Dennis A. Smith - Nabors Industries Ltd. Anthony G. Petrello - Nabors Industries Ltd. William J. Restrepo - Nabors Industries Ltd. Christopher Papouras - Nabors Industries Ltd. Siggi Meissner - Nabors Industries Ltd.

Waqar Syed - Goldman Sachs & Co. LLC J. Marshall Adkins - Raymond James & Associates, Inc. Sean C. Meakim - JPMorgan Securities LLC Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc. Ken Sill - SunTrust Robinson Humphrey, Inc. James Wicklund - Credit Suisse Securities (USA) LLC Scott A. Gruber - Citigroup Global Markets, Inc.

Good morning, and welcome to the Nabors Industries Fourth Quarter Earnings Conference Call. All participants will be in listen-only mode. After today's presentation, there will be an opportunity to ask questions. Please note that today's event is being recorded. I would now like to turn the conference over to Denny Smith, Vice President of Corporate Development. Please go ahead. Dennis A. Smith - Nabors Industries Ltd.: Good morning, everyone, and thank you for joining Nabors' fourth quarter and full year earnings teleconference. Today we will follow our customary format with Tony Petrello, our Chairman, President and Chief Executive Officer; and William Restrepo, our Chief Financial Officer, providing their perspectives on the results, along with insights into 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're participating by webcast, they are available as a download within the webcast. Alternatively, you can download the slides from the Investor Relations section of nabors.com under the submenu events calendar, where you will find them listed as supporting materials under the conference call listing. Instructions for the replay are posted there as well as under teleconference information. With us today, in addition to Tony, William and myself, are Siggi Meissner, President of our Global Drilling organization; Chris Papouras, our President of Nabors Drilling Solutions; John Sanchez, our Chief Operating Officer for Canrig; and other members of the senior management team. Since much of our commentary today will include our forward expectations, they may constitute forward-looking statements within the meaning of the Securities and Exchange Acts of 1933 and 1934. Such forward-looking statements are subject to certain risks and uncertainties as disclosed by Nabors from time to time in our 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 may discuss certain non-GAAP financial measures such as adjusted operating income, EBITDA and adjusted EBITDA. All reference to EBITDA made by either Tony or William during their presentations, whether if qualified by the word adjusted or otherwise, mean adjusted EBITDA as that term is defined on our website and in our earnings releases. We have posted to the investor relations section of our website a reconciliation of these non-GAAP financial measures to the most recently comparable GAAP measures. Now I'll turn the call over to Tony to begin. Anthony G. Petrello - Nabors Industries Ltd.: Good morning, everyone. Welcome to the call. We appreciate your participation as we review our operations for the fourth quarter of 2017 and our view of the market going forward. William will follow with a review of our financial results. I will then wrap up and we will take your questions. Before getting into the quarter's financials and market trends, I would like to take a moment to review what a transformational year 2017 was for Nabors. Specifically, I would like to highlight the four main accomplishments. First, we initiated operations with SANAD, our joint venture with Saudi Aramco. I believe this materially enhances the value of our International franchise. Second, we acquired Tesco to support our NDS strategy. This is already yielding synergies globally. Next, the pace of U.S. margin expansion has shifted markedly faster and our SmartRig units continue to be fully utilized. We expect this trend to continue through the year. Finally, we met our $50-million annualized Nabors Drilling Solutions or NDS adjusted EBITDA target for the fourth quarter. This $12.6 million figure represents over 450% growth from that of a year ago. Let's start with SANAD. This partnership between the world's largest oil producer and land driller represents an opportunity to achieve significantly higher operating efficiency and well productivity over time. We started operations on December 1 and currently have 45 working rigs total in Saudi Arabia. Of these 45, three are jack-ups subject to a previously announced contingent purchase and sale agreement. Eight of these rigs are owned by the joint venture, with two more to commence later this quarter. These are the remaining rigs secured by our partner Saudi Aramco. SANAD should begin taking deliveries of what will ultimately be 50 new build rigs manufactured in Saudi Arabia. We expect initial deliveries to begin in 2020. These rigs will benefit from long-term contracts and prescribed economics. We are pleased that Aramco has added three experienced senior executives to the SANAD board and is committed to ensuring that the venture is a commercial success. On December 15, we successfully closed the acquisition of Tesco. Our vision is to leverage the drilling rig to serve as the delivery platform for rig services. We are doing this successfully across multiple product lines. Tesco has long had an excellent reputation worldwide as a top tier tubular service provider and rig equipment manufacturer. On our last call, I outlined a $20-million synergy target for 2018 followed by a $30 million to $35 million run rate thereafter from cost alone. I am pleased to report that we are making good progress on this target. We now anticipate around $25 million of synergy capture in 2018. There may well be additional upside in our run rate number as well and we will revisit that topic as we gain a better understanding of the revenue potential. The integration is well underway, and we are pleased at the level of cooperation between the fine men and women of Tesco and their counterparts at Nabors. Turning to the U.S., our average daily margins for the segment increased from about $5,300 to nearly $6,450 per day. This acceleration in margin growth came primarily from the Lower 48 business and overwhelmingly from the revenue side. This is due to several reasons, which I will cover in more detail. We anticipate the U.S. will be the primary driver of revenue and adjusted EBITDA growth in 2018. Given its size and growing contribution to the company, we have revised our reporting to breakout NDS from what was previously the Rig Services segment. This new separate reporting segment is