U.S. LAND WELL-SERVICING

2010 marked the beginning of what we think will be steady improvement in our Well-Servicing unit as high oil prices fueled increases in both pricing and utilization for our well-servicing fleet.

Two strategic moves further improved results in this unit and positioned the company for even better performance in the years ahead. The Superior Well Services acquisition provides significant opportunities to expand the fluids management and salt water disposal segments of this unit’s business. This unit completed the acquisition of Energy Contractors at year end which, although it did not contribute to results in 2010, gives the company a significant presence in the increasingly important Marcellus Shale while adding excavation and rig-moving product lines. The management team for the newly acquired assets will remain with Nabors and be responsible for the Northeast, giving this unit much needed experience that will accelerate Nabors’ growth in this very promising region.

Nabors Well Services introduced new technology in 2010 designed to enhance the marketability of our rig fleet. The RIGWATCH® system for service rigs is being added to our Millennium rigs, giving the company a substantial competitive advantage, particularly in international markets.

A new safety initiative was implemented in 2010 designed to drive our total recordable incident rate below 1.0 even as man hours increased. The Time Out program empowers employees to stop any unsafe action at any time.

This unit is forecasting a large improvement in operating income in 2011 driven primarily by strong growth in rig utilization and fluid services, most notably in the shale plays. Nabors’ historical presence in these areas gives us a substantial advantage and the wheel-mounted nature of our rigs simplifies redeployment from less active areas. We are also converting our Millennium 5C rigs to drill surface hole for Nabors Drilling USA customers and we are providing equipment and services to Nabors’ Oil and Gas operations. A renewed emphasis on plugging and abandoning wells should also contribute to this unit’s results.