Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q4 2012 Earnings Presentation
34 slides from Nabors Industries's earnings presentation, Feb 20, 2013
Slide 1: 4Q 2012 Earnings Presentation
4Q 2012 Earnings Presentation February 20, 2013 Presenter: Anthony G. Petrello Chairman, President & Chief Executive Officer
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: 2012 Highlights
2012 Highlights Rig: PACE®-X1 at Crosby Yard
Slide 4: Consolidated Results: Record Operating Revenue, Gross Margin, EBITDA
Consolidated Results: Record Operating Revenue, Gross Margin, EBITDA -$1.0 -$0.5 $0.0 $0.5 $1.0 $1.5 $2.0 $2.5 2006 2007 2008 2009 2010 2011 2012 EBITDA Total Capex Net Operating Cash Flow $0 $1 $2 $3 $4 $5 $6 $7 $8 2006 2007 2008 2009 2010 2011 2012 Operating Revenue Gross Margin EBITDA Note: Net O
Slide 5: Debt Reduction Through Net Operating Cash Flow and Asset Sales
Debt Reduction Through Net Operating Cash Flow and Asset Sales ($MM's) 3/31/12 12/31/12 Change Total Debt $4,773 $4,380 $(393) Cash and ST Investments 494 778 284 Net Debt $4,279 $3,601 $(678) Net Debt to Capitalization(1) 42.4% 37.7% > Reduced Net Debt by $678 million from 1Q12 high > 2012 Operatin
Slide 6: Improved Capital Discipline in 2012
Improved Capital Discipline in 2012 Capital Expenditures ($MM’s) 2011 2012 Change U.S. Lower 48 $650 $649 $(1) U.S. Offshore 64 105 41 Alaska 4 4 0 Canada 95 103 8 International 654 265 (389) Rig Services 72 40 (32) Drilling & Rig Services $1,540 $1,166 $(374) Completion & Production Services $451 $
Slide 7: Innovative PACE-X Rig
Innovative PACE®-X Rig > Omni-directional walking system allows the rig to skid on both the X and Y axis > “Side Saddle” substructure features 16 ft. wide by 26 ft. tall clearance which optimizes batch drilling while allowing the rig to easily walk over existing well heads > BOP trolley enables batc
Slide 8: Best Safety Performance In Company History
Best Safety Performance In Company History 0 1 2 3 4 5 6 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total Recordable Incidence Rate (TRIR) IADC US Land Nabors 2011 2012 Change Total Recordable Incidence Rate 1.66 1.18 (29%) (per 200,000 man hours) > Reduced Total Recordable Incidence Rate (TR
Slide 9: Expanded and Extended Bank Facilities
Expanded and Extended Bank Facilities ($MM’s) 2011 2012 Revolver Capacity $1,400 $1,500 Drawn Amount 860 890 Revolver Liquidity 540 610 2011 (Prior Facility) > Revolving Facilities – $1.4 billion committed facility – Additional $200 million accordion – 2014 maturity 2012 (New Facility) > Revolving F
Slide 10: Earliest Debt Maturity is 2018
Earliest Debt Maturity is 2018 ($MM’s) 2011 2012 Change $275M Sr. Notes $275 $0 $(275) $975M Sr. Notes @ 6.15% due 2018 968 969 1 $1.125B Sr. Notes @ 9.25% due 2019 1,125 1,125 $700M Sr. Notes @ 5% due 2020 697 698 1 $700M notes @ 4.625% due 2021 698 698 Total Senior Debt 3,763 3,490 (273) Revolving
Slide 11: Update on Strategic Objectives
Update on Strategic Objectives > Improving balance sheet quality and flexibility > Streamlining the business > Enhancing operational excellence > Driving technology and innovation > Strengthening customer alignment
Slide 12: Nabors Global Infrastructure Operating Income