named Drilling Solutions. The new Rig Technologies segment is composed of Canrig and our recently acquired robotics product line and rotary steerable systems. We initiated our goal at the beginning of 2017 to reach an annualized adjusted EBITDA run rate of $50 million for NDS. At that time, our annual run rate from the fourth quarter of 2016 was just $10 million and many of our products had yet to gain significant penetration. We achieved an adjusted EBITDA of $12.6 million for NDS in the fourth quarter, meeting our target. With the new year, it is time to challenge ourselves again in terms of where we would like to see this business at the end of 2018. We are targeting NDS to double its adjusted EBITDA contribution to an annualized $100 million a year rate in the fourth quarter of 2018. We see expansion opportunities both geographically and by product. Economies of scale have enabled us to grow our margin on certain products. Now let me turn to this quarter's results. In the fourth quarter, Nabors generated adjusted EBITDA of $163 million on operating revenues of $708 million. This performance compares to $143 million and $662 million, respectively, in the third quarter. The quarter reflected strong performance for our U.S. business, driven primarily by higher Lower 48 average day rates and margins. Also, higher margins in Canada and growth in both NDS and Canrig more than offset a decline in International. Canrig had been impacted by order deferrals in the third quarter, so this rebound was largely expected. Nabors' worldwide rig activity was flat during the quarter as the dip in oil prices that occurred in July dampened operators' activities for the remainder of the 2017 budget cycle. With WTI solidly in the $55 to $65 range and Brent solidly above $60, we are seeing increased contract interest and activity from our clients. At this price range, we expect to see a steady increase in rig count both in the U.S. and internationally through 2018. Now, let me drill down a bit further into each of our business segments. Turning to the U.S., financial results in the U.S. Drilling segment improved, even with a relatively flat average working rig count for the fourth quarter. This fourth quarter rig count was down 1 rig to 106. Currently, we are running 114 rigs, as the rate of contract signings has accelerated with the initiation of 2018 budgets. Higher margins drove the entirety of the $10 million increase in the U.S. adjusted EBITDA. This increase of approximately $1,150 a day in margin was due entirely to increased revenue. We believe this accelerated margin growth trend is sustainable. We have renewed our organizational focus in this market and are repricing rigs on short-term contracts with the same clients to market rates with reduced lag. Rising oil prices with moderately expansive 2018 operator budgets have led to increased demand for rigs over the last few months. We continue to roll well-to-well or, more accurately, pad-to-pad contracts higher. At the same time, we are renewing term contracts. To give you an idea of how much pricing power remains coiled in our fleet, we have 13 SmartRig units rolling off term contracts this quarter. The average day rate for these rigs is just under $18,000. Take that $18,000 to the low to mid-$20,000s and you see some of the support bolstering our conviction of higher Lower 48 margins. Additionally, we still have work to do on costs in the Lower 48. There are multiple operational cost initiatives we are currently tackling. We should see this side of the margin equation pulling its weight in future quarters. With decreasing costs, I expect to see similar margin progression quarter over quarter in the Lower 48 through the year. When we add in the contribution of the M-400 with the Big Foot Project, beginning no later than April 1, we expect to add roughly another $800 a day to our average daily U.S. rig margin over and above this pace. We currently have 107 rigs working in the Lower 48 versus the 101 average for the fourth quarter, with 103 exiting the quarter. This total includes three FCR and 13 legacy AC rigs. The final of our four new M-1000 rigs is ringing up right now in the Permian about to start drilling for its major client. Our rig enhancement program, now nearly complete, has enabled us to meet the growing demand for our SmartRig units and share in the value creation with customers. We have eight remaining upgrades in our enhancement program located in the Northern U.S. With strengthening demand, we expect these eight will be completed and put to work over the next three quarters. Let me turn to the outlook. Current leading-edge day rates are moving higher in the Lower 48. Strong customer demand is driving full utilization and pricing traction for the highest-spec rigs. Many clients are willing to discuss term contracts, and we are increasing our term allocation as a portion of our overall fleet. However, we are increasing this percentage from a very low base. As of today, only about 15% of our Lower 48 working fleet is contracted on term beyond six months from now. In the current low to mid-$20,000 per day pricing environment for super spec rigs, we plan to lengthen our overall term structure at a steady pace in the coming months. We again surveyed our larger Lower 48 customers earlier this month. These operators represent about a third of the total rig count. Twice as many of these clients plan to add rigs as to drop them. The additions we see are broad-based and supported by available budget projections. The rate of addition from these large public clients lags that of smaller private clients. Based on this information, as of today, we would expect the Lower 48 rig count exit the year at 50 to 90 rigs above today's total. Of course, a year is a long time and this may change based on oil prices or other factors. Let's turn to International. In our International segment, the net average working rig count declined slightly versus our expectations for an increase. A later initiation date for our Aramco joint venture than we had originally anticipated, along with several delayed start-ups was the source of this variance. However, we exited the quarter with 95 rigs working internationally versus the 91 average for the fourth quarter. Today, we currently are at 96 rigs. As we noted on the previous call, we expected International margins to return to a more normalized level in the mid to low $17,000s, which they did. After the fourth quarter pause, we should resume rig activity increases in the first quarter for International. Offshore platforms have returned to work in Mexico and India along with rigs in Ecuador