Good morning, ladies and gentlemen, and thank you for standing by. Welcome to the Nabors Industries Ltd. First Quarter 2013 Earnings Conference Call. [Operator Instructions] I would like to remind everyone that this conference is being recorded today, Wednesday, April 24, 2013 at 10:00 a.m. Central Standard Time. I will now turn the conference over to Mr. Dennis Smith, Director of Corporate Development. Please go ahead, sir.

Good morning, everyone, and thank you, Ron. And thank you to everyone for joining us today on our second -- first quarter earnings conference call rather. We'll follow our customary format, with Tony Petrello, our Chairman and Chief Executive Officer, providing a review of the numbers of the quarter and what we see as a near- and longer-term outlook. We've also posted slides as we customarily do on our website. You can get it in 2 ways. If you're on a webcast, you can get them -- download it through the webcast or from our website at nabors.com under Events Calendar, in the conference call information there. That's also where we posted the historical format that we've reformatted our numbers in as well on an Excel worksheet. With Tony and myself today is Laura Doerre, our General Counsel; Clark Wood, our Principal Accounting Officer; and all of the heads of our principal business units and some of our other corporate staff. Since much of our remarks today will concern our expectations of the future and are subject to the numerous risks and elaborated on our 10-K and other filings, they qualify as forward-looking statements under the various Securities Acts, so we caution to be sure you view our filings and recognize that these are subject to change from time to time, within external factors and other things. And with that, I'll turn the call over to Tony to get started.

Good morning, everyone. Welcome to our conference call for the first quarter. I'd like to thank everyone for participating this morning. As Dennis said, we have posted to nabors.com a series of slide that contain details about our business, the performance of various segments and other relevant information. I will refer to some of these slides as we proceed, and I'll be referring to them by the page number on the lower bottom right-hand corner for your ease of reference. Let me start off by saying for those of you that are new to our company, Nabors today is a quality provider of oil and gas well construction, completion and production services, and compared to our peers, I think we possess an unmatched global footprint, scope of services and asset base. While Nabors appears to be valued primarily as a North American land driller, we operate in 24 countries with nearly 30,000 highly qualified experienced personnel representing 74 nationalities. This gives us exposure to virtually all of the world's significant oil and gas areas, with an increasing degree of operating leverage, a base EBITDA level last year of about $2 billion. Before I get into the details of our operating results, I'd like to first talk about some general recent events and accomplishments. Starting with Slide 5, Nabors would like to welcome Howard Wolf as a new Board Member. His appointment to the board reflects our ongoing commitment to adding qualified independent voices, with diverse experience and backgrounds. His years working with our industry and advising, as well as serving on boards, will provide valuable experience and insight. We are pleased to welcome Howard to the board. Second noteworthy event this quarter is the initiation of our quarterly dividend. The board initiated our first quarterly cash dividend which was paid…

Thank you, ladies and gentlemen. And Ron, I think we're ready for the question-and-answer session.

[Operator Instructions] Your first question comes from the line of Marshall Adkins from Raymond James. J. Marshall Adkins - Raymond James & Associates, Inc., Research Division: Tony, very thorough overview there. It seems like there's some confidence in the second half of recovery and a lot of that, and correct me if I'm wrong, seems to be focused on the International side. We've kind of been expecting this to come around here for a few years. You did give us some detail, but could you give us a little bit more color or some more specifics? I mean, what kind of rig count change do you think you'll get by the end of the year there or day rate change or the number of new builds or refurbs or -- can you quantify that and give us a little more color on why you're so confident by the end of the year, International is getting better?

Well, right -- Ziggy, are you still on the line?

Yes, I'm here.

Okay, let me just start by saying we're confident in part because it's tangible. I mean the south -- there is some tender out already for more than 20-plus incremental rigs that is now out there. We already have for a super major contract to put 2 rigs in Northern Iraq. There's discussions with -- for rigs in Argentina, and I think this is all symptomatic of what's going on. So Ziggy, do you want to add more color to that?

Yes, I think -- first of all, I think we have been waiting for this. Well I've been waiting for this for a long time. So finally, we see some change in the market. So when I look at it, we have like probably 1/3 of our contracts are coming up for renewal this year as well. So with more activity out there, I think they have a good opportunity to increase our weights to compensate for some of the higher costs that we have experienced in the last 2, 3 years. So Tony already mentioned Argentina, North Africa. Mexico is looking for more rigs. I see opportunities in some of the CIS countries, former CIS countries, and activity in Iraq is picking up again. So in combination with the [indiscernible] and Saudi, the market will be tight and I think that's when we come in and put the rigs to work that we have idled. And I see, I mean, obviously, new builds but not coming into play until 2014, late 2014. But definitely, an increase of [indiscernible]. J. Marshall Adkins - Raymond James & Associates, Inc., Research Division: Right. So just a quick follow-up on that and I'll turn it over. It sounds like we should be looking at more towards kind of Q4 before we -- this really starts to factor into the numbers just from a modeling perspective and certainly from a new build or refurb perspective maybe into '14 before we start plugging some of that in. Is that fair?

