in Alaska. In our Offshore business, the second quarter benefited from higher-than-expected dayrates and lower operating expenses. Utilization in the Lower 48 varies significantly by rig type with the highest utilization in our most capable rigs. At the end of the second quarter, over 90% of our PACE-X rigs were working or stacked on rate. For our B rigs which were the immediate predecessor to the X rig, utilization was 55%. All of our B rigs are located in the Bakken or Rockies. Among our major classes of AC rigs, utilization is most challenged in our F rigs. Utilization in our FCR fleet, which had the lowest contractual coverage entering the downturn, remains quite low. In Canada, the normal seasonal decline was exacerbated by the severe contraction in drilling overall. EBITDA in this segment was nominally positive. That result was better than we expected entering the quarter. In our International segment, the increase in revenue is largely attributable to the inclusion of revenue associated with the Saudi JV. On our previous earnings call, we telegraphed an expected decline in utilization. However, the three-unit contraction in rig years is a bit smaller than we expected. In some instances, we are seeing customers retain rigs after notifying us of their intent to release or they are extending rigs on a short-term basis. Average daily cash margin in the International business narrowed by approximately $1,600, principally reflecting the initial impact of rate relief. In our Rig Services segment, which consists of Canrig and the Ryan Directional business, results were down as drilling activity and the industry's newbuild activity both declined. Canrig's third-party top drive shipments dropped by almost 40%, while internal top drive units were down by third. Now I will focus on our outlook. For some time, I have used the profile of a bathtub to describe the slope of the expected recovery in drilling activity and rig count. At this point, I see no reason to change that outlook. The run up in WTI towards $60 offered some hope for increases in oilfield activity in the second half and, in fact, the Lower 48 rig count is now some 24 rigs above its June bottom. WTI has recently retreated back below $50. Assuming it remains at these levels, a second half activity increase now seems less likely. I will start my segment outlook comments with U.S. Drilling. In the Lower 48, we exited the quarter with 97 rigs on revenue including 10 rigs stacked on rate. Those counts now stand at 91 total, including 7 stacked on rate. At this point, we see third quarter rig years somewhere between the current level and the second quarter exit point. Looking at daily rig margin, we do not see as big a decline as expected in the second quarter due mainly to favorable mix and decisive action on direct cost management. For the third quarter, we could see a decline of more than $1,500 per day. The market picture remains disparate. We see a lot of variation in contract terms across customers and in their particular requirements. Recently, the deterioration in rates and demand had shown signs of moderating. This could change with recent drops in commodity prices if sustained. Some of the improvement we have seen in the market has come at the lower end, both among rig types and customer size. We typically do not focus on this segment of the market. Notwithstanding this view, our posture towards newbuilds for the Lower 48 market is unchanged. We deployed two X rigs in the quarter, including one for Colombia. We plan to deploy six X rigs in the third quarter, including five for Colombia. In the fourth quarter, we have one more contracted X rig scheduled to deploy. Our build plan includes two units to be completed during 2015 that do not currently have contracts. In addition, we will likely continue building approximately one rig per month into the early part of 2016. At this point, we are comfortable with this plan, especially considering the long lead time component inventory, which we procured late last year. As you would expect, we reevaluate this regularly. Let me address the Offshore business. As you know, the platform for the Big Foot project floated out in March. At that time, we expected the rig to commence its full dayrate before the end of 2015. In light of the issues with the platform's tendons, we now anticipate an extended delay before the rig is on location. We are in discussions with our customer about the ramifications of this event. Aside from this project, we expect normal seasonality in this business through the hurricane season. In our Alaska operation, the third quarter is normally seasonally the weakest. This should be the case this year as well. Our new rig currently under construction for work on the North Slope is scheduled to deploy in the second half of 2016. Our Canada business should ramp up seasonally in the third quarter. We are currently running 18 rigs in this market. As additional rigs returned to work, we expect margin to erode somewhat. The Canadian drilling market remains depressed. We see limited prospects for a meaningful improvement until commodity prices improve. For our International segment, the decline in utilization we have been expecting has lagged. It is likely to show over the next two quarters. In the third quarter, rig startups in Colombia and Saudi Arabia will likely be offset by the completion of contracts in several markets. Notably, the conclusion of these projects allows us to exit smaller markets, including Australia, Bahrain, Romania and Yemen and enhance our focus on long-term stable markets. In the immediate future, we expect third quarter daily rig margins to remain roughly flat. The full effect of rate concessions is reflected in our third quarter expectations. The full quarter impact of the previously mentioned startups should support increased activity and margins in the fourth quarter. In our Rig Services segment, revenue should hold flat. The margin profile of both businesses in this segment continues to deteriorate leading to sequentially lower operating income. Canrig's third quarter results will be helped by some equipment shipments that slipped into the third quarter. Recently, we have seen an increase in inquires and bidding activity. However, the decline in drilling activity and a lack of newbuilds on top of