<SUBMISSION>
<ACCESSION-NUMBER>0000950129-04-008047
<TYPE>8-K
<PUBLIC-DOCUMENT-COUNT>3
<PERIOD>20041025
<ITEMS>1.01
<ITEMS>9.01
<FILING-DATE>20041027
<DATE-OF-FILING-DATE-CHANGE>20041026
<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>041097701
</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>h19341ae8vk.txt
<DESCRIPTION>NABORS INDUSTRIES LTD. - OCTOBER 25, 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) OCTOBER 25, 2004


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


<Table>
<S>                                       <C>                                <C>
            BERMUDA                               000-49887                       980363970
(State or Other Jurisdiction of           (Commission File Number)            (I.R.S. Employer
 Incorporation or Organization)                                              Identification No.)


  2ND FL. INTERNATIONAL TRADING CENTRE
                 WARRENS
               PO BOX 905E
          ST. MICHAEL, BARBADOS                                                      N/A
(Address of principal executive offices)                                          (Zip Code)
</Table>


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


Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:

[ ]  Written communications pursuant to Rule 425 under the Securities Act
     (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act
     (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the
     Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the
     Exchange Act (17 CFR 240.13e-4(c))


<PAGE>


ITEM 1.01.  ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.

         On October 25, 2004, Nabors Industries, Inc., a Delaware corporation,
as issuer ("Nabors Delaware"), and Nabors Industries Ltd., a Bermuda exempted
company, as guarantor (the "Company"), entered into a Second Supplemental
Indenture (the "2021 Supplemental Indenture"), with J.P. Morgan Trust Company,
National Association (as successor to Bank One, N.A.), as trustee (the
"Trustee"), to the Indenture, dated as of February 5, 2001, as amended (the
"2021 Indenture"), by and among Nabors Delaware, the Company and the Trustee
with respect to Nabors Delaware's Zero Coupon Convertible Senior Debentures due
2021 (the "2021 Securities"). Nabors Delaware is a wholly owned subsidiary of
the Company.

         In addition, on October 25, 2004, Nabors Delaware, as issuer, and the
Company, as guarantor, entered into a First Supplemental Indenture with the
Trustee (together with the 2021 Supplemental Indenture, the "Supplemental
Indentures") to the Indenture, dated as of June 10, 2003 (together with the 2021
Indenture, the "Existing Indentures"), by and among Nabors Delaware, the Company
and the Trustee with respect to Nabors Delaware's Zero Coupon Senior
Exchangeable Notes due 2023 (the "2023 Securities" and together with the 2021
Securities, the "Securities").

         The Supplemental Indentures contain the following provisions and
generally have the following effects on the Existing Indentures:

     o   The Existing Indentures provided that Nabors Delaware had the right to
         elect, by written notice to holders ("Company Notice"), to pay the
         purchase price in cash or in the Company's common shares ("Common
         Shares"), or any combination of cash and Common Shares, when holders
         require Nabors Delaware to repurchase all or a portion of the
         Securities at the holder's option as provided in the Existing
         Indentures. In the Supplemental Indentures, Nabors Delaware and the
         Company covenanted and agreed for the benefit of the holders of
         Securities that in any Company Notice, Nabors Delaware will in all
         circumstances elect to pay the purchase price described above solely in
         cash.

     o   The Existing Indentures provide that upon an exchange of 2023
         Securities or conversion of 2021 Securities, Nabors Delaware has the
         right to elect, by written notice to holders, instead of delivering the
         number of Common Shares to be delivered upon such exchange or
         conversion, as the case may be, to pay such holder, in respect of all
         or a portion of such Securities, an amount of cash based on the value
         of such Common Shares determined pursuant to the Existing Indentures,
         provided that if such payment of cash is not permitted pursuant to the
         provisions of the Existing Indentures or any other agreement or
         instrument to which Nabors Delaware is a party or by which Nabors
         Delaware is bound or otherwise or an event of default under the
         respective Existing Indenture has occurred and is continuing, then
         Nabors Delaware will deliver Common Shares upon such exchange or
         conversion of such Securities (notwithstanding any notice of election
         to pay cash on such exchange or conversion). In the Supplemental


