Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Howard Weil 42nd Annual Energy Conference 2014
29 slides from Nabors Industries's conference presentation, Mar 25, 2014
Slide 1: Howard Weil 42nd Annual Energy Conference
Howard Weil 42nd Annual Energy Conference March 24-26, 2014
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: Company Profile
Company Profile @) NABORS
Slide 4: Worldwide Rig Fleet Status
549LAND WORKOVER RIGS 8JACKUPS – 5 Drilling – 3 Workover 490 LAND DRILLING RIGS 4BARGE RIGS 38PLATFORM RIGS – 20 Workover/Re-Drilling – 18 Drilling Worldwide Rig Fleet Status Actively Marketed Rigs Only As of December 31, 2013 4
Slide 5: Nabors' Historical Stock Price
$0 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 $0 $10 $20 $30 $40 $50 $60 EBITDA Stock Price Nabors’ Historical Stock Price Focused on re-establishing historical valuation Consensus EBITDA 5
Slide 6: Refocusing of Businesses Strategic Plan
2Q12 Refocusing of Businesses Strategic Plan > Streamlining the business > Enhancing operational excellence > Driving technology and innovation > Strengthening customer alignment > Improving balance sheet quality and flexibility 6
Slide 7: Streamlining the Business
(1) Includes announced new build commitments (2) Revenue excludes other reconciling items Streamlining the Business > Drilling & Rig Services – U.S. Lower 48 – 286 rigs(1) – U.S. Offshore – 24 rigs – Alaska – 19 rigs – Canada – 64 rigs – International – 157 rigs – Other Rig Services • Canrig (top dr
Slide 8: Improving Operational Efficiency
0 1 2 3 4 5 6 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Total Recordable Incidence Rate TRIR Improving Operational Efficiency Reduced TRIR by 14% 2012 2013 Change Total Recordable Incidence Rate 1.18 1.01 (14%) (per 200,000 man hours) IADC US Land Nabors 8
Slide 9: Driving Technology & Innovation
Driving Technology & Innovation PACE® Rig Performance PACE-X Competitor A1 Competitor A2 Competitor B Feet/Day in SCOOP - 2013 PACE-B Competitor A Competitor B Feet/Day in Bakken - 2013 PACE®-X rigs outperformed competitors by an average of 17% in the Scoop PACE®-B rigs outperformed competitors by a
Slide 10: Improving Financial Flexibility
Improving Financial Flexibility > Realized cash proceeds of over $600 million through the sale of non-strategic assets and businesses > Generated Free Cash Flow from operations of approximately $300 million > Refinanced $785mm (~70%) of 2019, 9.25% notes – Blended interest rate is now 4.56%, down fr
Slide 11: Customer Alignment
Customer Alignment 11 28% 38% 18% 7% 10% U.S. Drilling Customers by Revenue Major Large-Cap Mid-Cap Small/Micro-Cap Private 14% 48% 16% 3% 19% NCPS Customers by Revenue Major Large-Cap Mid-Cap Small/Micro-Cap Private 10% 20% 4% 52% 14% International Customers by Revenue Major Large-Cap Mid/Small-Cap
Slide 12: Macro Outlook: Rig Demand Growth
Macro Outlook: Rig Demand Growth 1
Slide 13: Nabors Global Market Study
Nabors Global Market Study Broad-Based Blind Study Conducted by 3rd Party Firm > Customers view Nabors as a best-in-class performer – International customers view Nabors as the top driller in both market share and customer perception > North American overall rig demand growth through 2018 projected
Slide 14: Continued Shift to Pad Drilling
Continued Shift to Pad Drilling More Wells per Pad Pad Drilling 2010A 2013A 2018E % of Wells Drilled on Pads 20% 50% 70% Avg. # of Wells per Pad 2.2 4.0 6+ Rig Counts include contracted rigs scheduled to be delivered and transferred, and moving systems scheduled to be installed 49% 51% Global Rigs w
Slide 15: Nabors Outlook: Near & Longer Term
Nabors Outlook: Near & Longer Term 4
Slide 16: Completion & Production Services
Completion & Production Services STIMULATION - Attractive returns - Term contracts - Global growth with NBR footprint - Synergies with well servicing and fluids COILED TUBING - Synergies with pressure pumping - Synergies with workover & well servicing - Growth potential WORKOVER & WELL SERVICING - L
Slide 17: Production Services Outlook
Production Services Outlook > Growing population of oil wells > Increased activity and service intensity from maturing horizontal oil wells > Shrinking supply of rigs capable of being reactivated, compounded by attrition of older base fleet suggests an improved market supply-demand over intermediate