the reduced backlog will likely continue to pressure margins. To summarize, several factors could impact further our results in coming quarters. Even though rig counts appear to stabilizing, rig revenues are likely to deteriorate. We have entered the phase of the cycle where average rig margins are resetting rapidly towards current spot market pricing as term contracts expire. The drilling market in Canada remains depressed along with commodity prices. We expect modest seasonal improvement later this year. However, we expect negative year-over-year results throughout 2015. Our rig on the Big Foot platform in the U.S. Gulf of Mexico remains on a MOG rate (15:04). We cannot currently predict when the rig will commence its full dayrate. With half the year under our belt in our International segment, we still expect an improvement in full-year results over the prior year. We expect income will decline in the third quarter with the potential for improvement in 2016. Finally, we remain committed to maintain breakeven or better free cash flow. We continuously scale our cost structure to the size of our operations. Our approach to capital spending is highly disciplined. These strategies should dampen the impact of the activity downturn and better position the company for an eventual upturn. This concludes my comments. Now I will turn the call over to William, who will detail our financial results. William J. Restrepo - Chief Financial Officer: Thank you, Tony, and thanks everybody for joining us today. Net income from continuing operations for the second quarter was a loss of $41.9 million, or $0.14 per diluted share. The quarter included income tax expense of $66.4 million, or $0.23 per share. The majority of this tax expense was the result of a change to our full-year forecast that resulted in a $0.20 per share catch up for the prior quarter. Before further discussing the company's second quarter results, I would like to highlight three issues which impact distorts comparability of the operational trends of the company. During my discussion, I will attempt more material to explain or remove the impact of these items. They include the following: First, during the quarter, we bought out our partners in a previously non-consolidated joint venture in Saudi Arabia. Until now we have reported our portion of the JV's net income under earnings from unconsolidated affiliates. This quarter we have started to report all of our Saudi results on a consolidated basis. Consequently, for the last month of the quarter, we have included both revenue and cost in place of our share of the JV's net income. Second, because C&J is currently dealing with the complexity of integrating accounting and IT for the NCPS business, we believe the reporting cycle is likely to be longer than ours during this transition. For the time being, we have decided to report C&J results with a one quarter lag. In our second quarter, we booked a loss of $800,000 in earnings from unconsolidated affiliates on our income statement. This relates to our ownership stake on the earnings of C&J for the first quarter period, following the closing of the transaction. Similarly, our third quarter results will include a proportionate share of C&J's second quarter net income. Third, while the first quarter included revenue and cost for the completion of the production business through the date of the transaction, the second quarter has no revenue or costs from these segments. Moving on to our results, revenue for the quarter of $862 million decreased by a $192.4 million, or 18.2%, as compared to the first quarter, excluding the impact of NCPS revenue. Although International revenue continued to increase sequentially by 2.9%, the increase was essentially the result of the full consolidation of our Saudi activity and masked the impact of price concessions to several customers as well as a 2.3% average reduction in active rigs. Our revenue in the North American drilling market fell by 33%, driven by the current downturn as well as seasonal factors in Canada, Alaska and the Gulf of Mexico. Revenue for Other Rig Services decreased by 30.2%, as building of new rigs has slowed considerably and our Ryan Services continued to trend down with the decrease in drilling activity in the Lower 48. The tough market conditions, which affected both volume and pricing, resulted in an $82 million sequential reduction in consolidated operating income for the quarter, excluding the C&P impact. Operating income margins for the company of 8.1% fell by 630 basis points sequentially, of which an estimated 38 basis points came from the impact of the Saudi consolidation. Decremental margins adjusted for the Saudi JV and the C&P impact were approximately 37%. Targeted overhead reductions and direct cost management helped mitigate the impact of price and activity deterioration on margin erosion. Now, I would like to comment on the initiatives we have in place to maintain our cash flow generation while staying free cash flow positive. First, we continue to apply strict controls on our capital expenditures. We remain on track to our 2015 capital expenditures of just over $900 million in our drilling-related businesses. For the second quarter, capital spending totaled just over $200 million. Second, our efforts to contain our SG&A expenses remain in place. So, the first half of the year, we have already reduced our SG&A by $43 million versus the six month run rate of 2014 fourth quarter. These cuts exclude the favorable impact of the C&J transaction, year-to-date severance costs and the addition of SG&A we have consolidated from the recent Saudi transaction. We anticipate the full-year impact of our reductions to exceed $80 million, as compared to the Q4 2014 annualized run rate. Third, our largest reductions in activity have occurred in the Lower 48 and Canadian markets. The key component of our downturn management has been the alignment of our direct operating costs to the falling activity levels. Since the end of December, we have reduced our Lower 48 staffing by 50%. During the second quarter on a sequential basis, we reduced our direct cost in this market, including field support, by 31.8%, in line with our average rig reduction of 30.6%. In Canada, we reduced direct cost sequentially by 58.3%, while the rigs have dropped by 62.1%. The