Morgan Stanley Summer Houston Energy Summit August 28, 2012 Presenter: Dennis A. Smith Director, Corporate Development & Investor Relations
Macro Outlook Lower Commodity Pricing Affecting Customers Cash Flows & Budgets 120 6 Oil prices down 7% since Jan 2012 and up 4% Jan 2011 100 5 80 4 Natural Gas prices down 5% since Jan 2012 and down 38% since Jan 2011 60…
Macro Outlook Rapidly Declining Gas Directed Rig Count Impacting Horizontal Activity 1,500 328 oil rig increase 1,408 1,400 since Oct 2011 Oil 1,300 1,200 Horiz 1,080 1,100 1,000 936 900 450 gas rig decrease since Oct 2011…
US Land Rig Count At inflection point Down 113 rigs from Nov 2011 peak, 35 since July US Land Rig Count (2003 - Current) 2500 2000 1500 1000 500 0 1/3/2003 1/3/2004 1/3/2005 1/3/2006 1/3/2007 1/3/2008 1/3/2009 1/3/2010 1/3/2011…
Nabors Business Outlook North America rigs and pumping services challenged by weak natural gas prices & volatile oil and NGL prices Contract backlog helps mitigate downside risk Relocation of equipment challenging supply/demand…
Improving Our Performance 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 Deliver operational excellence Our Priorities…
Our Priorities: Streamlined Scope of Services Simplify The Operations: Two Lines of Business Drilling and Rig Services Completion and Production Services 8
Our Priorities: Free Cash Flow Generation Refined capital spending Higher selectivity on capital projects Higher scrutiny on sustaining capital Consolidation savings and synergies Asset Sales E&P properties Selective non-core…
Ample Liquidity With Five Year Duration As of June 30, 2012 (Ms) Interest Face Liquidity and Revolving Credit: Maturity Rate Value Available Cash + Investments 460,634 Credit Line 9/14 1.75% 1,400,000 490,000 Current Liquidity…
Our Priorities: Enhance Balance Sheet Flexibility Targeted Net Debt Reduction 40% 25% by EOY 2013 Actual Targeted(3) (MMs) 1Q12 2Q12 EOY 2012 EOY 2013 Total Debt 4,773 4,674 4,455 3,489 Cash and Investments 500 461 461 586 Net Debt…
Asset Dispositions Status Timing / Value of Rigs US: Peak USA Completed 14 MM Canada: Blue Sky/Airborne Evaluating Bids 2012 Hybrid Coiled Tubing Drilling Rigs Withdrawn 2012 12 Workover & Well Services Evaluating Bids 2012 174 Alaska:…
Asset Dispositions: Oil and Gas Operations Recent Sales: Action Date Proceeds California Sale 4Q11 72 MM Austin Chalk Sale 1Q12 4 MM Colombia Sale 2Q12 73 MM Miscellaneous 2Q12 5 MM Total 154 MM Remaining Properties: Oil & Gas…
Asset Dispositions: Oil and Gas Operations NFR Overview Overview Map of Operations Focused on low risk, predictable resource Total Company development in the Eagle Ford Shale, Haynesville Shale and Cotton Valley Sand fairways in…
Asset Dispositions: Oil and Gas Operations Alaska Land Position 230,000 Gross Acres Ramshorn 50% WI NU Central 56,000 acres OU NSU MPU CRU Appaloosa KRU Telemark PBU LU PTU BU Tofkat Mustang Western 89,000 acres…
Asset Dispositions: Oil and Gas Operations British Columbia Horn River Land Position 33,000 Net Acres 16
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…
Nabors Global Reach High-graded drilling fleet with global footprint At EOY 2012: 207 new AC rigs since 2005 At EOY 2013: 223 new AC rigs since 2005 Significant forthcoming technological advantages Large N.A. platform servicing…
Drilling & Rig Services Global Rig Fleet AC SCR Mech Total Land US Lower 48 152 115 40 307 International 34 63 34 131 Canada 26 21 33 80 Alaska 4 12 3 19 Offshore US GOM 4 26 2 32 International 2 25 - 27 Total 222 275 116…
Drilling & Rig Services US Lower 48 Land Drilling - Premium Fleet Makeup By June 2013, will have built 152 new AC rigs since 2005 92 rigs will have walking systems by June 2013 Since 2006, 28 major upgrades have taken place,…
Drilling & Rig Services International Quick Facts 131 premium rigs throughout all major oil & gas operating regions 96% of drilling rigs have top drives (79 AC & 51 DC) 41 newbuilds in last 5 years 62 refurbs/upgrades in last 5…
Drilling & Rig Services Canada Quick Facts Since 2007: 11 AC new build deployed 13 AC top drives installed 29 automated catwalks installed 8 moving systems installed 35 pump upgrades 23
Canrig: A Technology Success Story Innovation 200th ROCKITTM system installed in 2011 REVITTM Stick-Slip system commercialized in 2011 over 45 installations to date Over 35% of services and rentals revenue in 2011 came from new…
Completion & Production Services Focus on Unconventional Development N.A. Assets Total Workover / Well-Servicing Rigs 678 Coil Tubing Rigs 12 Frac 805,000 HHP Cementing & Other 100,000 HHP Tanker Trucks 1,020 Frac Tanks…
Summary: Why Nabors Global footprint provides opportunity Significant efficiency and consolidation savings Long-term contracts limit downside in pressure pumping and gas drilling Lowering leverage Free cash flow generation…
Auxiliary Slides 28
Nabors Global Infrastructure Expected Seasonally Weak Second Quarter Operating Income (MMs) FY 2011 1Q12 2Q12 US Lower 48 414 132 127 US Offshore 1 8 10 Alaska 28 27 9 Canada 95 49 (4) International 124 21 16 Rig Services 56…
Nabors Global Infrastructure Margins and Activities 2Q11 1Q12 2Q12 Drilling Margin (1) Rig Yrs Margin (1) Rig Yrs Margin (1) Rig Yrs US Lower 48 10,201 194.2 10,942 219.0 11,178 217.9 US Offshore 11,937 9.4 19,630 11.9 18,729…
Drilling & Rig Services US Lower 48 Term Contracts in Force at June 30, 2012 Quarter End Number Of Rigs Subject To Term Contracts(1) 2Q12 3Q12 4Q12 1Q13 2Q13 1Q 2012 149 111 85 71 66 2Q 2012 146 128 87 74 65 (MMs) Actual…
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