The “pace” of new hydraulic fracturing (fracking) equipment deliveries to North America’s onshore resource plays is back on track after a frustrating three-month delay caused by a wet spring in the Marcellus Shale, harsh conditions in North Dakota and delayed equipment deliveries, the CEO of Nabors Industries Ltd. said Wednesday.

The oilfield services operator, which owns and operates 551 land drilling rigs and 748 land workover and well-servicing rigs in North America, reported quarterly earnings that were well above year-ago levels except for the pressure pumping business, where earnings were flat. Net income from continuing operations was $68.1 million (23 cents/share), compared with $44 million (15 cents) in 2Q2010 and $84.3 million (29 cents) in 1Q2011. Adjusted operating revenues totaled $174.8 million in the latest period, from $126.8 million a year ago and $191.0 million in the first quarter of 2011.

“The quarter exceeded our previous indications with better than anticipated results in our U.S. Lower 48, Alaskan and Canadian land drilling units,” said CEO Gene Isenberg. The pressure pumping business, which was underwhelming for the period, rebounded in June, suggesting “a return to expected levels of performance.”

Nabors’ largest sequential improvement from the first quarter was in its Lower 48 land drilling business, where operating income jumped to $99.2 million from $19 million.

“This was the result of a 6.3-rig increase in activity and an $807/day increase in average margins, which included $395/day in early termination payments,” the CEO said. “This unit secured another seven term contracts for new rigs during the quarter, bringing the total newbuild backlog to 36, including eight that are not yet committed to term contracts. We have already deployed eight during the first two quarters and expect to deploy another 13 before the end of the year, with the remaining 23 rigs expected to deploy throughout 2012. The outlook for this segment remains very promising, with significant interest in additional new and upgraded existing rigs continuing.”

The well servicing operations in the United States also soared in the latest quarter, which Isenberg attributed to “improved trucking and 24-hour rig activity and an increase in contributions from the Northeast region, partially offset by lingering weather issues in North Dakota and in [the] Marcellus, both areas where this unit is increasing its presence significantly. Additionally, this unit incurred significant extra expense in labor and materials to reactivate assets for upcoming work.” The unit’s operations are expected to improve “on the strength of higher pricing and the deployment of incremental assets.”

The flat year/year earnings within the pressure pumping business reflected “lost income and costs associated with delayed equipment deliveries and adverse weather,” Isenberg told analysts.

“A wet spring in the Marcellus Shale and the combination of late [ice] breakup and flooding in North Dakota impacted this business disproportionately given that these regions constitute nearly half of its current horsepower. We received the first spread of incremental frack equipment in mid-May and recently received two more as the pace of new frack equipment deliveries is back on track, although now approximately three months later than originally planned. We expect to have the remaining six spreads in service by the end of the first quarter of 2012, bringing our hydraulic fracturing fleet to a total of 854,000 hp.”

Nabors now has 10 term contracts in place in the Marcellus that cover eight currently operating frack spreads and two that are yet to be delivered, Isenberg said.

“We remain confident in the outlook for this business and continue to seek further expansion opportunities. We anticipate third quarter income to return to expected levels as new equipment arrives and costs and startup issues abate. This was evidenced by results in the month of June, which comprised approximately half of the quarter’s income.”

Nabors’ Canada operations were down $2.5 million in the quarter year/year, which was “much better than initially anticipated for the seasonally weak spring-thaw quarter,” said Isenberg. “While rain in July has caused a slower than expected start to the third quarter, the balance of the quarter looks promising, leading to an improved outlook for the full year. Numerous opportunities for new rigs have emerged in this market, which implies a more robust longer-term outlook than we previously thought.”