                                       2
<PAGE>

         Indentures, Nabors Delaware and the Company covenanted and agreed for
         the benefit of the holders of Securities that the written notice
         described in the first sentence of this paragraph, will in all
         circumstances specify that Nabors Delaware will make payment solely in
         cash for all Securities submitted for exchange or conversion unless the
         Full Cash Price (as defined in the Supplemental Indentures) for a
         Security is greater than the Principal Amount (as defined in the
         Existing Indentures) thereof, in which case Nabors Delaware will (x)
         pay in cash the percentage of the Full Cash Price equal to the quotient
         obtained by dividing the Principal Amount of such Security by the Full
         Cash Price for such Security, and (y) pay the remaining portion of the
         payment for such Securities in either, at Nabors Delaware's option,
         cash or Common Shares.

     o   Deleting in their entirety provisions in the Existing Indentures that
         permitted Nabors Delaware and the Company, at Nabors Delaware or the
         Company's option, to enter into exchange or conversion arrangements
         with investment banks when Nabors Delaware calls the Securities for
         redemption.

         The Supplemental Indentures were entered into without the consent of
holders of Securities pursuant to Section 9.01(4) of each of the Existing
Indentures. Section 9.01(4) of each of the Existing Indentures permits
amendments without the consent of holders to make any change that does not
adversely affect the rights of any holder of Securities.

         The above description of the Supplemental Indentures is a summary only
and is qualified in its entirety by reference to the Supplemental Indentures
which are filed as exhibits to this Current Report on Form 8-K.


                                       3
<PAGE>


ITEM 9.01.  FINANCIAL STATEMENTS AND EXHIBITS.

Exhibit No.       Description
-----------       -----------

4.1               Second Supplemental Indenture, dated as of October 25, 2004,
                  by and among Nabors Industries, Inc., as issuer ("Nabors
                  Delaware"), Nabors Industries Ltd., as guarantor (the
                  "Company"), and J.P. Morgan Trust Company, National
                  Association (as successor to Bank One, N.A.), as trustee (the
                  "Trustee"), to the Indenture, dated as of February 5, 2001, as
                  amended, with respect to Nabors Delaware's Zero Coupon
                  Convertible Senior Debentures due 2021.

4.2               First Supplemental Indenture, dated as of October 25, 2004, by
                  and among Nabors Delaware, as issuer, the Company, as
                  guarantor, and the Trustee, to the Indenture, dated as of June
                  10, 2003, with respect to Nabors Delaware's Zero Coupon Senior
                  Exchangeable Notes due 2023.


                                       4

<PAGE>


                                    SIGNATURE


         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 hereunder duly authorized.



                                        NABORS INDUSTRIES LTD.



                                        By:    /s/ Daniel McLachlin
                                               ---------------------------------
                                        Name:  Daniel McLachlin
                                        Title: Vice President - Administration
                                               & Secretary


Date: October 26, 2004

                                       5

<PAGE>


                                  EXHIBIT INDEX


Exhibit No.       Description
-----------       -----------

4.1               Second Supplemental Indenture, dated as of October 25, 2004,
                  by and among Nabors Industries, Inc., as issuer ("Nabors
                  Delaware"), Nabors Industries Ltd., as guarantor (the
                  "Company"), and J.P. Morgan Trust Company, National
                  Association (as successor to Bank One, N.A.), as trustee (the
                  "Trustee"), to the Indenture, dated as of February 5, 2001, as
                  amended, with respect to Nabors Delaware's Zero Coupon
                  Convertible Senior Debentures due 2021.

4.2               First Supplemental Indenture, dated as of October 25, 2004, by
                  and among Nabors Delaware, as issuer, the Company, as
                  guarantor, and the Trustee, to the Indenture, dated as of June
                  10, 2003, with respect to Nabors Delaware's Zero Coupon Senior
                  Exchangeable Notes due 2023.


                                       6


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.1
<SEQUENCE>2
<FILENAME>h19341aexv4w1.txt
<DESCRIPTION>SECOND SUPPLEMENTAL INDENTURE
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.1

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

                            NABORS INDUSTRIES, INC.,

                                   as Issuer,

                                       and

                             NABORS INDUSTRIES LTD.,

                                  as Guarantor,


                             ZERO COUPON CONVERTIBLE

                           SENIOR DEBENTURES DUE 2021


                          SECOND SUPPLEMENTAL INDENTURE

                          DATED AS OF OCTOBER 25, 2004


                 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION
                        (as successor to Bank One, N.A.),

                                   as Trustee


--------------------------------------------------------------------------------
<PAGE>
                 This SECOND SUPPLEMENTAL INDENTURE (this "Second Supplemental
Indenture"), dated as of October 25, 2004, is among Nabors Industries, Inc., a
Delaware corporation, as issuer (the "COMPANY"), Nabors Industries, Ltd., a
Bermuda exempted company, as guarantor (the "GUARANTOR"), and J.P. Morgan Trust
Company, National Association (as successor to Bank One, N.A.), a national
banking association, as trustee (the "TRUSTEE").