Canadian cost reductions were achieved despite the seasonal nature of this market, which is already building back up quickly after the low point of the spring breakup. Finally, we have launched a second round of discussions with our vendors as well as internal initiatives that together target a $120 million cost reduction over the next 12 months. This includes more centralized management of our spares inventories now possible under our new organizational structure. Given the uncertainty in the current environment as well as potential opportunities to enhance our debt profile and attractive investment opportunities that may arise, we recently upsized the revolving credit facility a second time to $2.2 billion. The facility has been upsized by a total of $700 million since the end of 2014. At the same time, we extended the expiration of facility to 2020 and a narrower spread. We're very pleased to have closed on the revolver in the current environment. This transaction highlights the strong relationships with our banking group, as well as the confidence of our lenders in our future prospects. I would now like to focus on the key metrics for our segments. Within the U.S. Drilling segment, our Lower 48 daily operating margin increased by $71 to $11,205 per rig, that amount included $510 per rig in early termination payments for revenue that would have been earned in future periods. Although, we experienced sequential day rate erosion during the quarter, it was partially offset by direct cost management. Daily operating expenses for the fleet improved by nearly $400, a 3% reduction. While our EBITDA margins for the U.S. Drilling business actually improved by 110 basis points to 42.5%, operating income margins for our U.S. business fell by 700 basis point to 10%, as segment G&A (23:55) overhead and depreciation on idle assets continued to erode operating income. In our International Drilling business, a specific item weighed on our results. Customer bankruptcy cost the company $5 million. Operating margins fell by 540 basis points to 18.2%, with the above bankruptcy costing us 110 basis points of the total. The remaining deterioration was driven mainly by the consolidation of the Saudi JV with an estimated impact of a 160 basis points as well as by reduced pricing and a slightly lower rig count. Our Canadian business entered its lowest quarter of the year on a seasonal basis and had negative operating income for the quarter with a rig count averaging just below 10 rigs. EBITDA margins were at 17%. We expect results to recover sharply as our rig count moves up from its seasonal low. The Rig Services segment revenue fell by 30% as land drilling activities slowed in the Lower 48. Canrig's equipment sales declined for both third-party customers and for Nabors as the rig building activity contracted. Although gross margins for both Canrig and Ryan held up with segment gross margin falling only 370 basis points to 26%, the much lower volume coupled with relatively stable R&D and other overhead expenses resulted in slightly negative operating income. Looking forward to Nabors as a whole, I would like to make a couple of comments on our future outlook. Our full-year effective income tax rate is now estimated at a low to mid-single digit benefit on normalized pre-tax earnings. As the mix of our profitability has continued to shift from high tax locations towards lower tax jurisdictions, we thus expect to essentially reverse the first half income tax expense during the second half. In terms of Lower 48 activity, currently rig count is some 24 rigs above the low point as per the rig data count. Given the sustained reduction in drilling activity, we have also seen Lower 48 production start to rollover. However, weakened international events have had a negative impact on oil prices. We believe that stronger oil prices are required for rig count in the Lower 48 to move materially upwards from its current level. Unless oil prices head back up towards the $60 mark, we would expect rig count to remain weak for the remainder of the year. In this near-term unfavorable U.S. environment, we have taken steps to protect our more sustainable international markets, as well as our Alaska and offshore activity. We also continue to enhance our financial flexibility. We continue to preserve our free cash flow through targeted cost management and CapEx reductions to restructure our company in order to more efficiently meet our future challenges, to modernize our fleet with industry-leading pad capable rigs and to improve our technology in order to firmly precision ourselves as leaders in drilling performance and drilling automation. With that, I will turn the call back to Tony for his concluding remarks. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Thank you, William. I want to conclude my remarks this morning with a review of the four pillars that form the foundation of our operational strategy. We believe they are valid over the entire cycle and in a wide variety of markets. First, capitalize on the existing asset base. Nabors has a worldwide fleet of over 500 rigs. Our goal is to increase the returns on our existing assets and we will do that. Our prime example is our use of mass in substructures from idle, high horsepower rigs in the high specification units we have built for the Middle East. Second, differentiate our service offering. We are realizing early success as we add more services to our rig offering. In addition, we are developing new model rigs for applications where we see the opportunity. Third, improve operational excellence. I will give you two examples here. One, our safety record continues to progress. Thus far this year, we have improved on the record performance we set last year. Second, we continue to shorten our rig moving times between pads with our new X rig and we are replicating that across the fleet. Finally, enhance our financial flexibility. As mentioned earlier, we extended and upsized our revolver this quarter. This is just the latest in a series of steps we have taken over the past couple years. We will focus on additional opportunities to increase the company's cash generation and meaningfully impact our financial flexibility. That concludes our remarks this morning. Thank you for your time. With that, I will take your questions.

