Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q4 2011 Earnings Presentation
23 slides from Nabors Industries's earnings presentation, Feb 22, 2012
Slide 1: 4Q 2011 Earnings Presentation
February 22, 2012 Presenter: Anthony G. Petrello Deputy Chairman, President & Chief Executive Officer 4Q 2011 Earnings Presentation Exhibit 99.2
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: Refining Our Business
Refining Our Business > Enhance balance sheet flexibility > Review each Business Unit for: – Strategic fit – Execution effectiveness – Capital efficiency > Realign with Customers – Drilling & Rig Services – Completion & Production Services
Slide 4: Re-Establish Balance Sheet Flexibility
Re-Establish Balance Sheet Flexibility Increased Focus on Balance Sheet Management and Net Debt Reduction Balance Sheet Data as of December 31, 2011 ($ Millions) Cash & Securities Accounts Receivable 1,577 Working Capital 1,286 Property, Plant and Equipment, Net 8,630 Total Assets 12,912 Total Debt
Slide 5: Re-Establish Balance Sheet Flexibility
Re-Establish Balance Sheet Flexibility Liquidity > Current liquidity approximately $1.0 billion > Expect OCF to fund all capital expenditures, redeem current debt and provide significant free cash flow Total debt > Weighted average coupon is 5.8% > Interest coverage ratio approximately 8 to 1 Term d
Slide 6: Business Line & Asset Class Evaluation
Business Line & Asset Class Evaluation Criteria > Leadership position > Attractive investment returns > Capable of growth or otherwise strategic
Slide 7: Our Business Lines: An Overview
Our Business Lines: An Overview Operating Segments by Line of Business Drilling and Rig Services – US Lower 48 – GOM Offshore – Canada – Ryan – Alaska – Peak – International – Canrig Completion and Production Services – US Workover and Well Servicing – US Fluids Management and Logistics – Canada Wor
Slide 8: Assets Strategically Positioned in Major US Unconventional Plays
Assets Strategically Positioned in Major US Unconventional Plays Shale Plays & Basin Working Drilling Rigs Frac Crews CTU Well Svc Rigs Fluid Svc Trucks Frac Tanks Marcellus Haynesville - Bakken/Rockies Eagle Ford Permian - Barnett - Granite Wash - Other - Total Note: Includes 2012 scheduled new equ
Slide 9: Nabors Global AC Rig Fleet
Nabors Global AC Rig Fleet New build rigs for US lower 48 land are only part of the Nabors story 12/31/11 To Be Delivered Total Alaska Drilling US Lower 48 Land Drilling Canada Drilling (1) International Drilling US Offshore Drilling Total NBR (1) Includes 10 AC Hybrid Coiled Tubing rigs
Slide 10: Accelerating Operating Cash Flow
Our Business Lines: An Overview Accelerating Operating Cash Flow 4Q Consolidated Run Rate exceeds Prior High and Increasing GAAP FY 2008 FY 2011 4Q11 Annualized US Lower 48 $839 $703 $826 US Well Servicing US Offshore Alaska Canada International Pressure Pumping Oil & Gas Other Sub total $2,035 $2,0
Slide 11: Margins and Activities
Margins and Activities (1) Margin = gross margin per rig per day for the period. Gross margin is computed by subtracting direct costs from operating revenues for the period. 4Q11 3Q11 4Q10 Margin (1) Rig Yrs Margin (1) Rig Yrs Margin (1) Rig Yrs US Lower 48 $10,922 216.7 $10,176 201.8 $9,472 184.3 U
Slide 12: Quarterly Adjusted Income (Loss)
Quarterly Adjusted Income (Loss) Derived from Operating Activities ($000’s) 4Q11 3Q11 4Q10 US Lower 48 $130,114 $104,877 $85,308 Nabors Well Services 24,237 22,839 12,132 US Offshore 3,422 2,457 (5,142) Alaska 5,343 3,021 11,252 Canada 36,553 21,604 16,572 International 23,450 29,015 71,814 Pressure
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Slide 14: U.S. Lower Land Drilling: Term Contracts in Force
U.S. Lower 48 Land Drilling Term Contracts in Force at 12/31/11 (1) Represents the quarter end number of contracts in force with no incremental contract awards in the future. Quarter end number of rigs subject to term contracts (1) 4Q11 1Q12 2Q12 3Q12 4Q12 3Q 2011 4Q 2011 2011 Contract Signatures 1Q
Slide 15: Lower 48 Summary by Basin
Lower 48 Summary by Basin Basin Oil/Gas Working Rigs Approx. Market Share Marcellus Gas 6% Haynesville Gas 13% Bakken/Rockies Oil/Gas 20% Eagle Ford Oil 15% Permian Oil 8% Barnett Gas Granite Wash Oil/Gas 5% Other Oil/Gas N/A Total
Slide 16: US Lower Land Drilling - Premium Fleet Makeup
Drilling Rigs & Services US Lower Land Drilling - Premium Fleet Makeup NDUSA Rig Fleet # of Rigs Util. AC Rigs @ 12/31/11 100% SCR Upgraded 85% SCR 50% Mechanical 68% Current Total 83% AC Rigs still to be deployed 100% Total 84% Expected % AC and AC Equivalent 71%
Slide 17: Canada Summary by Basin
Canada Summary by Basin Basin Oil/Gas Working Rigs Term Contracts Approx. Market Share Horn River Gas 4.0 24.0% Montney Oil/Gas 0.0 19.0% Duvernay Oil 2.0 11.0% Oil Sands Oil 2.0 6.0% Cardium Oil 0.0 13.0% Saskatchewan Oil 0.0 2.0% Total
Slide 18: Completion & Production Services
Completion & Production Services
Slide 19: Pressure Pumping Assets by Basin
Pressure Pumping Assets by Basin 4Q 2011 1Q 2012 EOY 2012 Pressure Pumping Coil Tubing Cementing Pressure Pumping Coil Tubing Cementing Pressure Pumping Coil Tubing Cementing Marcellus - Haynesville - - - Bakken/Rockies - Eagle Ford Permian - - - Barnett - - - - - - Granite Wash - - - Other Lower 48
Slide 20: Pressure Pumping Summary by Basin
Pressure Pumping Summary by Basin Basin Oil/Gas # of Crews LTSA Spot Approx. Market Position Marcellus Gas 4.0 2.0 2.0 T-4 th Haynesville Gas 1.0 0.0 1.0 T-4 th Bakken/Rockies Oil/Gas 11.0 8.0 3.0 nd Eagle Ford Oil/Gas 4.0 2.0 2.0 T-6 th Permian Oil 3.0 1.0 2.0 T-6 th Barnett Gas 1.0 1.0 0.0 T-5 th
Slide 21: Well Servicing Product Lines
Well Servicing Product Lines
Slide 22: Summary by Basin
Summary by Basin Basin Well Svc Rigs Fluid Svc Trucks Frac Tanks Bakken / Rockies Granite Wash / Mississippian Permian Basin Marcellus / Utica Eagle Ford Barnett / Haynesville San Joachim / Long Beach Total
Slide 23: Canrig: A Technology Success Story
Canrig: A Technology Success Story > Innovation – 200th ROCKIT TM system installed in – REVIT TM Stick-Slip system commercialized in – over installations to date – Over 35% of services and rentals revenue in 2011 came from new products, technologies and services introduced the past three years – Suc