<PAGE>   1
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549


                                   FORM 10-K
                 ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D)
                     OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED SEPTEMBER 30, 1996         COMMISSION FILE NO.: 1-9245


                            NABORS INDUSTRIES, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

          DELAWARE                                 93-0711613
(JURISDICTION OF INCORPORATION)         (I.R.S. EMPLOYER IDENTIFICATION NO.)



    515 WEST GREENS ROAD, SUITE 1200
           HOUSTON, TEXAS                              77067
   (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)          (ZIP CODE)

                                (281) 874-0035
               (REGISTRANT'S TELEPHONE NUMBER, INCLUDE AREA CODE)


          SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

                                                          NAME OF EACH
          TITLE OF EACH CLASS                    EXCHANGE ON WHICH REGISTERED

   COMMON STOCK, $.10 PAR VALUE, PER SHARE       AMERICAN STOCK EXCHANGE, INC.

         INDICATE BY CHECK MARK WHETHER REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS, AND (2) HAS BEEN SUBJECT TO SUCH FILING
REQUIREMENTS FOR THE PAST 90 DAYS.    YES   X        NO 
                                         ------        ------

     INDICATE BY CHECK MARK IF DISCLOSURE OF DELINQUENT FILERS PURSUANT TO ITEM
405 OF REGULATION S-K IS NOT CONTAINED HEREIN, AND WILL NOT BE CONTAINED, TO
THE BEST OF REGISTRANT'S KNOWLEDGE, IN DEFINITIVE PROXY OR INFORMATION
STATEMENTS INCORPORATED BY REFERENCE IN PART III OF THIS FORM 10-K OR ANY
AMENDMENT TO THIS FORM 10-K. [ X ]

         THE AGGREGATE MARKET VALUE ON NOVEMBER 30, 1996 OF VOTING STOCK HELD
BY NON-AFFILIATES OF THE REGISTRANT WAS APPROXIMATELY $1,432 MILLION.

         THE NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AS OF NOVEMBER 30,
1996 WAS 91,374,156.


                      DOCUMENTS INCORPORATED BY REFERENCE
                        (TO THE EXTENT INDICATED HEREIN)

 SPECIFIED PORTIONS OF THE 1996 ANNUAL REPORT TO STOCKHOLDERS (PARTS I AND II)
    SPECIFIED PORTIONS OF THE NOTICE OF ANNUAL MEETING OF STOCKHOLDERS AND
                          PROXY STATEMENT (PART III)







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                                        PART I

ITEM 1.  BUSINESS

OVERVIEW

Nabors Industries, Inc. (collectively with its subsidiaries, "Nabors" or the
"Company") is the largest land drilling contractor in the world. The Company,
which was incorporated in Delaware in 1978, has principally been engaged in
oil, gas and geothermal land drilling operations in Alaska, the US Lower 48
states and Canada, and internationally in the Middle East, the Far East, the
Commonwealth of Independent States ("CIS"), North and West Africa and South and
Central America. Nabors, through its subsidiaries, including primarily
Sundowner Offshore Services, Inc. ("Sundowner"), provides offshore drilling,
well servicing and workover services in the Gulf of Mexico, Alaska's Cook Inlet
and several international markets. Another Nabors subsidiary, J. W. Gibson Well
Service Company, provides well servicing and workover services primarily in the
Rocky Mountains and mid-continent region of the United States. The Company also
provides oilfield management, engineering, transportation, construction,
maintenance, well logging and other support services in selected domestic and
international markets. In addition, the Company's Canrig subsidiary 
manufacturers top drives for a broad range of drilling rig applications.

BUSINESS STRATEGY

Since the current management group began operating the Company in 1987, the
Company's business philosophy has been to establish and maintain a conservative
and flexible financial posture, to build a diverse portfolio of market positions
to mitigate risk and create potential for growth, to forge long-term
relationships with customers, to build a cadre of talented and experienced
employees, to grow and remain profitable in any market environment and to
position the business for the future by maintaining flexibility. This
philosophy has been implemented primarily through strategic acquisitions and
internal growth in existing and new markets. Nabors also has advanced this
philosophy by entering into strategic alliances with customers and by providing
integrated drilling, engineering and other oilfield services responsive to
customer needs.

EXPANSION BY ACQUISITIONS

Since 1988, through acquisitions of other drilling companies, asset purchases
and internal expansion, the Company has grown from a land drilling business
centered principally in Canada and Alaska, to an international company
operating on land and offshore in many of the major oil, gas and geothermal
markets in the world. In 1988, Nabors rig fleet consisted of 44 land drilling
rigs. The active Nabors-owned rig fleet consists of 329 land drilling rigs, 34
offshore rigs and 70 land workover and well servicing rigs. The significant
acquisitions by the Company are described below.

In November 1988, the Company acquired the Westburne Group of Companies, an
international drilling contractor with land drilling operations in the Middle
East, North Africa, Southeast Asia, the Far East, Australia and Canada and
offshore operations in the UK North Sea. This acquisition  provided the Company
with its initial entry into drilling markets outside North America.

During 1990, the Company acquired Loffland Brothers Company, a leader in the
domestic and international drilling industry for over 80 years, and Henley
Drilling Company, a subsidiary of Hunt Oil Company. These acquisitions added 74
rigs, significantly expanded the Company's presence in the North Sea, Middle
East and Canada and added major new markets, including the US Lower 48 states,
Venezuela, the Gulf of Mexico and Yemen.



