2011 Jefferies Global Energy Conference December 1, 2011 Presenter: Denny Smith Director, Corporate Development
Forward Looking Statements We often discuss expectations regarding our markets, demand for our products and services, and our future performance in our annual and quarterly reports, press releases, and other written and oral statements.…
Principles Upon Which Nabors Was Built Maintain a strong and flexible balance sheet Take advantage of opportunities as they arise Leverage our global infrastructure Achieve superior HSE performance Achieve superior operational…
A Great Platform An unparalleled asset base Established worldwide infrastructure Supply chain advantages Access to virtually all major worldwide markets Customer relationships with most major players Ideal corporate structure for…
Nabors Global Infrastructure Largest portfolio of premium assets 749 LAND WORKOVER RIGS 491 LAND DRILLING RIGS 12 JACKUPS 7 Drilling 5 Workover 680k PRESSURE 4 BARGE RIGS 39 PLATFORM RIGS PUMPING HHP 25 Workover/Re-Drilling…
Nabors Global AC Rig Fleet New build rigs for US lower 48 land are only part of the Nabors story To Be 11/11/11 Delivered Total Alaska Drilling 3 0 3 US Lower 48 Land Drilling 116 31 147 Canada Drilling 23* 3 26 International…
Global Fleet - Cash Flow Equivalent to US Land Rigs More to Nabors than just U.S. land drilling Actual 3Q 2011 U.S. Lower 48 Rig Years Equivalent Rig Count (1) Alaska 4.7 17 U.S. Lower 48 201.8 202 Canada 41.8 58 International…
Our Business Lines: An Overview Operating Segments by Line of Business Drilling Rigs and Services US Lower 48 GOM Offshore Canada Ryan Alaska Peak International Canrig Well Site and Production Services US Workover and Well…
Our Business Lines: An Overview Fleet Status (Sept 2011): Activity Improving Across all Operations High Low Now Drilling 2008 3Q09 3Q11 Exp. Avg. Avg. Avg. 4Q11 Alaska 11 9 5 5 US 48 Drilling 248 124 202 218 GOM Offshore 18 8 11 12…
Our Business Lines: An Overview Accelerating Operating Cash Flow 3Q Consolidated Run Rate at Prior Highs and Increasing 3Q11 FY 2008 TTM Annualized US Lower 48 839 648 713 US Well Servicing 214 136 175 US Offshore 102 28 50 Alaska 74…
Priority Areas for Review and Action Re-establish balance sheet flexibility Evaluate each business line for strategic fit, execution effectiveness and return hurdles 11
Re-Establish Balance Sheet Flexibility Increased Focus on Balance Sheet Management and Net Debt Reduction Balance Sheet Data as of September 30, 2011 ( Millions) Cash & Securities 436 Accounts Receivable 1,398 Working Capital 1,129…
Re-Establish Balance Sheet Flexibility Liquidity Current liquidity approximately 1.0 billion Expect 2012 OCF to fund all capital expenditures, redeem current debt and provide significant free cash flow Total debt Weighted average…
Re-Establish Balance Sheet Flexibility Assured Cash Flow is Relatively Constant Continued Term Contract Emphasis Note: Value of contracts in force as of September 30, 2011, assumes no incremental contracts or renewal of expiring…
Re-Establish Balance Sheet Flexibility De-levering Increase EBITDA to reduce net debt More discipline and higher hurdles for new projects Monetize non-performing and non-strategic assets 15
Evaluate Each Business Line Drilling Rigs & Services A Closer Look 16
Drilling Rigs & Services US Lower 48 Land Drilling: 106 127 113 123 Total Working Rigs: 219 now 250 w/ new builds 17
Drilling Rigs & Services US Lower 48 Land Drilling: Nabors Including Frac Shale Plays and Basins Rigs New Builds Crews Marcellus 12 14 2 Haynesville/Tuscaloosa 32 35 2 Permian 26 26 2 Barnett 3 3 2 Eagle Ford 36 43 3 Woodford 3 3 1…
Drilling Rigs & Services US Lower 48 Land Drilling: Premium Fleet Makeup NDUSA Rig Fleet AC Rigs 11/11/11 116 SCR Upgraded 65 SCR 44 Mechanical 41 Current Total 266 AC Rigs still to be deployed 31 Total 297 Expected % AC and AC…
