<SUBMISSION>
<ACCESSION-NUMBER>0000950129-04-000359
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>2
<PERIOD>20040130
<ITEMS>12
<ITEMS>7
<FILING-DATE>20040130
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>NABORS INDUSTRIES LTD
<CIK>0001163739
<ASSIGNED-SIC>1381
<IRS-NUMBER>980363970
<STATE-OF-INCORPORATION>D0
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>8-K
<ACT>34
<FILE-NUMBER>000-49887
<FILM-NUMBER>04554510
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>2ND FLOOR INT'L TRADING CENTER
<STREET2>WARRENS, P.O. BOX 905E
<CITY>ST. MICHAEL BARBADOS
<STATE>D0
<ZIP>0000
<PHONE>2464219471
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>2ND FLOOR INT'L TRADING CENTER
<STREET2>WARRENS, P.O. BOX 905E
<CITY>ST. MICHAEL BARBADOS
<STATE>D0
<ZIP>0000
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>8-K
<SEQUENCE>1
<FILENAME>h12216e8vk.txt
<DESCRIPTION>NABORS INDUSTRIES LTD.- JANUARY 30, 2004
<TEXT>
<PAGE>
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

     Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


       Date of Report (Date of earliest event reported): January 30, 2004

                             NABORS INDUSTRIES LTD.
             (Exact name of registrant as specified in its charter)


          Bermuda                      000-49887                 980363970
(State or Other Jurisdiction          (Commission              (IRS Employer
     of Incorporation)                File Number)          Identification No.)


2nd Fl. International Trading Centre
Warrens
PO Box 905E
St. Michael, Barbados                                               N/A
(Address of Principal Executive Offices)                        (Zip Code)


Registrant's telephone number, including area code: (246) 421-9471


                                       N/A
          (Former name or former address, if changed since last report)

<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.

         (c) Exhibits

         Exhibit No.      Description
         -----------      -----------
            99.1          Press Release issued by Nabors Industries Ltd. on
                          January 30, 2004.

ITEM 12. RESULTS OF OPERATIONS AND FINANCIAL CONDITION

              On January 30, 2004, the Company issued a press release announcing
         its results of operations for the three months and twelve months ended
         December 31, 2003. A copy of that release is furnished herewith as
         Exhibit 99.1 in accordance with General Instruction B.6 to Form 8-K.

              The press release furnished as an exhibit to this report includes
         forward-looking statements within the meaning of the Securities Act of
         1933 and the Securities Exchange Act of 1934. Such forward-looking
         statements are subject to certain risks and uncertainties, as disclosed
         by the Company from time to time in its filings with the Securities and
         Exchange Commission. As a result of these factors, the Company's actual
         results may differ materially from those indicated or implied by such
         forward-looking statements.

              The Company has presented its adjusted cash flow derived from
         operating activities for all periods presented in the earnings release,
         which is a "non-GAAP" financial measure under Regulation G. The
         components of adjusted cash flow derived from operating activities are
         computed by using amounts which are determined in accordance with
         generally accepted accounting principles ("GAAP"). Adjusted cash flow
         derived from operating activities is computed by subtracting direct
         costs and general and administrative expenses from Operating revenues
         and then adding Earnings from unconsolidated affiliates. As part of our
         press release information we have provided a reconciliation, for all
         periods presented in the release, of adjusted cash flow derived from
         operating activities to net cash provided by operating activities,
         which is its nearest comparable GAAP financial measure.

              The Company also presented its adjusted income derived from
         operating activities for all periods presented in the earnings release,
         which is a "non-GAAP" financial measure under Regulation G. The
         components of adjusted income derived from operating activities are
         computed by using amounts which are determined in accordance with GAAP.
         Adjusted income derived from operating activities is computed by
         subtracting direct costs, general and administrative expenses, and
         depreciation, depletion and amortization expense from Operating
         revenues and then adding Earnings from unconsolidated affiliates. As
         part of our press release information we have provided a reconciliation
         of adjusted income derived from operating activities to consolidated
         income before income taxes, which is its nearest comparable GAAP
         financial measure.

<PAGE>
              The Company included its adjusted cash flow derived from operating
         activities and adjusted income derived from operating activities in the
         release because management evaluates the performance of its business
         units and the consolidated Company based on several criteria, including
         adjusted cash flow derived from operating activities and adjusted
         income derived from operating activities, and because it believes these
         financial measures are an accurate reflection of the ongoing
         profitability of the Company.

<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.

                                            NABORS INDUSTRIES LTD.


