HOUSTON (Bloomberg) - Nabors Industries Ltd., the world's largest onshore oil and natural-gas driller, said first-quarter profit fell 41 percent as customers cut spending on exploration and production because of plunging energy prices.

Net income fell to $125.2 million, or 44 cents a share, from $212 million, or 74 cents, a year earlier, the Hamilton, Bermuda-based company said on Tuesday in a statement. Results included costs of $59.3 million to write down the value of reserves because of the lower prices. Excluding those costs, Nabors earned 65 cents a share, beating by nine cents the average of 26 analyst estimates compiled by Bloomberg.

US oil futures averaged $43.31 a barrel during the quarter, down 56 percent from a year earlier, as the global recession curbed energy demand. Natural-gas futures were 49 percent lower, at an average of $4.47 per million British thermal units.

"I think it's a reasonably good quarter," said Philip Weiss, an analyst at Argus Research in New York who rates Nabors shares a "buy" and owns none. "My sense is it might temper the numbers for the remainder of the year."

Nabors rose one cent to $14.60 at 5:34 p.m. after closing at $14.59 in New York Stock Exchange composite trading. The statement was issued after the close. The shares, which have 19 buy recommendations from analysts, seven holds and one sell, have gained 22 percent this year.

Oil and gas producers worldwide cut capital budgets by 17 percent this year, according to an estimate by Tristone Capital Ltd. The number of oil and gas rigs active in North America dropped to 1,049 on April 17, the lowest since 2002, according to a count by Baker Hughes Inc.

"There are increasing signs that our business may well be bottoming out in the seasonally low second quarter, but the timing of the inevitable recovery remains difficult to predict," CEO Eugene Isenberg said in the statement.

Revenue dropped 14 percent to $1.14 billion. The company owns about 1,297 land-based rigs and also has an offshore fleet.

"The decline in our rig count is slowing and we are optimistic we will see it stabilize in the near future," Mr. Isenberg said.

Operating revenue from the company's largest segment, the US Lower 48 land drilling unit, fell 4.2 percent to $389.9 million. Revenue from the second-largest business, the international group that does not include Canada and the US, rose 13 percent to $342.6 million.

With gas now below $4 per million British thermal units, "in many regions of the country where it previously had been economically viable to drill, it no longer makes sense", said Mark Brown, an analyst at Pritchard Capital Partners in New York who rates Nabors shares a "buy" and owns none. He commented in an interview the earnings statement was released.

Also on Tuesday, BJ Services Co., the Houston-based oilfield services provider that lost 52 percent of its market value last year, reported a 66 percent drop in net income in the quarter ended March 31 to $43 million, or 15 cents a share.