Good day, ladies and gentlemen. Thank you for standing by. And welcome to the Nabors Industries Limited Fourth quarter 2012 Earnings Conference Call. [Operator Instructions] This conference is being recorded today, February 20, 2013. I would now like to turn the conference over to our host, Dennis Smith, Director of Corporate Development. Please go ahead, sir.

Good morning, everyone, and thank you for joining our second quarter 2012 earnings -- or fourth quarter 2012 earnings conference call. Today, we're going to follow the customary format. We'll limit the call to about an hour. Tony will give some overview remarks for the quarter and give you some perspective on how we see the near term and more intermediate term shaping up. And we'll try and get time for Q&A at the end of that. In support of his remarks, we have posted the slides to our website, as we usually do. You can access them in 2 ways. If you're coming through the webcast, they're available as a download within the webcast. Alternatively, you can download them from nabors.com, our website, under Investor Relations, then the Events Calendar tab, and you'll find them listed as Supporting Materials for the conference call this morning. With us today besides Tony and myself are Laura Doerre, our General Counsel; Clark Wood, our Principal Accounting Officer; and all of the heads of our various business units. Since much of our remarks today will concern our expectations of the future, they are subject to numerous risk factors as elaborated upon in our 10-K and other filings, and I encourage you to visit those for the risk factors involved. These comments constitute forward-looking statements within the meaning of Securities Act of 1933 and the Securities Exchange Act of '34. Such forward-looking statements are subject to certain risks and uncertainties that are disclosed from time to time in our filings. As a result, the results may vary significantly from what we expect and/or implied by our forward-looking statements. And now with that, I'll turn it over to Tony to get started.

Good morning, everyone. I want to thank you all for participating this morning. As Denny said, I will be referring in my representation to slides posted on the website by slide number on the bottom right-hand side of the page number. Before I start, I'd like to talk about some 2012 highlights. I'd like to go on to the operating results, and I'd like to highlight some of our accomplishments this year in spite of challenging commodity prices and formidable market conditions. First, record financial results. Starting with Slide 4, Nabors generated record operating revenues, gross margin and EBITDA in 2012. Obviously, we would have liked to also report record operating income and EPS. But the fact that these results were obtained regardless of the market challenges we face speaks to the quality of our assets, our people and our geographically diverse operations. And also, I think it gives you some insight into the potential to unlock additional value through leveraging our scale. Debt reduction through cash flow and asset sales. On Slide 5, you'll see that we've reduced net debt by $678 million from its first quarter 2012 peak of $4.3 billion. This lowered our net debt-to-cap ratio to 38% from 42%. We accomplished this by generating net operating cash flow, which were defined as EBITDA less CapEx of approximately $550 million and through asset sales. Approximately $400 million of our net operating cash flow was earned in the second half of 2012 as previously committed projects worked their way through the pipeline in the first half of the year. We expect to generate significant net operating cash flow again in 2013 despite weaker North American market conditions. Turning to Slide #6 on capital discipline. We improved our capital discipline in 2012. Capital expenditures of $1.4 billion was $749…

Ian, we're ready for question-and-answer, please.

[Operator Instructions] Our first question is from the line of Jim Rollyson with Raymond James. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Kind of going back to your last statement just on free cash flow, and you guys did a really good job last year of working on taking cash and repaying your debt level. And I'm kind of curious what your kind of today target is of raising cash from operations and divestitures or what have you in terms of what are you expecting to repay for debt when you look at 2013.

I think the target's about $400 million.

And without assets.

Without assets, yes. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Okay. And prospects for asset sales, still kind of straggling E&P?

Yes, the -- we have those 3 E&P properties out there, and they're all with people. And we're working in part to get those put to bed. And so that focus is -- continues. There remains a high focus because it's part of the concept of reducing the noise in the company and focusing our energy on things that benefit us in the long term. So we're very committed to do that. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Okay. In your Offshore segment, you mentioned things may be looking a little bit better heading into '13. Kind of your outlook for maybe time frame of returning to profitability, because it sounds like the new platform rig you mentioned doesn't come in till very late in the year. Just kind of curious how you think about that progression through the year.

The Sun -- the Super-Sundowners right now are enjoying good utilization. And as I had mentioned, if you adjust out those onetime charges for the fourth quarter, first quarter we should -- you should see profitability in that segment in the first quarter. James M. Rollyson - Raymond James & Associates, Inc., Research Division: Okay. And lastly, you mentioned on the International front the fact that margins should improve a bit, it sounds like a little bit from pricing. And then as you go through the year, I think you said you've got some contracts that come into the back half of the year. How do we think about International just broadly from an activity standpoint? Last year, we were waiting for that to ramp up and, obviously, things have kind of stayed, from a rig count perspective and a profitability perspective, relatively flat. How do we think about the -- maybe where the rig count is today and where you think that may exit the year?

Dickey [ph]?

I think the rig count will slightly increase in 2013, where we see a lot of tender activity. And so I think we may exit 2013 with more rigs. But keep in mind that when you look at tender activity, internationally, it probably takes 6 to 9 months just to -- from submitting a tender, getting the award and then preparing the rigs. You could easily talk 9 to 12 months before we see the rig actually starting. So the year, from that perspective, is pretty much over.

