Welcome to our Conference Call this quarter. My name is Dennis Smith, the Director of Corporate Development. With me today, obviously, is Gene Isenberg who will be doing most of the call. We'll do the format as we usually do. Gene will give 20 or 30 minutes of comments about the quarter and more particularly about the outlook as we see it. And then, we'll open it up to Q&A and limit to approximately 1 hour the total duration of the call. In addition to Gene and myself, Tony Petrello, our President Chief Operating officer; Laura Doerre, our General Counsel; Clark Wood, our Principal Accounting Officer and the Presidents of our Bay Area's major business units. Before we begin, I just want to remind everybody that we will be discussing the outlook that constitutes forward-looking statements under the SEC Act and as such, they're subject to a lot of risk factors and changes in outlook, which are elaborated upon in our various filings, particularly our 10-Ks, and we encourage you to read that. With that, I'll turn it over to Gene to get started.

Thanks, and welcome again to Nabors' conference call for the first quarter. I want to thank everyone for participating again this morning. As usual, we have posted to the Nabors website a series of slides that contain details about the performance during the quarter, which I suggest you look at as we talk. First quarter operating income was generally in line modestly below first call consensus at $191 million. However, we would have reported another $24 million or $0.06 per share if were it not for certain items, which obscured a solidly improving outlook for virtually all of our business units. Most of the items included in that $24 million are unique to the first quarter and will not recur. In fact, approximately $8 million of that is deferred and will be recovered during actually this calendar year. The most significant of these items occurred in our Pressure Pumping unit, the weather delays and additional cost for fuel and repairs. And also those associated with the ramp-up we have planning resulted in a $13 million hit. These costs, the ongoing cost other than the buildup cost will be recovered in pricing as we go forward. Additional negative impact of approximately $7 million resulted in a supply-chain interruption at Canrig, which delayed the delivery of 10 rigs. The supply chain problem is repaired, and the income, in fact, will be recovered over the remainder of this calendar year. Internationally, we incurred a couple of million in unusual costs during the period. The onetime payment to Saudi nationals, at the behest of Saudi Aramco, which in principle, they have agreed we would cover in day rates, and the details of that are being firmed up. We had to suspend the operation of a couple of rigs in Yemen when we evacuated all…

Alicia, I think we're ready for the Q&A session please?

[Operator Instructions] Our first question is from the line of Dan Boyd with Goldman Sachs.

Gene, this one for you, it might even be for Ziggy. But I just want to get a little bit more visibility from your International market, particularly in the Middle East and with Saudi. From what I remember you guys think you have a dominant position in Saudi, but maybe you could just give us a recap in terms of how many rigs, land rigs you had working at Saudi at the prior peak, where you are today, and what, based on your conversation with Saudi, what that might look like as an exit rate as we enter 2012.

Ziggy was afraid of the question. He's in Dubai, but John? This is John Gass.

We discussed earlier, we renewed [indiscernible] out to tender. We renewed some of the contracts and also the cost of our stack rigs to work. We received tenders for 12 land rigs yesterday, which would -- 3 of the renewals were Nabors rigs, 2 for competitors, the rest are for incremental rigs, which would take up the stack fleet that we do have in Saudi Arabia. So we're looking to have 30 land rigs working plus the 4 jackups.

And what does that look like particularly in the last market?

Yes, what it looked like in the last market. Well, we, actually, we were down to -- land rigs were down to 22 land rigs working. So well be up to -- we could be up to 30 to 31 land rigs working there.

Dan, I think on a gross basis, including all the joint venture rigs, we got up to in the mid-, high 30s, 36, 38 something like that.

Okay. And did you take any rigs out of the region? Are you sourcing some for Iraq or other areas from your Saudi rigs?

Three of the Saudi rigs will be going -- are mobilizing now for Iraq. Couple went to Kuwait, right? There's been about 5 or 6 rigs at least.

And then what's the start-up timing? I'm trying to gauge and understand. It's very helpful when we talk about something in the maybe mid-70s for the fourth quarter of this year. But if everything's starting up and is the run rate into the first quarter of 12 significantly higher than that? Or do you have other contract rollovers that we should be thinking about, that might roll to lower margins or just where you might have some more uncertainty in the future?

