Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q4 2023 Earnings Presentation
25 slides from Nabors Industries's earnings presentation, Feb 6, 2024
Slide 1: 4Q 2023 Earnings Presentation
NABORS INDUSTRIES LTD. February 7, 2024 4Q 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: The Industry's Most Innovative Technology
N A B O R S . C O M 39% 43% 10% 8% Full Year 2023 Revenue by Segment U.S. Drilling International Drilling Drilling Solutions Rig Technologies 3 The Industry’s Most Innovative Technology NABORS INDUSTRIES Integrated Drilling and Technology Solutions Drilling Operations Drilling Solutions Rig Technolo
Slide 4: Recent Highlights
N A B O R S . C O M Recent Highlights NABORS INDUSTRIES 4 Growing NDS revenue with third parties in the Lower 48, up 8.1% and international customers, up 13.1% Deployed 5 of the 12 International rig awards Lower 48 market stabilizing and generating meaningful daily margins of $16,240 Nabors Awarded
Slide 5: Five Keys to Excellence
N A B O R S . C O M Expanding & enhancing our International segment 5 Performance excellence in the Lower 48 Five Keys to Excellence 1 Advancing technology & innovation with demonstrated results Progress on our commitment to de-lever 2 3 Leading in Sustainability and the Energy Transition 4 5
Slide 6: Performance Excellence In The Lower-48
N A B O R S . C O M 1 $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 Daily Gross Margin(1) $- $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Daily Rig Revenue(1) Daily Revenue and Margin Holding above Prior Cycle Highs Performance Excellence In The Lower-48 6
Slide 7: Leading to Growth in Our International Segment
N A B O R S . C O M 2 $- $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000 $20,000 Daily Gross Margin $- $10,000 $20,000 $30,000 $40,000 $50,000 Daily Rig Revenue Working to enhance both the top and bottom line International Focus Growing Dayrates and Margin Resilience Leading to G
Slide 8: Significant Growth Trajectory in Saudi Arabia
N A B O R S . C O M Significant Growth Trajectory in Saudi Arabia Resilience Leading to Growth in Our International Segment 8 40 45 50 55 1Q 2Q 3Q 4Q 1QA 2QA 3QA 4QA 1QF 2Q 3Q 4Q 2022 A 2023 2024 F SANAD Estimated Average Rig Count Potential* • Awarded 15 total rigs to-date • 50 rigs to be deployed
Slide 9: Significant Opportunity for Additional International Rigs by YE 2025
N A B O R S . C O M Significant Opportunity for Additional International Rigs by YE 2025 9 80 104 Actively negotiating tenders for 12 rigs in addition to contracts in-hand 87 * These estimates are based on current market conditions and expectations are based on information received from third partie
Slide 10: NDS Capitalizing on Higher Penetration
N A B O R S . C O M 0% 10% 20% 30% 40% 50% 60% $- $50 $100 $150 $200 $250 $300 $350 NDS Revenue, Adjusted EBITDA & Adjusted Gross Margin % Revenue Adjusted EBITDA Adjusted GM % NDS Capitalizing on Higher Penetration Improving Outlook For Our Technology & Innovation 10 Adjusted gross margin of 52% in
Slide 11: NDS Growing Third Party and International Revenue
N A B O R S . C O M NDS Growing Third Party and International Revenue Improving Outlook For Our Technology & Innovation 11 0% 133% 267% 400% 0 200 400 600 2016 2017 2018 2019 2020 2021 2022 2023 NDS - U.S Third Party Indexed Growth % 0% 200% 400% 600% 800% 0 200 400 600 800 1000 2016 2017 2018 2019
Slide 12: Predictive Drilling Increases Rate of Penetration
N A B O R S . C O M Predictive Drilling Increases Rate of Penetration (ROP) Improving Outlook For Our Technology & Innovation 12 Leveraging Predictive Drilling with SmartROS®, the Williston Operator safely accelerated ROP while extending bit life for six wells. • 61% Improvement in Average ROP • 78%
Slide 13: Significant Headway Reducing Debt
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 YE 2017 YE 2018 YE 2019 YE 2020 YE 2021 YE 2022 YE 2023 Billions Net Debt Significant Headway Reducing Debt Progress on Our Commitment to De-lever 13 ~ $1.6B Net Debt(1) reduction since YE 2017 $1.6B (1) Net Debt is a non-GAAP metric; se
Slide 14: Leading in Sustainability and the Energy Transition
N A B O R S . C O M Leading in Sustainability and the Energy Transition Energy Innovation vs. Energy Exclusion Remove tradeoffs between energy sources A Shared Path Forward Leading in Sustainability and the Energy Transition 14 Capitalize on Strengths and Adjacencies Add value to adjacent industries
Slide 15: Nabors Initiatives to Lower Emissions
N A B O R S . C O M Alternative Energy Emissions Monitoring Pursuing Multiple Decarbonization Pathways Green Fuels Energy Storage Leading in Sustainability and the Energy Transition Nabors Initiatives to Lower Emissions 15 Engine Optimization 5
Slide 16: Our Venture Portfolio
N A B O R S . C O M 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 16 5 Leading in Sustainability and the Energy Transition
Slide 17: Geothermal Market Technology Advancements
N A B O R S . C O M 17 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 18: Appendix
¢) NABORS Appendix
Slide 19: Rig Utilization and Availability, December 31, 2023
N A B O R S . C O M Rig Utilization and Availability, December 31, 2023 19 RIG FLEET(1) 319 RIGS ON REVENUE(1) 155 UTILIZATION AT 12/31/2023 49% TOTAL U.S. OFFSHORE 12 3 25% 15 3 20% ALASKA INTERNATIONAL 132 79 60% 111 74 67% U.S. LOWER-48 HIGH SPEC(2) (1) As of December 31, 2023
Slide 20: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
N A B O R S . C O M December 31, September 30, December 31, 2022 2023 2023 Net income (loss) ($58,155) ($31,244) $3,857 Income tax expense (benefit) 26,161 10,513 19,244 Income (loss) from continuing operations before income taxes ($31,994) ($20,731) $23,101 Investment (income) loss (9,194) (10,169)
Slide 21: Adjusted Gross Margin Reconciliation
N A B O R S . C O M December 31, September 30, December 31, 2022 2023 2023 Lower 48 - U.S. - Drilling Adjusted operating income 58,299 $ 40,366 $ 40,108 $ Plus: General and administrative costs 4,977 5,239 4,087 Plus: Research and engineering 1,637 1,389 1,276 GAAP Gross Margin 64,913 46,994 45,471
Slide 22: Reconciliation of Net Debt to Total Debt
N A B O R S . C O M Reconciliation of Net Debt to Total Debt 22 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 rep
Slide 23: Adjusted EBITDA by Segment
N A B O R S . C O M (In Thousands) Three Months Ended December 31, 2023 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) 51,494 $ 18,642 $ 30,127 $ 5,788 $ (37,176) $ 68,875 $ Depreciation and amortization 66,877
Slide 24: Reconciliation of Adjusted Free Cash Flow
N A B O R S . C O M Three Months Ended December 31 2023 Net cash provided by operating activities $181,921 Add: Capital expenditures, net of proceeds from sales of assets (129,700) Adjusted free cash flow $52,221 (In Thousands) Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operat
Slide 25: 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