Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q2 2024 Earnings Presentation
29 slides from Nabors Industries's earnings presentation, Jul 24, 2024
Slide 1: 2Q 2024 Earnings Presentation
2Q 2024 Earnings Presentation NABORS INDUSTRIES LTD. July 24, 2024
Slide 2: Forward Looking Statements
NABORS INDUSTRIES Forward Looking Statements We often discuss expectations regarding our future markets, demand for our products and services, and • our ability to retain skilled employees; our performance in our annual, quarterly, and current reports, press releases, and other written and oral • ou
Slide 3: The Industry's Most Innovative Technology
NABORS INDUSTRIES The Industry’s Most Innovative Technology 1H 2024 Revenue by Segment Working in tandem to generate superior drilling performance 7% 11% Drilling 36% Operations Integrated Drilling Drilling and Energy Solutions Technology Transition Solutions Rig 47% Technologies U.S. Drilling Inter
Slide 4: Drivers of Growth
Drivers of Growth Focused on Advanced Technology to Drive Solutions Capitalizing on Driving healthy Expanding our Innovating Reducing carbon global expansion margins in customer base advances in intensity Lower 48 Drilling drilling Leveraging our Demonstrating Growing NDS Setting the Energ
Slide 5: Recent Highlights
NABORS INDUSTRIES Recent Highlights Deployed 3 rigs in Algeria and 2 rigs in Saudi Arabia YTD Additional deployments planned in Algeria, Saudi Arabia and Argentina later this year Lower 48 rig market generating 2Q daily margins of ~$15,600, holding above prior market cycle highs Nabors Expanding Dri
Slide 6: Five Key Value Drivers
Five Key Value Drivers 1 2 3 4 5 Expanding & Performance Advancing Progress on our Leading in enhancing our excellence in the technology & commitment to Sustainability International Lower 48 innovation with de-lever and the Energy business demonstrated Transition results N A B O R S . C O M 6
Slide 7: Focus on Improving International Rig Economics
1 Resilience Leading to Growth in Our International Segment Focus on Improving International Rig Economics Daily Rig Revenue(1) Daily Gross Margin(1) $50,000 $20,000 $40,000 $16,000 Growing $30,000 $12,000 International results as we expand our fleet $20,000 $8,000 $10,000 $4,000 $- $- (1) Daily rig
Slide 8: Focus on Improving International Rig Economics
1 Resilience Leading to Growth in Our International Segment Focus on Improving International Rig Economics Daily Rig Revenue(1) Daily Gross Margin(1) $50,000 $20,000 $15,000 Working to enhance both the top and $40,000 $10,000 bottom line $5,000 $30,000 $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q
Slide 9: Significant Rig Growth Trajectory in Saudi Arabia
1 Resilience Leading to Growth in Our International Segment Significant Rig Growth Trajectory in Saudi Arabia SANAD Estimated Average Rig Count Potential* 60 Newbuild Program Generating Revenue 55 • Seven operating and two more scheduled in 2024 50 • To date 15 total rigs scheduled for deployment •
Slide 10: Significant Opportunity for Additional International Rigs by YE 2025
1 Resilience Leading to Growth in Our International Segment Significant Opportunity for Additional International Rigs by YE 2025 International Drilling Opportunity Set Rig Count* Potential awards, negotiations and tenders Awarded/Contracted Contracted Actively pursuing Working multiple opportunities
Slide 11: L48 Daily Revenue and Margin above All Prior Cycle Highs
2 Performance Excellence In The Lower-48 L48 Daily Revenue and Margin above All Prior Cycle Highs Daily Rig Revenue(1) Daily Gross Margin(1) $40,000 $20,000 $30,000 $15,000 Powerful $20,000 $10,000 daily revenue and margins leading to free cash flow $10,000 $5,000 $- $- (1) Daily rig revenue and adj
Slide 12: Resilient Performance in Volatile Commodity Market
2 Performance Excellence In The Lower-48 Resilient Performance in Volatile Commodity Market Daily Rig Revenue(1) Daily Gross Margin(1) $40,000 $20,000 $30,000 $15,000 Driving greater $20,000 $10,000 value capture $10,000 $5,000 $0 $0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2022 2
Slide 13: NDS Margin Gains Fueled by Increasing Penetration and Improving Service-line Mix
3 Improving Outlook For Our Technology & Innovation NDS Margin Gains Fueled by Increasing Penetration and Improving Service-line Mix NDS Revenue, Adjusted EBITDA & Adjusted Gross Margin % $350 70% $300 60% Adjusted gross $250 50% margin of 50% $200 40% $150 30% in 1H 2024 $100 20% $50 10% $- 0% Reve
Slide 14: NDS Targeting Third Party and International Markets
3 Improving Outlook For Our Technology & Innovation NDS Targeting Third Party and International Markets NDS - International Revenue Growth 1200% 1H 2024 Revenue Mix 800% International U.S. - NBR 400% 38% Rigs 42% 0% 2016 2017 2018 2019 2020 2021 2022 2023 1H 2024 NDS - U.S. Third Party Revenue Growt