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In 1993, the Company acquired substantially all of the assets of Grace Drilling
Company, which was then the largest land driller in the United States, and the
assets of Alaska United Drilling, which operates in Alaska. These acquisitions
added 170 drilling rigs to the Company's fleet and significantly expanded the
capabilities of the Company in the US Lower 48 states, strengthened its
operations in Alaska markets and provided a supply of component parts used to
reduce capital expenditure costs.

In 1994, the Company acquired Sundowner, a leader in the offshore well servicing
and workover markets. The Sundowner fleet purchased in the transaction included
15 platform rigs plus one rig under construction, five jackup workover rigs and
three workover and plug and abandonment barge rigs. The addition of Sundowner
has allowed the Company to expand into what the Company's management believes
will be significant markets in the coming years. Also in 1994, the Company
acquired 16 drilling rigs from MND Drilling, a subsidiary of Mitchell Energy
Development Corp., and eight mobile, medium-depth rigs from various other
sources.

In 1995, the Company purchased all of the stock of Delta Drilling Company
("Delta"). In acquiring Delta, which operated primarily in Texas and Louisiana,
Nabors added 30 land drilling rigs to its fleet.

In 1996, the Company acquired all of the stock of Exeter Drilling Company and
its subsidiary J.W. Gibson Well Service Company, and certain other assets from
other sources. In these acquisitions, the Company added 49 drilling rigs and
78 workover and well servicing rigs (10 of which were leased from third
parties). These acquisitions increased the Company's available rigs primarily 
in the Rocky Mountains, the mid-continent region, Texas and Louisiana, and 
marked the Company's entry into the land workover and well service business.

After the end of the fiscal year, in November 1996, the Company sold all of 
its UK North Sea operations to a subsidiary of Abbot Holdings Ltd. for 
approximately US$36 million, plus the value of working capital, in cash as 
well as four-year warrants to acquire 10.8 million shares of the stock of 
Abbot Holdings Ltd. at 83 pence per share. During December 1996, the Company 
purchased 47 land drilling rigs from Noble Drilling Corporation for $60 
million in cash. The rig fleet consists of 19 operating rigs and 28 stacked 
rigs located in the United States and Canada. Also in December 1996, the 
Company entered into an agreement with Adcor-Nicklos Drilling Company 
("Adcor"), pursuant to which all of the stock of Adcor will be exchanged for 
approximately 3.4 million shares of Nabors common stock. The transaction is 
expected to close in January 1997. Assets to be acquired in the Adcor 
transaction will include 30 active and six stacked rigs located in the United 
States, drill pipe, spare drilling equipment, yards, vehicles and other 
support equipment.

ALLIANCES, INTEGRATED DRILLING SERVICES AND ENGINEERING.

An increasing number of customers have been seeking to reduce costs and improve
efficiency in their exploration and development drilling programs by
establishing continuing relationships, or alliances, with a smaller number of
preferred drilling contractors. These alliances can result in long-term work
and increased profitability for drilling contractors that are selected as
partners in the alliance. The Company has been selected by certain operators as
alliance partner in Alaska, the US Lower 48 states and Canada. The Company
intends to continue to pursue opportunities for alliances with customers in all
of the markets in which it operates.

The Company's ability to provide drilling-related services and management of
drill site activities for its customers is also a factor in the Company's
growth. Many major oil and gas companies are reducing the number of services
they provide and the number of service contractors at a drill site, and are
requiring that the contractors remaining provide such drilling-related services
and management.



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Contractors that have been able to adapt to this expanded role have the
potential to achieve enhanced financial returns in consideration for providing
these additional services. As with alliances, the Company intends to continue to
seek opportunities to capitalize on its ability to provide a wide range of
services to its customers in addition to drilling.

Another factor in the growth of the Company has been its ability to provide
innovative, quality engineering and technical support for its drilling and
oilfield support operations. The Company provides engineering services to all
of its subsidiaries and to its worldwide customers from its Houston-based
engineering groups.

MARKETS

ALASKA

Nabors is the leading drilling contractor in Alaska, where it owns eight Arctic
land drilling and well service rigs on the North Slope and three land and one
platform drilling rig in the Cook Inlet area of South Central Alaska. All of
the North Slope rigs have been specifically designed to operate in severe
arctic conditions and employ wheel mounted systems designed by Nabors to permit
efficient movement of the rigs from well to well and over ice or gravel roads.
Three of these rigs are also self-propelled to further facilitate movement and
maneuverability. The well service rigs have been designed with spacing
capability that allows them to move between reduced well spacing on drilling
pads without disrupting production. In addition, Nabors' arctic rigs
incorporate environmental protection features such as dry mud and fluid
containment systems.

As a result of a restructuring in the relationship of the operators of the
Prudhoe Bay Unit, the largest North Slope oilfield, the operators began to
develop stronger, long-term relationships with fewer service companies. Early
in 1992, Nabors was selected as the first service company to work in alliance 
with these operators. This alliance has resulted in significant cost reductions
for the customers and has increased Nabors' market share in this major market. 
In fiscal 1994, the scope of the alliance was expanded to include the Milne 
Point Unit.

The Company has a 50% interest in Peak Oilfield Services ("Peak"), a general
partnership with Cook Inlet Region, Inc., a leading Alaskan native
corporation. Peak provides heavy equipment to move drilling rigs, water, other
fluids and construction materials. Peak also provides construction and
maintenance for roads, pads, facilities, equipment, drill sites and pipelines.
Peak is a partner to a five-year alliance contract to provide maintenance
services for the Prudhoe Bay Unit. Peak also has been chosen to coordinate and
supply drilling support transportation services to the unit. Peak has expanded
its business by the acquisition of Alaska Interstate Construction, an Alaska
based company with significant experience in Arctic road and site construction.
In addition, Peak has expanded its operations through the formation of Peak USA
Energy Services Ltd, a Texas limited partnership, which is providing trucking
and oilfield services in Texas and Oklahoma.

