Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Barclays Capital CEO Energy-Power Conference 2011
24 slides from Nabors Industries's conference presentation, Sep 8, 2011
Slide 1: Barclays Capital CEO Energy-Power Conference
Barclays Capital CEO Energy-Power Conference September 8, 2011 Presenters: Gene Isenberg, Chairman & CEO Denny Smith, Director, Corporate Development
Slide 2: Forward Looking Statements
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. Such statements, including statements in this document incorpor
Slide 3: A Conservative and Flexible Financial Position
A Conservative and Flexible Financial Position Balance Sheet Data as of June 30, 2011 ($ Millions) Cash & Securities (1) $715 Accounts Receivable 1,191 Working Capital (1) 1,528 Property, Plant and Equipment, Net 8,372 Total Assets 12,116 Total Debt (2) 4,265 Stockholders’ Equity 5,656 Net Debt to T
Slide 4: Nabors Global Infrastructure
Nabors Global Infrastructure Largest portfolio of premium assets 748 LAND WORKOVER RIGS 551 LAND DRILLING RIGS 13 JACKUPS > 8 Drilling > 5 Workover 580k PRESSURE 4 BARGE RIGS 40 PLATFORM RIGS PUMPING HHP > 24 Workover/Re-Drilling > 16 Drilling Actively Marketed Rigs Only DRILLING TOP DRIVE As of Jun
Slide 5: Fleet Status as of August 24, 2011
Fleet Status as of August 24, 2011 High Low Now Expected Drilling 2008 Avg. 3Q09 Avg. July 11 Avg. 3Q11 Alaska 11 9 4 5 US 48 Drilling 248 124 198 210 GOM Offshore 18 8 11 12 Canada 36 12 34 38 International 120 97 102 112 Total Drilling 433 250 349 376 Well Servicing (hrs/day) US Lower 48 2,998 146
Slide 6: Global Fleet — Cash Flow Equivalent to U.S. Land Rigs
Global Fleet — Cash Flow Equivalent to U.S. Land Rigs More to Nabors than just U.S. land drilling Actual 2Q 2011 U.S. Lower 48 Rig Years Equivalent Rig Count (1) Alaska 4.5 20 U.S. Lower 48 194.2 194 Canada 22.5 30 International 102.8 138 Offshore GOM 9.4 11 Well Servicing - 58 Canrig - 40 SWSI 15 C
Slide 7: Nabors Global AC Rig Fleet
Nabors Global AC Rig Fleet New build rigs for U.S. lower 48 land are only part of the Nabors story To be 6/30/11 delivered Total Alaska Drilling 3 0 3 U.S. Lower 48 Land Drilling 108 36 144 Canada Drilling 22* 4 26 International Drilling 33 3 36 U.S. Offshore Drilling 4 2 6 Total NBR 170 45 215 * In
Slide 8: Nabors Global Term Contract Backlog
Nabors Global Term Contract Backlog Note: Value of contracts in force as of July 30, 2011, assumes no incremental contracts or expiring contract renewals 8
Slide 9: Business Unit Overview
Business Unit Overview Alaska: • Activity down in 2011, bottom is 4Q11 • Onerous taxes, 6% decline rates and high infrastructure maintenance cost inhibits investment • Strong 1Q12 likely leading to favorable 2012 vs. 2011 • Longer-term opportunities and broader applications emerging • Leading positi
Slide 10: Business Unit Overview
Business Unit Overview U.S. Offshore: • Virtually 100% share of deepwater platform rig market • Moratorium/other impacts: $40+/- mm to EBIT in 2010, +/- $30 mm in 2011 • Secured awards for two deepwater platform rigs to deploy late 2012 • Three deepwater rigs back to work • Shallow water workover/P&
Slide 11: Business Unit Overview
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 drilling • Peak Oilfield Services now 100% NBR owned as of Jul
Slide 12: Oil & Gas — Current & Future Sales
Oil & Gas — Current & Future Sales Oil Assets: Colombia : • Sale process complete covering roughly 43% of Llanos acreage • Proceeds of $250 million, book gain $129 million • Expect to spend additional capital on remaining 245,000 net acres to position for future sale Gas Assets: British Columbia and