No, the run rate will definitely be a lot higher, and the only exposure that's in '12 really is there's 1 more jackup that has renewed in June but it will only be in effect for half a year. So it kind of dilutes its impact.

And I kind of leave this one as an open question. But back in North America, just trying to get a sense of how many rigs you have on the sidelines today that you might be able to pull back by year end, what the capital may be required for those and how you see that evolving as we think about your rig count beyond just the new builds that you're going to be putting to work?

Legacy or...

Exactly, legacy rate. Yes.

Well, again, we have 2 in the yards now. We have 6 more that are in the reactivation process as far as going through the approval. We got approximately 26 SCR rigs that could be looked at, be put back into the field, cost depending on level of refurb could be anywhere from $4 million to $8 million a rig. On mechanical rigs, we have approximately 18, which probably only may be 8 to 10 that we would actually put money into redeploying. The small and mechanical because we discussed some of the shallower horizons would be that number on the mechanical. On the SCR rigs, most of those are a minimum of 1,000-, 1,500-horsepower SCRs. But we could -- we're looking at, again, we're looking at a total of 8, 2 are in the yard. It's being worked on as we speak and those range anywhere from a big 1,000-horsepower to 1,500-horsepower SCRs.

Okay. So it sounds like exit rate rig count for this year could be in that 225 range?

I would say right at 220, correct.

Thanks. I'll turn it over.

The next question is from the line of Arun Jayaram with Credit Suisse. Arun Jayaram - Crédit Suisse AG: Gene, I do want to follow up to Dan's question is, can you help us think about, as you put incremental rigs to work in Saudi, I'm thinking onshore and also in Iraq, what is the increment -- I think this quarter, you reported about $13,400 margins in International. Can you help us think about what the margins will look like on that, on those incremental awards relative to what you reported this quarter? Just trying to understand how the margin outlook will look on a forward basis.

Yes, I don't see a super major change. I think the real problem is CapEx and incremental contract term and margin. So if you have to spend x million dollars and you're getting an extension of 2, 3 years and you're not raising the day rate, the margin's okay, but it's sort of treading water because you're having to spend the CapEx that you're incrementally -- incremental CapEx, which is going to be covered, only covered, by the incremental term. But you do have investment and prospects and all that. In the meantime, we're kind of investing in this way in Saudi but we recognize that as an issue. Arun Jayaram - Crédit Suisse AG: Okay, so the margin progression is, just to understand your comments, is you're going to see flattish type of margins from the incremental work, but you are getting the duration of the awards.

Yes, both to the positives to negatives of spending capital. Arun Jayaram - Crédit Suisse AG: Right. And my final question is, Gene, can you help us frame -- you said earnings are essentially flat. You obviously had a little bit of noise in Sweezey. Can you help us think about the 2011 outlook for Sweezey? You're adding I think 1 frac fleet a month, had some, maybe some delays in terms of supply chain. But can you help us think about how the next couple of quarters look like at Sweezey and give us some guidance on Sweezey going forward?

Well, the good news is the supply and demand in my view, I mean the market confirms this, is it still reflects the shortage of frac-ing. We're finding that we have more price inelasticity. In other words, we have more pricing power than we thought. We recently, for example, put in a fuel surcharge, and it just got paid, which indicates that we could do maybe a little more than that or there's some pricing power. Anyway, we're reflecting on this. For example, specifically we already had our long-term contracts geared with cost escalation pass-throughs. We're adapting that to our everyday contract as well. And the more we find that we can push prices, we'll do it and hopefully are doing it. Arun Jayaram - Crédit Suisse AG: So that argues for margin expansion through the year?

I don't know about through the year, but for the time being, yes. Bear in mind that a number of prominent prognosticators said that by the beginning of April, there'd be a surplus in frac-ing. So and there's a lot on order, but it's being delayed and a lot is being chewed up. All I'm telling you is right now, we have the pricing power, and I don't see a near-term reversal of that. Arun Jayaram - Crédit Suisse AG: Fair enough, Gene. Thanks.

The next question is from the line of Robin Shoemaker with Citigroup.

Yes, thank you, Gene. I wanted to ask about Canada. You indicate in the press release that 45 rigs are contracted after spring break-up, which would be quite a few more than you were running in third and fourth quarter of last year. So is this -- can you describe where -- is this demand in Canada coming from an oil play?