US LOWER 48 STATES AND CANADA

The Company currently markets 241 land rigs in the US Lower 48 states market.
Eighty-eight of the rigs are diesel electric rigs controlled by a computerized
SCR unit ("SCR rigs"), and 138 are capable of drilling to 15,000 feet or deeper.
In addition to oil and gas drilling, Nabors is also active in West Coast
geothermal drilling. Through its J. W. Gibson Well Service Company subsidiary,
the Company markets 75 workover and well servicing rigs in the Rocky Mountains
and the mid-continent region.


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The Company also has a fleet of 28 rigs in Canada. Fifteen rigs in the fleet are
diesel electric SCR rigs, seven are equipped with top drives and all of the rigs
in Nabors' Canadian fleet are capable of performing exploratory and development
drilling under arctic and sub-arctic conditions.

INTERNATIONAL DRILLING

South and Central America.  The Company currently operates 17 land drilling rigs
in Venezuela and provides crews for two rigs under labor contracts. Eight of
these rigs were redeployed from other areas of the world during since fiscal
year 1994 in connection with long term contracts with US-based operators and
Corpoven and Maraven (affiliates of PDVSA, the government owned oil company. The
Company also operates one rig in Colombia under a contract with Ecopetrol, the
national oil company of Colombia, and has one rig that recently completed
operations in Costa Rica and is expected to be redeployed to another country.

The Middle East.  In the Middle East, Nabors operates 18 land rigs and one
jackup rig. Of the 18 land rigs, seven are in Yemen, nine are in Saudi Arabia
and two are in other countries. Since 1994, there has been a substantial
downturn in drilling activities in Yemen and as of the end of the 1996 fiscal
year, only six drilling rigs are in operation.

The Company has a fleet of equipment in Yemen, including trucks, cranes,
bulldozers and other construction and transportation equipment. Because the 
Company's logistics service operations in Yemen have had disappointing 
operating results, the operations in that country have been substantially
reduced.

The CIS.  In the CIS, the Company owns four rigs, two of which were relocated
from Russia to Kazakhstan during fiscal 1996 and a third rig which is located 
in the Republic of Georgia. A fourth rig was deployed to Sakhalin Island in the
CIS in mid-1995 and is currently drilling there for a US-based operator.  In 
addition, the Company is a participant in a joint venture that operates two 
rigs in Kazakhstan.

Far East.  In the Far East, the Company owns three deep rated, diesel electric
SCR land rigs in Japan. In addition, the Company has mobilized one rig from 
Yemen to begin a contract for a US-based operator in Laos.

Africa. The Company has two rigs in Africa, one in Gabon and one in Ethiopia.

OFFSHORE DRILLING, WORKOVER AND WELL SERVICING

With the acquisition of Sundowner in October of 1994, the Company expanded its
existing offshore drilling business in the Gulf of Mexico and entered the
offshore workover and well servicing business in the US Gulf of Mexico, the 
CIS, Europe and West Africa. Sundowner operates a fleet of 30 rigs including
14 Sundowner and Super Sundowner platform rigs, three Minimum Area
Self-Erecting (MASE(TM)) platform drilling rigs, four API platform drilling 
rigs, one land rig converted to an offshore platform drilling rig, five jackup
workover rigs and three inland barge rigs (two of which currently are
inoperable). In addition, other subsidiaries own four offshore rigs, of which
one is a platform drilling rig located in Alaska, one is a jackup rig located in
the Middle East and two are barges chartered to a third party. Six of the Super
Sundowner rigs, two of the Sundowner rigs and all of the platform drilling rigs
(including the MASE(TM) rigs) are equipped with portable top drive units to
enhance drilling efficiency in sidetrack and horizontal drilling operations. A
subsidiary of Sundowner also provides plug and abandonment services on the Gulf
Coast. Sundowner has developed a new generation of innovative (MASE(TM))
platform drilling rigs, certain elements of which are patented, that results in
reduced drilling and workover costs. One of these MASE(TM) rigs has been
operating in Trinidad and two are operating in the Gulf of Mexico. The resources
of the Company, combined with the Sundowner technology, are expected to
facilitate expansion into new markets throughout the world.

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Additional information regarding markets in which the Company operates can be
found on page 5 of the Nabors Industries, Inc. 1996 Annual Report to
Stockholders ("1996 Annual Report") and is incorporated herein by reference.
For information regarding rig utilization in the various markets in which the
Company operates, see the discussion referenced under Item 7.

ENGINEERING DEVELOPMENTS

In recent years, Nabors has been increasingly involved in engineering research
and development with respect to the commercialization of new drilling
technology. Through its acquisition of Sundowner, the Company owns the rights
to proprietary designs and innovations which, when applied to the Company rigs,
can substantially reduce the costs of drilling and working on offshore wells.
These proprietary designs are being applied to a new generation of modular
MASE(TM) rigs specifically for drilling. Three of these MASE(TM) rigs are
presently operational.

The Company's Canrig subsidiary manufactures and markets electric top drives
that are designed with enhanced safety and drilling efficiency features. This
top drive design includes fixed and portable units that are being utilized in a
broad range of land and offshore applications. The Company also developed an
automated slant rig, capable of drilling shallow or slim hole wells.

The Company, in a joint project with a major oil company, designed and
constructed a slim hole drilling rig, utilizing an advanced drilling process
known as a Stratigraphic High Speed Advanced Drilling System. This small
footprint, slim hole rig, which the Company now owns, is designed to enable
operators to significantly cut the cost of exploration projects in remote and
difficult drilling regions. The Company has built a second slim hole rig using
the same technology. Both slim hole rigs are now operational in Venezuela.