Nabors Global Infrastructure Operating Income ($MM’s) 1Q12 2Q12 3Q12 4Q12 U.S. Lower 48 $132 $127 $115 $95 U.S. Offshore 8 10 (4) (14) Alaska 27 9 4 2 Canada 49 (4) 23 28 International 21 16 30 23 Rig Services 30 28 16 5 Drilling & Rig Services $267 $186 $185 $139 Completion Services $65 $46 $47 $30
Slide 13: Drilling & Rig Services
Drilling & Rig Services
Slide 14: Drilling & Rig Services Adjusted Income Derived from Operating Activities
Drilling & Rig Services Adjusted Income (Loss) Derived from Operating Activities ($M’s) 4Q11 1Q12 2Q12 3Q12 4Q12 Drilling & Rig Services: U.S. Lower 48 $130,114 $131,581 $126,532 $114,884 $94,719 U.S. Offshore 3,422 7,732 9,924 (3,650) (14,311) Alaska 5,343 27,420 8,895 3,973 2,195 Canada 36,553 49,
Slide 15: Global Rig Fleet Details
Global Rig Fleet Details AC SCR Mech Total Moving Systems Alaska 5 12 3 20 13 Lower 48 155 98 27 280 139 Canada 16 21 29 66 20 International 31 64 31 126 49 Offshore 6 44 2 52 n/a Total 213 239 92 544 221 As of 12/31/12 including contracted rigs scheduled to be delivered and moving systems scheduled
Slide 16: Fleet Retirements
Fleet Retirements Retirements Fleet as of 9/30/12 Active Inactive Fleet as of 12/31/12 Drilling & Rig Services U.S. Lower 48 Land Rigs 298 (35) 263 International Land Rigs 130 (4) (11) 126 Canada Land Rigs 73 (4) (10) 65 U.S. Offshore Rigs 29 (4) (7) 25 International Offshore Rigs 25 (1) 24 Note: Di
Slide 17: Versatile Fleet of Newbuilds
Versatile Fleet of Newbuilds PACE®-F Rig PACE®-M Rig PACE®-B Rig PACE®-X Rig > 27 built since May 2006 > 1000 kip hookload capacity > 600 kip setback capacity > Working in: Eagle Ford, Permian, Haynesville, Miss. Lime, Granite Wash, Woodford > 57 built since Dec. 2006 > 550 kip hookload capacity > 3
Slide 18: Lower 48 Working Rigs by Region and Play
Lower 48 Working Rigs by Region and Play 14 52 16 19 29 21 3 11 Total Lower 48 Rigs on Revenue: 168 As of 12/31/12 Basin Working Rigs Marcellus 11 Haynesville 18 Bakken/Rockies 66 Eagle Ford 29 Permian 19 Barnett 3 Granite Wash 7 Other 15 Total 168
Slide 19: Lower 48 Newbuild Deployments
Lower 48 Newbuild Deployments As of Dec 31, 2012, 144 Newbuilds deployed since 2005. 17 additional to be deployed by the end of 2013.
Slide 20: Lower 48 Pad Capable Rigs
Lower 48 Pad Capable Rigs Non-Pad Capable 84% Pad Capable NBR 5% Pad Capable Industry 11% Industry Skid, 65 NBR Skid, 25 NBR Walking, 114 Industry Walking, 112 Industry Skid, 65 NBR Skid, 25 NBR Walking, 61 Industry Walking, 112 Source: Baker Hughes Land Rig Count, NBR Estimates Nabors currently has
Slide 21: US Lower 48 Term Contracts in Force at December 31, 2012
Drilling & Rig Services US Lower 48 – Term Contracts in Force at December 31, 2012 Quarter End Number Of Rigs Subject To Term Contracts(1) 4Q12 1Q13 2Q13 3Q13 4Q13 3Q 2012 99 84 72 62 58 4Q 2012 109 95 81 69 63 (1) Represents the quarter end number of contracts in force with no incremental contract
Slide 22: Canada Rig Fleet Details
Canada Rig Fleet Details AC SCR Mech Total Moving Systems Canada 15 21 29 65 17 23% 32% 45% Rigs by Power Type AC SCR Mech 23% 77% Rigs with Moving Systems Moving Systems Non-Moving 73% 27% Rigs with Top Drives Top Drive No Top Drive 28% 60% 12% Since 2005 Newbuild Upgraded Original As of 12/31/12