Slide 15: Third-Party Drilling Contractor Breaks Records Utilizing Nabors Automation
3 Improving Outlook For Our Technology & Innovation Third-Party Drilling Contractor Breaks Records Utilizing Nabors Automation SmartDRILL vs. Manual Connection Times Results -38% -32% Leveraging Nabors SmartROS® and SmartDRILL® application, the third-party drilling contactor -29% Connection Time (mi
Slide 16: Significant Headway Improving Leverage
4 Progress on Our Commitment to De-lever Significant Headway Improving Leverage $1.8 billion Net Debt(1) reduction since 1Q 2018 Net Debt $4.0 $3.0 $1.8 billion Billions $2.0 $1.0 $- 1Q 2Q 3Q 4Q 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 2024 (1)
Slide 17: Our Energy Transition and Sustainability Strategy
Our Energy Transition and Sustainability Strategy Improve Collaborate Partner in Invest in Nabors’ with peers to adjacent companies environmental reduce carbon markets that developing footprint output in our leverage our green industry talent and technologies technologies N A B O R S . C O M 17
Slide 18: A Shared Path Forward
5 Leading in Sustainability and the Energy Transition A Shared Path Forward Energy Innovation vs. Capitalize on Collaboration is Key Energy Exclusion Strengths and to Success Adjacencies Remove tradeoffs between Leverage collective strengths to energy sources Add value to adjacent industries acceler
Slide 19: Nabors Initiatives to Lower Emissions
5 Leading in Sustainability and the Energy Transition Nabors Initiatives to Lower Emissions Alternative Energy Energy Storage Pursuing Multiple Engine Optimization Decarbonization Pathways Green Fuels Emissions Monitoring N A B O R S . C O M 19
Slide 20: Our Venture Portfolio
5 Leading in Sustainability and the Energy Transition Our Venture Alternative Portfolio Energy Future energy system needs clean, dispatchable and Energy scalable energy solutions Storage Emissions Monitoring N A B O R S . C O M 20
Slide 21: Geothermal Market Technology Advancements
5 Leading in Sustainability and the Energy Transition Geothermal Market Technology Advancements Nabors and its predecessor entities have been continuously innovating in the energy sector for over 100 years Innovative Drilling Technologies Reducing cost per energy-unit produced by using and combining
Slide 22: Appendix
(i) NABORS Appendix
Slide 23: Rig Utilization and Availability, June 30, 2024
Rig Utilization and Availability, June 30, 2024 U.S. Lower-48 U.S. Offshore Alaska International Total High Spec(2) Rig Fleet(1) 316 112 12 15 129 Rigs on Revenue(1) 161 69 3 4 85 Utilization(1) 51% 62% 25% 27% 66% (1) As of June 30, 2024 (2) Excludes non-high spec rigs in the Lower 48 N A B O R S .
Slide 24: Reconciliation of Non-GAAP Financial Measures to Net Income (Loss)
Reconciliation of Non-GAAP Financial Measures to Net Income (Loss) Adjusted EBITDA represents net income (loss) before, income taxes, investment income (loss), interest expense, other, net and depreciation and amortization. Adjusted EBITDA is a non-GAAP financial measure and should not be used in is
Slide 25: Reconciliation of U.S. Drilling Segment Adjusted Gross Margin to Adjusted Operating Income
Reconciliation of U.S. Drilling Segment Adjusted Gross Margin to U.S. Drilling Segment Adjusted Operating Income Adjusted gross margin by segment represents adjusted operating income (loss) plus general and administrative costs, research and engineering costs and depreciation and amortization. Three
Slide 26: Reconciliation of Net Debt to Total Debt
Reconciliation of Net Debt to Total Debt 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 reported in accordance wit
Slide 27: Reconciliation of Adjusted EBITDA by Segment to Adjusted Operating Income (Loss) by Segment
Reconciliation of Adjusted EBITDA by Segment to Adjusted Operating Income (Loss) by Segment Adjusted EBITDA by segment represents adjusted income (loss) plus depreciation and amortization. (In Thousands) Three Months Ended June 30, 2024 Other U.S. International Drilling Rig reconciling Total Drillin
Slide 28: Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities
Reconciliation of Adjusted Free Cash Flow to Net Cash Provided by Operating Activities Adjusted free cash flow represents net cash provided by operating activities less cash used for capital expenditures, net of proceeds from sales of assets. Management believes that adjusted free cash flow is an im
Slide 29: Contact Us
NABORS INDUSTRIES LTD. Contact Us: William C. Conroy, CFA VP - Corporate Development and Investor Relations William.Conroy@nabors.com Kara K. Peak Director - Corporate Development and Investor Relations Kara.Peak@nabors.com NABORS.COM NABORS CORPORATE SERVICES 515 W. Greens Road Suite 1200 Houston,