Company engineers have obtained new patents during the past year and have
patent applications pending for new technology associated with drilling
activities.

CUSTOMERS

The Company's customers include major oil and gas companies, foreign national
oil and gas companies and independent oil and gas companies. No single customer
provides as much as 10% of consolidated revenues.

INDUSTRY CONDITIONS, COMPETITION AND SEASONALITY

The Company's revenues and earnings are affected directly by the demand for
contract drilling and related oilfield services. Demand is a function of the
level of oil and gas exploration and development activity. The level of such
activity is impacted by many factors over which the Company has no control,
including among others, the market prices of oil and gas, the stability or
volatility of such prices, levels of production, activities of the Organization
of Petroleum Exporting Countries and other oil and gas producers, governmental
regulations, the level of worldwide economic activity, the development of
alternate energy sources, and the short and long-term effect of worldwide
energy conservation measures. Substantial uncertainty exists as to the future
level of oil and gas exploration and production drilling activity.

The contract drilling, workover and well servicing industry is a highly
fragmented, intensely competitive and cyclical business. Since 1982, the
contract drilling business has been severely impacted by the decline and
continued instability in the prices of oil and natural gas. Though these
depressed economic conditions have resulted in a consolidation of the number of
competitors and the reduction of the number of rigs available, the supply of
available rigs, particularly in the domestic land markets, still exceeds the
demand for those rigs. This excess capacity in the industry has resulted in
substantial



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competition. Competition for services in a particular market is
based on price, location, type and condition of available equipment and quality
of service. In the offshore drilling well servicing and workover business, the
technical capability of specialized equipment as well as technical and
engineering expertise is also important. A number of large and small
contractors provide competition for drilling contracts in all areas of the
Company's business. Although no single drilling competitor operates in all such
areas, certain competitors are present in more than one of those areas.

Within the last year, the offshore market has shown a substantial increase in
price, particularly for more sophisticated semi-submersible and jackup rigs.
The high demand and tight supply of these types of sophisticated rigs is also
resulting in increased prices for the type of platform and workover jackup rigs
operated by the Company. Within the last several months, prices for land
drilling rigs have started to increase, particularly with respect to SCR rigs
and rigs which are capable of drilling in excess of 15,000 feet.

Seasonality is not a significant factor with respect to the operations of the
Company.

DRILLING AND SERVICE CONTRACTS

The Company's drilling rigs are employed under individual contracts which
extend either over a stated period of time or the time required to drill
a well or a number of wells. Drilling contracts are generally obtained through
competitive bidding though some may be obtained by negotiation. Contracts are
generally subject to termination by the customer on short notice, but can be
firm for a number of wells or years.

Drilling contracts may provide for compensation on a daywork, footage, or
turnkey basis. Most of the Company's contracts are on a daywork basis. A
daywork contract provides for a basic rate per day when drilling (the
"Dayrate") and for lower rates when the rig is moving, or when drilling
operations are interrupted or restricted by equipment breakdowns, actions of
the customer or adverse weather conditions or other conditions beyond the
control of the Company. In addition, the daywork contracts typically provide
for a lump sum fee for the mobilization and demobilization of the drilling rig.
The Dayrate depends on market and competitive conditions, the nature of the
operations to be performed, the duration of the work, the equipment and
services to be provided, the geographic area involved and other variables.

The Company is also a party to turnkey and footage contracts in certain areas
of the United States. In a turnkey contract, the Company undertakes to drill a
well to a specified depth for a fixed price. In a footage contract, the Company
undertakes to drill a well to a specified depth at a fixed price per foot of
hole. In both turnkey and footage contracts, the Company must bear the cost of
performing the drilling services until the well has been drilled, and
accordingly, such contracts require significant cash commitments by the
Company. In both the turnkey and footage contracts, the Company generally
agrees to furnish services such as testing, coring and casing the hole and
other services which are not normally provided by a drilling contractor working
under a daywork contract. In both situations, compensation is earned upon
completion of the well to the specified depth. If the well is not completed to
the specified depth, the Company may not receive the fixed turnkey or footage
price. In addition, footage and turnkey contracts generally involve a higher
degree of risk to the Company than daywork contracts because the Company
assumes greater risks and bears the cost of unanticipated downhole problems and
price escalation.

Onshore transportation and support services are provided through long-term
contracts or on a short-term demand basis. Long-term contracts may either be
negotiated or awarded by competitive bidding. Whether provided on a long-term
or short-term basis, equipment and labor are usually billed separately

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at specified hourly rates. These hourly rates vary depending upon numerous
factors, including types of equipment and labor, and duration of the work.

OPERATING RISKS AND INSURANCE

The Company's operations are subject to many hazards inherent in the drilling,
workover and well servicing industries including blowouts, cratering, explosions
and fires, any of which could result in personal injury or death, damage to or
destruction of equipment and facilities, suspension of operations, environmental
damage to surrounding areas and damage to the property of others. The Company's
offshore operations are also subject to the hazards of marine operations
including capsizing, grounding, collision, damage from heavy weather or sea
conditions and unsound bottom conditions. In addition, the Company's
international operations are subject to risks of war, civil disturbances or
other political events. (See also "International Operations".) To the extent
that such risks are not transferred to customers by contract or indemnification
agreements, the Company seeks protection through insurance which the Company's
management considers to be adequate. However, there is no assurance that such
insurance or indemnification agreements will be adequate to protect the Company
against liability from all of the consequences of the hazards described above.
The occurrence of an event not fully insured or indemnified against, or the
failure of a customer to meet its indemnification obligations could result in
substantial losses to the Company. In addition, there can be no assurance that
insurance will be available, or, even if available, that it will be adequate or
that insurance premiums or other costs will not rise significantly in the
future.