                             RECITALS OF THE COMPANY

                  WHEREAS, the Company and the Trustee entered into an
Indenture, dated as of February 5, 2001, as amended and supplemented by the
First Supplemental Indenture thereto, dated as of June 21, 2002, and this Second
Supplemental Indenture (as so amended and supplemented, the "Indenture"),
pursuant to which the Company issued $1,381,200,000 in aggregate principal
amount at maturity of Zero Coupon Convertible Senior Debentures due 2021 (each a
"Security", collectively the "Securities");

                  WHEREAS, the Company and the Guarantor desire to execute this
Second Supplemental Indenture to add additional covenants by the Company for the
benefit of the Holders and to amend Sections 3.07 and 3.10 of the Indenture in
certain respects;

                  WHEREAS, Section 9.01(4) of the Indenture provides that the
Company and the Guarantor may enter into one or more supplemental indentures
without the written consent of any Holders to make any change that does not
adversely affect the right of any Holder;

                  WHEREAS, the Board of Directors of each of the Company and of
the Guarantor (or a duly authorized committee thereof) has duly adopted
resolutions authorizing the Company and the Guarantor, respectively, to execute
and deliver this Second Supplemental Indenture; and

                  WHEREAS, all the conditions and requirements necessary to make
this Second Supplemental Indenture, when duly executed and delivered, a valid
and binding agreement in accordance with its terms for the purposes herein
expressed, have been performed and fulfilled.


                  NOW, THEREFORE, THIS SECOND SUPPLEMENTAL INDENTURE
WITNESSETH:

                  For and in consideration of the premises provided for herein
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

<PAGE>
                                    ARTICLE 1

                              RELATION TO INDENTURE


         SECTION 1.1 RELATION TO INDENTURE.

                  This Second Supplemental Indenture constitutes an integral
part of the Indenture.

         SECTION 1.2 DEFINITIONS.

                  For all purposes of this Second Supplemental Indenture, except
as expressly provided for or unless the context otherwise requires:

                  (1) Capitalized terms used but not defined in this Second
Supplemental Indenture shall have the respective meanings assigned to them in
the Indenture; and

                  (2) All references in this Second Supplemental Indenture to
Articles and Sections, unless otherwise specified, refer to the corresponding
Articles and Sections of this Second Supplemental Indenture.

                                    ARTICLE 2

                           REDEMPTION AND REPURCHASES


         SECTION 2.1 EXCHANGE ARRANGEMENT ON CALL FOR REDEMPTION.

                  Section 3.07 of the Indenture is hereby amended by deleting it
in its entirety and substituting in place thereof the following:

                  Section 3.07. [INTENTIONALLY OMITTED].

         SECTION 2.2 EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL CHANGE
REPURCHASE NOTICE.

                  The last paragraph of Section 3.10 of the Indenture is hereby
amended by deleting it in its entirety and substituting in place thereof the
following:

                  There shall be no repurchase of any Securities pursuant to
         Section 3.08 hereof or repurchase pursuant to Section 3.09 hereof if
         there has occurred (prior to, on or after, as the case may be, the
         giving, by the Holders of such Securities, of the required Repurchase
         Notice or Option to Elect Repurchase Upon a Fundamental Change, as the


                                        2
<PAGE>
         case may be) and is continuing an Event of Default (other than a
         default in the payment of the Purchase Price or Fundamental Change
         Purchase Price, as the case may be, with respect to such Securities).


                                    ARTICLE 3

                              ADDITIONAL COVENANTS


         SECTION 3.1 PAYMENT OF PURCHASE PRICE IN CASH.

                  The following new Section 4.12 is hereby added to the
Indenture:

                  SECTION 4.12. PAYMENT OF PURCHASE PRICE IN CASH.