We will now begin the question-and-answer session. And our first question comes from Marshall Adkins of Raymond James. Please go ahead. Marshall Adkins - Raymond James & Associates, Inc.: Good morning, guys. Thanks for the thorough overview. I want to hear more about the Saudi situation. It seems like that's kind of a big deal. I mean it's been a really hot area and you're apparently increasing your stake there. Tell us what it means for you and kind of how that came about if you would. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Well, we're a long-term player there, as you know, for a long time, and the rules over the years have changed where local partners are no longer necessary for your operating in the country and it just came time that we wanted to gain greater control over our local operation and that was the motivation. We obviously see continued ramp-up in activity over there. It's no secret about their ambitions on gas rigs. As I've mentioned before, oil production, I think, internal consumption in the country is the big untold story with the amount of oil that they're consuming internally, which then drives the need for gas and their ambition on the gas rig – increasing rig count over the next couple of years, we think is real and, therefore, we wanted to position ourselves to take advantage of that. Marshall Adkins - Raymond James & Associates, Inc.: Okay. So it sounds like a pretty good deal. Some quick follow-up kind of unrelated, we're modeling a pretty big reduction in SG&A largely due to the C&J thing and William gave some details on that, but it – you clearly had a greater reduction in SG&A than we thought. Did I hear you correct that excluding the C&J, we're kind of looking for an $80 million annualized type reduction in SG&A outside of or in addition to what the C&J transaction already given, did I hear that correctly? Anthony G. Petrello - Chairman, President & Chief Executive Officer: You heard that correctly, and I think we're on target and we actually have ambitions to, hopefully, doing at least that well, if not better. William J. Restrepo - Chief Financial Officer: So, that versus the fourth quarter annualized rate. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. Versus the fourth quarter annualized rate, absolutely. Marshall Adkins - Raymond James & Associates, Inc.: Right, right. William J. Restrepo - Chief Financial Officer: Yeah. Marshall Adkins - Raymond James & Associates, Inc.: Got it. Thanks, guys. William J. Restrepo - Chief Financial Officer: Yeah. That's been high priority of ours, as you can see from the results of operation in the past two quarters. Marshall Adkins - Raymond James & Associates, Inc.: Yeah. It certainly was an upside surprise for us. Thanks.

Our next question comes from Byron Pope of Tudor, Pickering, Holt. Please go ahead. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Good morning guys. I wasn't writing quite fast enough, but Tony or William, I think I heard one of you say that Q3 rig margin per day as well as maybe in Q4 as well, flattish internationally; is that what I heard? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Maybe a little down in third quarter. And fourth quarter we think, once the deployments are fully operational, we should be back up. William J. Restrepo - Chief Financial Officer: There's supposed to be – we're going to be between contracts. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. Yeah. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: And then in thinking about rig years, you mentioned, I think, about international rig years being down sequentially in Q3, but given your newbuilds coming on stream, it doesn't feel that's going to be a dramatic fall off as you think about the next couple of quarters, is that fair? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. Think of it that our expectations is hopefully balanced. Obviously, we can't project yet. We have so little visibility on what we've been seeing in terms of – or anticipating some of these drop off in the International current rig years, but we think that what's been in the pipeline, it provides pretty good offset to it. So it should be a soft landing no matter what happens. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. And then last question for me, just on the U.S. Lower 48 in an environment where none of us has any good visibility on the back of the year, could you just frame for us how many of your rigs are on term contracts, maybe in the back of the year and then order of magnitude following on into 2016? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Basically about – in this quarter, so I would say of our current rig years for about two-thirds are on contracts and by the second quarter of next year it drops down to about 25%. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Great. Thanks guys. I appreciate it.

