Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Q2 2013 Earnings Presentation
24 slides from Nabors Industries's earnings presentation, Jul 24, 2013
Slide 1: 2Q13 Earnings Presentation
2Q13 Earnings Presentation July 24, 2013 Presenter: Anthony G. Petrello Chairman, President & Chief Executive Officer
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 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 incorp
Slide 3: 2013 Second Quarter Highlights
3 2013 Second Quarter Highlights
Slide 4: Gross Debt reduced by $302 million in 2Q13
Gross Debt reduced by $302 million in 2Q13 4 > Sequentially reduced Gross Debt by $302 million through net operating cash, cash on hand, and working capital improvements > Net Debt reduced by $219 million sequentially – Operating Cash Flow less Capital Expenditures = $90 million – Working Capital Im
Slide 5: Announced Long-Term Contracts 2012 - Present
0 5 10 15 20 25 30 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 Announced Long-Term Contracts 2012 - Present 5 Source: Company Press Releases and Conference Calls, Nabors announcements account for 21 PACE®-X, 3 PACE®-S and 1 PACE®-B NBR HP PTEN 25 8
Slide 6: US Efficiencies Result in More Wells per Rig
8,658 8,534 8,800 1,759 1,706 1,709 1,670 1,680 1,690 1,700 1,710 1,720 1,730 1,740 1,750 1,760 1,770 8,400 8,450 8,500 8,550 8,600 8,650 8,700 8,750 8,800 8,850 Q4 - 2012 Q1 - 2013 Q2 - 2013 US Wells US Rigs US Efficiencies Result in More Wells per Rig 6 > During Q2, land wells drilled increased by
Slide 7: Financial Summary
7 Financial Summary ($M’s except EPS) 2Q12 3Q12 4Q12 1Q13 2Q13 Revenue $1,602,797 $1,666,892 $1,596,807 $1,581,540 $1,492,946 EBITDA 486,363 497,612 427,034 422,953 361,142 Operating Income 225,347 228,015 149,751 149,588 90,943 Diluted EPS(1) $(0.34) $0.22 $0.44 $0.33 $0.08 (1) Diluted EPS for cont
Slide 8: Drilling & Rig Services
8 Drilling & Rig Services
Slide 9: Drilling & Rig Services Adjusted Income Derived from Operating Activities
9 Drilling & Rig Services Adjusted Income (Loss) Derived from Operating Activities ($M’s) 2Q12 3Q12 4Q12 1Q13 2Q13 Drilling & Rig Services: U.S. $145,351 $115,207 $82,603 $77,595 $69,813 Canada (529) 21,679 27,064 30,518 3,895 International 16,401 30,299 23,388 21,469 32,481 Rig Services 28,179 16,2
Slide 10: Global Rig Fleet Details
Global Rig Fleet Details 10 AC SCR Mech Total Moving Systems Alaska Land 5 12 2 19 13 Lower 48 157 96 26 279 143 Canada 15 21 29 65 20 International Land 33 65 28 126 49 Offshore 6 40 2 48 n/a Total 216 234 87 537 225 As of 6/30/13, including contracted rigs scheduled to be delivered and moving syst
Slide 11: 2Q13 Rig Utilization & Availability
2Q13 Rig Utilization & Availability 11 Rig Fleet 2Q13 Rig Years Utilization U.S. Lower 48 AC 141 128 91% Legacy 122 48 40% U.S. Lower 48 Total 263 176 67% U.S. Offshore 24 16 67% Alaska 19 5 26% Canada 65 17 26% International 150 125 83% Subtotal 521 339 PACE®-X Construction(1) 16 Total Fleet 537 (1
Slide 12: Progression of US Lower 48 Working Rig Count
Progression of US Lower 48 Working Rig Count 12 2/15/13 Bottom Q1 Exit Q2 Exit Today % Change Nabors Rig Count 165 175 177 183 10.91% BHI US Land Total Count 1691 1680 1670 1691 0% BHI Horizontal Count 1,139 1,099 1,067 1,058 -7.11% Source: Company Analysis, Baker Hughes US Land Rig Count (7/19/13)
