Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Goldman Sachs Global Energy Conference 2011
21 slides from Nabors Industries's conference presentation, Jan 11, 2011
Slide 1: Goldman Sachs Global Energy Conference 2011
Goldman Sachs Global Energy Conference 2011 January 11th, 2011 Dennis A. 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: Nabors Operational Map
Nabors Operational Map 13 JACK-UPS 8 Drilling 5 Workover 3 BARGE RIGS 38 PLATFORM RIGS 24 Workover/Re-Drilling 14 Drilling 728 LAND WORKOVER RIGS 554 LAND DRILLING RIGS Actively Marketed Rigs Only As of September 30, 2010 DRILLING INSTRUMENTATION TOP DRIVE MANUFACTURING OILFIELD SERVICES
Slide 4: A Conservative and Flexible Financial Position
A Conservative and Flexible Financial Position Cash & Securities (1) Cash & Securities (1) $809,917 $809,917 $809,917 Accounts Receivable Accounts Receivable 1,002,974 1,002,974 1,002,974 Working Capital (1) Working Capital (1) 304,404 304,404 304,404 Property, Plant and Equipment, Net Property, Pla
Slide 5: Capital Structure Progression
Capital Structure Progression In $ millions Debt EBITDA (1) Debt / EBITDA @ 9/30/2008 $4,212 $1,567 2.7x New borrowing: Jan. '09 $1,125 Repayment: Aug. '09 ($225) Repurchase: 2009-2010 ($1,307) New borrowing: Sep. '10 $700 @ 9/30/2010 $4,509 $1,605 2.8x Repayment: May '11 ($1,442) @ 6/30/2011 $3,067
Slide 6: Business Unit Overview
Business Unit Overview Alaska: Activity down with BP spending curtailment Results down 20% 09-10; 2011 down another 40% Longer-term opportunities and broader applications emerging Leading position in coiled-tubing drilling and AC technology US Well Servicing: Hours have steadily improved year-to-dat
Slide 7: Business Unit Overview
Business Unit Overview Canada: Increasingly positive versus 2009 loss 2011 outlook continues to improve with oil activity & B.C. shales We remain optimistic on our long-term position as market direction favors NBR fleet Other Segments: Innovative, technology-based products are currently being rolled
Slide 8: Oil & Gas - Planned Sales
Oil & Gas - Planned Sales Oil Assets: Colombia: 420k acres in 14 blocks (Llanos basin) Sale on track for early 2011 closing; in line with expectations Gas Assets: 2011 sale unlikely given weak natural gas environment; Long-term value expectations still intact British Columbia: 34k acres in Horn Rive
Slide 9: Oil & Gas - Remaining Assets
Oil & Gas - Remaining Assets Eagle Ford - 14k acres in oil window California - Cat Canyon steam flood reactivation project; Expected production in mid 2011 Alaska - 67k net acres on Alaska North Slope Barnett Shale - 17k net acres working interest Fayetteville Shale - 26k net acres working interest
Slide 10: US Lower Land
US Lower 48 Land As of 1/3/11, NDUSA has 186 rigs on revenue Virtually all PACE(r) rigs committed Full utilization of PACE(r) rigs has improved the market for SCR rigs Activity increasing in oil & liquids driven regions Percent of Cash Flow (EBITDA) in 2006: 85% gas; 15% Oil & Liquids Percent of Cas
Slide 11: Premium Domestic Rig Fleet
Premium Domestic Rig Fleet U.S. Land Fleet 223 Electric 97 Mechanical A/C 31% MECH 30% SCR 39% NDUSA Rig Fleet NDUSA Rig Fleet AC Rigs @ 9/30/2010 100 AC Rigs still to be deployed 17 SCR Upgraded 63 SCR 60 Mechanical 97 Total 320
Slide 12: International Drilling
International Drilling Deeper trough & slower recovery than expected (mainly Mexico & Saudi) High confidence that 2010-2011 is the bottom 2011 higher rig count yields EBIT up $50 million 2011 jack-ups re-pricing yields EBIT down $50 million Largest impact is 1Q11 followed by 2Q11 Dry docking on jack
Slide 13: SWSI Acquisition
SWSI Acquisition Purchase price of approximately $900 million Closed 34 days (September 10th) following announcement 3Q 2010 results: $12 million EBIT in 20 days implies +/- $200 million full-year EBIT Focus on Term Contracts
Slide 14: SWSI Locations
SWSI Locations Service centers located in nearly all major U.S. basins Leadership in the Marcellus, with 127,000 hp operating in the region Significant presence in other unconventional plays including Haynesville, Bakken, Woodford and Barnett
Slide 15: Summary & Outlook
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 activity U.S. Land Well Servicing - growing with volume, pricing
Slide 16: SHOW ME!!!
SHOW ME!!! To Do List: Initial demonstration of E&P values Demonstrate SWSI value Resume International growth Post sequential quarterly growth Enhanced multiple with increasing income Earn back premium to peers
Slide 17: Auxiliary Information
Auxiliary Information @) nasons mousrmIEs 170.
Slide 18: Margins and Activities
Margins and Activities Margin = gross margin per rig per day for the period. Gross margin is computed by subtracting direct costs from operating revenues for the period. 3Q10 3Q10 2Q10 2Q10 3Q09 3Q09 Margin (1) Rig Yrs Margin (1) Rig Yrs Margin (1) Rig Yrs US Lower 48 8,629 182.2 7,788 172.3 9,673 1
Slide 19: Quarterly Adjusted Income Derived from Operating Activities
Quarterly Adjusted Income Derived from Operating Activities ($000's) 3Q10 2Q10 3Q09 US Lower 48 70,452 58,169 46,382 Nabors Well Services 9,049 3,231 342 US Pressure Pumping 11,987 ----- ----- US Offshore (1,090) 8,104 (163) Alaska 14,299 12,388 11,145 Canada 1,013 (9,497) (10,448) International 64,
Slide 20: 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 derived from operating activities, which is a "non-GAAP" financial measure under Regulation G. The components of adjusted income derived
Slide 21: Non-GAAP Financial Information (continued)
Non-GAAP Financial Information (continued) The following table provides a reconciliation of adjusted income derived from operating activities for our reportable segments to income (loss) from continuing operations before income taxes for the three months ended September 30, 2010, June 30, 2010 and S
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