Slide 13: U.S. Lower Land Drilling
U.S. Lower 48 Land Drilling > As of 8/30/11, 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 was 85% dry gas and 15% liquids • 2011 EBITDA budgeted
Slide 14: U.S. Lower Land Drilling Premium Fleet Makeup
U.S. Lower 48 Land Drilling Premium Fleet Makeup NDUSA Rig Fleet AC AC Rigs @ 6/30/11 108 SCR 33% 38% AC Rigs still to be deployed 36 SCR Upgraded 65 MECH SCR 60 29% Mechanical 93 Current Total 326 U.S. Land Fleet > 233 Electric > 93 Mechanical 14
Slide 15: Strategic Shift — Marcellus Shale Expansion
Strategic Shift — Marcellus Shale Expansion Platform for drilling, well servicing, pressure pumping growth Continued Growth Established Operations Strategic Growth • Further expansion to • 2 drilling rigs • SWSI (pressure pumping) meet our customers’ • Energy Contractors LLC growing needs (well serv
Slide 16: International Drilling
International Drilling > Full-year 2011 EBIT down +/- 38% year-over-year • 3Q 2011 flat with 2Q 2011, 4Q 2011 up 35-40% • Income down with jackup repricing and contract upgrades — Largest impact is 1Q 2011 through 3Q 2011 — Downtime on 4 Saudi jackups for dry dock and upgrades — Lower rates on 3 Sau
Slide 17: Superior Well Services Acquisition
Superior Well Services Acquisition > Continued strong outlook > 18 crews currently A 23 by end of 1Q2012 > Current focus on securing term contracts (eleven currently) > 4Q 2010 EBIT: $54.6 million > 1Q & 2Q 2011: $43-$44 million with weather and temporary costs > 3Q 2011 & beyond should show steady
Slide 18: Summary & Outlook
Summary & Outlook Macro Risk Still Present: • Risk remains in North American Gas Markets • Risk remains on International timing • Risk remains in oil markets due to global GDP uncertainty Nonetheless 2011 is Promising: • International and U.S. Offshore — 4Q11 turnaround • Canada — growing with rig a
Slide 19: Auxiliary Information
Auxiliary Information
Slide 20: U.S. Lower Land Drilling Term Contracts in Force at 6/30/11
U.S. Lower 48 Land Drilling Term Contracts in Force at 6/30/11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 Quarter end number of rigs subject 145 140 104 98 82 73 to term contracts(1) (In $ Millions) Actual Estimates Prior Out Non-Working Rig Revenue Quarters 2Q11 3Q11 4Q11 Years Lump Sum $60.6 $7.0 — - - Lump Su
Slide 21: Margins and Activities
Margins and Activities 2Q11 1Q11 2Q10 Margin (1) Rig Yrs Margin (1) Rig Yrs Margin (1) Rig Yrs US Lower 48 $10,201 194.2 $9,394 187.9 $7,788 172.3 US Offshore 11,937 9.4 $9,945 8.0 20,147 11.0 Alaska 44,615 4.5 $52,542 5.3 30,015 8.0 Canada 11,597 22.5 $12,001 49.7 7,431 17.7 International 13,135 10
Slide 22: Quarterly Adjusted Income (Loss) Derived from Operating Activities
Quarterly Adjusted Income (Loss) Derived from Operating Activities ($000’s) 2Q11 1Q11 2Q10 US Lower 48 $99,231 $80,095 $58,169 Nabors Well Services 16,526 11,123 3,231 US Offshore (1,059) (3,977) 8,104 Alaska 8,288 11,019 12,388 Canada (2,512) 38,992 (9,497) International 35,851 35,497 64,972 Pressu
Slide 23: Non-GAAP Financial Information
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 measure under Regulation G. The components of adjusted income (
Slide 24: Non-GAAP Financial Information (continued)
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 taxes for the three months ended June 30, 2011, March 31, 2011 an
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