and Russia, offset by a single drop in the UAE this quarter. We still expect a significant uptick in Algeria, but these start dates have moved to the right. Finally, the three incremental SANAD rigs contributed on (15:10) December 1 will have a full quarter of work for Q1. As it pertains to larger tenders requiring significant new-build CapEx, we are bidding with several criteria in mind. First and most importantly, our investors expect a reasonable return on capital. Next, as both William and I have stated repeatedly, deleveraging is a top priority. Any new CapEx should be offset as much as possible with upfront client contributions and should deliver our target payback. To the extent we can add value for clients while fulfilling these requirements, we are enthusiastic to bring our rigs and full package of solutions. However, we will not approach bids with a win-work-at-all-costs mentality when it comes to bidding for incremental new builds. Let's turn to Canada. With a relatively higher gas mix versus the U.S., Canada has not gathered the same level of momentum. We had 14 average rigs working there in the fourth quarter, practically unchanged from the third. We have 23 rigs currently working there as activity increases for the winter months. The Canadian market has transitioned to more regional E&P companies with whom we have strong legacy relationships. We see both our rig and NDS margins increasing there in 2018 versus 2017. Our targeted upgrade program has increased our high-spec rig capacity that tends to remain working through the seasonal breakup. Let's turn to NDS. As I mentioned earlier, Nabors Drilling Solutions will now be reported in its own segment called Drilling Solutions. We met our $50-million adjusted EBITDA run rate target for Q4 2017 and we've set a $100-million run rate target for Q4 of 2018. NDS revenues and margins have continued to climb. Averaged across our working Lower 48 fleet, daily margins increased by nearly $150 per day quarter-on-quarter. Over the course of 2017, these margins increased nearly threefold to almost $1,350 a day with ample room to grow internationally. In the Lower 48, we expect continued directional drilling penetration plus additional growth from our early stage MPD offering and, of course, a big step forward in casing running services driven by Tesco. Incremental to this, we anticipate our rotary steerable tool will be commercial later this year. Overall penetration rates for the Lower 48 were steady quarter to quarter. We had 83% of our Lower 48 rigs running at least three NDS services with 36% running five or more NDS services. While NDS to date has focused most of its efforts in the Lower 48, we believe Saudi Arabia will be an emerging market for directional drilling and MPD in 2018. We have commenced two directional drilling jobs and Tesco has a strong tubular services business there. Beyond Saudi Arabia, we have additional NDS expansion targets identified internationally. These developments give us confidence for continued growth in 2018. We again reiterate our $200-million to $250-million target for 2020. Canrig, now the principal component of the new Rig Technologies segment, bounced back this quarter to produce slightly positive adjusted EBITDA. However, when accounting for the development expenses for the rotary steerable tool and the robotic technologies division, this segment as a whole had a negative $4.3 million adjusted EBITDA for the fourth quarter. We expect the rotary steerable and robotics efforts to transition from an R&D to commercial effort this year. A slowly-strengthening rig equipment market should benefit Canrig incrementally throughout the year. The addition of Tesco's equipment sales and aftermarket service business along with associated synergies will also benefit Canrig. Due to these factors, we expect the segment to turn adjusted EBITDA positive in the second half of 2018, but more importantly, from a long-term perspective, we believe Nabors has the potential to become the leading provider of drilling automation systems both on and offshore. This concludes my comments. William will now review the quarter's financial results and provide additional thoughts on the outlook. William J. Restrepo - Nabors Industries Ltd.: Good morning. The net loss from continuing operations attributable to Nabors of $116 million represented earnings per diluted share of $0.40. The results from the quarter were adversely impacted by $16.5 million or $0.06 per diluted share and post-tax costs related to the Tesco acquisition and the start-up of the Saudi Aramco joint venture. The quarter also included the impact on our tax balances from the recent changes to U.S. corporate tax legislation, which were offset by adjustments to other tax reserves. The fourth quarter results compared to a loss of $121 million or $0.42 per diluted share in the third quarter. Revenue from operations for the fourth quarter was $708 million as compared to $662 million in the prior quarter, a 7% improvement. U.S. Drilling revenue increased by 5% to $233 million, reflecting an increase in revenue per day. Average rig count for the quarter fell by one rig as we experienced some idle time from rigs moving to new customers at higher day rates in the Lower 48. As Tony noted, the pause in activity growth was temporary and increases in rig count have resumed this quarter. International revenue increased by 2% to $381 million despite slightly lower rig activity. In Canada, revenue increased by 10% to $20 million driven primarily by a $1,200-increase in average revenue per day. Today's rig count of 23 is well above our fourth quarter average of 14 rigs. Drilling Solutions' revenue increased 17% in the quarter to $44 million. Increased performance software installations and wellbore placement were the largest drivers. Tesco tubular services also contributed to our fourth quarter revenue. Rig Technologies revenue grew by 58% to $79 million. Much of this is attributable to a recovery in Canada's revenue after the third quarter, which was impacted by a high number of equipment deferrals following the weakening of oil prices during the third quarter. Similar to Drilling Solutions, Tesco product revenue had a positive fourth quarter impact. Adjusted EBITDA for the quarter was $163 million as compared to $143 million in the third quarter. A $10-million increase in the U.S. primarily reflected an improvement in Lower 48 margins. Lower 48 adjusted EBITDA rose by $7 million driven mainly by higher average day rates, as well as by higher revenue for mobs (22:46) and other charges to customers. We expect this day-rate trend to continue, along