                  The Company and the Guarantor covenant and agree for the
         benefit of each Holder that in any Company Notice issued pursuant to
         Section 3.08 of the Indenture, the Company shall in all circumstances
         elect to pay the Purchase Price solely in cash.

         SECTION 3.2 CONVERSION PAYMENTS IN CASH.

                  The following new Section 4.13 is hereby added to the
Indenture:

                  SECTION 4.13. CONVERSION PAYMENTS IN CASH.

                  (a) The Company and the Guarantor covenant and agree for the
         benefit of each Holder that any written notice issued by the Company
         pursuant to Section 11.02 of the Indenture shall in all circumstances
         specify that the Company shall make payment solely in cash for all
         Securities submitted for conversion unless the Full Cash Price (as
         defined below) for a Security is greater than the Principal Amount
         thereof, in which case the Company shall (x) pay in cash the percentage
         of the Full Cash Price equal to the quotient obtained by dividing the
         Principal Amount of such Security by the Full Cash Price for such
         Security, and (y) pay the remaining portion of the payment for such
         Securities either, at the option of the Company, (i) by delivery of a
         number of shares of Common Stock equal to the quotient obtained by
         dividing (A) the excess of the Full Cash Price for such Security over
         the Principal Amount of such Security by (B) the Sale Price of the
         Common Stock for the Trading Day immediately prior to the related
         Conversion Date (and cash in lieu of fractional shares of Common Stock)
         or (ii) in cash. The "FULL CASH PRICE" shall be equal to the Sale Price
         of the Common Stock on the Trading Day immediately prior to the related
         Conversion Date, multiplied by the Conversion Rate in effect on such
         Trading Day.


                                        3
<PAGE>
                  (b) The calculation set forth in Section 4.13(a) shall be made
         by the Company and the Guarantor. The Trustee shall have no duty to
         make the calculation set forth in Section 4.13(a) and takes no
         responsibility for any calculation made by the Company or the Guarantor
         pursuant to Section 4.13(a). Each Exchange Agent (other than the
         Company or one of its Affiliates) shall have the same protection under
         this Section 4.13(b) as the Trustee.


                                    ARTICLE 4

                            MISCELLANEOUS PROVISIONS


         SECTION 4.1 RATIFICATION OF INDENTURE.

                  Except as expressly modified or amended hereby, the Indenture
continues in full force and effect and is in all respects confirmed and
preserved.

         SECTION 4.2 EFFECTIVENESS.

                  This Second Supplemental Indenture shall be effective as of
the date first written above.

         SECTION 4.3 CONFLICT WITH THE TRUST INDENTURE ACT.

                  If any provision of this Second Supplemental Indenture
modifies or excludes any provision of the Trust Indenture Act that is required
under such Act to be part of and govern this Second Supplemental Indenture, the
latter provision of the Trust Indenture Act shall control. If any provision
hereof modifies or excludes any provision of the Trust Indenture Act that may be
so modified or excluded, the latter provision of the Trust Indenture Act shall
be deemed to apply to this Second Supplemental Indenture, as so modified or
excluded, as the case may be.

         SECTION 4.4 SECURITIES DEEMED CONFORMED.

                  As of the date hereof, the provisions of each Security then
outstanding shall be deemed to be conformed, without the necessity for any
reissuance or exchange of such Security or any other action on the part of the
Holders, the Company, the Guarantor or the Trustee, so as to reflect this Second
Supplemental Indenture.

         SECTION 4.5 NO ADDITIONAL TRUSTEE OBLIGATIONS.

                  No duties, responsibilities or liabilities are assumed, or
shall be construed to be assumed, by the Trustee by reason of this Second
Supplemental Indenture. This Second


                                        4
<PAGE>
Supplemental Indenture is executed and accepted by the Trustee subject to all
the terms and conditions set forth in the Indenture with the same force and
effect as if those terms and conditions were repeated at length herein and made
applicable to the Trustee with respect hereto.

         SECTION 4.6 SUCCESSORS.

                  All agreements of the Company, the Guarantor and the Trustee
in this Second Supplemental Indenture and in the Indenture shall bind their
respective successors.

         SECTION 4.7 BENEFITS OF SECOND SUPPLEMENTAL INDENTURE.

                  Nothing in this Second Supplemental Indenture, express or
implied, shall give to any Person, other than the parties hereto and their
successors hereunder and the Holders, any benefit or any legal or equitable
right, remedy or claim under this Second Supplemental Indenture.