Our next question comes from Robin Shoemaker of KeyBanc Capital Markets. Please go ahead. Robin E. Shoemaker - KeyBanc Capital Markets, Inc.: Thank you. So, Tony, I just wanted to get your sense of U.S. rig demand from your customers. Obviously, you mention it was looking a little better, we're up 24 from the lowest point. But we've heard some other companies suggesting that, with this recent drop in oil prices, we may not actually have seen the bottom on the U.S. rig count. So from your interactions with customers and what you're seeing on the horizon, do you think that we see a stable rig count at current levels or a slight decrease or increase for - Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. Robin E. Shoemaker - KeyBanc Capital Markets, Inc.: ... just through the end of the year? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Right. Obviously, this is grasping at straws here. If you go back and in mid-May, I think there had been some expectation, maybe I think starting to bounce a little bit by the end of the year. In fact, at that point, the oil price was about $57 a barrel; and we actually had some customers coming to us, telling us they had plans to have a steady rollout of some progression of increase in rigs. Our most recent conversation in the past week and updating for this conference call has been most of the operators talk about flat, and those people had actually told us about some plans to increase are now going back saying they need to reconfirm given oil prices. And some other customers are talking about taking a couple of rigs down. So that's kind of the latest feel for it. So I would say, we haven't heard yet a dramatic drop in rigs. I think some people are fine-tuning now in the light of the reduction in oil prices, and I think it's roughly a function of how long we'll stay in this $40 a barrel range. If so, I think there'll be some dropping. As I said, we haven't heard about wholesale change in plans, and most of the operators have basically told us they're looking at flat right now. But again, all these things, every operator we know of, whatever the plans are, they're all being revisited regularly. So that's the latest story. Robin E. Shoemaker - KeyBanc Capital Markets, Inc.: Right. Okay. So wanted to just ask about your initial reads on – you had a idea that C&J would perhaps have some greater international set of opportunities that might be helped along by Nabors. And of course you are doing pretty well internationally, especially in the Middle East. Is that process, not necessarily results probably not much yet, but is that process underway from the Nabors side of things? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Well, right now, I think C&J has been consumed with this market, first of all, getting this integration up and not losing a beat there and lowering their cost structures, but that is part of our plan and it's on our agenda to help support them. And as you've rightly pointed out, there's a few countries that we're in, where I think we can actually add value and we really believe Josh's management and asset base is ideal for some of these markets and we're committed to helping that happen, making that happen. So I would say so far, given where we are, it's probably a few months since the merger, there's been a lot more higher things to do. Dennis A. Smith - Director-Investor Relations: But beside that Tony, we actually have made progress on some of the core markets directly support this effort to get people established. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yep. Robin E. Shoemaker - KeyBanc Capital Markets, Inc.: Okay. Anthony G. Petrello - Chairman, President & Chief Executive Officer: In fact, Denny, I think we're actually supporting them getting registered for bids in certain countries for example - Dennis A. Smith - Director-Investor Relations: Right. Anthony G. Petrello - Chairman, President & Chief Executive Officer: ... things like that. Robin E. Shoemaker - KeyBanc Capital Markets, Inc.: Right. Good. Okay. Thank you. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yep.

Our next question comes from Scott Gruber of Citigroup. Please go ahead. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): Yes. Good morning. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Good morning. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): Given prevailing commodity prices, is it reasonable to assume that the rate relief you provided to customers abroad is likely to stick around next year, is that fair? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Sorry, can you repeat the question? Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): The rate relief you provided customers abroad - Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yes. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): ... for 2015 - Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yes. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): ... if the forward curve prevails, which is about $60 – $55 on Brent, should we expect those relief rates to stick around in 2016? Anthony G. Petrello - Chairman, President & Chief Executive Officer: I think we have to deal with that when the time comes. Right now, those were made given the current environment and – the international market, you have to bear in mind, it's not a perfectly substitutable market. The difference is in the U.S. today, there's a bunch of AC rigs stacked even amongst the top four guys. In the international market today there is virtually zero incremental utilization of rigs available, and that's a big difference. So in the Saudi market, if you want a deep gas rig, a new gas rig to do the deep, deep gas filling, it doesn't exist today. So that's a fact you have to take into account. That's why I don't think it's clear, the answer to your question right now. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): Got it. Have you entered into any agreements in the U.S. to provide rate relief when your peers had entered a few of those? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Well, we had some rollovers of contracts in the second quarter. We didn't have many really long-term contracts. I think maybe six months to a year on the extensions, and the extension rates were somewhere in the low 20s for AC rigs in the second quarter and around 20 on legacy rigs in the second quarter. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): And just in terms of the third and fourth quarter having a reduced demand outlook versus expectations three months ago, as you think about rigs rolling into the spot market, are you a believer that you can maintain that rate structure? Are you willing to sideline rigs versus putting them to work at lower rates? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Well, we're going to meet the market. Our strategy is to meet the market. We're not going to operate at cash flow negative margins or margins that just tear up our equipment. We're not going to do that. I think the rates I referred to in the second quarter are obviously down in the third quarter and fourth quarter. So we're going to meet the market. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): And that cash flow comment includes maintenance CapEx? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yes. Scott A. Gruber - Citigroup Global Markets, Inc. (Broker): Got it. That's all from me. Thanks. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah.