Slide 18: Production Services Rates and Hours
Production Services Rates and Hours $0 $100 $200 $300 $400 $500 $600 $700 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 2010 2011 2012 2013 Workover & Well Servicing Rig Rates & Hours Rig Hours Rig Rate $0 $20 $40 $60 $80 $100 $120 $140 0 500,000 1,000,000 1,500
Slide 19: Completion Services Outlook
Completion Services Outlook > Punishing weather in 1Q has greatly constrained our ability to work in Northern operating areas > 1Q operating results worse than expected > Beyond the winter weather, outlook improving > Expiring take-or-pay pressure pumping contracts rolled off with the new year > Nea
Slide 20: PACE-X Rig Deployments & Rig Years
PACE-X Rig Deployments & Rig Years 0 5 10 15 20 25 30 35 40 45 50 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 Deployments Cumulative Deployments Cumulative Rig Year 5.2 PACE-X Rig Years through 4Q13 PACE®-X Contract Summary Contracted Revenue $603 Million Rig Years 54.1 Avg. Contract Duration
Slide 21: US Land Drilling Efficiencies Flattening
US Land Drilling Efficiencies Flattening > Initial signs of diminishing efficiency improvements in key shale plays bodes well for high-tech rig demand Source: Baker Hughes U.S. Land Wells/Rig by Basin Date Eagle Ford Marcellus Permian Williston Total Q1 - 2013 4.51 5.19 4.62 3.05 4.34 Q2 - 2013 4.73
Slide 22: Alaska & Offshore Outlook
Alaska & Offshore Outlook > Improving prospects in Alaska and U.S. Offshore > Discussions underway for multiple additional large projects in Alaska > Utilization for our GOM platform rigs is stable, and discussions are underway with customers for additional units > Offshore, prospects for our Gulf o
Slide 23: Canada Outlook
Canada Outlook > Number of potential projects targeting Canadian natural gas liquids that continue to generate interest in the northwest part of the Western Canadian Sedimentary Basin > Montney, Horn River and Duvernay areas are expected to benefit from any future LNG export projects 4
Slide 24: Completion & Production Services
Completion & Production Services STIMULATION - Attractive returns - Term contracts - Global growth with NBR footprint - Synergies with well servicing and fluids COILED TUBING - Synergies with pressure pumping - Synergies with workover & well servicing - Growth potential WORKOVER & WELL SERVICING - L
Slide 25: Production Services Outlook
Production Services Outlook > Growing population of oil wells > Increased activity and service intensity from maturing horizontal oil wells > Shrinking supply of rigs capable of being reactivated, compounded by attrition of older base fleet suggests an improved market supply-demand over intermediate
Slide 26: Production Services Rates and Hours
Production Services Rates and Hours $0 $100 $200 $300 $400 $500 $600 $700 0 100,000 200,000 300,000 400,000 500,000 600,000 700,000 800,000 900,000 1,000,000 2010 2011 2012 2013 Workover & Well Servicing Rig Rates & Hours Rig Hours Rig Rate $0 $20 $40 $60 $80 $100 $120 $140 0 500,000 1,000,000 1,500
Slide 27: Completion Services Outlook
Completion Services Outlook > Punishing weather in 1Q has greatly constrained our ability to work in Northern operating areas > 1Q operating results worse than expected > Beyond the winter weather, outlook improving > Expiring take-or-pay pressure pumping contracts rolled off with the new year > Nea
Slide 28: Completion Services Outlook: Horizontal Rig Count Driving HHP Usage
Completion Services Outlook Horizontal Rig Count driving HHP Usage 9 10,000,000 10,500,000 11,000,000 11,500,000 12,000,000 12,500,000 13,000,000 13,500,000 1,000 1,020 1,040 1,060 1,080 1,100 1,120 1,140 1,160 1,180 1,200 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 Source: BHI Rig Counts & Pa
Slide 29: Summary: Why Nabors?
Summary: Why Nabors? > Clear Path to Improving Performance – Contract visibility – Bottoming out of U.S. Land – Visible upside in other drilling segments – Strong demographic in Well Servicing – Appearance of market bottom in Pressure Pumping > Unmatched Global Position and Opportunity Set – Largest
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