Yes, it's very similar, moving out of the British Colombia pure gas into the oil or heavy oil or liquid content, yes, analogously to the States.

So just following through sort of like 45 rigs contracted, is that kind of the number you could anticipate operating in Canada in the third and fourth quarter?

I would say at least that.

Yes, and the margin improvement in Canada really quite pronounced in the first quarter. Is that also a sustainable trend or...

I think so.

Okay.

It could be. James Crandell - Dahlman Rose & Company, LLC: Yes, because that was quite a big improvement in margin. And so then on the U.S. side, you said you've got 225 rigs at the end of the year and you anticipate margin progression through the year. Your margins peaked at a little over 11,000 a day in the U.S. in the last cycle. And is that a level that's achievable in the current cycle given the cost pressures?

Probably not. We're doing pretty well.

Okay, good. Thank you.

The next question is from the line of Jim Rollyson from Raymond James. James Rollyson - Raymond James & Associates, Inc.: Gene, maybe going back to Robin's question just on Canada to cut to the bottom line, I think a quarter ago, you guys were thinking operating income from that business for the year might be in the $35million to $40 million range from the low 20s last year. You almost did that already in the first quarter and recognized second quarter's going to be a loss but given the visibility you have with these 45 rigs in the latter part of the year, any revision or kind of thoughts on where operating income from Canada might end up for the year? Are we talking $80 million now or just kind of what are you thinking?

No, what number did you say we had given your earlier? James Rollyson - Raymond James & Associates, Inc.: 35, 40.

I think we'll do on the really juicy side up to 50% better than that. James Rollyson - Raymond James & Associates, Inc.: Okay, that's very helpful. And then on the Lower 48 side, just kind of some semantics here. The cost went up quite a bit this quarter sequentially, and you typically see that I guess with the payroll tax and stuff. Was all of the 650-plus increase per day rig day in cost related to the payroll tax that kind of fades somewhat as we go through the year? Or is there some other more recurring things in those numbers?

Okay, no. About $250, $300 a day is specific to payroll tax. There is some incremental cost vis-a-vis R&M starting these rigs up leave reactivated last year. We reactivated 36 conventional rigs, put those in the market. So we're still incurring some cost from that. Now the payroll tax will fall off in basically starting April, going forward, late March, April. Also, there was a pushdown in terms of our success from our HSE efforts that was in the fourth quarter. It also showed. You can see the flip in cost basis from that. And that -- so you saw some increase vis-a-vis that, which, I think, is about 200 plus also, 250. James Rollyson - Raymond James & Associates, Inc.: Okay, that's real helpful. And then Joe, on real build opportunities, you added 4. You're kind of up to 33 now. It seems like the rig count is still going up and interest in the newer types of rigs is still there. Can you maybe characterize what you're seeing for opportunities for additional new builds just going forward?

Yes, we're again, with the new builds, we have several operators where currently, we were hoping to be able to put those in numbers today. Unfortunately, we're a week or 2 weeks away from being able to finalize some of those negotiations. But there's still a lot of opportunities especially where operators are looking at pad development, i.e. our B series rig up in North Dakota. Our tremendous interest in that rig developed again as cost escalated there. They want to minimize location size, sum up operations and locations and reduce their cost. And so we're seeing a lot of interest, continued interest. But again, I don't have a specific number for you, but we're not back to where we were at 2006, 2007, early 2008. But we are definitely seeing a strong interest in the new builds. James Rollyson - Raymond James & Associates, Inc.: In order of magnitude, are we talking like 4 or 5 rigs or are we talking like 20 rigs?

On a go-forward basis, I would -- somewhere in between the 4 and the 20's on a go-forward basis. How does that sound? James Rollyson - Raymond James & Associates, Inc.: Good hedge. Thanks, guys.

The next question is from the line of Geoff Kieburtz with Weeden & Co. Geoff Kieburtz - Weeden & Co., LP: Gene, in the press release you said that by the end of 2011, you could see international land rigs supply and demand imbalance. What gives you the confidence on that? And what are the ramifications, if you're right?