Date:  January 30, 2004                     By: /s/ Daniel McLachlin
                                                --------------------------------
                                                Daniel McLachlin
                                                Vice President-Administration &
                                                Secretary

<PAGE>
                                  EXHIBIT INDEX


Exhibit No.       Description
-----------       -----------
99.1              Press Release issued by Nabors Industries Ltd. on
                  January 30, 2004.


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>3
<FILENAME>h12216exv99w1.txt
<DESCRIPTION>PRESS RELEASE
<TEXT>
<PAGE>
                                                                    EXHIBIT 99.1

--------------------------------------------------------------------------------
(NABORS INDUSTRIES LOGO)                                            NEWS RELEASE
--------------------------------------------------------------------------------

 NABORS' 4 Q 2003 NET INCOME INCREASES 138% AT $0.42 VS. $0.18 PER DILUTED SHARE


ST. MICHAEL, BARBADOS, JANUARY 30, 2004, NABORS INDUSTRIES LTD. (AMEX: NBR),
today announced its results for the fourth quarter and full year 2003. Adjusted
income derived from operating activities(1) was $65.8 million for the current
quarter compared to $39.3 million in the fourth quarter of last year and $52.9
million in the third quarter of this year. Net income was $64.9 million ($0.42
per diluted share) for the current quarter compared to $27.2 million ($0.18 per
diluted share) in the prior year quarter and $50.3 million ($0.33 per diluted
share) in the third quarter of this year. Operating revenues and Earnings from
unconsolidated affiliates were $524.6 million in the current quarter compared to
$382.8 million in the prior year quarter and $476.0 million in the third quarter
of this year. For the full year ended December 31, 2003, adjusted income derived
from operating activities was $212.7 million compared to $170.0 million in 2002.
Net income for 2003 was $192.2 million ($1.25 per diluted share) compared to
$121.5 million ($0.81 per diluted share) in 2002. Operating revenues and
Earnings from unconsolidated affiliates for the full year 2003 were $1.9 billion
compared to $1.5 billion for 2002.

Gene Isenberg, Nabors' Chairman and Chief Executive Officer, commented: "The
strong improvements in our 2003 results were broad-based with our North American
natural gas, International, and U.S. Land Well-servicing businesses posting the
largest increases. Our Alaskan and U.S. Offshore businesses also increased
significantly, with only our Manufacturing and Logistics operations posting
lower results.

The fourth quarter of 2003 showed a large increase over the same quarter of
2002, but more significantly it represented a substantial sequential increase
over the third quarter of 2003. The largest increases during the quarter came
from our North American gas drilling and U.S. Offshore operations with Alaska
also posting improved results. Our U.S. Land Well-servicing business was down in
the fourth quarter as expected, with seasonally lower rig hours, while our
International operations' results were lower as previously forecasted.

Looking forward, we expect every one of our businesses to achieve higher results
in the first quarter of 2004. We also expect this robust outlook to continue
throughout the year with substantial increases expected from all of our
businesses except Alaska, where the outlook has recently improved modestly.

In our U.S. Lower 48 Land Drilling unit, we are seeing the early stages of an
improved pricing environment in selected regions and horsepower classes. I
expect that by sometime in the second half of 2004 the Baker Hughes US land rig
count will have increased by more than 75 rigs from its 2003 highs, with Nabors
garnering a larger share as our traditional customers become more active and
well complexity continues to

      ----------
      (1) Adjusted income derived from operating activities is computed by
      subtracting direct costs, general and administrative expenses, and
      depreciation and amortization, and depletion expenses from Operating
      revenues and then adding Earnings from unconsolidated affiliates. Such
      amounts should not be used as a substitute to those amounts reported under
      accounting principles generally accepted in the United States of America
      (GAAP). A reconciliation of this non-GAAP measure to consolidated income
      before taxes, which is a GAAP measure, is provided herein.

<PAGE>
increase which requires more sophisticated rigs. This magnitude of market
increase should absorb much of the remaining capacity of quality rigs and bring
the rig supply / demand balance closer to the point where prices improve more
significantly. Our initiatives in adopting selected rig technologies, where
appropriate, are yielding positive results with customers as well as on our
returns on these investments. Our average rig moving times have improved
substantially and we have upgraded a number of our rigs with larger mud pumps
and power systems to accommodate the higher hydraulic horsepower requirements of
today's newer bits and drilling motors. Similarly, we are accelerating our
implementation of the OptiDrill(TM) automatic driller system and have completed
our implementation of internet data transmission throughout our fleet.

