Nabors Industries (NBR), the country’s largest land-oil rig contractor, tumbled after they reported a soft second quarter. Nabors blamed bad weather and stiff competition for the earnings shortfall. Nabors first hinted at troubling times in January, when they announced that they faced a near total suspension of pressure pumping work, a hydraulic fracturing method to extract oil and gas from shale rock.
Nabors was an early adopter of the controversial practice of hydraulic fracturing, commonly known as “fracking.” Since Nabors purchased fracking specialists Superior in 2010 for $900 million cash, fracking has becomes an increasingly common gas extraction tactic for the company, and the industry in general. Virginian energy and environmental consulting firm ICF Consulting projects that extraction methods like fracking will account for 64 percent of natural gas production by 2020.
However, larger companies like Halliburton Co. (HAL), Schlumberger Ltd. (SLB), and Baker Hughes Inc. (BHI) have edged in on Nabors fracking business. This competition from major players is coupled with increasing public scrutiny concerning the environmental impact and dangerous conditions associatd with fracking.
In Nov. 2012 Nabors were targeted in an expose by Bloomberg that highlighted a carcinogenic chemical they use in their fracking process. On July 7 HBO released Josh Fox’ “Gasland Part II,” a sequel documentary to “Gasland” that further explores the environmental and social impact of fracking. The following day, five rig workers in West Virginia were killed when a natural gas well exploded during fracking.
Nabors is down .37 percent to $16 a share. They’re up 10.63 percent on the year.