The ramifications are what we've been trying to not overstate and saying that by the fourth quarter of this year, International, in spite of the hickeys we've had because of other things, but because of these favorable trends, we'll frankly meet or exceed and bluntly it's likely to exceed by the fourth quarter of last year, which was pretty good. That was like $70 million. That was operating income. And these are the factors that go into making that projection, which is a little aggressive, but I'm pretty sure we can do it. Geoff Kieburtz - Weeden & Co., LP: Okay. In terms of margins, without getting caught onto the details about when the peak was, if you return to balance in the fourth quarter, when do you think you get back to peak International margins on the Land business?

Not for a bit. I mean we had unusually good circumstances in rig supply/demand back in 2006, which -- it's a worldwide phenomenon. Specifically, there were differences, obviously. But there were really super favorable confluence of factors, and isn't likely to occur in the near term or foreseeable future. And frankly, we can do pretty well without doing that super well. Geoff Kieburtz - Weeden & Co., LP: Okay, so that's not necessarily within your forecast at all, it sounds like?

Correct. Geoff Kieburtz - Weeden & Co., LP: Okay. And can you give us any kind of quantification on the step-down and the jackup rigs that on the ones that have rolled over?

Anything on that specifically? It's in line with what's happening in the industry general. The first one was 1,000-horsepower workover rig, and it's in the high 60s just below 70. The other one's approximate to in the high 70s close to 80. Geoff Kieburtz - Weeden & Co., LP: Compared to?

Compared to, the first one was at 90 and the second one was 134. And so it's like what you see going on in all of the jackups, and that's like more or less a 35% drop. Geoff Kieburtz - Weeden & Co., LP: Right, okay. And on the Pressure Pumping, did the deployment delay? If I understood your comments earlier, you incurred about a 2-month delay on the arrival or, let's say, deployment of the first spread. Your sense of the market now, is that kind of now you're on track and you keep going or is there a risk that we see a creeping delay as we move through the year?

The expectation is that this is it, but there's no absolute currency. Geoff Kieburtz - Weeden & Co., LP: Okay, and is there anything in particular that you know of the cause of that delay at the start-up?

Yes. Often, transmissions were the biggest long lead item and just high demand out there right now. Geoff Kieburtz - Weeden & Co., LP: Great that's it. Thank you very much.

The next question comes from the line of Jeff Tillery with Tudor, Pickering, Holt. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc.: Just wanted to get some color on 30% tax rate this quarter. It sounds like that's what we should expect during the rest of this year. And then, do we step down a little bit next year as International profitability returns. I just wanted to hear how you guys are thinking about that.

I think the big thing is that we added Superior Well-servicing which is, at the moment, 100% domestic at the higher tax rate. I don't know. I think the U.S. tax units are going to increase proportionately, about as well as the international. Maybe better. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc.: Right. And the characterization of the press release of expanding margins?

Incidentally, we don't actually pay cash taxes. I mean, this is the appropriate accounting, including accruals, but we're not paying currently taxes. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc.: That's good feedback. On the Lower 48, the press release discussed an expanding margin. That would say that the spot margins have approached where your term contracts are? Is that correct? And just trying to understand how to think about that for the rest of the year?

Joe?

Again, it's relative to different areas in the spot market, if it's North Dakota or if it's East Texas or wherever it's at. I mean those margins, i.e. North Dakota, are approaching, yes, some of our term contracts. Again, as some of the contracts roll over, we're seeing opportunities to get improvement on some of those term contracts that are now coming off. So for the rest of the year, we think it looks to continue to improve. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc.: And new term work being signed up for North Dakota is that now high 20s?

Yes. Jeff Tillery - Tudor, Pickering, Holt & Co. Securities, Inc.: And my last question is just -- the International has a lot of moving parts in the first half of the year. Second quarter, is it more impacted by the jackups being down? In other words, is operating income coming down sequentially, in the second quarter internationally?

Probably flattish.

The next question is from the line of Kurt Hallead with RBC Capital Markets.

I quick a follow-up for you guys. Can you maybe just answer it. I kind of was distracted by something. But on the tax rate for the company going in 2011 and in 2012, could you provide a little more clarity on how you expect that to progress?

I mean the fundamental along-the-line features that we're adding: Superior, which is 100% in the U.S. at the moment; well-servicing is growing rapidly, 100% U.S; the U.S. taxable entities; and in Canada, which is also a high tax rate domain. They're growing faster than International. So I don't know if we have -- do we have one for 2012 estimated tax? No, but it's not going to be lower.

