Feb 20 (Reuters) - Drilling rig contractor Nabors Industries

Ltd remains intent on cutting its debt pile down to size

in the face of scrutiny from its largest shareholder over the

underperformance of its stock.

Nabors shares were down 7 percent at $16.75 on Wednesday

after the company reported a decline in revenue for the fourth

quarter amid the worst slowdown in North American natural gas

drilling in more than a decade.

The shares have badly underperformed peers in the past year,

which caught the attention of Pamplona Capital Management -

owner of 9.3 percent of Nabors stock - which expressed its

concern in a regulatory filing last month.

Nabors has focused for many months on its balance sheet. The

combination of more cash flow and asset sales reduced its ratio

of debt to capitalization - net debt plus shareholders' equity -

to 38 percent from 42 percent earlier in 2012. Capital

expenditure fell by $700 million last year to $1.4 billion.

Nabors said these dual efforts at debt reduction would

continue this year, as it aims to achieve its end-2013

'debt-to-cap' target of 25 percent, which it set last October.

Chief Executive Tony Petrello, having now spent just over a

year in the top job, said he would shave another $400 million

off its $3.6 billion of net debt this year, regardless of

whether assets were sold.

'We expect to generate significant net operating cash flow

again in 2013 despite weaker North America market conditions,'

he said.

The company would also keep pursuing the sale of its

remaining oil and gas acreage in the Horn River area of British

Columbia, Alaska and the Eagle Ford basin in Texas, he added.

Nabors is also in the process of completing the sale to

private equity firm First Reserve of its 50 percent interest in

the $1 billion NFR joint venture - an oil and gas exploration

firm that First Reserve agreed to take control of in December.

As for Pamplona, that fund reported its stake as of the end

of July. The timing suggests it may have been what prompted

Nabors to authorize a shareholder rights plan, or 'poison pill,'

in July. Nabors said the plan gave shareholders rights to buy

new preferred stock to ensure 'fair and equal' treatment of all

investors if there were an effort to take over the company.

(Reporting by Braden Reddall in San Francisco; editing by

Sofina Mirza-Reid)

Keywords: NABORSINDUSTRIES RESULTS/DEBT

(braden.reddall@thomsonreuters.com)(+1 415 677 2543)(Reuters Messaging: braden.reddall.thomsonreuters.com@reuters.net)

COPYRIGHT

Copyright Thomson Reuters 2013. All rights reserved.

The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.