Our next question is from the line of Mike Urban with Deutsche Bank.

So Tony, give us some good color on some of the cost savings that you've realized, although it sounds like it was primarily on the G&A side. Could you maybe give us a little bit more sense in terms of just how far along you are in the whole integration and consolidation process internally, whether that's in dollar amounts and in baseball terms and innings and kind of where we can expect to go from there?

Well, as I mentioned, the first quarter to fourth quarter decline in G&A just in the Completion & Production Services, that has been -- that has occurred. In other words, if you take our run rate, how those units were operating before the merger took place to have that operating in the fourth quarter, there's a 16% decline in that combined G&A number already. And what we're saying is that we think going into next year, we can realize an additional 15% on a annual 2013 to 2014 basis. That effort does not include efforts on facilities, which is still on the table, which will take longer. So I'd say we're still in the early innings of the ballgame, to use your metaphor. The other aspect is that's just SG&A. The other point is to really use the Nabors supply chain organization to help change our cost structure on the stuff we do in that. And there, I also think we're in the early game or early stages. Nabors' supply chain has now taken over part of the inventory and distribution of materials, for example, in the -- on the completion side, and we hope this greater focus there is going to yield some benefits. So I think there's -- I mean, the good news is everyone is very committed to it. The fact that we've actually done this already shows we're serious about it. And I think there's still more to be done.

Okay, that's helpful. And then I guess on the revenue side, you talked about some successes in integrated services, and I think you termed it a 1-Nabors concept. Is that something that you're focusing on more as you do integrate the businesses? Is there a concerted sales and marketing effort there? Or is that more of a customer pull kind of thing?

It's definitely something we're focusing on. First of all, within the Completion & Production group themselves, there's a lot of related work. So if you have a pressure pumping job, why should we be there with the fluid management, for example? So by combining these groups together, there's going to be a much more concerted effort of marketing these all to the customer on a uniform basis. And that's basically going to be core to what they're doing. In the facilities, the way we're putting together the facilities will facilitate that by combining in various core places all those operations in one place which will make it easier, combine the back office, et cetera. So that's all part of the same strategy.

Okay. So as we roll all those things together, you gave a fairly conservative outlook, which I understand. But given potential to gain share, to integrate the bundle and then the costs coming out, assuming a flat outlook, we could still see margins come up based on the things that you control. Is that the way we should think about it?

That's the objective.

Our next question is from the line of Byron Pope with Tudor, Pickering & Holt. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Just one question for me as it relates to Completion Services. When you talk about operating income being down again sequentially in Q1, I'm trying to understand whether it's more the seasonal headwinds in plays like the Bakken and the Marcellus or more a function of the competitive landscape that you see out there. And really, what I'm trying to get to is I'm trying to think about, from an op income perspective for Completion Services, when we should think about that business potentially troughing. Is it kind of Q1, Q2 as you think about that business?

Marney [ph]?

Yes, I think in the first quarter, we definitely are seeing that, that's kind of a holiday hangover, if you will. In addition to that, we're positioned in a way with our footprint that represents about 75% of our active assets where we work in some of the seasonal environments, i.e. the harsh winter environment, if you will. But we are encouraged as we've been able to place some additional low-utilized crews to high-utilized positions and also recommence operations for one of our idle crews. In addition to that, we've been able to extend several contracts that have had bundling of services with them, some as far as 2014 based on our operational execution and our safety performance. So pricing, while it's below expectations right now, we're cautiously optimistic that due to some of the ramp-up we're seeing in potential utilization that eventually that's going to lead to improvement in pricing. When that happens, it's still a bit foggy, that's tough to say, but we're encouraged, to say the least. And the rollovers that we have done on the contract, these have been at price levels that, under the current market conditions, they're advantageous for today.

Our next question is from the line of Jim Crandell with Dahlman Rose. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: Tony, I think it's pretty impressive what -- well, the contracts you've won for your X rigs, and the day rates are pretty impressive, too. I mean, are you -- you must be, A, very pleased; and, B, to what extent do you think that the -- your developments here with this new X rig have really sort of changed the dynamic there? And I know you also -- you talked about some of the products of Canrig. And your strategy in the U.S. business has been really to -- maybe to try to compete by improving your offering and offering the best quality rigs in what the market wants out there. And I guess if you could elaborate on the success you've had and to the extent you think that you can really continue that going forward.

