Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q4 2016 Earnings Presentation
19 slides from Nabors Industries's earnings presentation, Feb 23, 2017
Slide 1: Forward-looking statements
2 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 that relate to matters that are n
Slide 2: Non-GAAP Financial Measures
3 Non-GAAP Financial Measures This presentation refers to certain “non-GAAP” financial measures, such as adjusted EBITDA, adjusted operating income (loss) and net debt. The components of these non-GAAP measures are computed by using amounts that are determined in accordance with accounting principle
Slide 3: Recent Company Highlights
4 Recent Company Highlights Signing of Saudi Arabia Joint Venture agreement with Saudi Aramco took place on October 31, 2016 Deployment of 20 rigs in 4Q16 in the Lower 48 (including two new M800’s), finishing the quarter at 75 rigs on revenue Non-binding MOU signed with Weatherford on February 1, 20
Slide 4: Recent Company Highlights
Recent Company Highlights * Signing of Saudi Arabia Joint Venture agreement with Saudi Aramco took place on October 31, 2016 + Deployment of 20 rigs in 4Q16 in the Lower 48 (including two new M800's), finishing the quarter at 75 rigs on revenue + Non-binding MOU signed with Weatherford on February 1
Slide 5: Financial Summary
6 Financial Summary Diluted Earnings (Losses) Per Share from continuing operations Includes net after-tax charges of 35¢ per share related to the impairment of certain assets Includes impairments of $1.12 per share related to our holdings in C&J Energy Services, Ltd. Includes impairments of $0.39 pe
Slide 6: Debt and Liquidity
7 Debt and Liquidity As of December 31, 2016 1. Capitalization defined as Net Debt plus Shareholders’ Equity 2. Coverage defined as TTM Adjusted EBITDA / TTM Interest Expense 3. Leverage defined as Total Debt / TTM Adjusted EBITDA Note: Subtotals may not foot due to rounding *The figures presented o
Slide 7: Debt and Liquidity
Debt and Liquidity As of December 31, 2016 High 4Q15 3Q16 4Q16 Change Change 3/31/2012 12/31/2015 9/30/2016 12/31/2016 4216 from 416 from (SMM's) 3Q16 4Q15 Total Debt $4,750 $3,662. $3,476 = $3,579 $103 ($83) Cash and ST Investments 494 275 201 295 95 21 Net Debt $4,256 $3,387 $3,275 $3,283 $8 ($104
Slide 8: The Nabors Pad Optimal Rig
9 “THE” Nabors Pad Optimal Rig 1500HP 3rd Mud Pump 4th Engine X-Y Walking System 25,000ft Racking Capacity Side-SaddleTM Configuration 1 2 3 4 5 1 2 3 4 5 6 6
Slide 9: Introducing the SMARTRig Pad Optimal Capabilities
10 Introducing the SMARTRigTM Pad Optimal Capabilities RigtelligentTM - Integrated Operating System Smart applications: Rigwatch® ROCKit® REVit® Drillsmart® Recipe to DrillTM Superior Racking Capacity - 25,000ft NDS-ReadyTM 1 2 3 4 5 5 1 2 3 4 5
Slide 10: Rigs and Technology Overview
11 Rigs PAD-OPTIMAL RIGS PACE®-X800, PACE®-M800, PACE®-M1000, PACE®-X700 OTHER NBR RIGS PACE®-M550, International Rigs Software/ Services RIGTELLIGENTTM INTEGRATED OPERATING SYSTEM RIGWATCH®, ROCKit®, REVit®, Drillsmart®, RECIPE TO DRILLTM, NDS-Ready™ The SMARTRigTM Tech The iRackerTM System, Full A
Slide 11: Rig Fleet 4Q16 Utilization & Availability
Rig Fleet(1) 4Q16 Average Rigs Working Average Utilization U.S. Lower 48 AC > 1500HP 106 56 53% AC Others 74 6 8% SCR Rigs 23 3 12% U.S. Lower 48 Total 203 64 32% U.S. Offshore 17 4 22% Alaska 16 4 25% Canada 47 13 28% International 160 92 57% Subtotal 443 177 40% Pace®-X Construction 3 Pace®-M800 C
Slide 12: Lower 48 Rig Utilization by Type
Walking Skidding Pad Not Pad Total Lower 48 Capable Capable Rigs Active Total Util. Active Total Util. Active Total Total Active Total Util. Active Total Util. AC 61 129 47% 5 22 23% 66 151 44% 6 29 21% 72* 180 40% PACE X 42 44 95% 0 0 0% 42 44 95% 0 0 0% 42 44 95% PACE M800 4 4 100% 0 0 0% 4 4 100%
Slide 13: Nabors Working Rigs
14 Nabors Working Rigs As of December 31, 2016 Total = 191(1) (1) Active Revenue Rigs on 12/31/2016 US 81 Colombia 7 Kazakhstan 3 Russia 1 Saudi Arabia 41 Venezuela 5 Ecuador 3 PNG 1 Argentina 19 Oman 4 Kuwait 2 Italy 1 Canada 18 Algeria 3 India 2
Slide 14: Saudi Arabia Joint Venture
15 Saudi Arabia Joint Venture Expecting Robust Growth in Rigs and Well Count(1) (1) Saudi Aramco In-Kingdom Total Value Add presentation Future Drilling Well Count(1) “Our ability to increase supplies of natural gas to reduce the Kingdom’s reliance on liquid fuel for electricity generation and to po
Slide 15: Saudi Arabia Joint Venture
Saudi Arabia Joint Venture Expecting Robust Growth in Rigs and Well Count” Future Drilling Well Count) 1,400 1,200 1,000 Oil ~100% 00 Increase 600 409 Gas, 200 *Inclides Unconventional Gas ° 2015 2020 2025 Manifa Field - Saudi Arabia “Our ability to increase supplies of natural gas to reduce the Kin
Slide 16: Rig Margins & Activity
17 Rig Margins & Activity (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. 1Q16 2Q16 3Q16 4Q16 Drilling Margin(1) Avg. Rigs Working Margin(1) Avg. Rigs Working Margin(1) Avg. Rigs Working Margin(1)
Slide 17: Reconciliation of Adjusted EBITDA to Income Before Income Taxes
18 Reconciliation of Adjusted EBITDA to Income (Loss) from Cont. Operations Before Income Taxes Adjusted EBITDA is computed by subtracting the sum of direct costs, general and administrative expenses and research and engineering expenses from operating revenues. Adjusted operating income (loss) is c
Slide 18: Reconciliation of Net Debt to Total Debt
19 Reconciliation of Net Debt to Total Debt Net debt is computed by subtracting the sum of cash 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 in accordance with GAAP. However
Slide 19: Reconciliation of Net Debt to Total Debt
Reconciliation of Net Debt to Total Debt Net debt is computed by subtracting the sum of cash 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 in accordance with GAAP. However,