The strength of our U.S. Gulf of Mexico offshore business is attributable to
several factors with one of the most significant being the deployment of three
new platform rigs for deepwater development projects commencing in the first
half of 2004. Further bolstering this unit is the continuing high utilization of
our 1,000 horsepower and larger self-erecting platform rigs which has been
helped by last year's export of several rigs in this class to international
venues for long-term contracts. In February our recently upgraded barge drilling
rig should recommence operations with greatly enhanced drilling capacity and a
reduced minimum draft. This is now the most versatile rig for the deep horizon
prospects of the shallowest water areas of the Gulf of Mexico. Lastly, it
appears that we will see a continuance of the improving market for our platform
and jackup workover rigs that materialized late last year.

Our Canadian unit continues to progress in excess of our expectations and
validate the timeliness of our expansion in that market. Our fourth quarter
results in Canada also benefited from the appreciation of the Canadian dollar
relative to the US dollar. We continue to invest in this business in both
innovative new rigs and technologies which are receiving strong customer
acceptance. Of course, we will experience a significant seasonal drop in
contribution during the second quarter of 2004 but, as compared to last year,
it will have a lower relative impact on our overall results.

Internationally, our 2004 results will benefit from the full-year contribution
of the multiple offshore rig deployments we completed last year. We also expect
to see a number of the long-running rigs that were unexpectedly idled late last
year return to work during the course of this year. Furthermore, we continue to
see a significant number of opportunities that are likely to materialize as the
year progresses.

Our U.S. Land Well-servicing business is beginning to demonstrate its leverage
with an anticipated modest increase in rig hours and margins generating a more
meaningful increase in profitability. We also expect sequential increases in our
Manufacturing and Logistics businesses throughout 2004 as a result of the
improving rig market, increased third party sales and the accelerated rollout of
several new technology-driven products.

All of this continues to reinforce our conviction that we can sustain robust
growth in our results for the next several years. In 2004 we expect to see a
continuation of the magnitude of growth in earnings per share that we saw in
2003, even in the face of a much higher tax rate. This is driven by a
substantial increase in the rate of growth in adjusted income and cash flow
from operations. Our confidence emanates from concrete developments in our
Canadian, International and U.S. Offshore businesses as well as, certain
regions of our U.S. Lower 48 Land Drilling market and elsewhere by the
continuing strength in the fundamentals, particularly North American natural
gas."

The Nabors companies own and operate almost 600 land drilling and approximately
950 land workover and well-servicing rigs worldwide. Offshore, Nabors operates
42 platforms, 16 jack-ups, and three barge rigs in the domestic and
international markets. Nabors markets 30 marine transportation and support
vessels, primarily in the U.S. Gulf of Mexico. In addition, Nabors manufactures
top drives and drilling instrumentation systems and provides comprehensive
oilfield hauling, engineering, civil construction,

<PAGE>
logistics and facilities maintenance, and project management services. Nabors
participates in most of the significant oil, gas and geothermal markets in the
world.

The information above includes forward-looking statements within the meaning of
the Securities Act of 1933 and the Securities Exchange Act of 1934. Such
forward-looking statements are subject to certain risks and uncertainties, as
disclosed by Nabors from time to time in its filings with the Securities and
Exchange Commission. As a result of these factors, Nabors' actual results may
differ materially from those indicated or implied by such forward-looking
statements.

--------------------------------------------------------------------------------

For further information, please contact Dennis A. Smith, Director of Corporate
Development of Nabors Corporate Services, Inc. at (281) 775-8038. To request
Investor Materials, call Angela Ridgell at (281) 775-8063 or our corporate
headquarters in St. Michael, Barbados at (246) 421-9471 or via email at
dan.mclachlin@nabors.com. Nabors will conduct a conference call to discuss the
quarter's results and the near-term outlook, today at 12:00 p.m. Eastern
Standard Time. The call can be accessed on our website at WWW.NABORS.COM, or
through First Call at WWW.FIRSTCALLEVENTS.COM.
<PAGE>
                    NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                        CONSOLIDATED STATEMENTS OF INCOME

                                   (UNAUDITED)


<Table>
<Caption>
                                                                     THREE MONTHS ENDED                        YEAR ENDED
                                                       --------------------------------------------   -----------------------------
                                                                 DECEMBER 31,         SEPTEMBER 30,           DECEMBER 31,
                                                       -----------------------------  -------------   -----------------------------
                                                           2003            2002           2003            2003            2002
                                                       -------------   -------------  -------------   -------------   -------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                                    <C>             <C>            <C>             <C>             <C>
Revenues and other income:
   Operating revenues                                  $     524,120   $     379,951  $     473,494   $   1,880,003   $   1,466,443
   Earnings from unconsolidated affiliates                       436           2,834          2,485          10,183          14,775
   Interest income                                             6,619           8,548          6,442          27,752          34,086
   Other income, net                                           2,582           1,556          2,279           4,908           3,708
                                                       -------------   -------------  -------------   -------------   -------------
      Total revenues and other income                        533,757         392,889        484,700       1,922,846       1,519,012
                                                       -------------   -------------  -------------   -------------   -------------

