CHICAGO (Bloomberg) — Shares of Nabors Industries Ltd., the world's largest onshore oil and natural-gas driller, rose as much as eight percent on takeover speculation.The shares climbed $1.01, or 3.3 percent, to $31.57 at 2.18 p.m. on the New York Stock Exchange after trading as high as $32.99. About 10.4 million shares had changed hands, exceeding the stock's full-day average by more than 50 percent.

"As far as we are aware, there's no substance" to speculation that a takeover is in the works, company spokesman Dennis Smith said today in a telephone interview. Nabors is based in Bermuda, and run from offices in Houston.

Speculation over a possible leveraged buyout spurred the jump in Nabors' stock price, said Kurt Hallead, an analyst at RBC Capital Markets in Austin, Texas, who rates the driller's shares at "sector perform."

After Nabors shares dropped to a 2006 low of $27.69 in October, down 33 percent from their record high set in January, Chief Executive Officer Gene Isenberg raised the prospect of a leveraged buyout. In a leveraged buyout, or LBO, the buyer borrows money to pay for the purchase, typically using the target company's assets as security.

Nabors "is always evaluating things that are going to increase value for our shareholders," including stock buybacks, Isenberg told investors on an October 25 conference call, following the release of the company's third-quarter earnings report.

If Nabors' stock "stays fairly attractive from our viewpoint, the long view, we'd consider other possibilities, such as LBOs," Isenberg said.