         SECTION 4.8 GOVERNING LAW.

                  THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE AND ENFORCE THIS SECOND SUPPLEMENTAL INDENTURE.

         SECTION 4.9 COUNTERPARTS.

                  This Second Supplemental Indenture may be executed in any
number of counterparts, each of which shall be an original, but all such
counterparts shall together constitute but one and the same instrument.

         SECTION 4.10 TRUSTEE.

                  The Trustee is not responsible in any manner whatsoever for or
in respect of the validity or sufficiency of this Second Supplemental Indenture
or for or in respect of the recitals contained herein, which are made solely by
the Company and the Guarantor.


                            [SIGNATURE PAGE FOLLOWS]


                                        5
<PAGE>
                  IN WITNESS WHEREOF, the parties hereto have cause this Second
Supple mental Indenture to be duly executed as of the first day and year first
written above.


                                           ISSUER:

                                           NABORS INDUSTRIES, INC.

                                           By: /s/ BRUCE P. KOCH
                                              ----------------------------------
                                                  Bruce P. Koch
                                                  Vice President-Finance and
                                                    Chief Financial Officer


                                           GUARANTOR:

                                           NABORS INDUSTRIES LTD.

                                           By: /s/ DANIEL MCLACHLIN
                                              ----------------------------------
                                                Daniel McLachlin
                                                Vice President - Administration


                                           TRUSTEE:

                                           J.P. MORGAN TRUST COMPANY,
                                           NATIONAL ASSOCIATION (as successor
                                           to Bank One, N.A.), as Trustee

                                           By: /s/ MARY JANE HENSON
                                              ----------------------------------
                                              Name: Mary Jane Henson
                                              Title: Vice President


                                        6

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-4.2
<SEQUENCE>3
<FILENAME>h19341aexv4w2.txt
<DESCRIPTION>FIRST SUPPLEMENTAL INDENTURE
<TEXT>
<PAGE>
                                                                     EXHIBIT 4.2

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

                            NABORS INDUSTRIES, INC.,

                                   as Issuer,

                                       and

                             NABORS INDUSTRIES LTD.,

                                  as Guarantor,


                               ZERO COUPON SENIOR

                           EXCHANGEABLE NOTES DUE 2023


                          FIRST SUPPLEMENTAL INDENTURE

                          DATED AS OF OCTOBER 25, 2004


                 J.P. MORGAN TRUST COMPANY, NATIONAL ASSOCIATION
                        (as successor to Bank One, N.A.),

                                   as Trustee

--------------------------------------------------------------------------------
<PAGE>
            This FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental
Indenture"), dated as of October 25, 2004, is among Nabors Industries, Inc., a
Delaware corporation, as issuer (the "COMPANY"), Nabors Industries, Ltd., a
Bermuda exempted company, as guarantor (the "GUARANTOR"), and J.P. Morgan Trust
Company, National Association (as successor to Bank One, N.A.), a national
banking association, as trustee (the "TRUSTEE").

                             RECITALS OF THE COMPANY

            WHEREAS, the Company and the Trustee entered into an Indenture,
dated as of June 10, 2003, as amended and supplemented by this First
Supplemental Indenture (as so amended and supplemented, the "Indenture"),
pursuant to which the Company issued $700,000,000 in aggregate principal amount
at maturity of Zero Coupon Senior Exchangeable Notes due 2023 (each a
"Security", collectively the "Securities");

            WHEREAS, the Company and the Guarantor desire to execute this First
Supplemental Indenture to add additional covenants by the Company for the
benefit of the Holders and to amend Sections 3.07 and 3.10 of the Indenture in
certain respects;

            WHEREAS, Section 9.01(4) of the Indenture provides that the Company
and the Guarantor may enter into one or more supplemental indentures without the
written consent of any Holders to make any change that does not adversely affect
the right of any Holder;

            WHEREAS, the Board of Directors of each of the Company and of the
Guarantor (or a duly authorized committee thereof) has duly adopted resolutions
authorizing the Company and the Guarantor, respectively, to execute and deliver
this First Supplemental Indenture; and

            WHEREAS, all the conditions and requirements necessary to make this
First Supplemental Indenture, when duly executed and delivered, a valid and
binding agreement in accordance with its terms for the purposes herein
expressed, have been performed and fulfilled.

