Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q3 2023 Earnings Presentation
29 slides from Nabors Industries's earnings presentation, Oct 26, 2023
Slide 1: 3Q 2023 Earnings Presentation
NABORS INDUSTRIES LTD. October 26, 2023 3Q 2023 Earnings Presentation
Slide 2: Forward Looking Statements
N A B O R S . C O M 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
Slide 3: September 30 Rig Utilization and Availability
N A B O R S . C O M 3 September 30 Rig Utilization and Availability RIG FLEET(1)(2) 326 RIGS ON REVENUE(1) 155 UTILIZATION AT 9/30/2023 49% TOTAL U.S. OFFSHORE 12 3 25% 16 4 25% ALASKA INTERNATIONAL 133 77 58% 111 71 64% U.S. LOWER-48 HIGH SPEC(2) (1) As of September 30, 2023 (2) Excludes non-high s
Slide 4: Recent Highlights
N A B O R S . C O M Focus on leverage Expecting $225-$250M FCF in 2023 Net debt reduction of $66M, or 3%, from 3Q a year ago RCF undrawn on Sept 30th 3Q 2023 adjusted EBITDA of $210M Adjusted EBITDA up 10% year-on-year Drilling Solutions progress 3Q adjusted EBITDA of $30M Adjusted gross margin(1) o
Slide 5: Five Keys to Excellence
N A B O R S . C O M 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 1 2 3 4 5
Slide 6: Performance Excellence In The Lower-48: Powerful daily revenue and margins
N A B O R S . C O M $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 L48 Drilling Adjusted Daily Gross Margin(1) $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 L48
Slide 7: Disciplined pricing maintains attractive daily margins
N A B O R S . C O M $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 L48 Drilling Adjusted Daily Gross Margin(1) 0 10 20 30 40 50 60 70 80 90 100 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 L48 Drilling Average Rig Count 7 Dis
Slide 8: Five Keys to Excellence
N A B O R S . C O M 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 1 2 3 4 5 Five Keys to Excellence
Slide 9: International Focus: Growing Dayrates and Margin
N A B O R S . C O M $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 International Drilling Adjusted Daily Gross Margin(1) $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1
Slide 10: Growing International Rig Count with Attractive Margins
N A B O R S . C O M 50 55 60 65 70 75 80 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 International Drilling Average Rig Count $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 International Drilling Adjusted Daily Gross Margin(
Slide 11: Significant Growth Trajectory in Saudi Arabia
N A B O R S . C O M 40 45 50 55 1Q 2Q 3Q 4Q 1QA 2QA 3QA 4QF 1Q 2Q 3Q 4Q 2022 A 2023 2024 F SANAD Estimated Average Rig Count Potential* 11 Significant Growth Trajectory in Saudi Arabia Resilience Leading to Growth in Our International Segment • Awarded 15 total rigs to-date • 50 rigs to be deployed
Slide 12: Five Keys to Excellence
N A B O R S . C O M 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 1 2 3 4 5 Five Keys to Excellence
Slide 13: NDS Capitalizing on Higher Penetration
N A B O R S . C O M 30% 35% 40% 45% 50% 55% 60% 65% $- $10 $20 $30 $40 $50 $60 $70 $80 $90 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 2021 2022 2023 NDS Revenue & Adjusted Gross Margin Revenue Adjusted gross margin Adjusted GM % 13 NDS Capitalizing on Higher Penetration Improving Outlook For Our Technology &
Slide 14: Successful Predictive-Drilling Closed Loop Test in Delaware Basin
N A B O R S . C O M 14 3 Improving Outlook For Our Technology & Innovation Successful Predictive-Drilling Closed Loop Test in Delaware Basin • ROP (Rate of Penetration) and WOB (Weight on Bit) maintained in an optimal band while also reducing variance between crews • Vibration filters actively adjus
Slide 15: Smart Suite Growth Maintains Upward Trajectory
N A B O R S . C O M 0 500 1000 1500 2000 2500 3000 3500 4000 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 Q4'22 Q1'23 Q2 '23 Q3 '23 Cumulative Number of Wells Drilled 15 Smart Suite Growth Maintains Upward Trajectory Improving Outlook For Our Technology & Innovation
