Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q4 2022 Earnings Presentation
27 slides from Nabors Industries's earnings presentation, Feb 8, 2023
Slide 1: 4Q 2022 Earnings Presentation
4Q 2022 Earnings Presentation NABORS INDUSTRIES LTD. February 7, 2023
Slide 2: Forward Looking Statements
Forward Looking Statements We o ften discuss expecta tions regarding our future markets, demand for our products and • our ability to retain skilled employees; services, and our performance in our annual, quarterl y, and curren t reports, press releases, and • our ability to complete, and realize th
Slide 3: 12/31/2022 Rig Utilization and Availability
12/31/2022 Rig Utilization and Availability U.S. LOWER-48 U.S. OFFSHORE ALASKA INTERNATIONAL TOTAL HIGH SPEC(2) RIG FLEET(1)(2) 329 111 12 16 134 RIGS ON REVENUE(1) 180 96 3 4 77 UTILIZATION AT 12/31/2022 55% 86% 25% 25% 57% (1) As of December 31, 2022 (2) Excludes non-high spec rigs in the Lower 48
Slide 4: Recent Highlights
4Q 2022 adjusted EBITDA Improving liquidity and Continued improvement in of $230M leverage L48 Significant sequential Adjusted 4Q free cash flow L48 Drilling 4Q adjusted daily improvements in all segments of $101M (Full year $154M) gross margin increased 31% to globally ~$14,600(1) Improved Net Leve
Slide 5: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in the enhancing our technology & commitment to de- Sustainability and Lower-48 International innovation with lever the Energy segment demonstrated Transition results N A B O R S . C O M
Slide 6: Strong Momentum in Rig Count and Margin
1 Performance Excellence In The Lower-48 Strong Momentum in Rig Count and Margin L48 Drilling Adjusted L48 Drilling Average Daily Gross Margin(1) Rig Count $16,000 100 90 $14,000 80 $12,000 70 Improving revenue $10,000 60 and margins on growing $8,000 50 rig activity $6,000 40 30 $4,000 20 $2,000 10
Slide 7: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in the enhancing our technology & commitment to de- Sustainability and Lower-48 International innovation with lever the Energy segment demonstrated Transition results N A B O R S . C O M
Slide 8: Growing International Rig Count and Margin
2 Resilience Leading to Growth in Our International Segment Growing International Rig Count and Margin International Drilling Adjusted Daily Gross Margin International Drilling $16,000 Average Rig Count 80 $14,000 75 $12,000 Increases in rig 70 $10,000 activity driving margin expansion $8,000 65 $6,
Slide 9: Significant Growth Trajectory in Saudi Arabia
2 Resilience Leading to Growth in Our International Segment Significant Growth Trajectory in Saudi Arabia SANAD Estimated Average Rig Count Potential* 55 Newbuild Program Generating Revenue 50 • Awarded additional 5 rigs (10 rigs total to-date) • 50 rigs to be deployed over 10 years • First startup
Slide 10: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in the enhancing our technology & commitment to de- Sustainability and Lower-48 International innovation with lever the Energy segment demonstrated Transition results N A B O R S . C O M
Slide 11: NDS Capitalizing on Growing Rig Count and Higher Penetration
3 Improving Outlook For Our Technology & Innovation NDS Capitalizing on Growing Rig Count and Higher Penetration Adjusted gross margin % of >52% in 4Q 2022, an all time high Expanding our high-value / high-margin low-capital technology services NDS Revenue & Adjusted Gross Margin $80 60% $70 55% $60
Slide 12: Customer Adoption Fueling Rapid NDS Footprint Expansion
3 Improving Outlook For Our Technology & Innovation Customer Adoption Fueling Rapid NDS Footprint Expansion NDS technology consistently adds value on both Nabors rigs and Third-party rigs U.S. Performance Software Installs U.S. RigCLOUD® Services Installs 200 100 100 92 180 87 90 83 160 80 71 140 70
Slide 13: Smart Suite: SmartSLIDE Significantly Improving Performance
3 Improving Outlook For Our Technology & Innovation SmartSLIDE® Significantly Improving Performance Consistently fewer interactions* using SmartSLIDE® increases accuracy and improves performance SmartNAV® Automated directional guidance system, improves wellbore Auto Driller and Top Drive Quill Inter
Slide 14: Cumulative Number of Wells Drilled
3 Improving Outlook For Our Technology & Innovation Smart Suite Growth Trajectory Validates Customer Acceptance Third-Party SmartSLIDE® 3000 Third-Party Deployment SmartDRILL® SmartDRILL® Automation Deployment Cumulative Number of Wells Drilled 2500 2,400+ Wells Drilled Commercialization 2000 1500 S
Slide 15: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in the enhancing our technology & commitment to Sustainability and Lower-48 International innovation with de-lever the Energy segment demonstrated Transition results N A B O R S . C O M
Slide 16: Significant Headway toward Financial Goals
4 Progress on Our Commitment to De-lever Significant Headway toward Financial Goals ~ $1.8B Net Debt(1) reduction from previous high in 1Q 2018 Net Debt $4.0 $3.5 $3.0 $1.8B $2.5 Billions $2.0 $1.5 $1.0 $0.5 $- 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2018 2019 2020 2021 2022 (1)
Slide 17: Five Keys to Excellence
Five Keys to Excellence 1 2 3 4 5 Performance Expanding & Advancing Progress on our Leading in excellence in the enhancing our technology & commitment to Sustainability and Lower-48 International innovation with de-lever the Energy segment demonstrated Transition results N A B O R S . C O M
Slide 18: Moving Forward on the Energy Transition
5 Leading in Sustainability and the Energy Transition Moving Forward on the Energy Transition Energy Efficiency & Expansion Beyond Oil Geothermal Emission Reduction & Gas Development Technologies Developing new verticals in: Differentiates Providing expertise in drilling and hydrogen, fuel efficienc
Slide 19: Growing Commitment to Operational and Environmental Stewardship
5 Leading in Sustainability and the Energy Transition Growing Commitment to Operational and Environmental Stewardship Dedicated to improving the environmental footprint of OFS Operating rigs with the environment as a stakeholder • Advanced advisory and control system optimizes the efficiency of fuel
Slide 20: Geothermal Market Technology Advancements
5 Leading in Sustainability and the Energy Transition Nabors and its predecessor entities have been continuously innovating in the energy sector for over 100 years Geothermal Market Innovative Drilling Technologies Technology Reducing cost per energy-unit produced by using and combining new technolo
Slide 21: Appendix
dl) NABORS Appendix NABORS.COM 21
Slide 22: 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 (loss) from discontinued operations, net of tax, income taxes, inv estment income (loss), interest expense, other, net and depreciation and amortization. Adjusted EBITDA is a
Slide 23: Reconciliation of U.S. Drilling Segment Adjusted Gross Margin
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. Thre
Slide 24: 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 25: Reconciliation of Adjusted EBITDA 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) Thre e Months Ende d De ce mbe r 3 1, 2 0 2 2 Other U.S. Canada International Drilling Rig recon
Slide 26: Reconciliation of Adjusted Free Cash Flow to Operating Cash Flow
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 27: 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,