            NOW, THEREFORE, THIS FIRST  SUPPLEMENTAL INDENTURE WITNESSETH:

            For and in consideration of the premises provided for herein by the
Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities, as follows:

<PAGE>
                                    ARTICLE 1

                              RELATION TO INDENTURE

      SECTION 1.1 RELATION TO INDENTURE.

            This First Supplemental Indenture constitutes an integral part of
the Indenture.

      SECTION 1.2 DEFINITIONS.

            For all purposes of this First Supplemental Indenture, except as
expressly provided for or unless the context otherwise requires:

            (1) Capitalized terms used but not defined in this First
Supplemental Indenture shall have the respective meanings assigned to them in
the Indenture; and

            (2) All references in this First Supplemental Indenture to Articles
and Sections, unless otherwise specified, refer to the corresponding Articles
and Sections of this First Supplemental Indenture.

                                    ARTICLE 2

                           REDEMPTION AND REPURCHASES

      SECTION 2.1 EXCHANGE ARRANGEMENT ON CALL FOR REDEMPTION.

            Section 3.07 of the Indenture is hereby amended by deleting it in
its entirety and substituting in place thereof the following:

                  Section 3.07 [INTENTIONALLY OMITTED].

      SECTION 2.2 EFFECT OF REPURCHASE NOTICE OR FUNDAMENTAL CHANGE
REPURCHASE NOTICE.

            The last paragraph of Section 3.10 of the Indenture is hereby
amended by deleting it in its entirety and substituting in place thereof the
following:

            There shall be no repurchase of any Securities pursuant to Section
      3.08 hereof or repurchase pursuant to Section 3.09 hereof if there has
      occurred (prior to, on or after, as the

                                       2
<PAGE>
      case may be, the giving, by the Holders of such Securities, of the
      required Repurchase Notice or Option to Elect Repurchase Upon a
      Fundamental Change, as the case may be) and is continuing an Event of
      Default (other than a default in the payment of the Purchase Price or
      Fundamental Change Purchase Price, as the case may be, with respect to
      such Securities).

                                    ARTICLE 3

                              ADDITIONAL COVENANTS

      SECTION 3.1 PAYMENT OF PURCHASE PRICE IN CASH.

            The following new Section 4.12 is hereby added to the Indenture:

            SECTION 4.12. PAYMENT OF PURCHASE PRICE IN CASH.

            The Company and the Guarantor covenant and agree for the benefit of
      each Holder that in any Company Notice issued pursuant to Section 3.08 of
      the Indenture, the Company shall in all circumstances elect to pay the
      Purchase Price solely in cash.

      SECTION 3.2 EXCHANGE PAYMENTS IN CASH.

            The following new Section 4.13 is hereby added to the Indenture:

            SECTION 4.13. EXCHANGE PAYMENTS IN CASH.

            (a) The Company and the Guarantor covenant and agree for the benefit
      of each Holder that any written notice issued by the Company pursuant to
      Section 11.02 of the Indenture shall in all circumstances specify that the
      Company shall make payment solely in cash for all Securities submitted for
      exchange unless the Full Cash Price (as defined below) for a Security is
      greater than the Principal Amount thereof, in which case the Company shall
      (x) pay in cash the percentage of the Full Cash Price equal to the
      quotient obtained by dividing the Principal Amount of such Security by the
      Full Cash Price for such Security, and (y) pay the remaining portion of
      the payment for such Securities either, at the option of the Company, (i)
      by delivery of a number of Common Shares equal to the quotient obtained by
      dividing (A) the excess of the Full Cash Price for such Security over the
      Principal Amount of such Security by (B) the average of the Sales Prices
      of the Common Shares for the five Trading Days immediately following the
      date on which the Company notifies the Holders that it has elected to pay
      cash in lieu of delivering Common Shares (and cash in lieu of fractional
      Common Shares) or (ii) in cash. The "FULL CASH PRICE" shall be equal to
      the average of the Sale Prices of the Common Shares for the five Trading
      Days beginning on the Trading Day immediately following the date on which
      the Company notifies the Holders that it has elected to pay cash in lieu
      of delivering Common Shares with

                                       3
<PAGE>
      respect to all or part of such exchanges, multiplied by the Exchange Rate
      on such notification date.