Costs and other deductions:
   Direct costs                                              350,306         252,397        323,296       1,276,953         973,910
   General and administrative expenses                        42,468          39,437         41,207         165,403         141,895
   Depreciation and amortization                              59,674          50,390         57,394         226,528         187,665
   Depletion                                                   6,345           1,226          1,136           8,599           7,700
   Interest expense                                           16,035          20,263         15,991          70,740          67,068
                                                       -------------   -------------  -------------   -------------   -------------
      Total costs and other deductions                       474,828         363,713        439,024       1,748,223       1,378,238
                                                       -------------   -------------  -------------   -------------   -------------

Income before income taxes                                    58,929          29,176         45,676         174,623         140,774
                                                       -------------   -------------  -------------   -------------   -------------

Income tax expense (benefit):
  Current                                                        564           1,454            644           8,494          10,185
  Deferred                                                    (6,506)            517         (5,249)        (26,099)          9,100
                                                       -------------   -------------  -------------   -------------   -------------
    Total income tax (benefit) expense                        (5,942)          1,971         (4,605)        (17,605)         19,285
                                                       -------------   -------------  -------------   -------------   -------------

Net income                                             $      64,871   $      27,205  $      50,281   $     192,228   $     121,489
                                                       =============   =============  =============   =============   =============

Earnings per share (1):
   Basic                                               $         .44   $         .19  $         .34   $        1.31   $         .85
   Diluted                                             $         .42   $         .18  $         .33   $        1.25   $         .81

Weighted average number
 of common shares outstanding (1):
  Basic                                                      146,984         145,385        146,905         146,495         143,655
                                                       -------------   -------------  -------------   -------------   -------------
  Diluted                                                    161,851         151,717        153,378         156,897         149,997
                                                       -------------   -------------  -------------   -------------   -------------

Adjusted income derived from operating activities (2)  $      65,763   $      39,335  $      52,946   $     212,703   $     170,048
                                                       =============   =============  =============   =============   =============
</Table>


(1)      See "Computation of Per Share Earnings" included herein as a separate
         schedule.

(2)      Adjusted income derived from operating activities is computed by:
         subtracting direct costs, general and administrative expenses, and
         depreciation and amortization, and depletion expense from Operating
         revenues and then adding Earnings from unconsolidated affiliates. Such
         amounts should not be used as a substitute to those amounts reported
         under accounting principles generally accepted in the United States of
         America (GAAP). However, management evaluates the performance of our
         business units and the consolidated company based on several criteria,
         including adjusted income derived from operating activities, because it
         believes that this financial measure is an accurate reflection of the
         ongoing profitability of our company. A reconciliation of this non-GAAP
         measure to income before income taxes, which is a GAAP measure, is
         provided within the table set forth immediately following the heading
         "Segment Reporting".



<PAGE>


                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                   (UNAUDITED)


<Table>
<Caption>
                                                              DECEMBER 31,
                                                      ---------------------------
                                                         2003             2002
                                                      ----------       ----------
(IN THOUSANDS, EXCEPT RATIOS)
<S>                                                   <C>              <C>
ASSETS
Current assets:
Cash and marketable securities                        $  919,673       $  871,651
Accounts receivable, net                                 409,985          320,299
Other current assets                                     174,536          177,958
                                                      ----------       ----------
     Total current assets                              1,504,194        1,369,908
Marketable securities                                    612,417          459,148
Property, plant and equipment, net                     2,990,792        2,801,067
Goodwill, net                                            336,027          306,762
Other long-term assets                                   147,809          126,987
                                                      ----------       ----------
     Total assets                                     $5,591,239       $5,063,872
                                                      ==========       ==========

LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt                     $  299,385       $  492,985
Other current liabilities                                294,006          258,469
                                                      ----------       ----------
     Total current liabilities                           593,391          751,454
Long-term debt                                         1,985,553        1,614,656
Other long-term liabilities                              521,412          539,307
                                                      ----------       ----------
     Total liabilities                                 3,100,356        2,905,417
Shareholders' equity                                   2,490,883        2,158,455
                                                      ----------       ----------
     Total liabilities and shareholders' equity       $5,591,239       $5,063,872
                                                      ==========       ==========