And our next question comes from Jim Wicklund of Credit Suisse. Please go ahead. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Hey, Jim, how you doing? James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Good morning. Very good, very good. As kind of a follow on to the last question, you said that the contract rollovers were in the low 20s. My question was going to be what is the spot market? So should I assume that's the current spot market? Anthony G. Petrello - Chairman, President & Chief Executive Officer: No. I just said that was in second quarter, the average in the second quarter. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay. Okay, okay. Anthony G. Petrello - Chairman, President & Chief Executive Officer: I said now I think it's obviously, its somewhere at least 10% below that and obviously it varies widely. It's frankly very little – we're talking about very few data points here. Maybe - James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Exactly. Anthony G. Petrello - Chairman, President & Chief Executive Officer: 50 or 60 (9:33) data points. So you really can't say there's a single rate on anything. It obviously depends on the class of rig, it depends on the market and right now, with operators' issues, it also depends on other things that are being negotiated. So I think it's very difficult for anybody to say where the leading edge rate is right now. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Yeah. Devon just announced that they can grow production next year with half the CapEx they spent this year. So we need to get the E&P companies to shut up and we'll be okay. What are your cash operating costs for a new PACE rig? I don't know, the PACE-X rig. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. They're $11,000 plus a day. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay, okay. That's very helpful. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Sure. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): And Tony, you had said in your remarks "a focus on the more sustainable international market." Clearly, it's not as hyper cyclical as the U.S. market, and you've made some significant inroads into South America and the Middle East. Should we see that as a dedication to continue that effort? I mean, I know you're going to build one rig a year. Assumed that was going to be for the U.S. market, that may not be a correct assumption. Will you continue to aggressively grow your international presence over the next two years? Anthony G. Petrello - Chairman, President & Chief Executive Officer: I think we will, and you see the benefit in our results from having a diversified asset base and portfolio. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay. Anthony G. Petrello - Chairman, President & Chief Executive Officer: We think that's the right strategy and we think actually the market hasn't really understood the amount of cash generation we actually have for our international operation and the durability of it. So yeah, we're committed to that. When you look at the macro, in terms of the gas, prospects in these countries, I think there is also real pretty good opportunity for us. So that's the reason why we're so committed to it. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): And last one if I could. Everybody had talked a couple of months or maybe a quarter or two ago about Saudi Arabia saying if you want to keep work in force, you got to take a 20% price cut. It didn't hit land rigs as much, because they're not just a substitutable as some of the other services. And then you make the acquisition of your partner, have you seen or has the acquisition of your partners relationship protected you from pricing pressure in Saudi? And can you kind of give us a broad idea of what that pricing pressure looks like today? Anthony G. Petrello - Chairman, President & Chief Executive Officer: First of all, the person that we took out was not a active partner, he was a passive partner an historical partner from actually the time of the Pool acquisition. So that's point one. Point two, I think there is a big difference between the rate deduction on land versus offshore for the reasons you said. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Good. Anthony G. Petrello - Chairman, President & Chief Executive Officer: And we have had some rate deductions on land, but the order of magnitude, obviously, you can see in our numbers is nowhere near what we attack on offshore, so. James Wicklund - Credit Suisse Securities (USA) LLC (Broker): Okay. I figured as much. I just needed to hear you say it. Tony, thanks much, appreciate it. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Absolutely.