with lower operating costs in future quarters. Additional seasonal work offshore bolts the results, which will be significantly enhanced in the second quarter once the recently-mobilized M-400 platform rig starts work. Drilling margins for the Lower 48 increased from $4,160 a day to nearly $5,000, exceeding our expectations for the quarter. The improvement was driven by rigs re-pricing from term contracts signed in the early 2017 or 2016 timeframe and by steadily increasing spot market rates. We expect this favorable day rate trend to endure as our remaining newbuilds and upgrades join the fleet, contract rollovers continue to re-price the market and pricing continues to firm. This trend is most visible in Texas though we see inquiries picking up in the Rockies and the Bakken with the upcoming spring thaw. As our cost reduction efforts start to bear fruit in the first quarter, we anticipate reporting Lower 48 margins around $6,000 per day with a similar pace of improvement going forward for the remainder of 2018. Given the current level of customer interest and existing commitments, we expect to average between 104 and 106 working rigs in the first quarter. As a reminder we have 107 working rigs in the Lower 48 as of today. International margins of approximately $17,200 met our expectations, albeit on a lower rig count. Compared with the third quarter's exceptional margin, adjusted EBITDA declined by $8 million to a total of $129 million in the fourth quarter. The lower rig count cost us approximately $2 million sequentially. Bad debt reserves of $2.2 million also impacted results negatively. With the inclusion of the SANAD rigs and the start-up of various rigs around the world, we expect to report roughly an incremental five rigs for the first quarter. We have 96 rigs working as of today. We signed multiyear extensions, effective first quarter, that will provide additional term at still attractive, but somewhat lower rates. The potential sale of the noncore but higher margin jack-up business, which we anticipate taking place in the next few months, would also have an impact. We expect International margins to drop below $17,000 a day following the sale of the jack-ups. Overall EBITDA for this segment should increase, however, with an increase in rig count. We also expect our International daily margins to regain their traditional level during the course of 2018 as we add high-margin rigs to our working fleet. Canada adjusted EBITDA increased by $1.7 million, or 65%, to $4.3 million, driven by a roughly $1,150 growth in margin to $4,650 per day. We are putting rigs back to work in Canada and we stand at 23 rigs as of today. We anticipate an average first quarter rig count of approximately 20 rigs with improved margins in the low $5,000s. Drilling Solutions met its fourth quarter target, posting an adjusted EBITDA contribution of $12.6 million up from $9.8 million in the third quarter. These services are benefiting from increased market penetration, as well as new product offerings and geographic expansion. The acquisition of Tesco's tubular services business has given us immediate scale in key markets such as Saudi Arabia, as well as footholds in markets Nabors did not previously serve. As Tony mentioned, $100 million is the new annualized adjusted EBITDA target for this segment by the fourth quarter of 2018. The Rig Technologies segment, representing Canrig and the two technology development efforts, improved its adjusted EBITDA to negative $4.3 million from negative $7.9 million in the third quarter. Canrig by itself was slightly positive. This segment will benefit from adding Tesco's legacy position in such markets as Russia. Now let me review our liquidity and cash generation. We priced $800 million of seven-year unsecured bonds during the first quarter at an interest rate of 5.75%. This financing was intended to address our near-term fixed income maturities, namely the $460 million outstanding on our 2018 6.15% senior notes, as well as the $303 million outstanding on our 2019 9.25% notes. We were pleased with the rate we were able to achieve, which we believe reflect investors' confidence in our ability to generate cash for the years to come. CapEx for the fourth quarter was $119 million, finishing the year at $539 million. We anticipate CapEx for 2018 will be around $500 million, which we'll regularly reexamine in light of our positive free cash flow target for 2018. We have no plans to complete further upgrades beyond the remaining eight we have in our original enhancement program. All of these cost approximately $4 million each. Net debt declined by $76 million sequentially. Excluding the net cash inflows from our two strategic transactions, our cash flow broke even. We expect cash flow for 2018 as a whole to be slightly positive. Our longer term forecasts continue to indicate material cash flow generation over the next few years. Our free cash flow will be allocated primarily to debt reduction. We will continue to be highly selective in our capital allocation. With that, I will turn the call back to Tony for his concluding remarks. Anthony G. Petrello - Nabors Industries Ltd.: Thank you, William. I want to conclude my remarks this morning with the following summary. As William mentioned, our new $800-million seven-year financing at just 5.75% implies substantial investor confidence. We have a robust liquidity profile and a pathway to substantially reducing debt. Generating positive cash flow this year remains a top priority. This quarter marked strong growth not in just revenue and adjusted EBITDA, but also in the competitive position and capabilities of Nabors. We officially began the joint venture operations in Saudi Arabia. We concluded the acquisition of Tesco, Nabors Drilling Solutions is growing into scale, and finally, our Lower 48 fleet is gaining recognition for the value it brings to clients. As far as the 2018 impact of these events, my expectations are highest for the U.S. To be frank, our margins there have lagged over the past couple years. I'm pleased to see the fourth quarter make a step change. With the focus we are putting on controlling cost and demonstrating the value of our SmartRig platform, I expect our Lower 48 margins to reach approximately $8,000 by the end of the year. This will be across a working fleet that should grow by high single digits from today's level, representing over $300,000 a day of incremental value to our investors. This translates to a targeted increase of over $100 million a year. That concludes my remarks this morning. Thank you for your time and attention. With that, we will take your questions.

