Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q2 2023 Earnings Presentation
30 slides from Nabors Industries's earnings presentation, Jul 25, 2023
Slide 1: 2Q 2023 Earnings Presentation
NABORS INDUSTRIES LTD. July 26, 2023 2Q 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: June 30 Rig Utilization and Availability
N A B O R S . C O M 3 June 30 Rig Utilization and Availability RIG FLEET(1)(2) 328 RIGS ON REVENUE(1) 161 UTILIZATION AT 6/30/2023 49% TOTAL U.S. OFFSHORE 12 3 25% 16 4 25% ALASKA INTERNATIONAL 134 76 57% 111 78 70% U.S. LOWER-48 HIGH SPEC(2) (1) As of June 30, 2023 (2) Excludes non-high spec rigs i
Slide 4: 2Q 2023 highlights
N A B O R S . C O M Improving leverage Adjusted 2Q free cash flow of $27M on strong collections and disciplined capex Redeemed $52M notes due in Sep’23 RCF undrawn on Jun 30th 2Q 2023 adjusted EBITDA of $235M Adjusted EBITDA up 49% year-on-year Lower 48 EBITDA down offset by increases in all other s
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: Daily Revenue and Margin
N A B O R S . C O M 6 Improving daily revenue and margins 1 Performance Excellence In The Lower-48 Further Expansion of Daily Revenue and Margin (1) Daily rig revenue and adjusted daily gross margin for drilling rigs only, does not include Nabors Drilling Solutions $0 $5,000 $10,000 $15,000 $20,000
Slide 7: Lower-48 Margin Improving as Commodity Pricing Challenged
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 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 2021 2022 2023 L48 Drilling Average Rig Count 7 Disciplin
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 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 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 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 1Q 2Q 2021 2
Slide 10: Growing International Rig Count 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 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2021 2022 2023 International Drilling Adjusted Daily Gross Margin(1) Increases in rig activity driving margin expansion 10 Growing International Rig Count and Margin 2 Resilience Leading
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 2QF 3QF 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 10 total rigs total to-date • 50 rigs to be dep
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 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 & Inn
Slide 14: Customer Adoption Fueling NDS Footprint Expansion
N A B O R S . C O M 52 58 64 71 83 87 92 100 106 96 -10 10 30 50 70 90 110 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2021 2022 2023 U.S. RigCLOUD® Services Installs Nabors 3rd Party 0 10 20 30 40 50 60 70 80 90 100 SmartDRILL SmartSLIDE/NAV REVit SmartPLAN U.S. Performance Software Installs 1Q'21 2Q'21 3Q'21 4Q
Slide 15: Collaboration on Leading Well Construction Automation
N A B O R S . C O M 15 3 Improving Outlook For Our Technology & Innovation Collaboration on Leading Well Construction Automation • Collaborate on technologies including the Halliburton Well Construction 4.0, the LOGIX® Autonomous Drilling Platform, and Nabors SmartROS® and RigCLOUD® • Automate well
Slide 16: Smart Suite Growth Maintains Upward Trajectory
N A B O R S . C O M 0 500 1000 1500 2000 2500 3000 3500 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 Cumulative Number of Wells Drilled 16 Smart Suite Growth Maintains Upward Trajectory Improving Outlook For Our Technology & Innovation 3,100+ Wells
Slide 17: 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 18: 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 2018 2019 2020 2021 2022 2023 Billions Net Debt 18 Significant Headway toward Financial Goals 4 Progress on Our Commitment to De-lever ~ $1.8B Net Debt(1) reduction from p
Slide 19: 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 20: Moving Forward on the Energy Transition
N A B O R S . C O M Expanding penetration on third-party rigs Energy Efficiency & Emission Reduction Technologies Geothermal Development Leveraging IP to applications beyond the rigs, including carbon capture Expansion Beyond Oil & Gas Differentiates Nabors rigs Developing new verticals in: hydrogen
Slide 21: Growing Commitment to Operational and Environmental Stewardship
N A B O R S . C O M 21 Leading in Sustainability and the Energy Transition • Advanced advisory and control system optimizes the efficiency of fuel consumption • Deploying energy storage systems on multiple rigs • Introducing innovative fuel enhancer to reduce fuel consumption and GHG emissions Opera
Slide 22: Leveraging Nabors' Capabilities to Accelerate Vast's Global Deployment
N A B O R S . C O M 22 Leveraging Nabors’ Capabilities to Accelerate Vast’s Global Deployment Leading in Sustainability and the Energy Transition Automation and Robotics Manufacturing and Facilities Controls, Software & AI Nabors’ Technology Nabors’ Ventures Commercial Technology Development Mainten
Slide 23: Geothermal Market and Technology Advancements
N A B O R S . C O M 23 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 24: Appendix
N A B O R S . C O M Appendix 24
Slide 25: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
N A B O R S . C O M June 30, March 31, June 30, 2022 2023 2023 Net income (loss) ($69,935) $61,060 $16,231 Income tax expense (benefit) 9,353 23,015 26,448 Income (loss) from continuing operations before income taxes ($60,582) $84,075 $42,679 Investment (income) loss (822) (9,866) (11,743) Interest
Slide 26: Adjusted Gross Margin Reconciliation
N A B O R S . C O M June 30, March 31, June 30, 2022 2023 2023 Lower 48 - U.S. - Drilling Adjusted operating income (937) $ 74,071 $ 60,496 $ Plus: General and administrative costs 4,740 5,056 5,209 Plus: Research and engineering 1,611 1,519 1,189 GAAP Gross Margin 5,414 80,646 66,894 Plus: Deprecia
Slide 27: Reconciliation of Net Debt to Total Debt
N A B O R S . C O M June 30, March 31, June 30, 2022 2023 2023 Long-Term Debt $2,601,510 $2,562,327 $2,503,250 Cash & Short-term Investments $417,978 $475,732 $429,059 Net Debt $2,183,532 $2,086,595 $2,074,191 (In Thousands) 27 Reconciliation of Net Debt to Total Debt Net debt is computed by subtrac
Slide 28: Adjusted EBITDA by Segment
N A B O R S . C O M (In Thousands) Three Months Ended June 30, 2023 U.S. Drilling International Drilling Drilling Solutions Rig Technologies Other reconciling items Total Adjusted operating income (loss) 75,408 $ 10,407 $ 28,351 $ 5,052 $ (43,893) $ 75,325 $ Depreciation and amortization 66,038 87,9
Slide 29: Reconciliation of Adjusted Free Cash Flow
N A B O R S . C O M Three Months Ended June 2023 Net cash provided by operating activities $168,466 Add: Capital expenditures, net of proceeds from sales of assets (141,683) Adjusted free cash flow $26,783 (In Thousands) 29 Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating
Slide 30: 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