Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — 2014 Johnson Rice Energy Conference
26 slides from Nabors Industries's conference presentation, Sep 30, 2014
Slide 1: 2014 Johnson Rice Energy Conference
2014 Johnson Rice Energy Conference September 30, 2014 Presenters: Siggi Meissner President, Nabors International William Conroy Associate Director, Corporate Development
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: Embark in a New Direction: Streamlining the Business
Embark in a New Direction Streamlining the Business > Actions Combine CS and PS segments into one organization Consolidate Alaska and U.S. Offshore into NDUSA Merge engineering groups into single centralized unit > Benefits Eliminate duplicate expenses Focus engineering and research efforts with coh
Slide 4: Anticipated Merger of NCPS with C&J Energy
Embark in a New Direction Streamlining the Business > Anticipated Merger of NCPS with C&J Energy Retain 53% equity interest in combined entity Create critical mass Capitalize on technology and increased scale Facilitate international expansion Realize more than $900M cash back to NBR 4
Slide 5: Nabors Post-transaction Benefits
Embark in a New Direction Streamlining the Business > Nabors Post-transaction Benefits Refocus on Drilling business Reduce internal competition for capital Increase proportion of revenue contractually covered Strategy Target ultra-high and high-performance drilling markets Advance drilling state-of-
Slide 6: Drilling Ahead - International
6 Drilling Ahead - International
Slide 7: We are market leaders in land drilling globally
7 We are market leaders in land drilling globally 1. We have a Global Footprint operating in about 24 countries around the world 2. Our crew is heavily skewed towards national crew in most regions 3. We invest substantially in training and safety of our people 4. We have Global 24-hour rig operation
Slide 8: Countries outside United States: workforce and assets
countries outside United States 8 >Our workforce: Over 10,000 employees Over 70 nationalities >Our assets: 134 Land Rigs 24 Offshore Rigs Mexico Argentina Saudi Arabia Operating areas Priority markets with details in later slides >Land rig description: <1500 HP: 42 Rigs 1500-2000 HP: 42 Rigs >2000 H
Slide 9: Saudi Arabia is our largest International market
9 Saudi Arabia is our largest International market > Rig renewals: 12 rigs renewed in 2013 and another 12 in 2014 Trend for early renewals expected to continue into 2015 > New rigs: 11 new rig awards for 2014 deployment Schedule: 1st rig started in 1Q and 2nd in 2Q 9 expected in 2H 2014 Capex: On-bu
Slide 10: Saudi Arabia: largest share of land drilling rigs, positioned to grow
Saudi Arabia: We have the largest share of land drilling rigs and are positioned to grow 10 Strong current market share Promising future opportunities Description > As of June 30, we estimate we are market leaders with ~21% share of land rig market and 8% share of offshore rig market > Saudi Arabia
Slide 11: Argentina is increasingly becoming an important market
11 Argentina is increasingly becoming an important market > Renewals: Most contracts extend into 2015 > New Rigs: 6 new rigs deployed since 2013 Schedule 1st rig started August 2013 Project delivered on time and on budget 26 24 19 21 2013 2014E 2011 2012 Description of the market Marketable rigs in
Slide 12: Argentina: increasing our presence in drilling rigs
Argentina: We are increasing our presence in drilling rigs 12 Significant current market share Promising future opportunities Description > We currently have ~9% of land drilling rig and 8% workover rig market share > We have moved from primarily providing workover rigs to providing drilling rigs >
Slide 13: Mexico offshore market has become one of our most important
13 Mexico offshore market has become one of our most important offshore markets > Renewals: Expect most offshore rigs to be renewed Land rig market is challenging in short term > New Rigs: Deploying two 3000 HP platform rigs in 2014/15 Schedule: 1st rig starting 4Q14 2nd rig starting 1Q15 Project on