For the new build, sure. I think the new build is sure, and I think as Ziggy mentioned, there is -- there are contracts that are opening up for renewal and some of that, hopefully, it was going to be realized in the second half as those -- as we deal with those renegotiated rates. J. Marshall Adkins - Raymond James & Associates, Inc., Research Division: Right. So look for rates to go up, and maybe a small bump in utilization Q3, Q4. Is that fair?

Fair.

Your next question comes from the line of Mike Urban from Deutsche Bank.

Tony, could you talk a little bit about the practical implications of some of the organizational changes that you've made and rolling some of these businesses together and moving them under different organizational structures? And in some cases, are there -- presumably, this is not just moves on paper, are there cost savings there? Are there revenue synergies, operating synergies there that you can talk about, if you can just go into a little bit more detail on that?

Sure. I think that there's a few objectives why this -- to do -- in doing this. The first one was obviously just the overall simplification to clarify what business course [ph] we're in. The other point is that by doing a reorganization, we're making available resources that we think have bigger applicability to more of Nabors. So for example, in the consolidated Alaska, our Gulf in Mexico and U.S. land operation. And you might say, "Well they're really vastly different markets." That's true, but if you look -- well we've talked about in terms of the X rig, the X rig genesis is a pad rig that has 1 super major. When you want to see the X rig recombinant, you've taken an offshore rig and put it on land. And what it reflects is all of the Super-Sundowner technology in terms of marginalizing rig on land. And so the one thing we're hoping to gain by this consolidation is to really pull the best of all the things that we've been doing in our various markets into a more cohesive group. And then the other 2 points you can point out, yes, another objective is cost savings. I think there in terms of the consolidation of our production and completion business units, we were -- we are at work doing that. I think there's been a decent SG&A savings just given our fourth quarter run rate to our first quarter run rate in our SG&A and in our Completion & Production business. It's a pretty significant delta right there alone. The problem is in a declining market as far as you see the effect of that. But that's a really a high priority of us to make sure we're best in class in not just performance, but efficiency and cost structure. And we have a bunch of initiatives to do that. And finally, the other thing that comes out of this is to improve our interface with our customer. We were out there now, more approaching customers on account rep basis than sort of looking at everything as a simple product line. And we're hoping to do more of that.

Got you. And in the past, you've talked about further streamlining the business, potentially some asset sales and other monetizations. I mean, there's presumably the -- just changing the organizational structure does not preclude any of that?

Absolutely, absolutely. The way I look at it, everything we're doing is just making better of whatever we have and creating more value. And the way we were structured, it doesn't preclude any option to optimize anything should we decide to do that. And so that's what we're doing. Basically, we're just -- first step was to get clearly the noncore stuff off the table and get rid of the noise. And that process is still continuing in terms of some E&P assets that we're still working on. And also things like the Gulf of Mexico barges and jackups are still issues for us to exit and that remains there. And then the X we spoke about doesn't takeaway from any of that.

Your next question comes from Jim Crandell from Cowen group.

Question for either Tony or Joe. It seems to me guys that not the only advantage, but one of the biggest advantages of the PACE-X rig has to do with its unique lift and roll walking systems. So 2 questions around that. The number one is, how easy is this to duplicate or because of certain features about the system or the greater the usage of your -- of Canrig equipment on the drilling rig and building the rig, designing the rig, actually the used Canrig equipment, does that really give you what you think is a long-term competitive advantage? And then the second part of that is to what extent as you upgrade the -- your PACE rigs, let's say, to have multidirectional walking capability, are these rigs -- do they have similar capabilities then to the PACE-X or does the PACE-X still is going to be viewed as a step above these other rigs?

Okay. I'll let Joe fill in. I'll try my first stab at that. Yes, there are -- you can take out -- you can -- there are -- people have built lift and roll systems out in the marketplace, so we don't have a lot of proprietary position in the overall lift and roll systems. But in terms of a substructure, what they can go on in terms of existing rigs, depending on how that substructure is set up, it either will work or not work. One thing about the PACE-X rig that is different is it's not just lift and roll, but it's also that sidesaddle that provides capabilities when you move to x and y, you can move over obstructions because you have that big open center, which again, you can't duplicate with an existing rig, adding it to an existing rig. That's some of the advantages. As I mentioned, we are taking existing PACE rigs, which don't have that sort of those features, still adding lift and roll systems and we're getting great interest in utilization on those in any event. In terms of your question about Canrig, the PACE-X rigs, for those of you that have seen it, the Canrig technology's built into it. One thing that we're doing is really integrating certain things like manage the ability to run Managed Pressure Drilling. Canrig has some proprietary technology on that. The PACE-X rigs are all being prewired to do that. Not that we can't put it on other rigs, existing rigs, but it's just -- it's easier if the rig is -- comes pre-equipped. So there's a lot of that, that's being weighed. It's not that the Canrig technology can't be put on other things. It's just that it's being put into PACE-X in a more thoughtful, cost-effective way. Joe, you've got anything to add?