Okay, great. Thanks, that's it for me.

The next question is from the line of John Daniel with Simmons & Company. John Daniel - Simmons & Company International: Just a couple of questions on the Well Service segment. The 20 rigs going to California, Gene, are those going to be incremental to the fleet and will they work on a 24-hour basis?

They'll be incremental. Will they work 24 hours?

No those are nonconformers.

They're workover rigs. Without the PLC?

Non-PLC. John Daniel - Simmons & Company International: Because some of those rigs out there I thought worked 2 shifts. So I've asked.

So we have some that are, yes. John Daniel - Simmons & Company International: Okay, and then, Gene, how do you see the margins evolving in the segment over the course of the year in light of all the pricing that people are trying to implement right now?

I think it's good, and I think we're going to do better than the forecast our guys telling me. John Daniel - Simmons & Company International: Back to your prior levels, I mean I know it's a common question across the very segments, but just...

Sorry, I don't remember the [indiscernible]. John Daniel - Simmons & Company International: All right, fair enough. Thanks, guys. Thanks for taking my questions.

The next question is from the line of Scott Gruber with Bernstein.

Gene, I just have 1 broader market question. On the international markets, we've seen horizontal drilling and some shale gas development pick up faster than we originally anticipated. You always had exploration or delineation programs, be it in Mexico and Argentina and China. And this morning, Baker [Hughes] mentioned interest in Saudi that we've actually had the Russians start talking about horizontal drilling as well. Gene, when do you think the opportunity will manifest for Nabors to start putting high-efficiency pace rigs to work abroad?

Particularly on the horizontal drilling?

Yes.

All I can tell you is we have one of our very best sales guys located internationally. And do you have anything specific, Dave, that we can look forward to?

I think what Gene's referring to, we actually moved one of our Pressure Pumping guys to the International group to explore these opportunities, along with the Drilling side we're looking [indiscernible] to expand into...

Are we messing -- I heard something about an experimental operation in Argentina

Looking at a different initial operation.

But nothing really firm?

Yes, that's correct.

Base rigs are already deployed internationally. Those opportunities are still coming. And also, we're talking about contracting I think. We'll have 130-ish base rigs domestically, and there's another 80-ish or so away from the U.S. land market. So the total is going to be probably 220. By the time Joe gets his rigs delivered worldwide we have Pace rigs deployed.

And also we've had several offerings that we currently work in the shales where they have potential JV partners who are coming from eastern Europe. Different areas to look at our rigs stateside, which we possibly either deploy or deploy to International, other opportunities. So that's been ongoing.

Okay, and are you looking at bundling the pumping and rigs together and marketing those in unison?

We originally contemplated the integrated package because we can offer more of them, just those 2. At the moment, the profitability frankly on the pumping side is way higher than anything else. So the point at the moment as we'd like to get term pumping and, there's no point in making that less easy to sell Any which way. Because the -- I mean, this frankly is like a one-year payout on that stuff compared to a good payout, a 3.5 year payout on a rig. So in the meantime, we're saying that while we could do all those things and where the opportunity arises, we do it. But we're not going to risk or delay or make them think twice about doing a multiyear frac-ing contract because we have a package including rigs. Robert MacKenzie - FBR Capital Markets & Co.: Okay, that makes sense.

The next question is from the line of David Wilson with Howard Weil Investments.

Gene, kind of a high-level question here. In the past, you've commented how the stock didn't accurately reflect all the value you guys have in your E&P segment and you are remedying that by selling or monetizing a portion of that. Are there any other segments out there right now where you sit back and think, "gosh, the full value of this segment isn't clearly reflected in our stock."? Are there any segments that kind of, you think, that are not being appreciated by us on the sell side...

Fully appreciated?

And you can't say all of them.

Oh, that was I was about to say. I don't know. I think the valuation of the pieces is greater than the valuation of the whole still. And maybe that's because we're presenting this stuff in less than the most effective way. I mean the domestic situation is extremely strong but we have to say it's drilling, it's work over, it's frac-ing, it's, you know -- I don't think we're presenting it the most effective way somehow yet.

