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NEW YORK (TheStreet) -- Nabors Industries (NBR) - Get Nabors Industries Ltd. Report , the owner of the world's biggest fleet of land-based drilling rigs, can increase earnings more than 45% this year and next year despite tumbling oil prices through a combination of selling non-core assets, international sales and providing rigs to oil companies looking to dig where they can make to the most money now. 

Nabors' third-quarter results last week included revenue of $1.81 billion, 17% higher than the same quarter last year, and earnings that swung from a loss of 30 cents a share to a profit from continuing operations of 19 cents a share, beating estimates compiled by Thomson Reuters. Nabors was helped by strong levels of activity in North Dakota's Bakken shale and Texas's Permian Basin.

But Nabors is not immune from deteriorating oil prices that threaten a reduction in the exploration and production spending that fuels drillers' growth. Nabors' shares, at $17.50, are up 3% for the year to date but have fallen by 40% over the last three months amid a 22% drop in the WTI and Brent oil futures in the same period.

Fadel Gheit, Oppenheimer's senior analyst who covers some of the biggest names in the industry such as Exxon Mobil (XOM) - Get Exxon Mobil Corporation Report and Chesapeake Energy (CHK) - Get Chesapeake Energy Corporation Report , told TheStreet in an email interview that all oil producers will cut their spending due to lower prices, as they have been doing over the last three decades in every oil cycle. "This time," Gheit said, "the question is not if, but how much."

During the third-quarter conference call, CEO Tony Petrello acknowledged the risk coming from lower oil prices but insisted that "notwithstanding the current oil price environment," the future outlook continues to "look positive."

Jefferies analyst Brad Handler agrees, but not completely. In an Oct. 23 research report emailed to TheStreet, Handler wrote that Nabors faces the risk coming from a decline in E&P spending, which is why he reduced the company's 2015 earnings estimates by 26.5%. However, the company can still significantly grow its earnings from 83 cents a share last year to $1.80 a share by 2015, Handler said.

How? Increasing demand for Nabor's high-specification rigs from onshore, or land-based, oil and gas companies in the U.S. that are upgrading their rig fleets. Morgan Stanley's analyst Ole Slorer said in a recent report emailed to TheStreet that Nabors could gain greater share in the North American onshore drilling market on the back of its high-specification rigs.

The dip in oil prices can also spur the demand for some of the company's advanced drilling rigs. Petrello said lower prices could force the oil companies to focus on producing from properties that offer a promising rate of return using some of Nabor's high-specification rigs.

There are also international markets, particularly in the Middle East and Latin America, where demand could continue to grow even if Brent crude prices stay at around $90 a barrel in 2015, Jefferies' Handler wrote, a slight improvement from the current levels of $84.70 a barrel.

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At the same time Nabors is "streamlining" its business under its "strategic review process." As part of a plan to simplify operations by selling some non-core assets, in June Nabor sold its fracking unit for $2.8 billion to C&J Emerge Services (CJES) . This unit helps energy companies bring their oil and gas wells ready for production.

Deals like this allow Nabors to reduce expenditures as it moves to report "meaningful reductions" in cost structure, Petrello said.

Nabors Industries did not respond to messages from


request requesting comment during press time.

At the time of publication, the author held no positions in any of the stocks mentioned.

This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.

TheStreet Ratings team rates NABORS INDUSTRIES LTD as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:

"We rate NABORS INDUSTRIES LTD (NBR) a HOLD. The primary factors that have impacted our rating are mixed ? some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, compelling growth in net income and solid stock price performance. However, as a counter to these strengths, we find that the company's profit margins have been poor overall."

You can view the full analysis from the report here: NBR Ratings Report