INTERNATIONAL OPERATIONS

A significant portion of the Company's business is derived from international
markets, including major operations in Canada, the Middle East, the North Sea
and South and Central America, as well as other operations in the CIS, the Far
East and Africa. Such operations may be subject to various risks, including
risk of war and civil disturbances and governmental activities that may limit
or disrupt markets, restrict the movement of funds or result in the deprivation
of contract rights or the taking of property without fair compensation. In
certain countries, such operations may be subject to the additional risk of
fluctuating currency values and exchange controls. (See also "Operating Risks
and Insurance".)

In the international markets in which the Company operates, it is subject to
various laws and regulations with respect to the operation and taxation of its
business and the import and export of its equipment from country to country,
the imposition, application and interpretation of which can be uncertain.

GOVERNMENTAL MATTERS

Governments at various levels in the United States and in various other
countries in which the Company operates have enacted legislation or adopted
regulations affecting the drilling and servicing of oil and gas wells,
controlling the discharge and disposal of wastes from drilling and other
operations and providing for the protection of the environment in general. In
recent years, laws and regulations protecting the environment have generally
become more stringent and have sought to impose greater liability on a larger
number of potentially responsible parties. While the Company believes it is
generally in compliance with applicable laws and regulations related to
environmental controls, the Company could nonetheless be subject to cleanup
costs or costs associated with environmental laws and regulations which could
be substantial and have a material adverse effect on the Company.

EMPLOYEES

At September 30, 1996, the Company employed approximately 8,650 persons. In
addition, Peak employed 864 persons.

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GEOGRAPHIC DISTRIBUTION OF EARNINGS AND ASSETS

The revenues, operating income (loss) and identifiable assets of each
geographic area for the three years ended September 30, 1996, can be found in
Note 14 of the Notes to Consolidated Financial Statements on page 38 of the
1996 Annual Report, which is incorporated herein by reference.


ITEM 2.  PROPERTIES

A table of information regarding the Company's rig fleet can be found on page
12 ("Rig Fleet") of the 1996 Annual Report and is incorporated herein by
reference.

Many of the international drilling rigs in the Company's fleet are supported by
mobile camps which house the drilling crews and a significant inventory of
spare parts and supplies. In addition, the Company owns various trucks,
forklifts, cranes, earth moving and other construction and transportation
equipment which are used to support the drilling and logistics operations.

The Company and its subsidiaries lease or own executive and administrative
office space in Houston, Texas (headquarters); Denver, Colorado; Anchorage,
Alaska; Houma, Arcadia and Lafayette, Louisiana; Bakersfield, California;
Englewood, Colorado; Magnolia, Texas; Calgary and Nisku, Alberta, Canada; 
Sana'a, Yemen; Dubai, U.A.E.; Dhahran, Saudi Arabia and Maracaibo, Anaco and 
Barinas, Venezuela. The Company owns or leases a number of facilities used in 
support of operations in each of its geographic markets.

Additional information about Properties can be found in Notes 1 and 4 of the 
Notes to Consolidated Financial Statements on pages 28, 29 and 32 of the 1996 
Annual Report and is incorporated herein by reference.

The Company's management believes that its equipment and facilities are
adequate to support its current level of operations as well as an expansion of
drilling operations in those geographical areas where the Company may choose to
expand.


ITEM 3.  LEGAL PROCEEDINGS

Information with respect to legal proceedings can be found in Note 11 of the
Notes to Consolidated Financial Statements under the caption "Contingencies" 
on page 37 of the 1996 Annual Report and is incorporated herein by reference.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of security holders of the Company
during the quarter ended September 30, 1996.


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                                        PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

MARKET

The information called for by this item can be found on the inside back cover
("Price of Common Stock") of the 1996 Annual Report and is incorporated herein
by reference.

The Company has neither declared nor paid any cash dividends on its common
stock since 1982. Certain debt instruments restrict the Company's ability to
pay dividends. Under the terms of these instruments, Nabors may pay dividends
to the extent that cumulative dividends plus certain other payments since March
31, 1989 do not exceed 50% of Nabors' cumulative net income since March 31,
1989 plus the proceeds of any offering of equity securities of Nabors that are
not redeemable at the option of the holder of the securities. As of September
30, 1996 retained earnings available for dividends totaled approximately
$178 million. The Company does not intend to pay any cash dividends on its
common stock in the foreseeable future.

ITEM 6.  SELECTED FINANCIAL DATA

The information called for by this item can be found on page 16 ("Selected
Financial Data") of the 1996 Annual Report and is incorporated herein by
reference.

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

The information called for by this item can be found on pages 17 through 22 
("Management's Discussion and Analysis of Financial Condition and Results
of Operations") of the 1996 Annual Report and is incorporated herein by
reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements, together with the report thereon of
Coopers & Lybrand L.L.P. dated November 25, 1996 (except as to the information
presented in Notes 9 and 15, for which the date is December 20, 1996) appear on
pages 23 through 38 of the 1996 Annual Report and are incorporated herein by
reference. With the exception of the aforementioned information and the
information expressly incorporated into Items 1, 2, 3, 6, 7 and 8 hereof, the
1996 Annual Report is not deemed to be filed as part of this report.

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
         FINANCIAL DISCLOSURE

None.