Total cash and marketable securities                  $1,532,090       $1,330,799

Working capital                                       $  910,803       $  618,454

Funded debt to capital ratio:
    - Gross                                             0.48 : 1         0.49 : 1
    - Net of cash and marketable securities             0.23 : 1         0.26 : 1
Interest coverage ratio:                                 6.8 : 1          6.0 : 1
</Table>



<PAGE>
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                                SEGMENT REPORTING
                                   (UNAUDITED)

The following table sets forth certain information with respect to our segments
and rig activity:

<Table>
<Caption>
                                                              THREE MONTHS ENDED                             YEAR ENDED
                                                 -----------------------------------------------    ------------------------------
                                                          DECEMBER 31,             SEPTEMBER 30,             DECEMBER 31,
                                                 ------------------------------    -------------    ------------------------------
                                                     2003             2002             2003             2003             2002
                                                 -------------    -------------    -------------    -------------    -------------
(IN THOUSANDS)
<S>                                              <C>              <C>              <C>              <C>              <C>
Reportable segments:
Operating revenues and Earnings
  from unconsolidated affiliates:
    Contract Drilling: (1)
      U.S. Lower 48 Land Drilling                $     139,986    $      79,853    $     132,065    $     476,258    $     374,659
      U.S. Land Well-servicing                          75,342           70,307           78,773          312,279          294,428
      U.S. Offshore                                     29,244           29,841           25,928          101,566          105,717
      Alaska                                            25,491           20,899           20,187          112,092          118,199
      Canada                                           100,190           51,158           71,489          322,303          141,497
      International                                    106,866           85,580          106,228          396,884          320,160
                                                 -------------    -------------    -------------    -------------    -------------
       Subtotal Contract Drilling (2)                  477,119          337,638          434,670        1,721,382        1,354,660

    Manufacturing, Logistics and Other (3)(4)           51,264           59,487           48,635          201,660          174,775
    Oil and Gas                                          9,467            3,550            3,366           16,919            7,223
    Other (5)                                          (13,294)         (17,890)         (10,692)         (49,775)         (55,440)
                                                 -------------    -------------    -------------    -------------    -------------
      Total                                      $     524,556    $     382,785    $     475,979    $   1,890,186    $   1,481,218
                                                 =============    =============    =============    =============    =============

Adjusted cash flow derived
  from operating activities: (6)
 Contract Drilling:
   U.S. Lower 48 Land Drilling                   $      26,354    $      14,475    $      25,697    $      85,992    $      84,435
   U.S. Land Well-servicing                             16,645           13,185           18,644           69,245           58,231
   U.S. Offshore                                         9,629           12,092            5,599           21,443           19,094
   Alaska                                                9,580            8,157            8,659           49,815           43,389
   Canada                                               32,936           13,917           18,054           89,696           38,127
   International                                        33,799           28,843           36,046          131,337          113,641
                                                 -------------    -------------    -------------    -------------    -------------
    Subtotal Contract Drilling                         128,943           90,669          112,699          447,528          356,917

 Manufacturing, Logistics and Other                      4,489            7,713            4,624           24,863           42,704
 Oil and Gas                                             7,319            3,434            3,351           14,449            6,642
 Other (7)                                              (8,969)         (10,865)          (9,198)         (39,010)         (40,850)
                                                 -------------    -------------    -------------    -------------    -------------
   Total                                               131,782           90,951          111,476          447,830          365,413
Depreciation, depletion and amortization:
   Contract Drilling                                   (54,376)         (45,392)         (52,308)        (206,329)        (171,347)
   Manufacturing, Logistics and Other                   (5,620)          (5,370)          (5,414)         (21,597)         (18,044)
   Oil and Gas                                          (6,345)          (1,226)          (1,136)          (8,599)          (7,700)
   Other (7)                                               322              372              328            1,398            1,726
                                                 -------------    -------------    -------------    -------------    -------------
     Total depreciation, depletion
       and amortization                                (66,019)         (51,616)         (58,530)        (235,127)        (195,365)

Adjusted income derived from
  operating activities:
   Contract Drilling                                    74,567           45,277           60,391          241,199          185,570
   Manufacturing, Logistics and Other                   (1,131)           2,343             (790)           3,266           24,660
   Oil and Gas                                             974            2,210            2,215            5,850           (1,056)
   Other (7)                                            (8,647)         (10,495)          (8,870)         (37,612)         (39,126)
                                                 -------------    -------------    -------------    -------------    -------------
     Total adjusted income derived
       from operating activities (8)                    65,763           39,335           52,946          212,703          170,048