Okay. And then maybe a little more specific one. Recently, you made comments around devoting some capital expand Nabors' capacity to enter into the coil tubing business. Can you quantify how much capital is being devoted to that and maybe frame the number of units to be added? I think last time, you mentioned that that was going to start up in the May-June timeframe. Is that still the case?

It's about $50 million that we've placed for 12 units. And the units will start coming late second quarter. We expect to have the first units deployed in the third quarter. Soon we'll get about a unit a month from there. So pretty well on track as far as the timing of those units.

We have some of our own capital that gets added to that in terms of total capital employed.

Okay, and just kind of a follow-on there, is there any concerns about getting crews for these coil tubing units? I mean, do you foresee any problems there?

It's a challenging market for sure, but we started the staffing process and going quite well at this point. And again, we felt like we got key people for the first 4 or 5 units in place. So I feel like we're pretty well on track to get the key people for those units.

And we're taking the financial hit for hiring these guys in anticipation of deployment.

Okay, great. That's it for me guys. Thank you.

The next question is from the line of Brian Uhlmer would Global Hunter.

I have a quick question, a follow-up on Sweezey . You mentioned taking it -- most of it's in the U.S. for now. What are your plans? What do you envision for that on the international front? Tracking rigs or setting up whole new segments in new countries? And how do you best see yourselves kind of attacking that market over the next year or 2 or 3 years? And what's your strategy there?

I would say we're looking to where we have controlled -- the total situation ideally where we own the acreage, do the rigs and all that stuff. But so long as the payout is as high in this market as it currently is, the grass is definitely not greener on the other side of the fence. So we're looking at it. We won't be late. We have areas where we control the employment of those things and we'll do that. But nothing is as attractive as what's here at home now.

Okay, so you're saying you're in the early stages of strategizing before you can do it?

Well, we control it, which would be like Canada or Alaska. That's a large place to put it, and we've looked at that already.

Okay, and following up on the delays that kind of the cost would have in all those additional folks on hire while you waited on equipment. How do you see your crew expansion and personnel expansion? And are you slightly worried about getting people to staff up all these new equipment, moderately worried or starting to get very worried?

I think, if anything, the delay has just given us more confidence that we can staff up. The excess people we talked about now that we had in system will man the first 4 crews, and we're looking at roughly 9 crews that we're adding through the rest of the year. So if anything, it probably puts us a little ahead of the curve and gave us more confidence that we can continue to add people and get them framed in time for the deployment of the extra equipment.

Great. Alright, thank you. Back to you.

T he next question is from the line of Janice Rudd with Pritchard Capital.

I just wanted to revisit the U.S. land rigs that you're building and kind of your time line of when you think these are going to be delivered? And are you experiencing much increase in component lead times and repricing and high pricing? And the next part is, are you negotiating in Canada to bring new builds there?

The answer to the question is right now, we're pulling about 2 rigs a month. We feel...

Domestically.

Domestically, excuse me, yes. And as far as pricing, we've -- our SPAR training group has worked well with our vendors to log down the pricing on our incremental rigs. So we're not seeing a tremendous amount of inflationary pressure on the equipment that's coming to us.

In Canada, we're building I think actually 2 drilling we work over flat rigs. And we anticipate they'll have more than full pay-out contracts.

So you don't have contracts with those rigs at the moment?

We didn't have one last week. I'm hoping we're coming closer, that's at the moment. When that manager tells me he's going to do what's he's going to do, he's going to be accountable. If he spends some money and the rig isn't working on a contract. I'm not saying it's never happened, but it very rarely happens. And we may have the contract by now. I would check the loop.

Okay. Thank you.

The next question is from the line of Jack Moore with Harpswell Capital.

I was wondering if you could just talk about kind of a bifurcation in margins upon where the E&Ps and the integrated seem to be flocking to, like the Permian and the Eagle Ford and where, I think, a few of your competitors are enjoying some robust margins. Just how you see the competitive landscape in those regions going forward? And do you see some of the margins there attracting more competitors?

The answer is when the margins are good, the competitor's going to come. And Joe Hudson is running that unit. He's not going to totally admit that he's not good at that budget. It's competitive. But I would say, to me the pleasant surprise is, in some of the hot markets, the less than state-of-the-art rigs are getting good margins because they can do the job. So in general, it's good. But I would say, the Bakken particularly, you don't need a super-duper rig.