            (b) The calculation set forth in Section 4.13(a) shall be made by
      the Company and the Guarantor. The Trustee shall have no duty to make the
      calculation set forth in Section 4.13(a) and takes no responsibility for
      any calculation made by the Company or the Guarantor pursuant to Section
      4.13(a). Each Exchange Agent (other than the Company or one of its
      Affiliates) shall have the same protection under this Section 4.13(b) as
      the Trustee.

                                    ARTICLE 4

                            MISCELLANEOUS PROVISIONS

      SECTION 4.1 RATIFICATION OF INDENTURE.

            Except as expressly modified or amended hereby, the Indenture
continues in full force and effect and is in all respects confirmed and
preserved.

      SECTION 4.2 EFFECTIVENESS.

            This First Supplemental Indenture shall be effective as of the date
first written above.

      SECTION 4.3 CONFLICT WITH THE TRUST INDENTURE ACT.

            If any provision of this First Supplemental Indenture modifies or
excludes any provision of the Trust Indenture Act that is required under such
Act to be part of and govern this First Supplemental Indenture, the latter
provision of the Trust Indenture Act shall control. If any provision hereof
modifies or excludes any provision of the Trust Indenture Act that may be so
modified or excluded, the latter provision of the Trust Indenture Act shall be
deemed to apply to this First Supplemental Indenture, as so modified or
excluded, as the case may be.

      SECTION 4.4 SECURITIES DEEMED CONFORMED.

            As of the date hereof, the provisions of each Security then
outstanding shall be deemed to be conformed, without the necessity for any
reissuance or exchange of such Security or any other action on the part of the
Holders, the Company, the Guarantor or the Trustee, so as to reflect this First
Supplemental Indenture.

                                       4
<PAGE>
      SECTION 4.5 NO ADDITIONAL TRUSTEE OBLIGATIONS.

            No duties, responsibilities or liabilities are assumed, or shall be
construed to be assumed, by the Trustee by reason of this First Supplemental
Indenture. This First Supplemental Indenture is executed and accepted by the
Trustee subject to all the terms and conditions set forth in the Indenture with
the same force and effect as if those terms and conditions were repeated at
length herein and made applicable to the Trustee with respect hereto.

      SECTION 4.6 SUCCESSORS.

            All agreements of the Company, the Guarantor and the Trustee in this
First Supplemental Indenture and in the Indenture shall bind their respective
successors.

      SECTION 4.7 BENEFITS OF FIRST SUPPLEMENTAL INDENTURE.

            Nothing in this First Supplemental Indenture, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this First Supplemental Indenture.

      SECTION 4.8 GOVERNING LAW.

            THE LAW OF THE STATE OF NEW YORK SHALL GOVERN AND BE USED TO
CONSTRUE AND ENFORCE THIS FIRST SUPPLEMENTAL INDENTURE.

      SECTION 4.9 COUNTERPARTS.

            This First Supplemental Indenture may be executed in any number of
counterparts, each of which shall be an original, but all such counterparts
shall together constitute but one and the same instrument.

      SECTION 4.10 TRUSTEE.

            The Trustee is not responsible in any manner whatsoever for or in
respect of the validity or sufficiency of this First Supplemental Indenture or
for or in respect of the recitals contained herein, which are made solely by the
Company and the Guarantor.


                       [SIGNATURE PAGE FOLLOWS]

                                       5
<PAGE>
            IN WITNESS WHEREOF, the parties hereto have cause this First
Supplemental Indenture to be duly executed as of the first day and year first
written above.

                                    ISSUER:

                                    NABORS INDUSTRIES, INC.

                                    By: /s/ BRUCE P. KOCH
                                        ------------------------------
                                        Bruce P. Koch
                                        Vice President-Finance and
                                          Chief Financial Officer


                                    GUARANTOR:

                                    NABORS INDUSTRIES LTD.

                                    By: /s/ DANIEL MCLACHLIN
                                        ------------------------------
                                        Daniel McLachlin
                                        Vice President - Administration


                                    TRUSTEE:

                                    J.P. MORGAN TRUST COMPANY,
                                    NATIONAL ASSOCIATION (as successor
                                    to Bank One, N.A.), as Trustee

                                    By: /s/ MARY JANE HENSON
                                        ------------------------------
                                        Name:  Mary Jane Henson
                                        Title: Vice President

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