Our next question comes from Brad Handler of Jefferies. Please go ahead. Bradley P. Handler - Jefferies LLC: Thanks. Good morning, guys. Anthony G. Petrello - Chairman, President & Chief Executive Officer: HI. Bradley P. Handler - Jefferies LLC: Couple questions, maybe starting on the U.S. market also, but starting with clarification. I just – I'm not sure I heard your color around the U.S. land margin progression in the second half. I thought I heard it might fall $1,500 a day, but I just want to confirm that? Anthony G. Petrello - Chairman, President & Chief Executive Officer: William, why don't you take that. William J. Restrepo - Chief Financial Officer: We said $1,500 per day. And basically, that's not really that the leading spot rates are falling. Well, that's not the only factor, but we're rolling into the new spot rate, a lot of our term contracts. So that will have an impact. We expect to continue working on our direct costs, but it won't be enough to mitigate the drop in the average day rate for the contracted rigs. Bradley P. Handler - Jefferies LLC: Okay. And that was a third quarter comment specifically or does that take a couple quarter to roll into; what were you referring to? William J. Restrepo - Chief Financial Officer: I think we'll see it already in the third quarter. Bradley P. Handler - Jefferies LLC: In the third, right. And presumably that pressure continues as more rolls onto the spot market through the middle of next year. William J. Restrepo - Chief Financial Officer: That'd be correct, yes. Bradley P. Handler - Jefferies LLC: That's your implication, right. Besides from what you can do on the cost offsetting front, okay. William J. Restrepo - Chief Financial Officer: That is correct. Bradley P. Handler - Jefferies LLC: I guess as a sort of related follow up. What are you – I understand the macro issues around clients pulling back on whatever incremental rigs they might have been thinking about. Is there a high-grading process that is at all relevant in your customer base, are you seeing some opportunities stem from, okay, I shed a certain – you know, I don't have to explain high grading. Are you seeing any of that in the interactions with your customers today? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Siggi, you want to comment? Siggi Meissner - President, Global Drilling Operations, Nabors Industries Ltd.: Okay. I didn't understand the question, really. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. The high grading of opportunities. I think the way you see the market today, it does show high grading's in force. And as people's term contracts expire when an operator has a choice for a rig, I think all things being equal, if they can get in an AC rig verses a legacy rig, they're the high grade for the AC rig. And I think that the way the numbers look today, it supports that that high grading has been active. Our mission today, frankly, is to try to make money in an environment that's not growing. So we have to do a few things. We have to figure out how to operate more cost effectively. We have to figure out how to make sure we execute performance matters. And the third thing is we need to construct a value proposition around those AC rigs to differentiate ourselves against everybody else that has them. But, and one of thesis is that there is high grading of rigs. Bradley P. Handler - Jefferies LLC: Sure. You made an interesting observation which I think we have also seen elsewhere which is that some of the incremental rigs have been at the lower end of the spectrum coming off of bottom. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Exactly. If you look at that bump in the rig count we mentioned, actually look at the participants, it's actually the checkbook drillers that were more quickly to just kind of rebound and that – the big boys don't necessarily participate equally in that segment, so. Bradley P. Handler - Jefferies LLC: Right. So that dynamic presumably falls off and maybe the high grading becomes a little bit more prevalent in terms of at least incremental rig contract, so. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Exactly, exactly. Bradley P. Handler - Jefferies LLC: Okay. All right. That's helpful. Thank you. I'll urn it back.

Our next question comes from Mike Urban of Deutsche Bank. Please go ahead. Michael Urban - Deutsche Bank Securities, Inc.: Thanks, good morning. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Good morning. Michael Urban - Deutsche Bank Securities, Inc.: Just wanted to follow up on that high grading question. It makes perfect sense from an efficiency perspective, the comment they made as contracts roll off, all else equal, why wouldn't you take an AC. But the macro or the overall data hasn't really supported that yet and then your kind of anecdotal comments and then also just what we've seen off the bottom are suggesting that that hasn't happened. Is that just a function of time and normalization in the market or are we missing something where it just operators are maybe just looking to flat out cheap and not necessarily making what, in your mind, is the correct assessment value? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. I think that you just, with the latter point that you referred to, a lot of guys are just when they're in a cash flow crisis, they just look it cheap and that's what they're using to normalize. They're not looking at what the rig can actually do in terms of normalized productivity. And one of our missions is to try to make that value proposition clearer. But the other point I'd say is the legacy rigs, although, they are legacy rigs, they're not – they don't die immediately around here in this industry. I mean mechanical rigs have taken a long time to die and the SDR rigs, is – in our view, is still going to be around. And on a price basis, they're going to set new marks of loads that it's not so easy necessarily to displace them, at least not at rates that you're really going to be happy with. But on the other hand, I think the issue is for the high-grade rigs to demonstrate the value proposition to the customer and make it attractive to him to think about displacing. That's the challenge here. Michael Urban - Deutsche Bank Securities, Inc.: Okay. Gotcha. Very helpful. My other questions were answered. Thank you.