No, you answered it well, Tony. The key there is -- as Tony noted, is also -- notes was the height of the wellhead we can get over is exceptional if you're looking at side [indiscernible] going on the pad of these existing wells. This is truly a key feature. We've got multiple -- lift and roll systems on other AC rigs. It certainly gives us an advantage. We're looking at, as you also heard, deploying this in other equipment to make the rigs more marketable. The PACE-X for us today, is the latest step and that's taking all of the -- or bringing all the technology we have in there, and engineering and know-how and put it in units and put in PACE-X. So, no, I think it's -- again, the ability to put moving -- on existing assets and legacy assets truly makes it more marketable, some of which we beginning to put these systems on, and the PACE-X, the lift and roll, it's quite unique and it's been the feature of a lot of different engineering groups and operations coming together in the design things in this industry.

Okay, and just as a follow-up on that same topic, Joe or Tony. So are you suggesting or even if you're not suggesting, if you designed your fleet with walking systems that are based on jack and claw technology instead of lift and roll, are you at a competitive disadvantage in your opinion and you may have to look at redesigning your walking system at your rig? And secondly, just a quick answer, Tony, the 2 new contracts you won this quarter, can we assume that they're term contracts and with day rates somewhere around the average of the previous 17 that you disclosed last quarter?

I should say on the last point, they are term contracts and they're attractive rates.

Going back to the first question, again. Are you saying we're -- no, not every pad is going to be a 5-, 6-well pad. So we have equipment that we think will work in the North in the near term with the jack and claw system. As we mentioned, we have several out -- we're not -- Jim, we're not looking at continuing to all at that type of build and equipment. However, there's still a lot of operations, different areas. That's all they needed, 1 or 2 wells, and 2 to 3 wells max, and there's a point that the systems worked fine. But as the shale plays develop and mature, you're looking at much larger number of wells.

And that's why we're focusing on doing it that way.

Your next question comes from the line of Byron Pope from Tudor, Pickering, Holt. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: In the context of your comment about 2013 CapEx, you are probably being in that $1.2 billion range. It sounded like, if anything, it might be biased, higher based on the opportunity set you see for new builds, both domestically and internationally. So my question is as you think about incremental opportunities to deploy capital internationally, could you just speak to some of the criteria or metrics that you're now using to evaluate those sort of capital allocation decisions as it relates to your International business?

Right. Let me -- our -- the first thing is our ability to execute. And note, we're aware -- keenly aware that previously, we've had some operational hiccups. So in these contracts, now that we're looking at it, it's our ability to execute is an important organization issue. The second thing is focusing the activity towards the deployment on markets that really have some capacity for scale. I mean, it's all well and good to have -- to put a rig on a term contract in a particular country, but a 1-rig operation a country doesn't really do much for us given our size right now. So those filters now have become much more pronounced in our evaluation. And International still will compete against the other business units for capital. Where nobody has an immediate lock on capital, everyone -- all these projects are going to be measured against one another. And so that continues as an objective. Byron K. Pope - Tudor, Pickering, Holt & Co. Securities, Inc., Research Division: Okay. And then just a second question for the U.S. Lower 48 business. I mean, you've got 16 kind of new build rigs left to be delivered. And as you think about kind of incremental opportunities to add new build rigs, it sounds like depending on customer conversations, there'll be additional opportunities for PACE-X rigs. But how do you think about the pace with which you'll likely put some of your currently idle AC rigs back to work? And in terms of basins, it seems as though you picked up some activity in the Permian. I'm just wondering if that's an area where we should expect for Nabors to continue to see it redeployed some of its currently idle AC rigs?

Correct. I mean, I think one thing since our last conference call that we exercise is the commitment on our part to put idle rigs back to work, both AC and legacy. And as we noted, we have a net 5 AC rigs that went back to work. The markets that we've focused on, those include the Northeast, the Rocky Mountains, South Texas and West Texas. Those are the markets that we're focused on right now.

Your next question comes from Waqar Syed from Goldman Sachs.

Could you talk about this offshore platform rig that you have for the U.S. Gulf of Mexico? When will it start operations and any guidance on what the day rate could be for that rig?

Hey, the rig that Nabors owns will actually begin mobilizing, we hope, sometime in November after the hurricane season. So that's when we should start doing the operation, start the revenue stream.