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The information called for by this item will be contained in the Nabors
Industries, Inc. definitive Proxy Statement to be distributed in connection
with its Annual Meeting (the "Proxy Statement") under the captions "Election of
Directors" and "Executive Officers" and is incorporated herein by reference.


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Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors and executive officers, and persons who own more than ten percent of
a registered class of the Company's equity securities, to file with the
Securities and Exchange Commission and the American Stock Exchange initial
reports of ownership and reports of changes in ownership of Common Stock and
other equity securities of the Company. Officers, directors and greater than
ten-percent shareholders are required by SEC regulation to furnish the Company
with all Section 16(a) forms which they file.

To the Company's knowledge, based solely on review of the copies of such
reports furnished to the Company and written representations that no other
reports were required during the two fiscal years ended September 30,1996, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.

ITEM 11.  EXECUTIVE COMPENSATION

The information called for by this item will be contained in the Proxy
Statement to be distributed in connection with its Annual Meeting under the
caption "Remuneration of Management" and is incorporated herein by reference;
except for information not deemed to be "soliciting material" or "filed" with
the SEC including the Report of the Compensation Committee on Executive
Compensation and the Five Year Stock Performance Graph which is not deemed to
be incorporated by reference.

ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The information called for by this item will be contained in the Proxy
Statement to be distributed in connection with its Annual Meeting under the
caption "Share Ownership of Management and Principal Shareholders" and is
incorporated herein by reference.

ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The information called for by this item will be contained in the Proxy
Statement to be distributed in connection with its Annual Meeting, under the
caption "Business Relationships" and "Compensation Committee Interlocks and
Insider Participation" and is incorporated herein by reference.


                                    PART IV

ITEM 14.          EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM
                  8-K

(a)      The following documents are filed as part of this report:

         (1)      Financial Statements of Nabors Industries, Inc. and
                  Subsidiaries which are listed in Part II, Item 8 and are
                  incorporated herein by reference from the Company's 1996
                  Annual Report to Stockholders from the respective page
                  numbers indicated:                                 
 
                                                                       Page No.
                  Report of Independent Accountants                       23

                  Consolidated Balance Sheets                             24

                  Consolidated Statements of Income                       25

                  Consolidated Statements of Changes in
                    Stockholders' Equity                                  26

                  Consolidated Statements of Cash Flows                   27

                  Notes to Consolidated Financial Statements              28




                                       11
<PAGE>   12



         (2)      Financial Statement Schedules 

                  Supplemental schedules are omitted because of the absence 
                  of the conditions under which they are required or because 
                  the required information is included in the financial 
                  statements or notes thereto.

         (3)      Exhibits

                  Exhibit          Description

                  3(1)             Restated Certificate of Incorporation and
                                   By-Laws of the Registrant dated May 12,
                                   1988
                  
                  3.1(2)           Certificate of Amendment of the Restated
                                   Certificate of Incorporation of the
                                   Registrant dated May 8, 1990
                  
                  3.2(3)           Certificate of Amendment of the Restated
                                   Certificate of Incorporation of the
                                   Registrant dated April 12, 1991
                  
                  3.3(7)           Certificate of Amendment of the Restated
                                   Certificate of Incorporation of the
                                   Registrant dated March 11, 1994
                  
                  3.4(2)           Amendment to the Restated By-Laws of the
                                   Corporation
                  
                  4.1(11)          Indenture for Subordinated Debt Securities
                                   dated May 28, 1996 between Marine Midland
                                   Bank, Trustee and Nabors Industries, Inc. 
                                   in connection with $172,500,000 aggregarate 
                                   principal amount of 5% Convertible 
                                   Subordinated Notes due 2006 (the "Notes")

                  4.2(11)          Supplemental Indenture dated May 28, 1996
                                   between Marine Midland Bank, Trustee and 
                                   Nabors Industries, Inc. in connection with 
                                   the Notes
                  
                  4.3              Registration Rights Agreement dated as of 
                                   April 30, 1996 between Nabors Industries, 
                                   Inc. and Occidental Oil and Gas Corporation

                  10.1(7)          1993 Stock Option Plan for Non-Employee
                                   Directors
                  
                  10.2(10)         1994 Executive Officers Stock Plan
                  
                  10.3(10)         1996 Employee Stock Plan
                  
                  10.4             1994 Executive Stock Option Agreement
                                   effective December 28, 1994 between Nabors
                                   Industries, Inc. and Eugene M. Isenberg
                  
                  10.5             1994 Executive Stock Option Agreement
                                   effective December 28, 1994 between Nabors
                                   Industries, Inc. and Anthony G. Petrello
                  
                  10.6             1994 Executive Stock Option Agreement
                                   effective December 28, 1994 between Nabors
                                   Industries, Inc. and Richard A. Stratton
                  
                  10.7(8)          Employment Agreement effective October 1,
                                   1994 between Nabors Industries, Inc. and
                                   Eugene M. Isenberg

                  10.8(8)          Employment Agreement effective October 1,
                                   1994 between Nabors Industries, Inc. and 
                                   Anthony G. Petrello




                                       12
<PAGE>   13
                  10.9(9)          Amendment to Employment Contract dated as
                                   of December 28, 1994 between Nabors
                                   Industries, Inc. and Richard A. Stratton
                  
                  10.10(4)         Note Purchase Agreement between Nabors
                                   Industries, Inc. and John Hancock Mutual
                                   Life Insurance Company dated October 1,
                                   1992
                  
                  10.11(5)         Agreement and Plan of Reorganization dated
                                   as of August 26, 1993 between Equity
                                   Strategies Fund, Inc. and Nabors
                                   Industries, Inc.
                  
