Nabors Industries Ltd. (NBR) Balance Sheet

The balance sheet is gradually strengthening as total debt has been reduced by roughly $400 million over the last five quarters, with the D/E ratio improving from 2.10 in 2024Q4 to 1.48 in 2026Q2. However, this deleveraging is occurring alongside a contraction in total assets, which suggests the company is not growing its asset base but rather paying down obligations. The equity base remains thin at $544 million, and retained earnings are deeply negative at -$1.9 billion, implying that the improvement in leverage is more a function of debt reduction than of profitable operations.

While the D/E ratio has improved from 2.10 to 1.48 over the past year, the absolute level of debt remains substantial relative to equity, and the company's interest burden is a major drag on profitability, as evidenced by the net loss in 2026Q2 despite positive operating income. The debt-to-assets ratio is approximately 48%, which is elevated compared to peers like HP (0.82 D/E) and PTEN (0.40 D/E), suggesting that Nabors carries a higher financial risk profile. The reported D/E of 1.48 in the latest quarter is consistent with historical norms, but the earlier discrepancy (1.78% in the snapshot) remains unresolved and warrants further investigation.

The asset mix is heavily weighted toward property, plant, and equipment, which constitutes roughly 66% of total assets, reflecting the capital-intensive nature of the drilling business. The decline in PPE suggests that capital expenditures are not fully offsetting depreciation, which may indicate a strategy of harvesting existing assets rather than investing in new capacity. The absence of goodwill is notable and reduces the risk of impairment charges, but the shrinking asset base could limit future revenue generation if rigs are not being replaced.

The equity position has improved from a low of $135 million in 2024Q4, but this is largely due to a reduction in total liabilities rather than profitable operations. Retained earnings have been consistently negative, and the company has not paid dividends or repurchased shares, indicating that all cash generation is being used for debt repayment and reinvestment. The equity cushion is thin relative to the debt load, and any further losses could erode it further, potentially raising going-concern questions if not addressed.

The current ratio has remained above 1.5 over the past year, indicating that current assets are sufficient to cover current liabilities, but the buffer is not as strong as some peers like KRP (8.64). Cash increased from $412.9 million in 2024Q1 to $509.8 million in 2026Q2, but it remains volatile, swinging from $940.7 million in 2025Q4 to $428.1 million in 2025Q3. This volatility suggests that liquidity is sensitive to working capital swings and capital expenditure timing, and the company may need to rely on debt markets if cash generation falters.