Nabors Industries (NBR) risk factors, FY2024 10-K

Business and Operational Risks

1. 01Fluctuations in oil and natural gas prices could adversely affect drilling activity and our revenues, cash flows and profitability
2. 02Our customers and thereby our business and profitability could be adversely affected by low oil prices or turmoil in the global economy
3. 03We operate in a highly competitive industry with excess drilling capacity, which may adversely affect our results of operations
4. 04We must renew customer contracts to remain competitive
5. 05The nature of our operations presents inherent risks of loss, including weather-related risks, that could adversely affect our results of operations
6. 06Our drilling contracts may in certain instances be renegotiated, suspended or terminated without an early termination payment
7. 07The loss of one or a number of our large customers could have a material adverse effect on our business, financial condition and results of operations
8. 08The profitability of our operations could be adversely affected by war, civil disturbance, terrorist activity or other political or economic instability, fluctuation in currency exchange rates and local import and export controls
9. 09We rely on third-party suppliers, manufacturers and service providers to secure equipment, components and parts used in rig operations, conversions, upgrades and construction
10. 10Our contracts with state-owned energy companies may expose us to greater risks than we normally assume in contracts with non-governmental customers
11. 11Control of oil and natural gas reserves by NOCs may affect the demand for our services and products and create additional risks in our operations
12. 12Our operating expense includes fixed costs that may not decline in proportion to decreases in rig utilization and dayrates
13. 13Actions of and disputes with our joint venture partners could have a material adverse effect on the business and results of operations of our joint ventures and, in turn, our business and consolidated results of operations
14. 14Failure to realize the anticipated benefits of acquisitions, divestitures, investments, joint ventures and other strategic transactions may adversely affect our business, results of operations and financial position
15. 15Decisions by internet service, cloud host service and related providers to restrict or ban our ability to use their platforms could adversely affect our ability to promote and conduct our business and inform investors
16. 16Failure to effectively and timely address the energy transition could adversely affect our business, financial condition, results of operations, cash flows and share price
17. 17Our aspirations, goals and initiatives related to sustainability and emissions reduction, and our public statements and disclosures regarding them, expose us to risks
18. 18We will be subject to a number of uncertainties during the timeframe when Nabors Energy Transition Corporation II (“NETC II”) pursues a business combination, which could adversely affect our business, financial condition, results of operations, cash flows and share price

Financial Risks

1. 19We may record additional losses or impairment charges related to sold or idle drilling rigs and other assets
2. 20Our financial and operating flexibility could be affected by our long-term debt and other financial commitments
3. 21Volatility in prices of goods and services and interest rates could expose us to risks in managing our operating and capital costs
4. 22Our ability to access capital markets could be limited
5. 23A downgrade in our credit rating could negatively affect our cost of and ability to access capital markets or other financing sources

Technology Risks

1. 24Limitations on our ability to obtain, maintain, protect or enforce our intellectual property rights, including our trade secrets, could cause a loss in revenues and any competitive advantage we hold
2. 25Technology disputes could negatively affect our operations or increase our costs
3. 26Improvements in or new discoveries of alternative energy technologies could have a material adverse effect on our financial condition and results of operations
4. 27Our business is subject to cybersecurity risks

Legal and Regulatory Risks

1. 28Our international business exposes us to additional risks, including risks related to international laws and regulations, and compliance obligations under the Foreign Corrupt Practices Act and other applicable anti-corruption laws
2. 29Changes to, or noncompliance with laws and regulations regarding environmental matters or exposure to environmental liabilities, could adversely affect our results of operations
3. 30The physical effects of climate change and the regulation of greenhouse gas emissions and climate change could have a negative effect on our business
4. 31assurance that we will not be subject to this regulation, or other climate regulation promulgated by another federal agency in the future
5. 32We are subject to complex and evolving laws and regulations regarding data privacy and security
6. 33Legal proceedings and governmental investigations could affect our financial condition and results of operations
7. 34decisions against us that could have an adverse effect on our financial condition or results of operations. See “Item 3—Legal Proceedings” for a discussion of certain existing legal proceedings
8. 35We may be subject to changes in tax laws and have additional tax liabilities
9. 36Significant issuances of common shares could adversely affect the market price of our common shares
10. 37Our common share price has been and may continue to be volatile
11. 38As a holding company, we depend on our operating subsidiaries and investments to meet our financial obligations

Risks Related to Our Merger with Parker Drilling Company

1. 39The market value of Nabors common shares could be negatively affected by risks and conditions that apply to the combined company, which may be different from the risks and conditions applicable to Nabors, and sales of Nabors’ shares in connection with Merger would impact the price of our common shares
2. 40Failure to complete the Merger could negatively impact the future business and financial results of Nabors
3. 41Litigation relating to the Merger could result in an injunction preventing the completion of the applicable transaction and/or substantial costs to us
4. 42The failure to integrate successfully the businesses of Nabors and Parker or to effectively managed the consolidated company post-Merger could adversely affect the combined company’s future results
5. 43The synergies attributable to the mergers may vary from expectations
6. 44The combined company is expected to incur substantial expenses related to the integration of Nabors and Parker following the Merger
7. 45The combined company may not be able to utilize a portion of Nabors’ or Parker’s net operating loss carry forwards (“NOLs”) to offset future taxable income for U.S. federal tax purposes, which could adversely affect the combined company’s net income and cash flows
8. 46The due diligence process that we undertook before entering into the Merger Agreement with Parker may not have revealed all facts that may be relevant in connection with Merger

General Risks

1. 47Investor sentiment and public perception related to the fossil fuels industry and to ESG initiatives could affect the demand for our services, increase our costs of capital, our reporting requirement, and our operations, which could negatively affect our stock price
2. 48Our business, results of operations and financial condition have been and may continue to be adversely affected by global public health epidemics and future adverse effects could be material and difficult to predict
3. 49The loss of key executives or inability to attract and retain experienced technical professionals and talented personnel could reduce our competitiveness and harm prospects for future success
4. 50Unionization efforts and labor regulations in certain countries in which we operate could materially increase our costs or limit our flexibility