                  10.12(6)         Agreement and Plan of Merger dated August
                                   12, 1994 by and Among Nabors Industries,
                                   Inc., Nabors Acquisition Corp. and
                                   Sundowner Offshore Services, Inc.
                  
                  10.13(9)         Stock Purchase Agreement entered into as of
                                   December 22, 1994 by and between Nabors
                                   Drilling USA, Inc. and Gordon P. Getty
                  
                  10.14            Stock Purchase Agreement dated as of March
                                   8, 1996 between Nabors Industries, Inc. and
                                   Occidental Oil and Gas Corporation as
                                   amended by Amendment No. 1 to Stock Purchase
                                   Agreement dated as of April 23, 1996
                  
                  10.15            Share Purchase Agreement dates as of
                                   October 18, 1996 by and among Abbot Group
                                   plc, Nabors Industries, Inc., and KCA
                                   Drilling Group Limited
                  
                  10.16            Asset Purchase Agreement between Noble
                                   Drilling Corporation, Noble Properties, 
                                   Inc., Noble Drilling (Canada) Ltd. and 
                                   Nabors Industries, Inc. dated November 15, 
                                   1996

                  10.17(11)        Underwriting Agreement dated May 21, 1996
                                   by and among Nabors Industries, Inc. and
                                   Salomon Brothers, Inc., Goldman, Sachs &
                                   Co., Merrill, Lynch, Pierce, Fenner &
                                   Smith, Incorporated and Simmons and
                                   Company, International as representatives
                                   of the underwriters named therein in
                                   connection with the offering of the Notes

                  12               Computation of Ratios of Earnings to Fixed
                                   Charges

                  13               1996 Annual Report to Stockholders
                  
                  21               List of Subsidiaries of Nabors Industries,
                                   Inc.
                  
                  23               Consent of Independent Accountants




                                       13
<PAGE>   14

                   27              Financial Data Schedule

-------------------------

                   (1)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-7773, filed with the Commission on
                            January 11, 1988.               
        
                   (2)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 21, 1990.              
        
                   (3)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 30, 1991.              
        
                   (4)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 29, 1992.              
        
                   (5)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 29, 1993.              
        
                   (6)      Incorporated by Reference to the Exhibits to Form
                            S-4, File No. 33-84188, filed with the
                            Commission on September 20, 1994.           
        
                   (7)      Incorporated by Reference to Form S-8, Registration
                            No. 33-87322, filed with the Commission on December
                            29, 1994.
        
                   (8)      Incorporated by Reference to Form 10-Q for Quarter
                            ended June 30, 1995, File No. 1-9245, filed
                            with the Commission on August 14, 1995. 
        
                   (9)      Incorporated by Reference to Form 10-K, File No.
                            1-9245 filed with the Commission on December
                            27, 1995.                               
        
                   (10)     Incorporated by Reference to Form S-8, Registration
                            No. 333-11313, filed with the Commission on
                            September 3, 1996.                          
        
                   (11)     Incorporated by Reference to Form 8-K, File No.
                            1-9245, filed with the Commission on May 28,
                            1996.                                      
        

(b)       Reports on Form 8-K:

          None



                                       14
<PAGE>   15



                                   SIGNATURES




Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized on December 30, 1996.




                                     NABORS INDUSTRIES, INC.



                                     By:  /s/Anthony G. Petrello
                                          ----------------------
                                          Anthony G. Petrello
                                          President





                                       15
<PAGE>   16





Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.


<TABLE>
<CAPTION>
Signature                        Title                        Date
---------                        -----                        ----

<S>                        <C>                          <C>
/s/ Eugene M. Isenberg      Chairman and                December 30, 1996
----------------------      Chief Executive Officer
Eugene M. Isenberg                                 



/s/ Richard A. Stratton     Vice Chairman               December 30, 1996
----------------------                                                   
Richard A. Stratton



/s/ Anthony G. Petrello     President and               December 30, 1996
----------------------      Chief Operating Officer
Anthony G. Petrello



/s/ Martin J. Whitman       Director                    December 30, 1996
----------------------      
Martin J. Whitman



/s/ Myron M. Sheinfeld      Director                    December 30, 1996
----------------------      
Myron M. Sheinfeld



/s/ Jack Wexler             Director                    December 30, 1996
----------------------      
Jack Wexler



/s/ Gary T. Hurford         Director                    December 30, 1996
----------------------      
Gary T. Hurford



/s/ Hans Schmidt            Director                    December 30, 1996
----------------------      
Hans Schmidt
</TABLE>




                                       16
<PAGE>   17




<TABLE>
<CAPTION>
Signature                        Title                     Date
---------                        -----                     ----

<S>                         <C>                         <C>
/s/ Michael W. Dundy        Vice President and          December 30, 1996
----------------------      General Counsel
Michael W. Dundy            



/s/ Daniel McLachlin        Vice President              December 30, 1996
----------------------      
Daniel McLachlin



/s/ Bruce P. Koch           Vice President - Finance    December 30, 1996
----------------------      
Bruce P. Koch
</TABLE>




                                       17
<PAGE>   18
                               INDEX TO EXHIBITS

                  Exhibit          Description

                  3(1)             Restated Certificate of Incorporation and
                                   By-Laws of the Registrant dated May 12,
                                   1988
                  
                  3.1(2)           Certificate of Amendment of the Restated
                                   Certificate of Incorporation of the
                                   Registrant dated May 8, 1990
                  
                  3.2(3)           Certificate of Amendment of the Restated
                                   Certificate of Incorporation of the
                                   Registrant dated April 12, 1991
                  
                  3.3(7)           Certificate of Amendment of the Restated
                                   Certificate of Incorporation of the
                                   Registrant dated March 11, 1994
                  