We will now begin the question-and-answer session. Our next question comes from Waqar Syed of Goldman Sachs. Please go ahead. Waqar Syed - Goldman Sachs & Co. LLC: My question relates to the Tesco acquisition. Could you provide some more color on how do you plan to generate the cost synergies, and then also the revenue synergies, especially? And the target, original target, of $35 million, that seems to be achievable mostly from just the G&A. What could be the upside case beyond that? And then also on the revenue synergies side if you could highlight a little bit more. Anthony G. Petrello - Nabors Industries Ltd.: Okay. Well, the unique thing about the acquisition, as you know, was they're in the big manufacturing business, which really had a product overlay with the Canrig. The overlay wasn't that much in all categories because Canrig does certain products that Tesco didn't, like flow works (32:08) and VFDs hat Tesco didn't. But Tesco did have a top drive product range that actually is more robust than the lower, (32:18) less than 500-ton top drive category. So there is – and then they have the tubular services business. So there is obviously ample cost consolidation opportunities to take that organization and overlay it into the Canrig organization of manufacturing and the NDS organization of tubular services, which is what we've done right out of the box. And then, of course, our infrastructure has been set to scale so we're able to absorb this without really much – very little in the way of incremental corporate additions. So that was step one and that's what we're in the process of doing well. Then with respect to field operations, we're moving to a geomarket model where in the geomarket you have rigs and you have NDS in those markets and there's going to be savings in the actual field infrastructure aspects of delivering services to clients. That's point two and point three is the way we want to run the tubular services business is a little bit different especially on Nabors rigs versus what's been done today. As you know, we uniquely – because we have the top drive as part of our portfolio, we're looking to not just bundle a (33:33) business but actually deliver it in a different way. So our inspiration is to actually integrate the tool into the rig. In a couple years from now we want a rig to look with a top drive the way (33:47) the way people look at rigs with top drives if they're ubiquitous, and that the rig crew is substantially responsible for running the service. So that the idea is to basically disrupt the way it's done today. To do that, there has to be some changes to the way the case and terms is done and there's some technology hurdles but those are being addressed in the second quarter. We're going to have a model where a typical CRT tool that goes out there with a separate set of hardware, some of that redundant hardware will be eliminated. And then we'll be moving to cross training crews to handle most of the services, et cetera. So we believe that provides for margin expansion as well. So that may be a long answer but that's the concept. In addition to that, the Tesco install base, it's interesting. People may not realize this. Canrig has an excess of about 1,300 top drives worldwide and Tesco has about the same install base worldwide. So there's a huge install base Tesco top drive market that's – the portion of that is AC top drives will also become a target for Nabors performance products on third-party rigs. So that's another growth potential that will come out of the deal as well, which historically we focused on not just Nabors rigs but third-party rigs with Canrig AC top drives so now we're expanding that market as well. So there will be potential for a product like ROCKIT and our new Navigator product as well. Waqar Syed - Goldman Sachs & Co. LLC: So do you see this revenue synergy potential show up in 2018 results? Or this is more like a 2019 and 2020 kind of time period that you realize that? Anthony G. Petrello - Nabors Industries Ltd.: Well, I thought (35:23) I'd say we're working on it every month and the sooner the better as far as I'm concerned but realistically, to get these products done and out there is probably the late second half of the year. Waqar Syed - Goldman Sachs & Co. LLC: Okay. And then on the rotary steerables, could you provide some more color on the commercialization process? It feels as if it's been pushed to the right a little bit. Anthony G. Petrello - Nabors Industries Ltd.: Well, what – we've actually had another two tests at Catoosa and I think in March it's actually going to a customer for a test. So we'll see what the field trial with the customer yields and we have high expectations. And hopefully that goes well and then we can start gearing up. So the idea is to target the second half of the year, to have a tool in the marketplace. That's the goal. We're going to a real customer next month. Waqar Syed - Goldman Sachs & Co. LLC: Great. Thank you very much.

Our next question comes from Marshall Adkins of Raymond James. Please go ahead. J. Marshall Adkins - Raymond James & Associates, Inc.: Good morning, guys. Tony, thank you for the rotary steerable update, let's stay kind of on that tech theme. Give us an update, if you would, also on the managed pressure drilling. I know the Weatherford JV fell apart but that and robotics, any sense of time there? It seems like the robotics is a lot further off than the rotary steerable, but if you could just give color on those technology initiatives and any other ones that I've missed. Anthony G. Petrello - Nabors Industries Ltd.: Okay. On the managed pressure – I mean, what we're doing with the Weatherford is we are sourcing our rotating head with Weatherford, and we're working on a long-term – kind of working a long-term arrangement with that. So that's what we're doing vis-a-vis that, but we do have an MPD offering that we've had some success about and I'll let Chris talk about it here. Chris? Christopher Papouras - Nabors Industries Ltd.: Sure. We've deployed four systems. We've got six additional systems coming, but the approach that we're trying to take is really to quantify the value of MPD and our goal is to ultimately mainstream it. So one of our clients that we're working is basically moving over to MPD across their entire fleet of rigs. And the idea is by tightly integrating with the rig controls, we can drive down the cost of the offering, while still being able to create the value. So that system is out there and we expect to achieve some growth as we add – continue to add systems. Anthony G. Petrello - Nabors Industries Ltd.: And the good thing about it, Marshall, is that the configuration of the hardware as compared to a standalone provider is about probably at least – maybe at least 40% cheaper hardware cost wise than a standard provider, because the way our SmartRigs are designed, they're designed with the expectation that will be an MPD-ready rig, so the piping is all done to accommodate it as a drop in .So that's one of the advantages of doing this as basically rig-as-a-platform concept, which as you know that's our concept, so. And then, with respect to... J. Marshall Adkins - Raymond James & Associates, Inc.: Hold on just a second. By your tone there, Tony, it sounds like this managed pressure drilling thing is maybe a little bit bigger deal going forward than certainly I thought or most of us thought. Anthony G. Petrello - Nabors Industries Ltd.: Well, I think the issue is right now the service. The service is so expensive in the U.S., there's probably – I mean, even the leading provider probably only have 10 or 12 jobs, or something like that. I don't know the exact number, but compared to the rig count it's so expensive. J. Marshall Adkins - Raymond James & Associates, Inc.: Okay. Anthony G. Petrello - Nabors Industries Ltd.: So one of our missions here is to first get a sort of what we call a Tier 1 service, which is a basic service on the rig, and do it in a number that we can recapture our hardware costs in the deal and then get some additional margin from a Tier-1 level. And then by – but once we have that set up that way, the infrastructure with the software will be set up to run a fully-managed MPD