So it will start the revenue stream when it starts mobilizing or when it actually gets on the platform?

When it starts mobilizing on the yard. Currently, the rig is being -- we're utilizing it, finishing commissioning and we're also training on the rig as we speak.

Okay. And what could be the day rate? Is it 100-plus kind of range or 100,000 plus?

Yes, definitely. Otherwise we'd rather not say.

We wouldn't be on the call.

And the operating cost would be in the $30,000, $35,000 a day range. Would that be fair?

Yes.

Maybe a little less, yes, closer to $20,000 25,000, I think.

Okay, that's fair. Secondly, in the previous filing, you've mentioned that you've hired some advisors for -- to advise on restructuring. What have you heard from them? Have they come up with a proposal or what's the timing of any advice that you get from there -- from them?

Well I think you're referring to our press release where we said that the board is evaluating strategies to enhance shareholder value, including optimizing its capital structure, reviewing our mix of business and improving our operational performance. And that we were seeking -- we were -- where we can get access to financial advisers to help with that review. That's part and parcel, frankly, of what we've been doing in the past couple of years, where we first decided we will get rid of our non-core assets and clean up the business and focus on the execution. And this is a natural extension of that focus and what's left and how do we optimize the value. I guess we've hired -- the board has hired an independent outside person to come in and look at where we are, and that review will take place over the summer.

Okay. So they'll come up with the proposal over the summer. Is that what you're saying?

Well I don't know if they come up with a proposal, but they're going to review where we are and -- based on what that review is and then what actions and what changes we want to make as a result of it, then the board will decide. But that review will take place over the summer.

Your next question comes from Jim Wicklund from Crédit Suisse. James Knowlton Wicklund - Crédit Suisse AG, Research Division: What is the outlook for cost inflation of people? Is it proving to be difficult? Is it proving to be easy with the rig count down?

Definitely improving. It's, the people -- when the rig count is going up, obviously, the number -- inflation kicks in. But right now, things have stabilized. We feel very comfortable where it's positioned.

Yes. Let me add... James Knowlton Wicklund - Crédit Suisse AG, Research Division: [indiscernible] significant cost inflation this year?

Not domestically.

Not domestically. But International, maybe Ziggy could talk to it. I mean, International, certainly, there's been all kinds of local legislation, local pressure in countries that for sociopolitical reasons have different objectives and they're passing either regulations or mandates that increase our costs. And even things like travel today, travel expense is much higher. So we do have those kinds of cost pressures. Ziggy, do you want to add anything?

Yes, definitely the cost impact is on the local level. But having said that, at the same time, the local labor force, us being in the areas for such a long time, they give us the foundation actually to promote people and that we'll have people for additional rigs in the future. So it's kind of a bad and good -- you have the high expenses, but also you have the labor force for additional growth. James Knowlton Wicklund - Crédit Suisse AG, Research Division: Okay. And my follow-up, if I could, speaking of International, there's a couple of rig packages that are expected to be on the market. I don't expect you guys to explicitly comment on acquisitions. But I would assume, Tony, since, I mean, you ran International for a while that -- is that an area of potential expansion for Nabors?

I think International is a core part of our portfolio, and what we'll always asses is our option of growing organically versus acquisition or both. And you can assume we're looking at all those options continuously.

Ron, I think we're bumping up against our 1 hour. Let's take one more question and wrap up the call, please.

Our last question comes from the line of Robin Shoemaker from Citi.

I just wanted to ask, you indicated you expect a few incremental rigs in the North America market through the end of the year. Is there any sign at all of any resumption of activity in the dry gas basins? That is my first question. And if not, as I expect, where do you think those incremental rigs will mostly be, that incremental demand will be in North America?

The -- as far as dry gas, Robin, we're not seeing an uptick. When it does come, it will come in the small independents. They'll drive it first in terms of incremental rig demand. Tony mentioned the Rocky Mountain area. We'll see some increment from that area, some of the lower Mid-Continent, the Pan Am Oil and West Texas continues to improve. So that's where we'll see it grow.

Okay. And since you -- part of your non-core asset plans to dispose of non-core assets has to do with gas reserves, what are you seeing, if anything, in terms of a different market for those assets as -- or is there any difference in the market for those assets compared to the last couple of years when you have explored the possibility of selling those assets?

Well, first of all, gas assets, we have Horn River Basin. And I think the one thing that's different today versus where we were 18 months ago would be the prospect of LNG as an export reality is more visible, and that would then open up the Horn River to a whole different set of economics. And so depending on what the players that are in that market how they asses that reality and the timing, that can either be good or not good for us. But that's probably the biggest difference in terms of that asset and its marketability from where we've been.

Ron, we'll wrap up the call with that. If you'd close it out for us, please.

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. You may now disconnect your line.