And you saw in this quarter something quite interesting, which was even though our rig count dropped, NDS actually grew in third party business, which is interesting in and of itself, which proves the concept that what we’re trying to unlock with this stuff is something that actually has a broader applicability away from just Nabors rigs. So, the answer is yes, I do believe as the market matures, as the big players take a bigger position in the U.S. market and they are more technology focused, that there isn’t an opportunity to gain market share. So, one example of that is the focus on with the consolidation has occurred. I think one of the things people will be focused on is improving EOR, not just drilling wealth faster. As the industry’s done a great job drilling wells very, very quickly.
And at a certain point there’s going to be a lot of diminishing returns. So, I think some of the metrics are, may go to looking at EOR per lateral foot drilled, and you’ve actually seen some of the big guys talk about that increasing lateral length as much as five miles and that kind of stuff benefits Nabors, because we’ve pre-invested in that move. We built the M 1000 rig, which was the successors to the X-ray a couple years ago, has a million-pound hook load that’s perfectly designed for these longer lateral lengths. We also introduced to the market a new top drive that has the pious torque available that can actually handle a five-mile lateral. So, the company’s positioned itself to capture that moment. And I think when as the market moves in that direction that all these were betts, we made the past couple years as the market moves in that direction, I think it help would help us also with share.
So, that’s a pretty long-winded answer, but I hope — it’s response is to what you wanted.
Dan Kutz: No, that’s great. It was a long-winded question, so, thank you. And then, I guess just another one on the international space. So, if I back out the SANAD rates that are working today, you guys are somewhere in the low, mid-seventies. And if I look back to kind of the pre-pandemic period, when the SANAD program hadn’t kicked off, you guys, international activity was another dozen, two dozen above where your ex nod activity is now. Well, what I’m basically trying to frame or understand is like, what do you think the potential is in the international space just to kind of get back to the level of investment and activity that’s required to kind of get back to a normal production level? And then on top of that you have all of these capacity growth targets that a lot of the Middle East players are have put out there.
But I guess, I’m just trying to understand if there’s a historical period that you would point to that you think could be the opportunity for international activity upside outside of SANAD. And again, I appreciate you guys have given us a ton of color on your visibility over the next two years, but I’m just trying to understand what like the ultimate opportunity could be for international rig redeployments if, aside from the substantial SANAD opportunity.
Tony Petrello: Well, I gave you a pretty big list of those opportunities and it is really going to be a question of our prioritizing where we want to allocate the capa, what’s best served is, what a way I would put it. And as we think about that, some of the other logic I’ve talked about, which is technology and NDS also applies to international in terms of which opportunities we choose to pursue. So, it’s going to be a balance in terms of allocation of capital and what we want to pursue in terms of how fast we want to grow. But I think right now you’re seeing an environment where there’s not going to be a dear of opportunities. The question is what are the returns on capital are good enough to meet what our hurdle rates and what are they such that it makes 101 equal three when we pursue that opportunity. And I’ll let William add anything to that.
William Restrepo : I think, Latin America, which is under — I would say, estimated piece of the pie, I think, we have real opportunities to grow in places like Argentina and Columbia where we already are the strongest player and in Mexico on the platform rig market, we’re getting a lot of pressure from Pix to add rigs in that market as well. So, I don’t even want to mention Venezuela because it’s still a little bit up in the air and whether, how much the sanctions are going to be removed and how much some of our clients are going to go back to that. But we do have real opportunity. We have four rigs in prime condition in Venezuela waiting for a resumption and activity by some of the foreign players. And then we have seen places like, Kazakhstan that have gone down, but we don’t know when that will come back.
But I think, if it does, we’re ready for that as well. And then Kuwait, we have some very important tenders coming and we are very well positioned in that market as well. Now we mentioned that we got an award in an Algeria for 4 rigs, which is a very impactful win for us. And we are looking at other places in North Africa as well to expand. So those are the areas where you would, where you would expect to see most of the uptick in Nabors. Now we do have to be conscious that we cannot address all the opportunities that are out there. So, we have to be selective. We have to focus, as Tony said, on places where you can get technology on top of the rigs. And we have to make sure we have a CapEx program for next year. That makes sense in terms of our free cash flow objectives.
Operator: And the next question is a follow up from Derek Podhaizer with Barclays.
Derek Podhaizer: I just wanted to follow up on the 11 rig highlighted international to be deployed by the end of next year. Is that a net number or, I’m just wondering how we should think about that. Will we see some offsets, maybe some rig releases in other regions? I know you highlighted Kuwait and Columbia as areas of softness currently. Just thinking about if that 11 is completely incremental or we should think the 11 minus something.
William Restrepo: Listen, the 11 is stuff that we have in hand already, but we have others that we have very high probability of getting. So, the 11 could be higher right now. It’s true that in some places it could be some releases somewhere. But again, we have very long-term contracts all over the place, so right now we’re not expecting to see reductions in other places.
Derek Podhaizer : Got it. Okay. Very helpful. And then just, I know capital allocation strategy talked about it being towards debt reduction repayment, but considering just how constructive you are on NDS, I’m just curious how we should think about M&A opportunities, whether it’s a Tuck-in or Bolt-on as far as technology or anybody else out there that can fold right into the under the Nabors solution. Just thinking about M&A opportunities and NDS how we should think about that.
William Restrepo: I think you’ve hit on something that clearly, it’s been on our radar for quite a while, and we have been looking and we’ve added some small software stuff that you haven’t really seen much visibility to. That’s become part of our product lines as well. So, kind of add to our internal growth with kind of small tuck-in acquisitions. And then we’ve also embarked on partnerships as well. So, our example is Cova out there, which has a software product that we competed with, but together we think we can actually do one-on-one equals four. And the marketplace is not a big marketplace, right? I mean, there’s only x 100 — 700 rigs, what in the international, I mean, altogether maybe 1500 rigs that are target rigs. It’s not like the Microsoft and Apple, which have a gazillion customers out there.
So, for the technology to work, it makes sense to try to work with incumbents and see if there’s a way to make things work better. And so, we’ve embarked on that path with some of these deals we’ve done and we’re open to it. We are looking at other similar deals, not just acquisitions.
