Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q3 2022 Earnings Presentation
27 slides from Nabors Industries's earnings presentation, Oct 25, 2022
Slide 1: 3Q 2022 Earnings Presentation
NABORS INDUSTRIES LTD. October 25, 2022 3Q 2022 Earnings Presentation
Slide 2: Forward Looking Statements
NABORS.COM We often discuss expectations regarding our future markets, demand for our products and services, and our performance in our annual, quarterly, and current reports, press releases, and other written and oral statements . Such statements, including statements in this document that relate t
Slide 3: Rig Utilization and Availability
NABORS.COM 3 9/30/2022 Rig Utilization and Availability RIG FLEET (1)(2) 328 RIGS ON REVENUE (1) 177 UTILIZATION AT 9/30/2022 54% TOTAL U.S. OFFSHORE 12 3 25% 16 4 25% ALASKA INTERNATIONAL 133 75 56% 111 94 85% U.S. LOWER - 48 HIGH SPEC (2) (1) As of September 30, 2022 (2) Excludes non - high spec r
Slide 4: Recent Highlights
NABORS.COM Improving liquidity and leverage Reduced net debt by $2 3 M in 3Q’22 Adjusted free cash flow of $35M 3Q 2022 adjusted EBITDA of $191M Strong improvement in all segments Revenue growth of 10% Adjusted EBITDA margin (1) of 28% Drilling Solutions growth and market penetration 3Q’22 adjusted
Slide 5: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower - 48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de - lever Leading in Sustainability and the Energy Transition Five Keys to Excellence 2 3 4 5 1
Slide 6: Performance Excellence In The Lower-48
NABORS.COM 0 10 20 30 40 50 60 70 80 90 100 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2020 2021 2022 L48 Drilling Average Rig Count $0 $50 $100 $150 $200 $250 $300 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2020 2021 2022 L48 Drilling Revenue and Adjusted Gross Margin Operating Revenue Adjusted Gross Margin 6 Improving revenue and marg
Slide 7: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower - 48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de - lever Leading in Sustainability and the Energy Transition 2 3 4 5 1 Five Keys to Excellence
Slide 8: Strong and Growing International Margins and Rig Counts
NABORS.COM 50 55 60 65 70 75 80 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2020 2021 2022 International Drilling Average Rig Count $0 $50 $100 $150 $200 $250 $300 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2020 2021 2022 International Drilling Revenue and Adjusted Gross Margin Operating Revenue Adjusted Gross Margin Increases in rig act
Slide 9: Significant Growth Trajectory in Saudi Arabia
NABORS.COM 65 70 75 80 85 1QA 2QA 3QA 4QE 1Q 2Q 3Q 4Q 2022 2023E International Average Rig Count Potential Estimated* Growth from SANAD alone 9 Significant Growth Trajectory in Saudi Arabia Resilience Leading to Growth in Our International Segment • 50 rigs over 10 years, awarded 5 rigs to - date •
Slide 10: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower - 48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de - lever Leading in Sustainability and the Energy Transition 2 3 4 5 1 Five Keys to Excellence
Slide 11: NDS Capitalizing on Growing Rig Count and Higher Penetration
NABORS.COM 30% 35% 40% 45% 50% 55% 60% 65% $- $10 $20 $30 $40 $50 $60 $70 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2020 2021 2022 NDS Revenue & Adjusted Gross Margin Revenue Adjusted gross margin Adjusted GM % 11 NDS Capitalizing on Growing Rig Count and Higher Penetration Improving Outlook For Our Technology & Inno
Slide 12: Customer Adoption Fueling Rapid NDS Footprint Expansion
NABORS.COM Customer Adoption Fueling Rapid NDS Footprint Expansion 45 52 58 64 71 83 87 92 0 10 20 30 40 50 60 70 80 90 100 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2020 2021 2022 U.S. RigCLOUD® Services Installs Nabors 3rd Party 0 20 40 60 80 100 120 140 160 180 ROCKit SmartDRILL U.S. Performance Software Installs
Slide 13: SmartDRILL Significantly Improving Performance
NABORS.COM Case Study: F or a major operator in Colombia Savings of > $103,000 per well D rives performance R educes cost Mitigates variability 13 SmartDRILL ® Significantly Improving Performance - 10 20 30 40 Pre-SmartDRILL SmartDRILL Minutes Average Connection Time - 38% SmartNAV® Automated direct
