Note 3 Joint Ventures

During 2016, we entered into an agreement with Saudi Aramco to form SANAD, a new joint venture, to own, manage and operate onshore drilling rigs in the Kingdom of Saudi Arabia. SANAD, which is equally owned by Saudi Aramco and Nabors, began operations during the fourth quarter of 2017.

During 2017, Nabors and Saudi Aramco each contributed $20 million in cash for the purpose of capitalizing the joint venture upon formation. In addition, since inception Nabors and Saudi Aramco have each contributed a combination of drilling rigs, drilling rig equipment and other assets, including cash, each with a value of approximately $394 million to the joint venture. During September 2018, we contributed drilling rigs and equipment with a value of approximately $190 million. On October 4, 2018, we received Saudi Aramco’s matching contribution of drilling rigs and other assets, including cash. The contributions were received in exchange for redeemable ownership interests which accrue interest annually, have a twenty-five year maturity and are required to be converted to authorized capital should certain events occur, including the accumulation of specified losses. In the accompanying consolidated balance sheet, Nabors has reported Saudi Aramco’s share of authorized capital as a component of noncontrolling interest in equity and Saudi Aramco’s share of the redeemable ownership interests as redeemable noncontrolling interest in subsidiary, classified as mezzanine equity. The accrued interest on the redeemable ownership interest is a non-cash financing activity and is reported as an increase in the redeemable noncontrolling interest in subsidiary line in our condensed consolidated balance sheet.

The condensed balance sheet of SANAD, as included in our consolidated balance sheet, is presented below.


	September 30,		December 31,
(In thousands)	2018		2017
Assets:
Cash and cash equivalents	$	48,591	$	94,496
Accounts receivable		54,135		10,580
Other current assets		9,760		10,834
Property, plant and equipment, net		420,742		130,218
Other long-term assets		19,696		23,091
Total assets	$	552,924	$	269,219
Liabilities:
Accounts payable	$	56,515	$	7,236
Accrued liabilities		5,251		2,592
Total liabilities	$	61,766	$	9,828

The assets of SANAD cannot be used by Nabors for general corporate purposes. Additionally, creditors of SANAD do not have recourse to other assets of Nabors.