e424b3
 

Filed Pursuant to Rule 424(b)(3)
Registration Nos. 333-136797
333-136797-01
Prospectus Supplement No. 1
(To Prospectus Dated August 21, 2006)
     
NABORS INDUSTRIES, INC.   NABORS INDUSTRIES LTD.
$2,750,000,000
0.94% SENIOR EXCHANGEABLE NOTES DUE 2011
GUARANTEED BY NABORS INDUSTRIES LTD.
 
COMMON SHARES, PAR VALUE U.S.$0.001 PER SHARE, OF NABORS INDUSTRIES LTD.
ISSUABLE UPON EXCHANGE OF THE NOTES
 
GUARANTEE OF NABORS INDUSTRIES LTD.
 
     This prospectus supplement, which supplements the prospectus filed by Nabors Industries, Inc. (the “Company”) and Nabors Industries Ltd. (“Nabors”) on August 21, 2006, will be used by selling security holders to resell the notes and the common shares issuable upon the exchange of the notes. You should read this prospectus supplement in conjunction with the related prospectus, which is to be delivered by selling security holders to prospective purchasers along with this prospectus supplement.
 
     NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
 
     You should read and rely only on the information contained in the prospectus supplement and the related prospectus, together with those documents incorporated by reference, as described on page (iii) of the prospectus under “Incorporation By Reference.” Neither the Company, Nabors nor any selling security holder has authorized any person to provide you with different or additional information. If anyone provides you with different or additional information, you should not rely on it. The selling security holders are offering to sell, and are seeking offers to buy, the securities only in jurisdictions where offers and sales are permitted. Neither this prospectus supplement nor the related prospectus constitutes an offer to sell, or a solicitation of an offer to buy, any securities by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation. You should not assume that the information contained in this prospectus supplement or the related prospectus is accurate as of any date other than the date on the front cover of the respective document.
Investing in the notes or Nabors’ common shares issuable upon exchange of the notes involves
risks. See “Risk Factors,” beginning on page 5 of the related prospectus.
 
The date of this prospectus is September 7, 2006.

 

 

     The information set forth in the following table modifies and supplements the information set forth in the table appearing under the heading “Selling Security Holders” in the related prospectus. The information is based on information provided to the Company and Nabors by or on behalf of the selling security holders on or prior to September 6, 2006 and has not been independently verified by the Company and Nabors. Since the date on which each selling security holder identified below provided this information, any of these selling security holders may have sold, transferred or otherwise disposed of all or a portion of its securities in transactions exempt from the registration requirements of the Securities Act or pursuant to the prospectus to which this prospectus supplement relates. The selling security holders may from time to time offer and sell pursuant to the prospectus or supplements thereto any or all of the securities. Because the selling security holders are not obligated to sell securities, the Company cannot estimate the amount of the notes or how many shares of common stock that the selling security holders will hold upon consummation of any such sales. Information about other selling security holders, if any, will be provided in one or more prospectus supplements or post-effective amendments to the registration statement of which the prospectus is a part.
                                         