Slide 14: Smart Suite Growth Trajectory Validates Customer Acceptance
NABORS.COM 0 500 1000 1500 2000 2500 Q2'17 Q4'17 Q2'18 Q4'18 Q2'19 Q4'19 Q2'20 Q4'20 Q1'21 Q2'21 Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Cumulative Number of Wells Drilled 14 Smart Suite Growth Trajectory Validates Customer Acceptance Improving Outlook For Our Technology & Innovation • 92% Customer Retention
Slide 15: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower - 48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de - lever Leading in Sustainability and the Energy Transition 2 3 4 5 1 Five Keys to Excellence
Slide 16: Significant Headway toward Financial Goals
NABORS.COM $- $0.5 $1.0 $1.5 $2.0 $2.5 $3.0 $3.5 $4.0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2018 2019 2020 2021 2022 Billions Net Debt 16 Significant Headway toward Financial Goals Progress on Our Commitment to De - lever 4 ~ $1.7B Net Debt (1) reduction from previous high in 1Q 2
Slide 17: Five Keys to Excellence
NABORS.COM Performance excellence in the Lower - 48 Expanding & enhancing our International segment Advancing technology & innovation with demonstrated results Progress on our commitment to de - lever Leading in Sustainability and the Energy Transition 2 3 4 5 1 Five Keys to Excellence
Slide 18: Moving Forward on the Energy Transition
NABORS.COM Expanding the implementation of solutions on third - party rigs Energy Efficiency & Emission Reduction Technologies Geothermal Development Leveraging IP to create products applicable beyond the rigs, including carbon capture technologies Expansion Beyond Oil & Gas Further differentiating
Slide 19: Growing Commitment to Operational and Environmental Stewardship
NABORS.COM 19 Leading in Sustainability and the Energy Transition • Advanced control system optimizes the efficiency of fuel consumption • Deploying energy storage systems on multiple rigs • Introducing innovative fuel enhancer to reduce fuel consumption and GHG emissions • Achieved approximately a
Slide 20: Geothermal Market
NABORS.COM Geothermal Market Technology Advancements Ubiquitous Ability to create heat reservoirs by drilling into deep rock formations Technological advancements are enabling wide - scale commercial geothermal development Innovative Drilling Technologies Reducing cost per energy - unit produced by
Slide 21: Appendix
NABORS.COM Appendix 21
Slide 22: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
NABORS.COM Three Months Ended September 30, June 30, September 30, 2021 2022 2022 Net income (loss) ($115,722) ($69,935) ($4,461) (Income) loss from discontinued operations, net of tax 20 0 0 Income (loss) from continuing operations, net of tax ($115,702) ($69,935) ($4,461) Income tax expense (benef
Slide 23: Adjusted Gross Margin Reconciliation
NABORS.COM Three Months Ended September 30, June 30, September 30, 2021 2022 2022 Lower 48 - U.S. - Drilling Adjusted operating income (30,783)$ (937)$ 25,551$ Plus: General and administrative costs 4,606 4,740 4,798 Plus: Research and engineering 1,296 1,611 1,652 GAAP Gross Margin (24,881) 5,414 3
Slide 24: Reconciliation of Net Debt to Total Debt
NABORS.COM 24 Reconciliation of Net Debt to Total Debt Net debt is computed by subtracting the sum of cash, cash equivalents and short - term investments from total debt. This non - GAAP measure has limitations and therefore should not be used in isolation or as a substitute for the amounts reported
Slide 25: Adjusted EBITDA by Segment
NABORS.COM (In Thousands) Three Months Ended September 30, 2022 U.S. Drilling Canada Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) 37,776$ (9)$ (907)$ 20,099$ 3,412$ (39,406)$ 20,965$ Depreciation and amortization 7
Slide 26: Reconciliation of Adjusted Free Cash Flow
NABORS.COM 26 Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of pro ceeds from sales of assets. Management believes that adjusted free cas
Slide 27: Nabors Industries Ltd. Contact Us
NABORS INDUSTRIES LTD. NABORS.COM NABORS CORPORATE SERVICES 515 W. Greens Road Suite 1200 Houston, TX 77067 - 4525 @naborsglobal Contact Us: William C. Conroy, CFA VP - Corporate Development and Investor Relations William.Conroy@nabors.com Kara K. Peak Director - Corporate Development and Investor R