Investments in Unconsolidated Affiliates

9 Months Ended

Sep. 30, 2012

Investments in Unconsolidated Affiliates

Investments in Unconsolidated Affiliates

Note 8 Investments in Unconsolidated Affiliates

We have several unconsolidated affiliates that are integral to our operations.  For a full description, refer to Note 10 — Investments in Unconsolidated Affiliates in our 2011 Annual Report.

At September 30, 2012 and December 31, 2011, our consolidated balance sheets reflect our investments in unconsolidated affiliates accounted for using the equity method totaling $70.2 million and $371.0 million, respectively.  In addition, assets held for sale include investments in unconsolidated affiliates accounted for using the equity method totaling $13.7 million at each of September 30, 2012 and December 31, 2011, respectively.

During each quarter of 2012 our unconsolidated U.S. oil and gas joint venture has recorded full-cost ceiling test writedowns of which we have recognized $310.0 million during the nine months ended September 30, 2012 representing our proportionate share.  The full-cost ceiling test writedowns during 2012 occurred as a result of the sustained low natural gas price environment when using the prior 12-month average natural gas price.  We recorded these writedowns against the carrying value of our investment and, as of September 30, 2012, our equity investment has been written down to a zero balance.

Presented below is summarized income statement (loss) information for our unconsolidated U.S. oil and gas joint venture:

	Three Months EndedSeptember 30,					Nine Months EndedSeptember 30,
	2012			2011		2012			2011
	(In thousands)
Gross revenues	$	91,445		$	65,985	$	216,914		$	169,738
Gross margin	$	63,462		$	51,640	$	146,519		$	133,858
Net income (loss)	$	(240,414	)	$	15,127	$	(649,926	)	$	53,918
Nabors’ earnings (losses) from our U.S. oil and gas joint venture (1)	$	(98,805	)	$	34,909	$	(301,800	)	$	56,285

(1)During the three and nine months ended September 30, 2012, our unconsolidated U.S. oil and gas joint venture recorded full-cost ceiling test writedowns, of which our proportionate share was $96.3 million and $310.0 million, respectively.  The writedowns are included in our Oil and Gas operating segment.