Well, Jim, thank you for raising this question. I think one things, first of all, I'm kind of personally pleased that, that is -- we got these rig awards in the context of a market that has us -- this shift downward, a market where even today everyone about new rigs. And I don't know what you-all have analyzed in your analyst reports, but people say there's anywhere from 50 to 75 AC rigs, existing rigs out there and yet, notwithstanding that, we signed up these new rig contracts. So it must mean that there's something really special about what we're offering. And what I'd like to say is I think these rigs really try to represent what -- a little bit of what the changes -- what's going up here at Nabors. It's a real focus on providing a solution to an operator, not just to -- not just an asset to earn a day rate from. And it's also an effort to have this company use the best of what it has to offer from all the various -- what heretofore was known as silos within the company. I mean, this X rig, some people, when they look at it, they say it's like -- it looks like an offshore rig on land. Other people say it has a lot of the mobility issues figured out that when we're removing stuff internationally, because it breaks down the container sizes. And as I mentioned, it is at its heart a pad-capable rig, which we've been doing pad drilling in Alaska. So really, what it represents is the change in Nabors to tap all the knowledge that we have in energy to bring it in a uniform fashion to what we do. And the point of Canrig in this thing is also interesting. I mean, as you know, 40% of the purchase price or cost of the rig is manufactured by Canrig. And what we'd like to think is that the smartest components, the VFD, for example, the top drive, all the controls. And one things that we're also very focused on is embedding all Canrig's algorithms and building on that to make -- it's not just a new rig from a hardware point of view but a new rig from an intelligence point of view. And we're going to spend a lot of time using that, and using Canrig to help us do that. So that's sort of where we're at. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: Okay, good. And another question, Tony. On your asset sales, you talked about the 3 Oil and Gas units. How about the rigs and oil service assets that you have for sale now, are you optimistic that those businesses will still be sold? Will they be sold for what you thought you could get for them early on? Or might you just sit with some of these assets and wait for improving markets?

I think on the well servicing, we'll probably wait, having been through it and not found the window, the right window. And but on the jackups, we -- the Gulf of Mexico jackups, I think we're still -- and barges in the Gulf of Mexico, we'll be looking at an opportunity. It depends. Right now, the way the market is going, maybe the -- an opportunity will open up. James D. Crandell - Dahlman Rose & Company, LLC, Research Division: Okay. And last question, Tony. Of your different business -- I mean, your different product lines, which businesses, if any, do you think you may not have seen the lows now in EBITDA and you could be still looking at results heading down from here?

Sure. I think Pressure Pumping is probably the one that's the greatest risk. And then the U.S.A. for the reasons I said, the $1,000-a-day difference going into the next quarter. So those are the 2 from where we sit today, yes.

Our next question is from the line of Waqar Syed with Goldman Sachs.

Tony, you have about $380 million of assets held for sale on your balance sheet. Even assuming like somewhere around the $300 million mark, would you consider like a dividend? You could easily pay like $1 in dividend to the shareholders. Or even consider a share buyback, which at this price could amount to about 5.5% of shares outstanding?

I think our focus right now has been to generate the cash and get that cash down -- get our net debt down and still have enough firepower to undertake our capital development program. So I'm not saying that we wouldn't consider those things. I think they're -- we still think about them all the time. It's just in terms of the current short-term priority. If you go back about 4 years ago when we had excess cash, when we totally had excess cash, we had no reluctance to do a $1.5 billion-or-so amount of share buybacks. So you're not talking to a management team that is not prepared to give back money to shareholders. It's just a question of where you think the right opportunity and use of the cash is. And given the variability and uncertainty of the outlook with our sector right now and the visibility, it doesn't seem like it's the smartest time to maybe do what you're talking about. But we'll -- we -- we're looking at it all the time.

And when could be the next time that you could take a look at that? That has to be a board meeting where that decision will be made?

I think you can assume that we're taking -- we are taking a look at that regularly, including our next board meeting.

Okay, great. That is from John Daniel with Simmons & Company. John M. Daniel - Simmons & Company International, Research Division: Tony, first question is on, your working rig count slide shows 18 rigs in the Haynesville. Can you just share what your outlook is for those rigs over the next couple of quarters?

[indiscernible]

In Haynesville, you've got 18. What's the outlook for those? Actually interesting, John, the first X rig is going to Haynesville.

Yes, the first PACE-X is actually mobilizing in this week for the Haynesville. Between the Gulf Coast and what we call our architect's barrier, we're positioned for -- the market's going to change. We just don't know when. We're well positioned for that market. And also, the Haynesville area also contributes operational support down into Woodbine. So we -- there's no's short-term uptick, what natural gas prices do, we're going to see a big opportunity for our rigs. John M. Daniel - Simmons & Company International, Research Division: Okay. Next one. Tony, you mentioned that Lower 48 cash margins will be down about $1,000 a day. Is that decline based off of the reported cash margins or the cash margins adjusted for the contract termination payments?

No, that's adjusted out, yes.

Adjusted out.

That's kind of the exit rate of 4Q. So there's not really any further deterioration that we expect. John M. Daniel - Simmons & Company International, Research Division: Got it. Okay. And then last one is just, Denny, just some color or commentary on your cash margin expectations for Canada in Q1.

It gets very mix influenced. We're going to have more rigs running, but there's a mix of the big rigs work early and then the smaller ones come in. So it could probably average slightly less than it did this quarter, mostly all because of mix, so...

Thank you.

Ian, that will wind up our call today. If you would close it out for us, please?

Thank you. Ladies and gentlemen, this concludes the Nabors Industries Limited Fourth Quarter 2012 Earnings Conference Call. Thank you for your participation. And you may now disconnect.