Joint Ventures

9 Months Ended

Sep. 30, 2019

Joint Ventures

Joint Ventures

Note 3 Joint Ventures

During 2016, we entered into an agreement with Saudi Aramco to form a joint venture known as SANAD to own, manage and operate onshore drilling rigs in the Kingdom of Saudi Arabia. SANAD is equally owned by Saudi Aramco and Nabors.

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. 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 condensed 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 condensed consolidated balance sheet, is presented below.

	September 30,		December 31,
	2019		2018
	(In thousands)
Assets:
Cash and cash equivalents	$	273,417	$	211,618
Accounts receivable		76,836		73,699
Other current assets		20,153		17,198
Property, plant and equipment, net		440,794		457,963
Other long-term assets		15,254		36,583
Total assets	$	826,454	$	797,061
Liabilities:
Accounts payable	$	67,000	$	60,087
Accrued liabilities		17,064		8,530
Total liabilities	$	84,064	$	68,617