    0.94% Senior Exchangeable        
    Notes Due 2011     Common Shares  
    Principal Amount of     Percentage of     Nabors'              
    Notes Beneficially     Notes     Common Shares     Number of     Number of  
    Owned and Offered     Outstanding     Owned Prior to     Shares Offered     Shares Held  
Name   Hereby(1)     Before Offering     the Offering(1)(2)     for Sale(3)     After Offering  
Allstate Insurance Company (4)
     11,000,000       *       421,494       240,043       181,450  
Allstate Life Insurance Company (4)
     6,500,000       *       170,374       141,843       28,530  
Altima Fund SICAV PLC In Respect of Trinity Sub Fund
     3,500,000       *       76,377       76,377       0  
AM International E MAC 63 Ltd.
     7,756,000       *       169,252       169,252       0  
AM Master Fund I, LP
     14,532,000       *       317,118       317,118       0  
Aviva Life Insurance Co. (29)(41)
     1,750,000       *       38,188       38,188       0  
Bancroft IAM Limited (30)
     5,000,000       *       109,110       109,110       0  
Bear Stearns & Co. Inc. (5)
     20,000,000       *       1,481,90       436,442       1,045,463  
BNP Paribas Arbitrage (6)
     17,000,000       *       370,975       370,975       0  
CGNU Life Fund (31)(41)
     3,200,000       *       69,830       69,830       0  
Chrysler Corporation Master Retirement Trust (7)(8)
     2,845,000       *       161,227       62,083       99,143  
Citigroup Global Markets Inc. (9)
     54,939,000       2.00 %     1,198,884       1,198,884       0  
Commercial Union Life Fund (32)(41)
     4,000,000       *       87,288       87,288       0  
Credit Suisse Securities, LLC (10)
     52,545,000       1.91 %     1,146,642       1,146,642       0  
Delaware Public Employees Retirement System (8)(11)
     1,160,000       *       65,684       25,313       40,370  
Delta Airlines Master Trust — CV (8)(12)
     565,000       *       33,727       12,329       21,397  
Delta Pilots Disability & Survivorship Trust —CV (8)(13)
     345,000       *       19,654       7,528       12,125  
F.M. Kirby Foundation, Inc. (8)(14)
     510,000       *       28,818       11,129       17,688  
Goldman Sachs Profit Sharing Master Trust (45)
     247,000       *       5,390       5,390       0  
Institutional Benchmark Series (Master Feeder) Limited in Respect of Electra Series c/o Quattro Fund (33)
     1,210,000       *       33,537       26,404       7,132  
International Truck & Engine Corporation Non-Contributory Retirement Plan Trust (8)(15)
     275,000       *       15,701       6,001       9,700  
International Truck & Engine Corporation Retiree Health Benefit Trust (8)(16)
     165,000       *       9,306       3,600       5,706  
International Truck & Engine Corporation Retirement Plan for Salaried Employees Trust (8)(17)
     150,000       *       8,551       3,273       5,278  
Lehman Brothers, Inc. (18)
     58,000,000       2.11 %     1,265,681       1,265,681       0  
Lyxor/AM Investment Fund Ltd.
     2,212,000       *       48,270       48,270       0  
Microsoft Capital Group, L.P. (8)(19)
     180,000       *       20,475       3,927       16,547  
MSS Convertible Arbitrage Fund c/o TQA Investors, LLC (20)
     42,000       *       916       916       0  
Norwich Union Life and Pensions (34)(41)
     5,600,000       *       122,203       122,203       0  
OCM Convertible Trust (8)(21)
     990,000       *       61,404       21,603       39,800  
OCM Global Convertible Securities Fund (8)(22)
     310,000       *       17,463       6,764       10,698  

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    0.94% Senior Exchangeable        
    Notes Due 2011     Common Shares  
    Principal Amount of     Percentage of     Nabors'              
    Notes Beneficially     Notes     Common Shares     Number of     Number of  
    Owned and Offered     Outstanding     Owned Prior to     Shares Offered     Shares Held  
Name   Hereby(1)     Before Offering     the Offering(1)(2)     for Sale(3)     After Offering  
Oz Special Funding (OZMD) L.P. (35)
     19,753,000       *       431,051       431,051       0  
Partners Group Alternative Strategies PCC Limited, Red Delta Cell c/o Quattro Fund (36)
     2,300,000       *       57,323       50,190       7,132  
Partner Reinsurance Company Ltd. (8)
     1,590,000       *       34,697       34,697       0  
Quattro Fund Ltd. (37)(44)
     18,190,000       *       518,199       396,944       121,255  
Quattro Multistrategy Masterfund LP (38)(44)
     2,300,000       *       57,323       50,190       7,132  
Qwest Occupational Health Trust (8)(23)
     205,000       *       13,318       4,473       8,844  
Qwest Pension Trust (8)(24)
     675,000       *       38,267       14,729       23,537  
RMF Umbrella SICAV (25)
     1,200,000       *       26,186       26,186       0  
The Travelers Indemnity Company (8)
     2,530,000       *       55,209       55,209       0  
TQA Master Fund Ltd. (20)
     2,708,000       *       59,094       59,094       0  
TQA Master Plus Fund Ltd. (20)
     1,256,000               27,408       27,408       0  
UnumProvident Corporation (8)(26)
     380,000       *       21,416       8,292       13,124  
Vanguard Convertible Securities Fund, Inc. (8)(27)
     4,820,000       *       273,085       105,182       167,902  
Virginia Retirement System (8)(28)
     2,260,000       *       128,062       49,317       78,744  
Wachovia Capital Markets LLC (39)
     25,000,000       *       545,552       545,552       0  
Waterstone Market Neutral MAC 51, Ltd. (40)(42)
     27,885,000       *       608,509       608,509       0  
Waterstone Markets Neutral Master Fund, Ltd. (40)(43)
     46,615,000       1.70 %     1,017,237       1,017,237       0  
Zurich Institutional Benchmarks Master Fund Ltd. c/o TQA Investors, LLC (20)
     640,000       *       13,966       13,966       0  
 
*   less than one percent
 
(1)   Includes Nabors’ common shares issuable upon exchange of the notes based on the initial exchange rate of 21.8221 common shares per $1,000 principal amount of the notes. However, on exchange, the principal amount of the notes will be paid in cash and the exchange rate is subject to adjustment as described under “Description of the Notes — Exchange of Notes.” As a result, the number of common shares issuable upon exchange of the notes may increase or decrease in the future.
 
