NESR - National Energy Services Reunit

National Energy Services Reunited (NESR) provides oilfield services including well drilling, completion, production, and fluid management services to national and international oil companies operating in the Middle East and North Africa region. The business model is B2B contract-based, serving upstream oil and gas operators such as Saudi Aramco, ADNOC, and other NOCs under multi-year service agreements. NESR generates approximately $1.3B in annual revenue, with operations concentrated in Saudi Arabia, UAE, Oman, Iraq, and other MENA markets. The company focuses exclusively on the MENA oilfield services market, differentiating it from globally diversified competitors like Halliburton or SLB.

Past Year Trends

• NESR's full-year 2025 revenue grew only 1.7% YoY to $1.324 billion, a sharp deceleration from 14.1% growth in FY2024, driven by lower Saudi Arabia rig counts and contract transition gaps in its largest market. (Bearish)
• NESR was awarded the Jafurah unconventional fracturing contract in Saudi Arabia in late 2024, described by management as the largest single oilfield services contract award in the sector's history, positioning the company toward a $2 billion annual revenue run rate by end of 2026. (Bullish)
• NESR experienced significant working capital deterioration through the first three quarters of 2025, with accounts receivable expanding materially due to extended collection periods from regional NOC customers, though the company reported record collections in Q4 2025 and its lowest year-end days sales outstanding on record. (Neutral)

Next Year Trends

• The Jafurah fracturing contract ramp-up through 2026 is the primary revenue catalyst, with management guiding to a $2 billion annualized revenue run rate by year-end 2026, implying roughly 50% growth from the 2025 base if achieved on schedule. (Bullish)
• NESR signed approximately $300 million in new cementing contracts in Kuwait and North Africa in March 2025 with five-year terms, which will begin contributing meaningfully to revenue in 2026 and partially offset any continued softness in the Saudi market. (Bullish)
• Planned capital expenditure increase to approximately $165 million in 2026 (from $150.9 million in 2025) to support the Jafurah and other growth programs introduces execution and free cash flow risk, particularly if NOC customers continue to delay payments, given the company's already-elevated receivables concentration in a handful of Middle Eastern national oil companies. (Bearish)

Red Flags

[(B) Securities Fraud Class Action Lawsuit] Pomerantz Law Firm announced an investigation of claims on behalf of NESR investors regarding potential securities fraud or unlawful business practices by the company and certain officers/directors. — PR Newswire / Pomerantz Law Firm press release, 2023

[(E) Exchange Delisting Warning] NESR received a formal delisting determination from Nasdaq's Listing Qualifications Department for failure to timely file its Annual Report on Form 20-F; the company regained compliance after filing audited financials on December 29, 2023. — NESR Investor Relations press release, November 2022