ALASKA

Results in Alaska were down slightly, although much better than anticipated due to stringent cost reductions, better rig utilization and numerous camp rentals in support of summer construction efforts.

This unit’s safety record was excellent with a year-end recordable rate of .98, down from 1.65 the prior year. The reduction was driven primarily by the implementation of the company-wide Mission to Zero program, which is extending the Nabors safety culture to the lowest levels.

The outlook for 2011 is for a continuing and significant decline in operating income as several projects have or will soon wind down. However, drilling activities should improve modestly in the second half and could be further bolstered if proposed streamlining of the tax regime is enacted by the state legislature.

Longer term, high oil prices should fuel the eventual restoration of drilling activity, including the likely development of the high viscosity reservoirs that are abundant on the North Slope. Meanwhile, the success of our proprietary coiled tubing technology continues to generate interest and could result in additional units in the next few years.