(2)   In calculating the Number of Nabors’ Common Shares Owned Prior to the Offering, we treated as outstanding the number of Nabors’ common shares issuable upon exchange of all of that particular holder’s notes in accordance with the applicable referenced exchange rates.
 
(3)   Shares selling security holders may, but are not obligated, to sell consist of Nabors’ common shares issuable upon exchange of the notes, assuming exchange of all of the holder’s notes into Nabors’ common shares at an exchange rate of 21.8221 common shares per $1,000 principal amount of the notes and a cash payment in lieu of any fractional share interest. However, on exchange, the principal amount of the notes will be paid in cash and the exchange rate is subject to adjustment as described under “Description of the Notes — Exchange of Notes.”
 
(4)   Allstate Insurance Company (“AIC”) is a subsidiary of Allstate Corporation, which is a publicly traded company on the New York Stock Exchange. AIC is the parent company of Allstate Life Insurance Company (“ALIC”). AIC, directly and through its subsidiaries, is one of the largest property and liability insurance companies in the United States. ALIC, directly and through its subsidiaries, is one of the 20 largest writers of life insurance and annuity products in the United States. Allstate Investments LLC, an affiliate of AIC and ALIC, is the investment manager for these entities. The Public Equity Group of Allstate Investments, LLC, which has responsibility for the respective securities, is not aware of any positions, offices or other material relationships involving AIC or its subsidiaries which should be disclosed in response to the questions contained in the selling security holder questionnaire. No independent investigation has been made, however, as to whether there are or may have been any such transactions as a result of insurance activities, business or marketing relationships, or investment activities of other groups or divisions or actions with respect to or by such investee companies. AIC and ALIC are affiliates of registered broker-dealers. ALIC owns a 50% equity interest in Allstate Distributors, LLC and ALFS, Inc. and Allstate Financial Services LLC, are wholly-owned subsidiaries of ALIC. These entities are NASD members.
 
    The number of Nabors’ Common Shares Owned Prior to the Offering by Allstate Insurance Company includes $5,750,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes) and 17,400 shares of Nabors’ common shares.
 
    The number of Nabors’ Common Shares Owned Prior to the Offering by Allstate Life Insurance Company includes $1,000,000

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    principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(5)   The number of Nabors’ Common Shares Owned Prior to the Offering by Bear Stearns & Co. Inc. (“Bear Stearns”) includes 1,045,463 shares of Nabors’ common shares. Bear Stearns is a subsidiary of The Bear Stearns Companies Inc., a publicly traded company on the New York Stock Exchange, and has identified itself as a broker-dealer.
 
(6)   BNP Paribas Arbitrage is a subsidiary of BNP Paribas, SA, a publicly-held entity and investment company registered under the Investment Company Act of 1940, and an affiliate of BNP Paribas Securities Corp., a NASD member.
 
(7)   The number of Nabors’ Common Shares Owned Prior to the Offering by Chrysler Corporation Master Retirement Trust includes $3,475,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(8)   Oaktree Capital Management LLC (“Oaktree”) is the investment manager of the respective securities. Inasmuch as Oaktree may not be aware of all of the investment and other activities of the selling security holders, its responses to the selling security holder Questionnaire is based solely upon Oaktree’s actual knowledge as of the date thereof, without any inquiry.
 
(9)   Citigroup Global Markets, Inc. (“Citigroup”) is a subsidiary of Citigroup Inc., a publicly-held entity and has identified itself as a broker-dealer. Citigroup participated as co-book runner for the private offering of the securities.
 
(10)   Credit Suisse Securities LLC has identified itself as a broker-dealer. Jeff Andreski holds voting control and disposition power over the respective securities.
 
(11)   The number of Nabors’ Common Shares Owned Prior to the Offering by Delaware Public Employees Retirement System includes $1,415,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(12)   The number of Nabors’ Common Shares Owned Prior to the Offering by Delta Air Lines Master Trust — CV includes $750,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(13)   The number of Nabors’ Common Shares Owned Prior to the Offering by Delta Pilots Disability & Survivorship Trust — CV includes $425,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(14)   The number of Nabors’ Common Shares Owned Prior to the Offering by F.M. Kirby Foundation, Inc. includes $620,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(15)   The number of Nabors’ Common Shares Owned Prior to the Offering by International Truck & Engine Corporation Non-Contributory Retirement Plan Trust includes $340,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(16)   The number of Nabors’ Common Shares Owned Prior to the Offering International Truck & Engine Corporation Retiree Health Benefit Trust includes $200,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(17)   The number of Nabors’ Common Shares Owned Prior to the Offering by International Truck & Engine Corporation Retirement Plan for Salaried Employees Trust includes $185,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(18)   Lehman Brothers Inc. identified itself as a publicly-held entity, a broker-dealer and an investment company registered under the Investment Company Act of 1940, as amended.

