Macquarie Energy Conference May 26, 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.…
A Conservative and Flexible Financial Position Balance Sheet Data as of March 31, 2011 ( Millions) Cash & Securities (1) 774 Accounts Receivable 1,242 Working Capital (1) 480 Property, Plant and Equipment, Net 7,975 Total Assets…
Nabors Global Infrastructure Largest portfolio of premium assets 727 LAND WORKOVER RIGS 550 LAND DRILLING RIGS 13 JACKUPS 8 Drilling 5 Workover 450k PRESSURE 3 BARGE RIGS 37 PLATFORM RIGS PUMPING HHP 23 Workover/Re-Drilling…
Strategic Shift of Global Business Mix Significant movement towards oil & liquids 2010 2006 20% 35% 65% 80% North American Gas North American Liquids & Global Oil (1) Percent of drilling, well servicing, and pressure…
Global Fleet - Cash Flow Equivalent to U.S. Land Rigs More to Nabors than just U.S. land drilling Actual 1Q 2011 U.S. Lower 48 Rig Years Equivalent Rig Count (1) Alaska 5.3 30 U.S. Lower 48 187.9 188 Canada 49.7 63 International…
Nabors Global AC Rig Fleet New build rigs for U.S. lower 48 land is only part of the Nabors story To be 5/01/11 delivered Total Alaska Drilling 3 0 3 U.S. Lower 48 Land Drilling 104 25 129 Canada Drilling 22* 4 26 International…
Strategic Shift Marcellus Shale Expansion Platform for drilling, well servicing, pressure pumping growth Strategic Opportunities Established Operations Strategic Growth Further expansion to meet our customers 2 drilling rigs…
Business Unit Overview Alaska: Activity down in 2011, bottom is 4Q11 Onerous taxes, 6% decline rates and high infrastructure maintenance cost inhibits investment Longer-term opportunities and broader applications emerging Leading…
Business Unit Overview U.S. Offshore: Virtually 100% share of deepwater platform rig market Moratorium/other impacts: 40+/- mm to EBIT in 2010, +/- 20 mm in 2011 Secured awards for two deepwater platform rigs to deploy late 2012…
Business Unit Overview Other Segments: Strong Canrig backlog Innovative, technology-based products are currently being rolled out yielding competitive edges in our rig operations Ryan - broader applications emerging for directional…
Oil & Gas Planned Sales Oil Assets: Colombia: Sale process nearly complete covering roughly 43% of Llanos acreage Proceeds of 250+ million Expect to spend additional capital on remaining 245,000 net acres to position for future sale…
U.S. Lower 48 Land Drilling As of 5/01/11, NDUSA has 204 rigs on revenue Virtually all PACE rigs committed Full utilization of PACE rigs strengthen market for SCR rigs Activity increasing in oil & liquids driven regions 2006 EBITDA…
U.S. Lower 48 Land Drilling Premium Fleet Makeup NDUSA Rig Fleet AC SCR AC Rigs 5/01/11 104 32% 39% AC Rigs still to be deployed 25 SCR Upgraded 65 MECH SCR 60 29% Mechanical 93 U.S. Land Fleet Current Total 322 229…
U.S. Lower 48 Land Drilling Recent Achievements Bakken: NDUSA rig achieved 1,000 days without recordable incident. Drilled a horizontal well in 15.88 days (spud to td) Marcellus: NDUSA rig drilled 8,000 ft in 3.88 days (spud to td)…
Nabors Global Infrastructure International competitive advantages High barriers to entry Favorable international tax position Established footprint (yards, offices, facilities) Large pool of national management Large pool of TCN…
International Drilling Full-year 2011 EBIT down 20% year-over-year 4Q 2011 EBIT should approximate 4Q 2010 EBIT Jackup repricing and downtime (90) million in 2011 EBIT Largest impact in 1Q 2011 and 2Q 2011 Downtime on 4 Saudi…
Superior Well Services Acquisition Continued strong outlook 15 crews currently 23 by EOY 2011 Current focus on securing term contracts 4Q 2010 EBIT: 54.6 million 1Q 2011: 43.7 million with weather and temporary costs Capacity…
Nabors Key Value Drivers Combined these yield significant operational leverage Pricing Financial Leverage Flexibility Global Utilization Value Infrastructure Leverage Creation Premium Capacity Assets Leverage 19
Pricing & Utilization Leverage Incremental increase yields significant upside Pricing: 5% increase in pricing applied to annualized 4Q 2010 results of all operating business units (excluding oil & gas) yields a 30% increase in…
Acquisitions & Growth Additions ACQUISITIONS Acquisition Actual 4Q 2010 EBIT EBIT (U.S. Millions) Costs (1) 2010 EBIT Annualized Payback Est. ROCE 2010 927.6 66.7 230.7 4x 16% GROWTH ADDITIONS Growth Capital (2) Est. ROCE 2010…
Summary & Outlook Macro Risk Still Present: Risk remains in North American Gas Markets Risk remains on International timing Nonetheless 2011 is Promising: International and U.S. Offshore 2nd Half Turnaround Canada growing with rig…
Quarterly Adjusted Income Derived from Operating Activities (000s) 1Q 11 4Q 10 1Q 10 U.S. Lower 48 80,095 85,308 60,286 Nabors Well Services 11,123 12,132 7,185 Pressure Pumping 43,715 54,664 ---- U.S. Offshore (3,977) (5,142)…
Non-GAAP Financial Information Within the preceding slides in this presentation, we present, both historically and on a forward- looking basis, our adjusted income derived from operating activities, which is a non-GAAP financial measure…
Non-GAAP Financial Information (continued) The following table provides a reconciliation of adjusted income derived from operating activities for our reportable segments to income from continuing operations before income taxes for the…
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