                  3.4(2)           Amendment to the Restated By-Laws of the
                                   Corporation
                  
                  4.1(11)          Indenture for Subordinated Debt Securities
                                   dated May 28, 1996 between Marine Midland
                                   Bank, Trustee and Nabors Industries, Inc. 
                                   in connection with $172,500,000 aggregate 
                                   principal amount of 5% Convertible 
                                   Subordinated Notes due 2006 (the "Notes")

                  4.2(11)          Supplemental Indenture dated May 28, 1996
                                   between Marine Midland Bank, Trustee and 
                                   Nabors Industries, Inc. in connection with 
                                   the Notes
                  
                  4.3              Registration Rights Agreement dated as of 
                                   April 30, 1996 between Nabors Industries, 
                                   Inc. and Occidental Oil and Gas Corporation

                  10.1(7)          1993 Stock Option Plan for Non-Employee
                                   Directors
                  
                  10.2(10)         1994 Executive Officers Stock Plan
                  
                  10.3(10)         1996 Employee Stock Plan
                  
                  10.4             1994 Executive Stock Option Agreement
                                   effective December 28, 1994 between Nabors
                                   Industries, Inc. and Eugene M. Isenberg
                  
                  10.5             1994 Executive Stock Option Agreement
                                   effective December 28, 1994 between Nabors
                                   Industries, Inc. and Anthony G. Petrello
                  
                  10.6             1994 Executive Stock Option Agreement
                                   effective December 28, 1994 between Nabors
                                   Industries, Inc. and Richard A. Stratton
                  
                  10.7(8)          Employment Agreement effective October 1,
                                   1994 between Nabors Industries, Inc. and
                                   Eugene M. Isenberg

                  10.8(8)          Employment Agreement effective October 1,
                                   1994 between Nabors Industries, Inc. and 
                                   Anthony G. Petrello




<PAGE>   19
                  10.9(9)          Amendment to Employment Contract dated as
                                   of December 28, 1994 between Nabors
                                   Industries, Inc. and Richard A. Stratton
                  
                  10.10(4)         Note Purchase Agreement between Nabors
                                   Industries, Inc. and John Hancock Mutual
                                   Life Insurance Company dated October 1,
                                   1992
                  
                  10.11(5)         Agreement and Plan of Reorganization dated
                                   as of August 26, 1993 between Equity
                                   Strategies Fund, Inc. and Nabors
                                   Industries, Inc.
                  
                  10.12(6)         Agreement and Plan of Merger dated August
                                   12, 1994 by and Among Nabors Industries,
                                   Inc., Nabors Acquisition Corp. and
                                   Sundowner Offshore Services, Inc.
                  
                  10.13(9)         Stock Purchase Agreement entered into as of
                                   December 22, 1994 by and between Nabors
                                   Drilling USA, Inc. and Gordon P. Getty
                  
                  10.14            Stock Purchase Agreement dated as of March
                                   8, 1996 between Nabors Industries, Inc. and
                                   Occidental Oil and Gas Corporation as
                                   amended by Amendment No. 1 to Stock Purchase
                                   Agreement dated as of April 23, 1996
                  
                  10.15            Share Purchase Agreement dates as of
                                   October 18, 1996 by and among Abbot Group
                                   plc, Nabors Industries, Inc., and KCA
                                   Drilling Group Limited
                  
                  10.16            Asset Purchase Agreement between Noble
                                   Drilling Corporation, Noble Properties, 
                                   Inc., Noble Drilling (Canada) Ltd. and 
                                   Nabors Industries, Inc. dated November 15, 
                                   1996

                  10.17(11)        Underwriting Agreement dated May 21, 1996
                                   by and among Nabors Industries, Inc. and
                                   Salomon Brothers, Inc., Goldman, Sachs &
                                   Co., Merrill, Lynch, Pierce, Fenner &
                                   Smith, Incorporated and Simmons and
                                   Company, International as representatives
                                   of the underwriters named therein in
                                   connection with the offering of the Notes

                  12               Computation of Ratios of Earnings to Fixed
                                   Charges

                  13               1996 Annual Report to Stockholders
                  
                  21               List of Subsidiaries of Nabors Industries,
                                   Inc.
                  
                  23               Consent of Independent Accountants




<PAGE>   20

                   27              Financial Data Schedule

-------------------------

                   (1)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-7773, filed with the Commission on
                            January 11, 1988.               
        
                   (2)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 21, 1990.              
        
                   (3)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 30, 1991.              
        
                   (4)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 29, 1992.              
        
                   (5)      Incorporated by Reference to the Exhibits to Form
                            10-K, File No. 1-9245, filed with the Commission on
                            December 29, 1993.              
        
                   (6)      Incorporated by Reference to the Exhibits to Form
                            S-4, File No. 33-84188, filed with the
                            Commission on September 20, 1994.           
        
                   (7)      Incorporated by Reference to Form S-8, Registration 
                            No. 33-87322, filed with the Commission on 
                            December 29, 1994.                                 
        
                   (8)      Incorporated by Reference to Form 10-Q for Quarter
                            ended June 30, 1995, File No. 1-9245, filed
                            with the Commission on August 14, 1995. 
        
                   (9)      Incorporated by Reference to Form 10-K, File No.
                            1-9245 filed with the Commission on December
                            27, 1995.                               
        
                   (10)     Incorporated by Reference to Form S-8, Registration 
                            No. 333-11313, filed with the Commission on
                            September 3, 1996.                          
        
                   (11)     Incorporated by Reference to Form 8-K, File No.
                            1-9245, filed with the Commission on May 28,
                            1996.