offering. We're automatically controlling the chokes, (39:27) everything. So if the operator elects to do that, then it's a high-margin potential. And the value proposition is we have to figure out a way to show the operator what the true savings are to them, which really involves losses (39:41) and other things, and that's a big education process. But as Chris said, we've recently done a project with an operator and that actually has given us some confidence. We actually come up with an MPD calculator that will show him the savings and why. I think it's assuring (39:56) to say everybody would like to run their rigs' MPD. Managed pressure drilling is – always everyone thinks that's the way to do it. The question is it's never been cost effective, so our mission is to try and get a model here that is cost effective with a low-barrier entry to get it in front of the operator. And then, once it's proven to him, then maybe try to upsell the full service. That's the goal, but it's not something that we're going to do overnight, because of all of those hurdles, but that's the thought here. J. Marshall Adkins - Raymond James & Associates, Inc.: And then the other technologies? Anthony G. Petrello - Nabors Industries Ltd.: Okay. So the other technologies, I mentioned the rotary steerable tool. In terms of performance products, we have what's called our Navigator product, which is like – those of you who have heard me talk before, it's like Waze on an iPhone for direction of driller. It basically says here is where you are, here is where you need to go. And then, it calculates what the top drive (40:50) has to do to get there in terms of turns, et cetera. And then, we have another product called PILOT, which is the version of – our version of Google driving car that actually drives the rig with the tool, it slides and rotates the tool automatically. Both of those products have been in field testing on hundreds of wells, and those are going live this quarter for commercial offerings as well. And then, the third thing is the robotics, which is a two-step thing. There's robotics for a land rig we're working to get out. As you know, we have the first generation with an automatic pipe handler rig, it's in the rig yard (41:27). We're hoping to place it by the customer, which is a 1,500-horsepower AC rig rack and pinion style. And then, we're in the process of trying to get out what we're calling the iRacker, which is a pipe handler on a rig floor convert existing – our existing platform of rigs to automatic rigs with pipe handlers. So that's going in testing right now and we're looking for the second half of the year to get that out. And then, finally, on RDS, which is the robotics company in Norway, which we also acquired. That product is very mature in terms of been through testing for several years now and we're in talks with several large offshore drilling contractors, who all have the same issue before them, which is how to lower their – how to increase their efficiency in their operation and how to differentiate themselves. And I think this platform of tools on the rig floor, which is an automatic pipe handler including a robot that moves the stuff around to make it work, is a unique offering and we have interest from at least two or three very large offshore drillers, and we're trying to get that commercial. So the goals on both of those obviously are toward the latter part of the year, but they're highly active and focused on right now. J. Marshall Adkins - Raymond James & Associates, Inc.: Thank you, Tony. Anthony G. Petrello - Nabors Industries Ltd.: Sure.

Our next question comes from Sean Meakim of JPMorgan. Please go ahead. Sean C. Meakim - JPMorgan Securities LLC: Thank you. Hi. Good morning. Anthony G. Petrello - Nabors Industries Ltd.: Good morning. Sean C. Meakim - JPMorgan Securities LLC: So with just some of the moving parts with respect to the International fleet, I was hoping you can maybe just give us a little more granularity around the interplay between the jack-up sale as well as some of the incremental rigs that are going to be coming in at better rates, just thinking about that margin profile and the cash margin. Is there a normalized type of number you can throw out there for us? How should we think about that progression through 2018? Anthony G. Petrello - Nabors Industries Ltd.: Okay. So let me try to give you some overall color. First of all, with respect to margins, as we said, we see some additional modest declines in margin the first half of the year which I would say in the 3% to 5% arena. However, we expect that that growth was going to be offset by a gain in activity. The margin decline is primarily due to two factors which you've identified one of them. First, is we had certain rigs in South America that were entered into at the height of the market in 2014 and very robust pricing which we've renegotiated and extended through 2019 at attractive rates today, but still less than what they were at the extreme high in 2014. But we feel that was strategic and it locked up those rigs through 2019, and they're producing solid returns and attractive returns on capital. The second thing is, as you signaled, is the letter of intent to sell the Middle East jack-ups in two tranches. Those are no longer core assets outside of – and they're outside of the Aramco joint venture, and there's better natural owners for them at this stage. This will allow us to deleverage and avoid some CapEx, but the jack-ups are working at relatively high margins before maintenance and sustaining CapEx, so therefore we have an effect on the average margin. As we said in the call, as we said, we expect the transaction to close somewhere in the next two or three months. So that's where the offsets occur. As far as bouncing back in the second half, there's a couple factors at work there. We're not operating yet at full with our full fleet of rigs in Saudi Arabia because our partner hasn't yet been able to put in the other two rigs on the payroll and that will improve the daily margins as well, and with Brent prices out at $65, we're engaged in multiple client discussions because the market's clearly tightening. Although we'll have a few 2014 legacy contracts, we have great many contracts for 2016 or 2017 that were signed at inferior rates and, as they roll, we think we'll move to higher rates. In terms of activity level, when you talk about international markets, International is not a monolith, as you all know. You've heard us say this before. It's really about 15 separate country markets, and they all operate and react independently from one another. We currently expect about four to six rigs higher in the first quarter and then a modest increase each quarter going forward. We're currently at 96 rigs, up from five (sic) [95] (45:54) in the fourth quarter, and we put our platform rig back to work in Mexico, another rig in India, and a rig each in Russia and Ecuador, and on top of those we have the – as I said, we have the Saudi rigs. So that gives you the overall picture. Sean C. Meakim - JPMorgan Securities LLC: Thank you that's very helpful. One follow-up to that, just one of the more nuanced pieces that I think would be helpful to flesh out a bit, is with some of those legacy contracts from the prior cycle, some of those were coming in at maybe you're amortizing pretty good EBITDA but the cash component was less, because you just – you pulled forward, you got more of it up front to help finance the rigs. As we think about re-contracting, yes, maybe some of them are at lower rates, but you're getting maybe a conversion between EBITDA and cash. And so maybe could you give us some sense of some of the impact to cash from ops which maybe see some benefit on for that as you move through to 2018? Anthony G. Petrello - Nabors Industries Ltd.: Yeah. Obviously, as you have pointed out, the nominal rate today of those – the nominal real rate today on a cash basis is less than the prevailing market. Therefore, there should be some uptick as you move into rollover, but of course those are all subject to negotiation, but that's obviously something that we're keenly aware of. Sean C. Meakim - JPMorgan Securities LLC: Got it. Okay. Thank you for the feedback.