Interest expense                                       (16,035)         (20,263)         (15,991)         (70,740)         (67,068)
Interest income                                          6,619            8,548            6,442           27,752           34,086
Other income, net                                        2,582            1,556            2,279            4,908            3,708
                                                 -------------    -------------    -------------    -------------    -------------
Income before income taxes                       $      58,929    $      29,176    $      45,676    $     174,623    $     140,774
                                                 =============    =============    =============    =============    =============

Net cash provided by operating
  activities from our consolidated
  statements of cash flows (6)                   $     159,193    $     101,756    $      94,509    $     394,473    $     387,445
                                                 =============    =============    =============    =============    =============

Rig activity:
Rig years: (9)
   U.S. Lower 48 Land Drilling                           168.3             95.5            157.4            143.1            103.0
   U.S. Offshore                                          14.1             14.0             14.1             14.1             14.5
   Alaska                                                  7.3              7.7              6.3              7.9              9.3
   Canada                                                 47.1             29.6             39.1             42.1             22.9
   International (10)                                     64.0             59.9             63.3             61.1             55.1
                                                 -------------    -------------    -------------    -------------    -------------
      Total rig years                                    300.8            206.7            280.2            268.3            204.8
                                                 =============    =============    =============    =============    =============
Rig hours: (11)
   U.S. Land Well-servicing                            257,578          250,364          275,610        1,088,511        1,014,657
   Canada Well-servicing (12)                           92,079           71,704           90,233          321,472          164,785
                                                 -------------    -------------    -------------    -------------    -------------
      Total rig hours                                  349,657          322,068          365,843        1,409,983        1,179,442
                                                 =============    =============    =============    =============    =============
</Table>

(1)      This segment includes our drilling, workover and well-servicing
         operations, on land and offshore.

(2)      Includes Earnings from unconsolidated affiliates, accounted for by the
         equity method, of $.03 million, $.8 million and $1.0 million for the
         three months ended December 31, 2003 and 2002, and September 30, 2003,
         respectively, and $2.8 million and $3.9 million for the years ended
         December 31, 2003 and 2002, respectively.

(3)      Includes our marine transportation and supply services, drilling
         technology and top drive manufacturing, directional drilling, rig
         instrumentation and software, and construction and logistics
         operations.

(4)      Includes Earnings from unconsolidated affiliates, accounted for by the
         equity method, of $.4 million, $2.0 million and $1.5 million for the
         three months ended December 31, 2003 and 2002, and September 30, 2003,
         respectively, and $7.4 million and $10.9 million for the years ended
         December 31, 2003 and 2002, respectively.

(5)      Represents the elimination of inter-segment transactions.

(6)      Adjusted cash flow derived from operating activities is computed by:
         subtracting direct costs and general and administrative expenses from
         Operating revenues and then adding Earnings from unconsolidated
         affiliates. Such amounts should not be used as a substitute to those
         amounts reported under GAAP. However, management evaluates the
         performance of our business units based on several criteria, including
         adjusted cash flow derived from operating activities, because it
         believes that this financial measure is an accurate reflection of the
         ongoing performance of our business units. The following is a
         reconciliation of net cash provided by operating activities from our
         consolidated statements of cash flows, which is a GAAP measure, to this
         non-GAAP measure:


<Table>
<Caption>
                                                          THREE MONTHS ENDED                          YEAR ENDED
                                             ---------------------------------------------   -----------------------------
                                                      DECEMBER 31,           SEPTEMBER 30,            DECEMBER 31,
                                             -----------------------------   -------------   -----------------------------
                                                 2003            2002            2003            2003            2002
                                             -------------   -------------   -------------   -------------   -------------
(IN THOUSANDS)
<S>                                          <C>             <C>             <C>             <C>             <C>
Net cash provided by operating activities
   from our consolidated statements of
   cash flows                                $     159,193   $     101,756   $      94,509   $     394,473   $     387,445
Interest expense                                    16,035          20,263          15,991          70,740          67,068
Interest income                                     (6,619)         (8,548)         (6,442)        (27,752)        (34,086)
Other income, net                                   (2,582)         (1,556)         (2,279)         (4,908)         (3,708)
Current income tax expense                             564           1,454             644           8,494          10,185
Deferred financing costs amortization               (1,366)         (1,328)         (1,378)         (5,464)         (5,122)
Discount amortization on long-term debt             (4,991)         (7,859)         (4,961)        (25,521)        (30,790)
Amortization of loss on cash flow hedges               (35)            (50)            (42)           (152)            (50)
(Losses) gains on long-term assets, net               (706)          5,696             (95)          2,476           4,570
Gains on marketable securities, net                  3,454             491              65           6,146           2,877
Gains (losses) on derivative instruments               520          (1,983)          2,042          (1,139)         (1,983)
Sales of marketable securities and other
   investments, trading                                 --              --              --          (4,484)             --
Foreign currency transaction gains (losses)            443          (1,623)             36             830             486
Loss on early extinguishment of debt                    --              --              --            (908)           (202)
Equity in earnings (losses) of
   unconsolidated affiliates,
   net of dividends                                    311           2,834          (1,154)            919           4,900
Decrease (increase), net of effects
  from acquisitions, from changes
  in balance sheet accounts                        (32,439)        (18,596)         14,540          34,080         (36,177)
                                             -------------   -------------   -------------   -------------   -------------
Adjusted cash flow derived from
  operating activities                       $     131,782   $      90,951   $     111,476   $     447,830   $     365,413
                                             =============   =============   =============   =============   =============
</Table>