Slide 16: Five Keys to Excellence
N A B O R S . C O M 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 1 2 3 4 5 Five Keys to Excellence
Slide 17: Significant Headway toward Financial Goals
N A B O R S . C O M $- $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 4Q 1Q 2Q 3Q 2018 2019 2020 2021 2022 2023 Billions Net Debt 17 Significant Headway toward Financial Goals 4 Progress on Our Commitment to De-lever ~ $1.8B Net Debt(1) reduction fro
Slide 18: Five Keys to Excellence
N A B O R S . C O M 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 1 2 3 4 5 Five Keys to Excellence
Slide 19: A Shared Path Forward
N A B O R S . C O M 5 Leading in Sustainability and the Energy Transition Energy Innovation vs. Energy Exclusion Remove tradeoffs between energy sources 19 A Shared Path Forward Capitalize on Strengths and Adjacencies Can we add value to other industries? Collaboration is Key to Success Leverage col
Slide 20: Nabors Initiatives to Lower Emissions
N A B O R S . C O M 5 Leading in Sustainability and the Energy Transition 20 Nabors Initiatives to Lower Emissions Pursuing Multiple Decarbonization Pathways Cleaner Fuels Energy Storage Engine Optimization Emissions Monitoring Alternative Energy
Slide 21: Our Venture Portfolio
5 Leading in Sustainability and the Energy Transition Emissions Monitoring Energy Storage Alternative Energy Our Venture Portfolio Future energy system needs clean, dispatchable and scalable energy solutions N A B O R S . C O M 21
Slide 22: Geothermal Market and Technology Advancements
N A B O R S . C O M 22 Ubiquitous Ability to create heat reservoirs by drilling into deep rock formations Innovative Drilling Technologies Reducing cost per energy-unit produced by using and combining new technologies Baseload Reliable and available 24/7 Renewable Subsurface heat replenished natural
Slide 23: Appendix
N A B O R S . C O M Appendix 23
Slide 24: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
N A B O R S . C O M September 30, June 30, September 30, 2022 2023 2023 Net income (loss) ($4,461) $16,231 ($31,244) Income tax expense (benefit) 12,352 26,448 10,513 Income (loss) from continuing operations before income taxes $7,891 $42,679 ($20,731) Investment (income) loss (4,813) (11,743) (10,1
Slide 25: Adjusted Gross Margin Reconciliation
N A B O R S . C O M September 30, June 30, September 30, 2022 2023 2023 Lower 48 - U.S. - Drilling Adjusted operating income 25,551 $ 60,496 $ 40,366 $ Plus: General and administrative costs 4,798 5,209 5,239 Plus: Research and engineering 1,652 1,189 1,389 GAAP Gross Margin 32,001 66,894 46,994 Plu
Slide 26: Reconciliation of Net Debt to Total Debt
N A B O R S . C O M September 30, June 30, September 30, 2022 2023 2023 Long-Term Debt $2,585,517 $2,503,250 $2,501,339 Cash & Short-term Investments $425,070 $429,059 $406,643 Net Debt $2,160,447 $2,074,191 $2,094,696 (In Thousands) 26 Reconciliation of Net Debt to Total Debt Net debt is computed b
Slide 27: Adjusted EBITDA by Segment Reconciliation
N A B O R S . C O M (In Thousands) Three Months Ended September 30, 2023 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) 49,582 $ 9,862 $ 25,341 $ 4,995 $ (41,092) $ 48,688 $ Depreciation and amortization 67,775
Slide 28: Reconciliation of Adjusted Free Cash Flow
N A B O R S . C O M Three Months Ended September 2023 Net cash provided by operating activities $133,425 Add: Capital expenditures, net of proceeds from sales of assets (138,583) Adjusted free cash flow ($5,158) (In Thousands) 28 Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Oper
Slide 29: Nabors Industries Ltd. Contact Us
NABORS INDUSTRIES LTD. NABORS.COM NABORS CORPORATE SERVICES 515 W. Greens Road Suite 1200 Houston, TX 77067-4525 @ n a b o r s g l o b a l Contact Us: William C. Conroy, CFA VP - Corporate Development and Investor Relations William.Conroy@nabors.com Kara K. Peak Director - Corporate Development and