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. Anthony G. Petrello - Nabors Industries Ltd.: Good morning. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: I just have one question on the U.S. Lower 48. It feels like if the market – the U.S. Lower 48 market ends up adding, call it, 90 rigs between now and the end of the year, you're going to have more E&P operators looking to term out super-spec rigs. And so I realize we're starting from a relatively low base in terms of your rigs that are term contracted six-plus months out on the horizon, but how do you weigh the pros and cons of terming out rigs, call it, in the one to two-year range? I mean, might we see a return to those multiyear contracts that we saw in the last cycle? How do you think about it? Anthony G. Petrello - Nabors Industries Ltd.: Yeah. I think given that the portfolio is now only 15%, I think as we move to the low to mid-teen number, and I think the prospect and the advantages of terming out a portion, I think probably we'd like to double our percentage. And I think as we – all the players march down the path of terming out, I think it actually will probably cause some tightening of the numbers as well. So I think that's one of the advantages we have given where our portfolio is, assuming the market develops the way you just said, which is what we've planned for. Which is why we're in the situation we're in. But that's exactly the plan. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Okay. And then just a second quick question. As I think about the three newbuild PACE rigs that'll be delivered this year and then the eight potential rigs that get upgraded, it seems reasonable to think that most, if not all, of those are probably going to have a similar number of NDS services on them as for the stats that you gave earlier. Anthony G. Petrello - Nabors Industries Ltd.: Absolutely, and I think every operator that's looked at the new M-800 and M-1000 rigs, when they see that the rig is MPD-ready and DD-ready, et cetera, they're very open to those discussions. And I think they're our best marketing of the NDS services, so that's the whole strategy in a nutshell. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc.: Great. Thanks, guys. Appreciate it. Anthony G. Petrello - Nabors Industries Ltd.: Thank you.

Our next question comes from Ken Sill of SunTrust. Please go ahead. Ken Sill - SunTrust Robinson Humphrey, Inc.: Yeah. Good morning, guys. It's a very good outlook we've got here. Tony, you were talking about getting up to $8,000 cash margins towards the end of the year on your premium rigs. Is that inclusive of the NDS services? Or is that just a standalone day rate cash margin? Anthony G. Petrello - Nabors Industries Ltd.: Yeah. Let me be clear about this because when you look at our numbers, there's two things about our margins and our revenues on our rigs you have to be aware of. The first one is our rigs, the number is the basic rig that we reported, which means – and when we give you the indications of rates that we're talking about, we mean a basic rate without any extra stuff, no extra services, no NDS services. Other competitors of ours run some casing, they run some trucking and other things. The numbers I'm giving you is pure base rate, ex-the NDS, which is now – I think the marketplace was a little confused. Now that we've split it out, I think it ought to be very clear that the rig numbers are all base rate only. In terms of how we get there, on the base rate, as we mentioned on the rig, we have 13 super-spec rigs rolling over from term contracts this quarter. Their average day rate is under $18,000, and so you see the leverage when they move to the low to mid-20s, and then you have the two additional newbuilds. But also, on the cost side, we've implemented some initiatives that we're beginning to realize in the first quarter. You've got to remember, a lot of the costs that we have in the system was because of the gear-up to get to the 91 SmartRigs we have today. And included in our costs today is still some start-up amortization, which is about $5 a day, which will roll off by midyear. But the combination of that and cost focus as well as rolling up rates, that gives us a path that we're talking about to get to $8,000 by the end of the year. And as we already said, for the first quarter, we're targeting $6,000. Ken Sill - SunTrust Robinson Humphrey, Inc.: Yes. So... William J. Restrepo - Nabors Industries Ltd.: Let me clarify as well. It's not just for our super-spec rigs. It's for whole Lower 48 fleet, which includes a dozen or so legacy rigs and smaller rigs, SCR rigs and so forth. Anthony G. Petrello - Nabors Industries Ltd.: Now, that's absolutely true. And so when you compare our average margins per rig to somewhat – some people call us pure-play rig companies with all 1,500 AC rigs, then you have to bear that in mind that's the other issue. So normalized, the numbers on that stuff, the base would probably be higher. Ken Sill - SunTrust Robinson Humphrey, Inc.: Yes. So those are very strong cash margins. So I guess kind of backing into the other elephant in the room question, is at $8,000 a day cash margins, is that enough to justify building new rigs? Or does it need to be higher? Anthony G. Petrello - Nabors Industries Ltd.: Well, with respect to newbuilds, I think right now our top priority remains paying down debt and generating attractive returns on capital many (52:30) dollar. To commit to new builds in the Lower 48 I think we'd have to see first customer commitments for term contracts probably close to three years. We have to see leading edge pricing say in the upper mid 20s or mid to upper 20s and it would have to make sense vis-a-vis our other investor alternatives. I mean, when I look at incremental capital as a company, I have to look at where it's best served. Is it best served NDS, the robotics, International or domestic and so we're actually making the guys kind of compete for the capital to increase returns. I think overall the mission this year is to attract more for our assets. If I had to use a phrase I'd say this is the year of squeezing the orange. In other words, I want to get more juice out of what we have in the company and I want to get as much juice out of everything I have. I'm very proud of the asset base we now have. I'm proud of the technology portfolio we've put together, but now what we have to do is make hay with it, make money with it. And what we really want to do is squeeze as much as we can out of everything we have. So I'm not saying it's not possible, I'm saying, though, there's a bunch of preconditions to get there. Ken Sill - SunTrust Robinson Humphrey, Inc.: Well, and congratulations on creating a company that now has alternatives to deploy capital. Thank you. Anthony G. Petrello - Nabors Industries Ltd.: Thank you.

