Special Purpose Acquisition Companies

12 Months Ended

Dec. 31, 2023

Special Purpose Acquisition Companies

Special Purpose Acquisition Companies

Note 21 Special Purpose Acquisition Companies

As of December 31, 2023 Nabors is the co-sponsor of one SPAC. The SPAC is a consolidated VIE included in the accompanying consolidated financial statements under Restricted cash held in trust and Redeemable noncontrolling interest in subsidiary. The SPAC’s funds are held in an interest-bearing U.S. based trust account (“Trust Account”) and are invested in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act, which invests only in direct U.S. government treasury obligations. The funds in the trust account will only be released to the SPAC upon completion by the SPAC of a business combination or in connection with redemptions of any of the redeemable common shares, except with respect to interest earned on the funds which may be withdrawn to pay the SPAC’s taxes.

The company accounts for the non-controlling interest in the SPAC as subject to possible redemption in accordance with FASB ASC Topic 480 “Distinguishing Liabilities from Equity.” The SPAC’s common stock features certain redemption rights, which are considered to be outside the company’s control and subject to occurrence of uncertain future events. Nabors will recognize any future changes in redemption value immediately as they occur – i.e., adjusting the carrying amount of the instrument to its current redemption amount at each reporting period.

NETC

In November 2021, NETC cosponsored by Nabors and Greens Road Energy LLC completed its’ initial public offering. Greens Road Energy LLC is owned by certain members of Nabors’ board of directors and management team. As part of the initial public offering of NETC and subsequent private placement warrant transactions, $281.5 million was deposited in a Trust Account. In February 2023, NETC entered into a definitive agreement for a business combination with Vast Renewables Limited (“Vast”), a development-stage company specializing in the design and manufacturing of concentrated solar thermal power (CSP) systems.

In December 2023, NETC and Vast completed the business combination.  As a result, Nabors owns approximately 15% of Vast’s ordinary shares, 7.4 million warrants of Vast, which are exercisable for one whole share of Vast at a price of $11.50 per share (“Vast Warrants”), and is entitled to up to approximately 2.4 million ordinary shares of Vast that are eligible to be received by Nabors in three equal increments, if Vast stock price reaches $12.50, $15.00 and $17.50 (“Vast Earnout Shares”).  Nabors also has two representatives on the board of Vast.  As a result of our ownership percentage and board representation, Nabors has significant influence over Vast and will account for its investment in Vast as an equity method investment.  Our equity method investment, the Vast Warrants and the Vast Earnout Shares, were all recorded at fair market value at the time of closing, and the financial statements of NETC were deconsolidated from the Nabors consolidated financial statements.  The impact of this transaction and subsequent application of equity method of accounting for our investment in Vast, and the fair value accounting for the Vast Warrants and Vast Earnout Shares, was a net gain for the quarter ended December 31, 2023, of approximately $7.2 million, which is included in the accompanying consolidated income statement under Other, net.  The Vast Warrants and Vast Earnout Shares will be marked to market on an ongoing basis.

The following table summarizes NETC’s effects on changes in non-controlling interest subject to possible redemption.

	2023		2022
	(In thousands)
Balance, beginning of year	$	284,841	$	281,520
Net earnings		5,540		3,321
Nabors deemed dividends to SPAC public shareholders		3,055		—
Noncontrolling interest deemed dividends to SPAC public shareholders		1,774		—
Redemptions and distributions of Trust Account		(295,210)		—
Balance as of December 31	$	—	$	284,841

NETC II

In July 2023, NETC II co-sponsored by Nabors and Greens Road Energy II LLC, completed its initial public offering of 30,500,000 units at $10.00 per unit, generating gross proceeds of approximately $305.0 million. Greens Road Energy II LLC is owned by certain members of Nabors’ management team and board members. Simultaneously with the closing of the IPO, NETC II completed the private sale of an aggregate of 9,540,000 warrants for an aggregate value of $9.5 million and issued unsecured promissory notes for an aggregate amount of $3.1 million. As part of the initial public offering of NETC II and subsequent private placement warrant transactions, $308.1 million was deposited in a Trust Account on July 18, 2023. As of December 31, 2023, the Trust Account balance was $315.5 million.

Approximately $315.5 million of non-controlling interest subject to possible redemption is presented at full redemption value as temporary equity, outside of the stockholders’ equity section in the accompanying consolidated financial statements as of December 31, 2023.

The following table summarizes NETC II’s effects on changes in non-controlling interest subject to possible redemption.

	2023
	(In thousands)
Balance, beginning of year	$	—
Initial public offering		294,474
Net earnings		7,438
Nabors deemed dividends to SPAC public shareholders		5,583
Noncontrolling interest deemed dividends to SPAC public shareholders		7,993
Balance as of December 31	$	315,488