Slide 13: International Working Rigs
International Working Rigs 13 Algeria 10 Ecuador 6 Kurdistan 2 Romania 1 Angola 1 India 5 Kuwait 2 Russia 5 Argentina 17 Iraq 4 Malaysia 2 Saudi Arabia 32 Colombia 7 Italy 1 Mexico 13 UAE 1 Congo 2 Jordan 1 Oman 4 Venezuela 5 Kazakhstan 1 PNG 2 Yemen 2 Total 126 As of 6/30/13
Slide 14: Canada Working Rigs by Play
Canada Working Rigs by Play 14 Play Target AC SCR Mechanical Pad Capable Workover Rigs Montney Oil / Gas 3 7 6 1 Duvernay (NW Alberta) Oil 12 Cardium (Central Alberta) Oil 5 28 Saskatchewan Oil 1 6 Oil Sands Oil 1 1 8 Horn River Gas 1 1 1 Fort Liard Gas 1 1 Other Oil / Gas 9 Total 5 9 6 8 65 As of 6
Slide 15: Completion & Production Services
15 Completion & Production Services
Slide 16: Completion & Production Services Adjusted Income Derived from Operating Activities
Completion & Production Services Adjusted Income Derived from Operating Activities 16 ($M’s) 2Q12 3Q12 4Q12 1Q13 2Q13 Completion & Production Services: Completion Services $46,144 $47,218 $30,296 $17,756 $6,870 Production Services 25,397 34,035 21,374 26,014 23,471 Total $71,541 $81,253 $51,670 $43,
Slide 17: Pressure Pumping Concentrated in Northern U.S.
Pressure Pumping Concentrated in Northern U.S. 17 “April 2013 was the coldest on record, on April 15th over 80% of state highways were ‘no travel advised’ due to the heavy snow fall, and more recently May 2013 [was] the wettest on record.“ - North Dakota Industrial Commission Dept. of Mineral Resour
Slide 18: Completion & Production Services Fleet
Completion & Production Services Fleet Region Rigs Frac Crews 24 Hr. Frac Crews Trucks Frac Tanks CTU Cementing Wireline Western 181 113 99 15 12 Rockies 69 10 6 57 332 2 9 10 Mid-Con 36 107 448 2 8 11 Northeast 11 5 2 105 606 5 40 15 West Texas 104 3 332 1,238 2 4 4 South Texas 25 3 3 196 573 4 7 2
Slide 19: U.S. Production Services Rates & Hours
U.S. Production Services Rates & Hours 21% CAGR in EBITDA 2009-2012 19 500,000 600,000 700,000 800,000 900,000 $380 $420 $460 $500 $540 $580 2009 2010 2011 2012 Well Servicing Rigs: Annual Rates and Hours Rig Hours Rig Rate 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 $80 $90 $100 $110 $120 $13
Slide 20: Summary
20 Summary
Slide 21: Key Takeaways
Key Takeaways > Near term remains challenging with limited visibility > Outsized operating leverage over longer term > Global optionality relative to North America-centric peers > Continued focus on EBITDA generation > Multiple opportunities for high-impact investments > Focused on matters within ou
Slide 22: ORS NAB
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Slide 23: EBITDA
EBITDA 23 ($M’s) 2Q12 3Q12 4Q12 1Q13 2Q13 Drilling & Rig Services $399,217 $398,741 $359,889 $356,688 $321,958 Completion & Production Services 123,176 136,488 107,732 97,842 81,515 Other reconciling items (36,030) (37,617) (40,587) (31,577) (42,331) Total $486,363 $497,612 $427,034 $422,953 $361,14
Slide 24: Quarter End Number of Rigs Subject to Term Contracts
Quarter End Number of Rigs Subject to Term Contracts 25 2Q13 3Q13 4Q13 1Q14 2Q14 U.S. Lower 48 119 101 87 71 66 International 107 102 89 85 76 Canada 21 18 12 10 8 Alaska 5 4 4 4 4 Offshore 38 27 21 17 15 Total 290 252 213 187 169 Represents the quarter end number of contracts in force with no incre