Our next question comes from James Wicklund of Credit Suisse. Please go ahead. James Wicklund - Credit Suisse Securities (USA) LLC: Hey, guys. Ken have asked my question on the $8,000 day rate and that was a very good explanation, I appreciate that. The M-400, I mean, the equivalent of 20 land rigs, how any chances, how many opportunities are there for more platform rigs in the world today? Anthony G. Petrello - Nabors Industries Ltd.: Of that kind? Actually, there has been rumblings of maybe another one, but obviously they're warm in the oven kind of projects. But I think the one thing about Nabors is we're uniquely positioned to deliver that stuff and I don't think people realize that people come to us because of our technology profile to do that kind of thing. Those rigs for those platforms in particular, they required certain special engineering that to get the kind of rig on the platform to meet the variable bit load (54:48) requirements for example, we had to embed a new 4,000-horsepower drill works that was wider than the main competitor who normally provides that 4,000-horsepower drill works. And that is a real testament to the engineering prowess and the technology that we've built up as a company. And it's actually that part of the offshore business for us is, Jim, is also in substance a precursor for the stuff that happens on land because as you know there's always this sophistication stuff going on offshore, but the issue is how to make it commercial in a scaled environment. And that's really the focus of our technology initiatives. I'm not trying to be leading edge here on any of this stuff including the downhole tools. What I'm trying to do is take the existing technology, repackage it and make it scalable and make it ubiquitous to our platform. That's the mission. So far we're still at the second inning of that ballgame but that's what we're trying to do and projects like the M-400 is an example of that. James Wicklund - Credit Suisse Securities (USA) LLC: It appears to be working, Tony. Congratulations and this rig is going to be just on contract working constantly for how many years? Anthony G. Petrello - Nabors Industries Ltd.: Five years. William J. Restrepo - Nabors Industries Ltd.: Plus an extension but I'm sure that will not be the same margins. James Wicklund - Credit Suisse Securities (USA) LLC: Okay. Thanks, guys, appreciate it. Anthony G. Petrello - Nabors Industries Ltd.: Thank you. Dennis A. Smith - Nabors Industries Ltd.: Operator, this is Denny. I think we're going to just take one more question and we'll wrap up the call, please.

Our next question comes from Scott Gruber of Citigroup. Please go ahead. Scott A. Gruber - Citigroup Global Markets, Inc.: Yes. Good morning. Thanks for squeezing me in. Anthony G. Petrello - Nabors Industries Ltd.: Thank you. Scott A. Gruber - Citigroup Global Markets, Inc.: Tony, so your International rig count today is 96, heading up towards 100. I was looking back you peaked at about 130 in 2014. What level of activity growth abroad do you need to see some pricing gains? And there's obviously some new building activity that looks like it's going to start moving forward here. Does that inhibit potential pricing gains for the base fleet? How do you think about that? Anthony G. Petrello - Nabors Industries Ltd.: Yeah, I think you have to segment the market a little bit. So for example, to the extent there's activity in the 3,000-horsepower arena, which is the deep gas stuff, which the certain Middle East markets where that is. I think by the next (57:09) the next round of activity maybe the second half of the year, those numbers should be – those pricings should be pretty attractive, because there really isn't any equipment out there other than existing rollovers of existing stuff to do that work and therefore every rig is a newbuild. So by definition you have replacement cost pricing, which is – and therefore it's a very attractive target market with a lot of – very few competitors. So with respect to that, with respect to the rest of the market, I think, yes, the market, the pricing is still – it's robust, but there's still rollovers out there, so it's not as leading edge yet. Scott A. Gruber - Citigroup Global Markets, Inc.: And you have good exposure to deep gas activity in Saudi. Can you remind us what that exposure is, what percentage of your fleet in Saudi today is drilling deep gas? Anthony G. Petrello - Nabors Industries Ltd.: Siggi is on the phone. Siggi, can you give the exact number? It's a very high percentage of the stuff we're doing (58:09). Siggi Meissner - Nabors Industries Ltd.: I think our market share in the gas is about 22%. Definitely over 20%. Dennis A. Smith - Nabors Industries Ltd.: What percent of our fleet, Siggi? Siggi Meissner - Nabors Industries Ltd.: I would think we have – I would say one-third of the rigs is probably in the gas. Scott A. Gruber - Citigroup Global Markets, Inc.: Great. Well, that's all for me. I'll turn it back. Thanks. Anthony G. Petrello - Nabors Industries Ltd.: Great. Thank you. Dennis A. Smith - Nabors Industries Ltd.: Operator, want to thank everybody for participating today. If we didn't get to any questions you got, feel free to e-mail us or reach out for us. And, operator, if you could go ahead and close out the call, please?

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