Slide 14: Mexico-Offshore: pioneered the offshore market with significant share
Mexico-Offshore: We have pioneered the offshore market and have significant market share 14 Significant current market share Promising future opportunities Description > We currently have about 8% of offshore rig market share > We have pioneered the offshore technology (MASE rigs) in Mexico and PEME
Slide 15: Well positioned to take advantage of increasing demand for land rigs
15 In summary, we are well positioned to take advantage of the increasing demand for land rigs 1. We have a Global Footprint 2. Our crew is heavily skewed towards national crew in most regions 3. We invest substantially in training and safety of our people 4. We have Global 24-hour rig operations su
Slide 16: Drilling Ahead
Drilling Ahead @) NABORS
Slide 17: Unmatched Global Position and Opportunity Set
Drilling Ahead > Unmatched Global Position and Opportunity Set Largest fleet of land drilling rigs in the industry Vertically-integrated drilling equipment and technology Global footprint with dominant position in attractive markets > Clear Path to Improving Performance Strong International backlog
Slide 18: Next Years Market Survey Conducted by 3rd Party Firm
Drilling Ahead Next 5 Years Market Survey Conducted by 3rd Party Firm > Interviews with 60 Oil & Gas Operators 40 North America based majors to mid- > International #1 in drilling performance and technical capabilities Clear market share leader > North America One of two top-tier drillers High ratin
Slide 19: Global Market Study International Summary
Drilling Ahead Next 5 Years Global Market Study International Summary > Nabors holds prime slot in two markets with the highest expected five-year growth Nabors is a leader in the high value/high growth Saudi Arabia and Latin America markets Middle East, 160 total additional rigs expected Latin Amer
Slide 20: Global Market Study North America Summary
Drilling Ahead Next 5 Years Global Market Study North America Summary 20 > 2-4% - projected NAM total rig demand CAGR > 5-7% - rig demand CAGR > 10-12% - Pad Drilling 2010A 2013A 2018E % of Wells Drilled on Pads 20% 50% 70% Avg. # of Wells per Pad 2.2 4.0 6+ Accelerating Trend Towards Higher-Density
Slide 21: Accelerating Newbuilds
Drilling Ahead Accelerating Newbuilds 118 Rigs Planned for Delivery in 3 Years 22 0 10 20 30 40 50 60 2013 2014 2015 New and Substantially-Upgraded Rigs
Slide 22: Enhancing ROCE: Return-on-Capital Improvement Opportunities
Drilling Ahead Enhancing ROCE Return-on-Capital Improvement Opportunities 23 > Near-term 7-Point Improvement in PACE®-X ROCE Growing the Numerator Value Pricing and Pricing Discipline Operating Expenses Improving the Denominator Capital Cost Reduction of 15% > Enhanced Value Proposition Processes to
Slide 23: Leverage from New Rigs
0.0x 0.5x 1.0x 1.5x 2.0x 2.5x 3.0x 3.5x Legacy Other AC PACE®-X International Alaska + Offshore Drilling Ahead Leverage from New Rigs Growing Accretion through Mix Shift to High-spec Rigs 24 Average Daily Rig Margin by Rig Type as of 2Q 2014 118 planned newbuild rig deployments 2013-2015E
Slide 24: Strong Pricing Gains
Drilling Ahead Strong Pricing Gains Actual Lower-48 AC Rig Fleet (Excluding PACE®-X Rigs) 25 Revenue per Day Trend, Normalized for Mix 100% 102% 104% 106% 108% 110% 112% Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14
Slide 25: Robust Outlook
Drilling Ahead Robust Outlook > Lower-48 Positive pricing momentum Strong AC newbuild demand > International Middle East Latin America Repricing renewals to current market > Canada Stronger year-round demand Evaluating potential newbuilds > Canrig Growing internal and third-party equipment Strong gr
Slide 26: Summary: Why Nabors?
Summary Why Nabors? > Significant progress on streamlining the business, evidenced by the C&J transaction > Intensified focus on global drilling business with emphasis on return on capital > Strong global growth outlook > Optimized capital structure and financial flexibility 27
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