Our next question comes from John Daniel of Simmons. Please go ahead. John Matthew Daniel - Simmons & Company International: Thank you. Hey, Tony, given your liquidity position today, where do you see the greatest opportunities for acquisitions? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Well, we obviously look at everything that's out there. I mean the problem of acquisitions is you'd have to reach a few hurdles for me. First of all, it has to at least be something that is as good as my internal growth opportunities. Secondly, if I'm looking at the rig business, the problem is the caliber and class of rigs I'm getting, there's not really many fleets out there that will improve the mix of my rig base. And so it's hard to see acquisitions that actually do that. And the third thing is an acquisition I want to meaningfully improve my market position would be customers, something like that. And most the markets we're in today and so you when you apply this litmus test, it has pretty high standard for an acquisition. Notwithstanding that, we're obviously looking for acquisitions all the time and we actually have a balance sheet now again that we think we're going to able to execute and do that, but this hurdle is high right now. John Matthew Daniel - Simmons & Company International: Would you say that the majority of your time today is being spent on just dealing with the current market turmoil versus trying to look at growth opportunity? Anthony G. Petrello - Chairman, President & Chief Executive Officer: No. I would say we have the best people doing everything right now. So we're looking at the growth opportunities. It's fair to say based on everything that's been on the market that you've heard about, we looked at John Matthew Daniel - Simmons & Company International: Yeah. Anthony G. Petrello - Chairman, President & Chief Executive Officer: And we continue to look at things, so. John Matthew Daniel - Simmons & Company International: All right. Just one more from me, this may sound like a bit of a naïve question, but when I look at the Q2 international rig count, there are a number of countries where you're only operating one rig. And I presume those contracts must be good to have just one rig in country, but would those areas be the ones that might be most at risk down two to three quarters from now if competitive pricing pressures escalate? Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yeah. We don't like being in single string operations long term. So if we're there, it's, hopefully, because it's a beachhead for further growth or it's because the economics were so good it made up for the fact it was single string. But like I said, I think we want to concentrate in the areas where we can have real growth opportunities, and that's one of the missions today. John Matthew Daniel - Simmons & Company International: Okay. Thank you. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Yep. Dennis A. Smith - Director-Investor Relations: Dan, this is Denny. We're getting close to the one hour mark, so why don't we just take one more question and wind up the call, please.

Thank you. Our final question will come from Sean Meakim of JPMorgan. Please go ahead. Sean C. Meakim - JPMorgan Securities LLC: Hey, good morning, guys. Anthony G. Petrello - Chairman, President & Chief Executive Officer: Good morning. Sean C. Meakim - JPMorgan Securities LLC: Just – maybe just a follow-up on some of the previous conversation but seeing that from a different end. For some of those customers maybe haven't participated in the high spec market before, are you seeing any of those folks looking to take advantage of lower dayrates or high spec rigs? Maybe the 1% seen previously, but now looking to kind of get in at a better price? Anthony G. Petrello - Chairman, President & Chief Executive Officer: I think given the change in prices, I think people who hadn't thought about before, it's topical discussion now. I mean the tougher mines are open. So I think those kind of people are thinking about it, absolutely. But it's still a sales challenge for people who haven't made that switch yet. Sean C. Meakim - JPMorgan Securities LLC: Okay. That's fair. And if we think about, if the base outlook perhaps is a flattish rig count kind of bouncing around for the next several quarters, we get into a substantial portion of 2016 and we're still in kind of roughly at the same levels, would you expect pricing pressure for even the upper end of the AC market to remain – for pricing pressure remain intact? Or do you think that at some point here, in a flash rig count, you can see some stabilization in the upper end of the market? Anthony G. Petrello - Chairman, President & Chief Executive Officer: I think if things just bounce around at the same level, I think there will be continued pricing pressure. Sean C. Meakim - JPMorgan Securities LLC: All right. Fair enough. Thank you, guys. Anthony G. Petrello - Chairman, President & Chief Executive Officer: All right. Thank you.

This concludes our question-and-answer session. I'd like to turn the conference back over to management for any closing remarks. Dennis A. Smith - Director-Investor Relations: Ladies and gentlemen, we want to thank you for participating today, and if you have further questions or anything as always feel free to reach out and call us or e-mail us. Thank you, again.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.