Nabors Industries has signed a definitive agreement to sell its Quail Tools subsidiary to Superior Energy Services for a net consideration of $600m, with adjustments for net working capital.
The deal includes $375m in cash and a $250m seller note.
Nabors expects to incur around $5m in cash taxes on the sale, utilising net operating loss carryforwards to mitigate the impact.
Quail Tools, a downhole tubulars provider, operates in the US oil and gas drilling market.
Superior Energy Services, which also provides rental tubulars in the US and international markets, will become the preferred supplier of rental drill pipe and related products to Nabors as part of the transaction.
This deal broadens Superior's footprint in the US market, augmenting its scale and proficiency. Furthermore, it aims to bolster the company's potential to provide customers across the globe with efficient and economical services.
Nabors expects Quail to generate an adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) of around $150m this year, not accounting for any potential synergies that Superior may realise.
Nabors chairman, president and CEO Anthony Petrello said: "In Superior, we believe Dave Lesar and his talented team will enable Quail to achieve even greater success.
“The combined company will be the premier provider in both the US land and offshore tubular rental space, and there are substantial additional synergy opportunities.”
Quail Tools offers a range of drill pipe, landing strings, completion tubing and accredited pressure control equipment.
This acquisition will merge Quail into Superior's rental operations, which already encompass names such as Stabil Drill, Workstrings International and HB Rentals, forging a unified service-driven entity with reach, technical expertise and a broad geographical footprint.
This strategic amalgamation with Superior's existing well service businesses equips the company to supply essential products and services to exploration and production clients worldwide, catering to every stage of their well life cycles.
The sale is expected to accelerate more than five years of expected free cash flow from the combined businesses of Parker Wellbore, which Nabors acquired in March 2025.
Nabors foresees a reduction in net debt of $625m with the full realisation of the sale proceeds. The company demonstrated long-term debt of $2.7bn and net debt of $2.3bn.
The agreement is expected to enable a decrease in net debt of more than 25% and yield yearly interest savings of more than $50m, thus improving Nabors' financial flexibility.
Post-divestiture, Nabors will maintain ownership of the drilling rig, as well as the operations and management contracts, and the tubular running services operations that were obtained from Parker.
After the Parker acquisition, Nabors sold idle Parker rig assets for around $35m. The retained businesses are expected to generate adjusted EBITDA of at least $55m in 2025, encompassing post-closing synergies.