(7)      Represents the elimination of inter-segment transactions and
         unallocated corporate expenses.

(8)      Adjusted income derived from operating activities is computed by:
         subtracting direct costs, general and administrative expenses,
         depreciation and amortization, and depletion expense from Operating
         revenues and then adding Earnings from unconsolidated affiliates. Such
         amounts should not be used as a substitute to those amounts reported
         under GAAP. However, management evaluates the performance of our
         business units and the consolidated company based on several criteria,
         including adjusted income derived from operating activities, because it
         believes that this financial measure is an accurate reflection of the
         ongoing profitability of our company. A reconciliation of this non-GAAP
         measure to consolidated income before income taxes, which is a GAAP
         measure, is provided within the table set forth immediately following
         the heading "Segment Reporting".

(9)      Excludes well-servicing rigs, which are measured in rig hours. Includes
         our percentage ownership of rigs from unconsolidated affiliates. Rig
         years represents a measure of the number of equivalent rigs operating
         during a given period. For example, one rig operating 182.5 days during
         a 365-day period represents 0.5 rig years.

(10)     International rig years include our equivalent percentage ownership of
         rigs owned by unconsolidated affiliates which totaled 3.5 years, 4.0
         years and 3.7 years during the three months ended December 31, 2003 and
         2002, and September 30, 2003, respectively, and 3.8 years and 3.7 years
         during the years ended December 31, 2003 and 2002, respectively.

(11)     Rig hours represents the aggregate number of hours that our
         well-servicing rig fleet operated during the year.

(12)     The Canada Well-servicing operation was acquired during April 2002 as
         part of our acquisition of Enserco Energy Service Company Inc.
<PAGE>
                     NABORS INDUSTRIES LTD. AND SUBSIDIARIES

                        COMPUTATION OF PER SHARE EARNINGS
                                   (UNAUDITED)

A reconciliation of the numerators and denominators of the basic and diluted
earnings per share computations is as follows:

<Table>
<Caption>
                                                          THREE MONTHS ENDED                            YEAR ENDED
                                            -----------------------------------------------    ------------------------------
                                                      DECEMBER 31,            SEPTEMBER 30,            DECEMBER 31,
                                            ------------------------------    -------------    ------------------------------
                                                2003             2002             2003             2003             2002
                                            -------------    -------------    -------------    -------------    -------------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S>                                         <C>              <C>              <C>              <C>              <C>
Net income (numerator):
   Net income - basic                       $      64,871    $      27,205    $      50,281    $     192,228    $     121,489
   Add interest expense on assumed
      conversion of our zero coupon
      convertible senior debentures,
      net of tax:
        $825 million due 2020 (1)                      --               --               --            3,639               --
        $1.381 billion due 2021 (2)                 3,062               --               --               --               --
                                            -------------    -------------    -------------    -------------    -------------
   Adjusted net income - diluted            $      67,933    $      27,205    $      50,281    $     195,867    $     121,489
                                            -------------    -------------    -------------    -------------    -------------

   Earnings per share:
     Basic                                  $         .44    $         .19    $         .34    $        1.31    $         .85
     Diluted                                $         .42    $         .18    $         .33    $        1.25    $         .81

Shares (denominator):
   Weighted average number of shares
      outstanding - basic (3)                     146,984          145,385          146,905          146,495          143,655
   Net effect of dilutive stock options
      and warrants based on the treasury
      stock method                                  6,376            6,332            6,473            6,604            6,342
   Assumed conversion of our zero coupon
      convertible/exchangeable senior
      debentures/notes:
        $825 million due 2020 (1)                      --               --               --            3,798               --
        $1.381 billion due 2021 (2)                 8,491               --               --               --               --
        $700 million due 2023 (4)                      --               --               --               --               --
                                            -------------    -------------    -------------    -------------    -------------
   Weighted average number of shares
      outstanding - diluted                       161,851          151,717          153,378          156,897          149,997
                                            -------------    -------------    -------------    -------------    -------------
</Table>

