Howard Weil 40th Annual Energy Conference March 26, 2012 Presenter: Anthony G. Petrello President & Chief Executive Officer
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.…
Improving Our Performance: Back to the Future Where we went wrong What will not be different What will be different 3
Improving Our Performance: Back to the Future Where We Went Wrong: E&P Investments Unfortunate timing on stock buy backs Suboptimal international capital deployment Missed US growth opportunity 4
Improving Our Performance: Back to the Future What Will Not Be Different Core principles that built Nabors Maintain a strong and flexible balance sheet Invest capital for returns well above our cost of capital Make use of our size…
Improving Our Performance: Back to the Future What Will Be Different: Our Priorities Streamlined scope of services Free cash flow generation Extract more from our asset base 6
Our Priorities: Streamlined Scope of Services Review each Business Unit based upon: Strategic fit Leadership position Growth capability or otherwise strategic Execution effectiveness Superior operational performance Reliable…
Our Priorities: Streamlined Scope of Services Two areas of divestitures Oil & Gas assets Other non-core operations 8
Our Priorities: Streamlined Scope of Services Monetize Oil & Gas Properties: Oil & Gas Assets Status Estimated Value Colombia Acreage In process Included below Eagle Ford In process Included below Alaska North Slope In process…
Our Priorities: Streamlined Scope of Services Monetize Other Non-Core Asset Sales: Status Timing of Rigs Canada: Blue Sky/Airborne In process 2012 Hybrid Coiled Tubing Drilling Rigs In process 2012 12 Workover & Well Services In…
Our Priorities: Free Cash Flow Generation Refined capital spending Higher selectivity on capital projects Higher scrutiny on sustaining capital Consolidation savings and synergies 11
Our Priorities: Enhance Balance Sheet Flexibility Solid credit metrics at 2.2x leverage, 7:1 coverage and long dated maturities Balance sheet data as of December 31, 2011 ( Millions) Cash & Securities 540 Accounts Receivable 1,577…
Our Priorities: Enhance Balance Sheet Flexibility Targeted Net Debt Reduction 42% 25% by 2014 Actual Targeted (Millions) EOY 2011 EOY 2012 EOY 2013 Total Debt 4,624 4,900 3,500 Cash and Investments 550 900 1,100 Net Debt 4,074…
Our Priorities: Extract More From the Asset Base Simplify the operations: Two Divisions Drilling and Rig Services Completion and Production Services 14
Our Priorities: Extract More From the Asset Base Drilling and Rig Services (DRS) LAND RIGS OFFSHORE RIGS SPECIALIZED RIGS - Global leadership position - Unique niche - Unique niche - Premium fleet - High market share - Proprietary…
Our Priorities: Extract More From the Asset Base Assets Tier 1 Tier 2 Tier 3 Land 210 174 138 Offshore 7 47 3 Total 217 221 141 Operating Cash Flow (000s) 2008A 2010A 2011A 4Q Annualized Land 1,361 925 1,176 1,302 Offshore…
Our Priorities: Extract More From the Asset Base Completion and Production Services (CPS) COILED TUBING RIGS WORKOVER/ - Synergies with pressure pumping WELL-SERVICING RIGS - Synergies with workover / well-servicing - Leadership…
Our Priorities: Extract More From the Asset Base Assets Total Workover / Well-Servicing Rigs 575 Coil Tubing Rigs 12 Frac 857,000 HHP Cementing & Other 100,000 HHP Tanker Trucks 996 Frac Tanks 3,929 Disposal Wells 21 Operating…
Our Priorities: Extract More From the Asset Base Planned Change: Two effective, product-oriented business lines Migrate away from business unit structure Consolidate regional operations management Establish customer account…
Our Priorities: Extract More From the Asset Base Target Benefits - Financial Economies from business unit consolidation Elimination of redundant unit support functions Elimination of redundant facilities Improved asset…
Our Priorities: Extract More From the Asset Base Target Benefits - Operational and Technical Centralized engineering, project management and technology development More effective use of technical resources More rapid and uniform…
Looking Ahead: What We Will Look Like Operating Cash Flow (000s) 2008A 2011A 4Q Annualized Drilling & Rig Services 1,795 1,437 1,587 Completion & Production Services 243 580 627 Total (1) 2,038 2,017 2,214 (1) Operating…
Looking Ahead: Assets Strategically Positioned in Major US Plays Working Fluid Shale Plays & Drilling Frac Well Svc Svc Frac Basin Rigs Crews CTU Rigs Trucks Tanks Marcellus 14 4 3 27 155 720 Haynesville 32 1 - 9 43 186…
Looking Ahead: Risk Factors Current risk primarily results from weaker natural gas pricing & growing supply of frac crews Anticipate US land rig count for the industry will be flat to down slightly in second half of 2012…
Looking Ahead: Risk Mitigation Repositioned to oil, 80% of 2012 global cash flow Long-term contracts significantly mitigate NBR exposure in both segments US Land: 186 of 220 rigs under term contracts at 12/31/11 cancellation…
Looking Ahead: What Contributes to Our Optimism Lower 48 drilling expected to increase 25 additional rigs operating in 2012 21 newbuilds to be deployed in 2012 Margins up slightly on mix International expected to improve 18…
Looking Ahead: What Contributes to Our Optimism Expanded Use of Technology as Differentiator 200th ROCKIT system installed in 2011 REVIT Stick-Slip system commercialized in 2011 over 45 installations to date Commercializing of new…
Summary: Why Nabors Visibility on 2012 upside International, Offshore, Well-Servicing Significant efficiency and consolidation savings Global footprint provides opportunity Long-term contracts limit downside in pressure pumping…
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