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(19)   The number of Nabors’ Common Shares Owned Prior to the Offering by Microsoft Capital Group, L.P. includes $580,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(20)   TQA Investors, LLC is the investment advisor for the selling security holders.
 
(21)   The number of Nabors’ Common Shares Owned Prior to the Offering by OCM Convertible Trust includes $1,395,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(22)   The number of Nabors’ Common Shares Owned Prior to the Offering by OCM Global Convertible Securities Fund includes $375,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(23)   The number of Nabors’ Common Shares Owned Prior to the Offering by Qwest Occupational Health Trust includes $310,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(24)   The number of Nabors’ Common Shares Owned Prior to the Offering by Qwest Pension Trust includes $825,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(25)   RMF Umbrella SICAV is a self-contained open ended investment fund founded under the laws of Luxembourg. It has no management company or single controlling shareholder. It issues shares of equal value and equal voting power. It is controlled by all of its shareholders.
 
(26)   The number of Nabors’ Common Shares Owned Prior to the Offering by UnumProvident Corporation includes $460,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(27)   The number of Nabors’ Common Shares Owned Prior to the Offering by Vanguard Convertible Securities Fund, Inc. includes $5,885,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(28)   The number of Nabors’ Common Shares Owned Prior to the Offering by Virginia Retirement System includes $2,760,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(29)   Aviva Life Insurance Company is a subsidiary of Aviva PLC, which is a publicly-traded company on the London Stock Exchange. Aviva PLC has identified itself as an investment company registered under the Investment Company Act of 1940, as amended.
 
(30)   An affiliate of Bancroft IAM Limited is a NASD member. Silverback Asset Management, LLC holds voting control and disposition power over the respective securities.
 
(31)   CGNU Life Fund has identified itself as a publicly-held entity.
 
(32)   Commercial Union Life Fund has identified itself as a publicly-held entity and an investment company registered under the Investment Company Act of 1940, as amended.
 
(33)   The number of Nabors’ Common Shares Owned Prior to the Offering by Institutional Benchmark Series (Master Feeder) Limited in Respect of Electra Series c/o Quattro Fund includes $250,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes). Gary Crowdek holds voting control and disposition power over the respective securities.
 
(34)   Norwich Union Life and Pensions has identified itself as a publicly-held entity and an investment company registered under the

5

 

    Investment Company Act of 1940, as amended.
 
(35)   Daniel S. Och, as Senior Managing Member of Och-Ziff Associates, LLC, the Managing Member of OZ Special Funding (OZMD) GP, Ltd., the General Partner of the selling security holder, may be deemed to have voting and/or investment control of the securities held by the selling security holder.
 
(36)   The number of Nabors’ Common Shares Owned Prior to the Offering by Partners Group Alternative Strategies PCC Limited, Red Delta Cell c/o Quattro fund includes $250,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes). Mark Rowe, Felix Haldnek, Michael Fitchet and Denis O’Malley hold voting control and disposition power over the respective securities.
 
(37)   The number of Nabors’ Common Shares Owned Prior to the Offering by Quattro Fund Ltd. includes $4,250,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(38)   The number of Nabors’ Common Shares Owned Prior to the Offering by Quattro Multistrategy Masterfund LP includes $250,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(39)   Wachovia Capital Markets LLC (“Wachovia”) is a subsidiary of Wachovia Corp., which is a publicly traded company on the New York Stock Exchange. Wachovia has identified itself as a broker dealer and an investment company registered under the Investment Company Act of 1940, as amended.
 
(40)   Shawn Bergerson holds voting control and disposition power over the respective securities.
 
(41)   David Clott holds voting control and disposition power over the respective securities.
 
(42)   The number of Nabors’ Common Shares Owned Prior to the Offering by Waterstone Market Neutral MAC 51 Ltd. includes $5,614,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(43)   The number of Nabors’ Common Shares Owned Prior to the Offering by Waterstone Market Neutral Master Fund, Ltd. includes $9,386,000 principal amount of our Series B Zero Coupon Senior Exchangeable Notes Due 2023 (exchangeable for Nabors’ common shares at the exchange rate of 28.5306 common shares per $1,000 principal amount of notes).
 
(44)   Andrew Kaplan, Brian Swain and Louis Napoli hold voting control and disposition power over the respective securities.
 
(45)   Selling security holder is an affiliate of Goldman Sachs & Co. Daniel S. Och, Senior Managing Member of OZ Management, LLC, Investment Manager of the selling security holder may be deemed to have investment and/or voting control of the securities held by the selling security holder.

6