(1)      Diluted earnings per share for the year ended December 31, 2003
         reflects the assumed conversion of our $825 million zero coupon
         convertible senior debentures, as the conversion in that period would
         have been dilutive. We redeemed for cash the remaining outstanding
         principal amount of our $825 million zero coupon convertible senior
         debentures on June 20, 2003 and therefore these debentures did not
         impact the calculation of diluted earnings per share for the three
         months ended December 31 and September 30, 2003. For the three months
         and year ended December 31, 2002, the weighted average number of shares
         outstanding-diluted excludes 8.1 million potentially dilutive shares
         issuable upon the conversion of our $825 million zero coupon
         convertible senior debentures because the inclusion of such shares
         would have been anti-dilutive, given the level of net income for those
         periods. Net income for the three months and year ended December 31,
         2002 also excludes the related add-back of interest expense, net of
         tax, of $1.9 million and $7.6 million, respectively, for these
         debentures. These shares would have been dilutive and therefore
         included in the calculation of the weighted average number of shares
         outstanding-diluted had diluted earnings per share been at or above
         $.24 and $.93, respectively, for the three months and year ended
         December 31, 2002.

(2)      Diluted earnings per share for the three months ended December 31, 2003
         reflects the assumed conversion of our $1.381 billion zero coupon
         convertible senior debentures, as the conversion in that period would
         have been dilutive. For the three months ended December 31, 2002 and
         September 30, 2003 and the years ended December 31, 2003 and 2002, the
         weighted average number of shares outstanding-diluted excludes 8.5
         million potentially dilutive shares issuable upon the conversion of our
         $1.381 billion zero coupon convertible senior debentures because the
         inclusion of such shares would have been anti-dilutive, given the level
         of net income for those periods. Net income for the three months ended
         December 31, 2002 and September 30, 2003 and the years ended December
         31, 2003 and 2002, excludes the related add-back of interest expense of
         $3.0 million, $3.0 million, $12.1 million and $11.8 million,
         respectively, for these debentures. These shares would have been
         dilutive and therefore included in the calculation of the weighted
         average number of shares outstanding-diluted had diluted earnings per
         share been at or above $.35 and $.36 for the three months ended
         December 31, 2002 and September 30, 2003, and at or above $1.43 and
         $1.39 for the years ended December 31, 2003 and 2002.



<PAGE>
(3)      Includes the following weighted average number of common shares of
         Nabors and weighted average number of exchangeable shares of Nabors
         Exchangeco, respectively: 146.6 million and .4 million shares for the
         three months ended December 31, 2003; 144.7 million and .7 million
         shares for the three months ended December 31, 2002; 146.5 million and
         .4 million shares for the three months ended September 30, 2003; 146.0
         million and .5 million shares for the year ended December 31, 2003; and
         143.2 million and .4 million shares for the year ended December 31,
         2002. The exchangeable shares of Nabors Exchangeco are exchangeable for
         Nabors common shares on a one-for-one basis, and have essentially
         identical rights as Nabors Industries Ltd. common shares, including but
         not limited to voting rights and the right to receive dividends, if
         any.


(4)      Diluted earnings per share for the three months and year ended December
         31, 2003 and for the three months ended September 30, 2003 excludes
         approximately 10.0 million potentially dilutive shares initially
         issuable upon the exchange of our $700 million zero coupon exchangeable
         senior notes due 2023. Such shares are contingently exchangeable under
         certain circumstances and would only be included in the calculation of
         the weighted average number of shares outstanding-diluted if any of
         those criteria were met. Such criteria were not met during the three
         months and year ended December 31, 2003 and the three months ended
         September 30, 2003. Based on the initial exchange price per share,
         these shares would be exchangeable if the closing sale price per share
         of Nabors' common shares for at least 20 trading days during the period
         of 30 consecutive trading days ending on the last trading day of the
         previous calendar quarter is greater than or equal to $84.12 for all
         calendar quarters ending on or before June 30, 2008, and $77.11 for all
         calendar quarters thereafter. These notes were issued in June 2003 and
         therefore did not impact the calculation of diluted earnings per share
         for the three months and year ended December 31, 2002.

</TEXT>
</DOCUMENT>
</SUBMISSION>