Drilling Rigs & Services US Lower 48 Land Drilling: YTD EBITDA: 496MM; YTD EBIT: 284MM As of 11/11/11, 219 rigs on revenue Full utilization of PACE rigs strengthens market for SCR and Mechanical rigs Leading edge pricing continues to…
Drilling Rigs & Services International: YTD EBITDA: 301.5MM; YTD EBIT: 100.3MM 1Q12 should reflect the bottom 4Q11 and 1Q12 impacted by delays in contract awards, start- ups, rig upgrades, and jackup dry docking 3Q rig count…
Drilling Rigs & Services Canada: YTD EBITDA: 117MM; YTD EBIT: 58MM 3Q - Strong post break-up recovery at 21.6MM EBIT Cardium & NE British Columbia shales driving increased activity Significant upside remaining as 2011 projected…
Drilling Rigs & Services Alaska: YTD EBITDA: 50.5MM; YTD EBIT: 22.3MM Strong 1Q & 2Q 2012 due to more active exploration season Approximately 75% of 2011/2012 exploration work to be performed by Nabors Reduced oil & gas tax…
Drilling Rigs & Services US Offshore: YTD EBITDA: 24.9MM; YTD EBIT: (2.6MM) Returned to profitability in 3Q at 2.5MM EBIT Six deepwater platform rigs back to work Per IADC, permitting approval rate is 85% below pre-Macondo level,…
Evaluate Each Business Line Wellsite & Production Services 25
Wellsite & Production Services US Well Servicing: Operating Facilities District California 16 Mid-Continent 12 Rocky Mountain 16 Northeast 9 Southeast 24 Western 21 Total 98 26
Wellsite & Production Services US Well Servicing: YTD EBITDA: 108MM; YTD EBIT: 50.5MM 4Q & 1Q likely to be flat due to holidays and weather Pricing steady with modest net increases as costs are increasing 1000 new frac tanks in…
Wellsite & Production Services US Pressure Pumping: Building a Strong Geographic Presence 28
Wellsite & Production Services US Pressure Pumping: Good Competitive Positions Spread Counts Key Market Total HAL SLB BHI SWS Appalachia 40 6 5 5 3 going to 5 Eagle Ford 50 7 7 4 3 West Texas 80 17 8 14 5 Rockies-Bakken 48 18 9 7 5…
Wellsite & Production Services US Pressure Pumping: YTD EBITDA: 228.6MM; YTD EBIT: 152.7MM Increasingly competitive in some regions Capacity balance pushing to the right Currently 20 crews (745k frac HHP) 25 (855k frac HHP) by…
Wellsite & Production Services US Pressure Pumping: Opportunities Supply chain integration into Nabors Material warehousing and storage economies Margin improvement Sand hauling and logistics capture of revenue Water…
Evaluate Each Business Line Oil & Gas: Expeditiously monetize in an orderly and optimal manner Net Cash Cash Invested Proceeds to Date Position 2,100MM 845MM (1,255)MM Wholly Owned Net Acreage: (000s Acres) British Columbia Shales…
Summary Great opportunity for Nabors and its shareholders Unequalled global asset quality and infrastructure Virtually every segment improving with good longer-term outlook Numerous attractive growth opportunities Urgent action…
Auxiliary Information
US Lower 48 Land Drilling Term Contracts in Force at 9/30/11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Quarter-end number of rigs 163 144 124 104 86 69 subject to term contracts(1) (In Millions) Actual Estimates Prior Out Non-Working Rig…
Quarterly Adjusted Income (Loss) Derived from Operating Activities (000s) 3Q11 2Q11 3Q10 US Lower 48 104,877 99,231 70,452 Nabors Well Services 22,839 16,526 9,049 US Offshore 2,457 (1,059) (1,090) Alaska 3,021 8,288 14,299…
Non-GAAP Financial Information Within the preceding slides in this presentation, we present, both historically and on a forward-looking basis, our adjusted income (loss) derived from operating activities, which is a non-GAAP financial…
Non-GAAP Financial Information (continued) The following table provides a reconciliation of adjusted income (loss) derived from operating activities for our reportable segments to income (loss) from continuing operations before income…
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