No. And again, I think the question was a good one for us. In the U.S.A., we specifically have a very large market share in the Bakken, which was the most attractive E&P market as we understand in the U.S. We are moving into west Texas. We've had a significant increase in rig count in west Texas in the past, probably, 6 months. I mean Pace rig coming from, down from the Haynesville area. We deployed rigs from again that same gas prone area into the Eagle Ford. So we are seeing market rate improvements in both of those areas. But again, for us, the key point is then the Bakken, which we have 25%, 26% market share up there.

Right. And where you're moving rigs, you're looking to compete on the full scale of Nabors' offerings. Is that correct?

Yes.

And then, thanks very much, and finally can you talk about Yemen, just what your expectations there are and how long? Obviously you can't predict how the fighting ends and when it ends. But just from the energy business perspective, the disruptions you're seeing and what you expect going forward.

I expect that I won't visit and go from town to town like 6 or 7 years ago. I don't know. I think what's the status right now? Are the expats out?

All the expats are out and our rigs are being staffed by the locals to keep them up. And we've negotiated with our customer in a long-term standby rate without crewing, so they didn't want to put them on force. Make sure they don't want to cancel the contracts. So they want to keep them there. Their expectations are that they'll start up, they don't know when, but they feel like it's not going to be forever. So they are working through the ministry and everything to put the rigs back to work. They still are earning revenue while they're staffed.

How many rigs are up and running?

We have 3 rigs that are down. But still have 1 rig working.

Great. Thanks very much.

And your next question is from the line of Tom Curran with Wells Fargo.

I'm curious when it comes to Colombia following the acreage you'll be selling, what's your net production going to be?

I frankly don't know. Do you know?

It's pretty small in that it's more in the middle of the Magdalena basin. The area cubes we’ll be left with in the Llanos is all prospective acreage. It's not really been evaluated yet.

Okay, and then turning to the U.S. Well-servicing market, do you see the potential for further consolidation there within the legacy fleet as the market continues to strengthen? And might Nabors have an interest in it?

I'd say we'd have an interest in it. That's a business where consolidation should be very economical because they have multiple locations, I mean scores of locations, which many of them would be redundant. At the moment, we should be aggressively looking at a location redundancy that our own separate business units create. In other words, Superior has a bunch of them. Workover has a bunch of them. Drilling has a bunch of them. We have room for consolidation ourselves, which I hope and I think we're working on now. But yes, this is an area where the overhead, fixed overhead, is humungous and somebody has x dozen -- or x score of locations and if you merge with somebody else you're going to have a significant portion of those redundant. It's all available. We're not doing anything with that. The workover, in my view at the moment, and everything's subject to change, including my view, this is a local case then. This is not our forte. It's kind of a more the kid, the guy who's running the little league team is more likely to get the business. And the equipment is they have a very short period, so quality of the equipment isn't always appreciated or is relevant in drilling.

Okay, as a result of that, do you -- as you look to continue to expand the fleet, is it more likely that we'll see you continue ordering new build workover units? Or could we see a shift to more asset transactions?

I would say it's more likely to be organic. Everything is possible.

Okay, thanks for the overview.

The next question is from the line of Obena Obelo [ph] with Citigroup.

Quick question actually just focusing on the balance sheet. I know the $1.4 billion convert's coming due and the intention seems to be x the draw on the revolver and then use available cash and not cash from operations. Is there a consideration that's coming into the bond markets given that the market seemed to be pretty receptive and open, perhaps to refinance or maybe just drawn down on the revolver first and then coming with new issue?

We'll look at our options. And frankly, the terms of the convertibles are getting so juicy. But while we actually don't want to issue equity, it's opportunistic. We look like we'll end up with $600 million or $700 million or $800 million short by the end of the year. After paying off the 1.4, there could be asset sales that we're looking at. And we have manufacturing that's non-core that we could do the selling, et cetera. But we'll see what it is then. But I think the important point is, today, we could do $1 billion even debt deal tomorrow. But today the markets are vital. We traditionally have borrowed before we needed it, we’ll be both conservative that way.

Okay, that's it. Thank you. I appreciate it.

Alicia, I think that we'll wind up the call now. If you want it close it out for us, please?

Absolutely. Ladies and gentlemen, that does conclude our conference for today. You may now disconnect, and thank you for your participation.