NEW YORK (MarketWatch) � Shares of Nabors Industries rose Friday after a strategic move by the company to refocus on its core land-rig drilling business failed to stem a sharp drop in its stock price this month.
/quotes/zigman/306432/quotes/nls/nbr NBR 13.19, +0.24, +1.85% /quotes/zigman/1470028 OSX 192.72, -0.16, -0.08%
In possibly his biggest move since taking the reins of the Hamilton, Bermuda-based oil-service firm late last year, Nabors Chief Executive Officer Anthony Petrello laid out a change of course this week at the Howard Weil Energy Conference in New Orleans.
In a filing with regulators that provided details of his presentation, Petrello said Monday the land rig operator �went wrong� by investing in exploration and production businesses.
Nabors NBR �now plans to sell such assets as part of an $800 million divestment program.
The company�s stock buybacks were made with �unfortunate timing� and Nabors also missed out on growth opportunities in the U.S., which has seen a rise in domestic oil and gas production, he said.
Nabors shares fell 3% on the day of Petrello�s speech and for the three following sessions, but finally ticked up on Friday, rising 1.9% to $17.49.
In the month of March, Nabors has fallen more than 20%, compared to a drop of less than 10% by the Philadelphia Oil Service Index OSX . Nabors is a component of that index.
Analyst Phil Weiss of Argus Research reiterated his buy rating on Nabors on Thursday.
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�The shares of Nabors...offer a compelling opportunity to invest in a company with the potential to streamline operations, boost margins, strengthen the balance sheet, and improve capital efficiency,� Weiss said in a note to clients. �Investors have the opportunity to realize significant profits by holding the shares of companies such as Nabors that are transitioning from weak to strong allocators of capital.�
On the minus side for Nabors, Weiss cut his 2012 earnings estimate for the company to $2.15 a share from $2.25 a share to reflect slimmer profit margins at the company�s pressure pumping and U.S. land drilling segments.
Named chief executive in October, Petrello took over for Eugene Isenberg, who is now chairman.
Nabors said in February that Isenberg waived a $100 million payment, which would have been one of the largest termination checks in corporate history, according to a report by Dow Jones Newswires.
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