Slide 23: Canada Drilling
Canada Drilling 0 10 20 30 40 50 60 2Q 3Q 4Q 1Q Recent Seasonal Ramps 2010/2011 2011/2012 2012/2013 0 10 20 30 40 50 60 2Q07 3Q07 4Q07 1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 Canada Rig Year Seasonality Canada Rig Years 4Q rig count lower t
Slide 24: Canada Working Rigs by Play
Canada Working Rigs by Play Play AC SCR Mechanical Walking Rigs Workover Rigs Montney 4 3 1 5 2 Duvernay (NW Alberta) 36 Cardium (Central Alberta) 2 10 15 2 37 Saskatchewan 3 1 9 Oil Sands 3 2 4 8 Horn River 1 2 2 0 Total 10 17 19 14 94 As of 12/31/12
Slide 25: International Land Working Rigs
International Land Working Rigs 5 17 10 6 2 2 1 1 2 4 11 32 1 5 3 5 Algeria 5 Ecuador 6 Kuwait 2 Romania 1 Angola 1 India 5 Malaysia 2 Russia 4 Argentina 17 Iraq 6 Mexico 11 Saudi Arabia 32 Colombia 10 Jordan 1 Oman 5 Venezuela 5 Congo 2 Kazakhstan 2 PNG 1 Yemen 3 5 2 1 Total 122
Slide 26: International Land Fleet Details
International Land Fleet Details AC SCR Mech Total Moving Systems International 31 64 31 126 49 24% 51% 25% Rigs by Power Type AC SCR Mech 39% 61% Rigs with Moving Systems Moving Systems Non-Moving 90% 10% Rigs with Top Drives Top Drive No Top Drive 31% 35% 34% Since 2005 Newbuild Refurbished Origin
Slide 27: Completion & Production Services
Completion & Production Services
Slide 28: Completion & Production Services Adjusted Income Derived from Operating Activities
Completion & Production Services Adjusted Income Derived from Operating Activities ($M’s) 4Q11 1Q12 2Q12 3Q12 4Q12 Completion & Production Services: Completion Services $76,470 $64,860 $46,144 $47,218 $30,296 Production Services 24,237 21,888 28,586 32,825 20,360 Total $100,707 $86,748 $74,730 $80,0
Slide 29: Completion & Production Services Fleet
Completion & Production Services Fleet Region Rigs Frac Crews Trucks Frac Tanks CTU Cementing Wireline Additional Equipment Western 181 106 99 15 12 P&A Rigs, Foam Units Rockies 69 10 56 323 2 9 10 P&A Rigs, Pumps, Swivels Mid-Con 36 1 111 412 2 7 8 Reverse Units, Foam Units Northeast 11 4 105 582 4
Slide 30: Fleet Retirements
Fleet Retirements Retirements Fleet as of 9/30/12 Active Inactive Other Fleet as of 12/31/12 Completion & Production Services U.S. Lower 48 W/O & Well Servicing Rigs 504 (62) (71) 442 U.S. Lower 48 Trucks 1,043 (36) (50) 24 1,031 U.S. Lower 48 Frac Tanks 3,813 (282) (26) (4) 3,527 Canada W/O & Well
Slide 31: Stimulation Fleet Contract Detail
Stimulation Fleet Contract Detail Region # of Crews TSA Spot Idle Oil/Liquids Dry Gas 24 Hr. Rockies 10 7 3 10 6 Mid-Con 1 1 1 Northeast 4 1 3 2 2 3 West Texas 3 1 1 1 3 1 South Texas 3 2 1 3 3 Ark-La-Tex 3 3 3 Canada 2 2 2 Total 26 11 10 5 21 5 13
Slide 32: Summary
Summary
Slide 33: Ancillary Information
Ancillary Information ) NABORS 34
Slide 34: Nabors Global Infrastructure Margins and Activities
Nabors Global Infrastructure Margins and Activities 4Q11 3Q12 4Q12 Drilling Margin (1) Rig Yrs Margin (1) Rig Yrs Margin (1) Rig Yrs US Lower 48 10,922 216.7 $12,030 193.8 $12,363 172.7 US Offshore 17,250 10.0 8,634 12.8 (428) 12.4 Alaska 29,489 5.0 29,628 4.6 22,344 5.2 Canada 12,061 45.2 13,439 34