Nabors Industries Ltd. · NYSE:NBR
Nabors Industries — Investor Presentation (March 2017)
30 slides from Nabors Industries's investor presentation, Mar 27, 2017
Slide 1: Forward-Looking Statements
This presentation discusses certain forward-looking statements including, but not limited to, EBITDA Net Debt, and Free Cash Flow projections on a consolidated and segment basis, new rig technology, rig margin improvement potential, job growth opportunities, cost savings, and expectations regarding
Slide 2: Non-GAAP Financial Measures Disclaimer
3 Non-GAAP Financial Measures Disclaimer This presentation refers to certain non-GAAP financial measures, such as Adjusted EBITDA (or EBITDA), Free Cash Flow and Net Debt. Adjusted EBITDA is computed by subtracting the sum of direct costs, general and administrative expenses and research and enginee
Slide 3: Operational Update Focus and Strategic Direction
4 Operational Update Focus and Strategic Direction
Slide 4: Update on First Quarter Performance – Lower 48
5 Lower 48 We are currently reactivating more rigs than expected, as customer demand for future deliveries of super spec rigs accelerates. Additionally, we have had all PACE®-X and PACE®-M800 rigs 100% utilized. We have added 18 rigs so far this quarter to the working rig count and see continued upw
Slide 5: Update on First Quarter Performance – International
6 International In our largest international market, multiple land drilling contractors have been requested to recertify various structural components As previously mentioned, we incurred some of these costs during Q4, resulting in between 8 and 40 days of lost revenue per re-certified rig Per clien
Slide 6: Operational Update Focus and Strategic Direction
7 Operational Update Focus and Strategic Direction
Slide 7: From 2012 Howard Weil Conference to Today
8 Developed Pad-Optimal PACE®-X and PACE®-M800 rigs Executed over $1.6 Bn in asset sales Lowered Total Debt by $1.2 Bn Introduced first fully automated land rig From 2012 Howard Weil Conference to Today 2012 Howard Weil Presentation To Today
Slide 8: Significant Achievements Since Last Year
9 Throughout the downturn, Nabors has consistently delivered neutral or positive free cash flow, prioritized debt reduction, maintained the dividend, and continued making critical R&D advances Significant Achievements Since Last Year
Slide 9: Levers of Value Creation
10 5 Levers of Value Creation Permanent Cost Reduction Premium Operational Performance Nabors Drilling Solutions Full Drilling Automation International Portfolio Upside Permanent structural cost reduction - SG&A and other costs Premium rates with “beyond pad-optimal” rigs and RigtelligentTM- OS to o
Slide 10: Permanent Cost Reductions
11 Permanent Cost Reductions Focus on Cost Control and Efficiency (1) Versus Q4 2014 excluding our Completion and Production Services segments run rate of $445m / year -45% Further Initiatives Achieved & In Progress Lowered costs across supply chain, $120m in annual savings versus 2014 run rate Alig
Slide 11: International Portfolio Upside: Highlights of Key International Markets
12 International Portfolio Upside Highlights of Key International Markets International Quarterly Average Rigs Working (excl. Canada): International rigs now account for roughly half of Nabors active global fleet as of Q4 2016 MENA resilience has largely offset cyclical weakness in Latin America and
Slide 12: Saudi Arabia Joint Venture
13 Joint Venture was initiated as part of Saudi Arabia’s “Vision 2030” and Saudi Aramco’s “In-Kingdom Total Value Add” (IKTVA) Program Saudi Aramco’s goals are to increase localization to 70% by 2021, while: Serving Saudi Aramco’s needs Exporting to the region & the world Growing & diversifying the
Slide 13: Resulting in Outperformance of the Market Since Trough
14 Nabors has greatly outperformed the broader market during the recovery to date SMARTRigs™ are now 100% on revenue With larger, pad-focused operators driving the bulk of rig count additions in 2017, we expect pad-optimal rigs to increase both total count and share (1) Premium Operational Performan
Slide 14: Rigtelligent Operating System Efficiency and KPIs Focus
15 Premium Operational Performance RigtelligentTM Operating System Efficiency and KPIs Focus SMARTRig™ DRILLER RigWatchTM Unique in the industry Auto-generated daily reports and end-of-well report ensure transparency of performance Data-driven decision-making drives top performance in all services p
Slide 15: Four Product Lines Supported by Nabors IP Portfolio
16 Nabors Drilling Solutions Four Product Lines Supported by Nabors IP Portfolio Performance Drilling Tools ROCKit® REVit® DrillsmartTM RigWatch® AccuSteer ® MWD RSS Tool Wellbore Placement Managed Pressure Drilling Non Stop Driller BOP Testing Tubular Services MPD-Ready™ Other Services 4
Slide 16: Changing Nature of Service Delivery
Nabors Drilling Solutions Changing Nature of Service Delivery 17 SMARTRig™ DRILLER REMOTE OPERATIONS CENTER CASING CREW MANAGED PRESSURE DRILLER RIG MANAGER MUD LOGGING More than 160 drillers, rig managers, and engineers trained for NDSReady™ Rigs DIRECTIONAL DRILLING DIRECTIONAL DRILLERS MWD 4
Slide 17: NDS Illustrated Weighted Average Margin per Rig
18 (1) Conventional only NDS - Illustrated Weighted Average Margin per Rig in the U.S., $/d Rigwatch® Others WBP – Conv.(1) MPD 2020 Illustration ~$5,300 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. RevitTM Rockit® 4 Nabors Drilling Solutions ~$200-$250m EBITDA by 2020
Slide 18: Performance Drilling Tools Provides More Accurate Drilling
19 (1) Conventional only RevitTM Rigwatch® Others WBP – Conv.(1) MPD Rockit® 2020 Illustration ~$5,300 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. 19 Nabors proprietary systems and technology to improve performance through: - Tool face control and orientation - Pipe o
Slide 19: Increasing Activity Across All Other Product Lines
20 (1) Conventional only RevitTM Rigwatch® Others WBP – Conv.(1) MPD Rockit® 2020 Illustration ~$5,300 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. 20 Other Services Increasing traction along with the increasing rig activity in the L48 Currently at full utilization and
Slide 20: MPD-Ready Incorporated Managed Pressure Drilling System
21 (1) Conventional only Rigwatch® Others WBP – Conv.(1) MPD 2020 Illustration ~$5,300 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. Nabors MPD-ReadyTM Built into the rig drill floor, using existing systems and crews, reducing safety and operational risks Activated with
Slide 21: Land Focused Wellbore Placement Tools and Services
22 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. Rigwatch® Others WBP – Conv.(1) MPD 2020 Illustration ~$5,300 RevitTM Rockit® (1) Conventional only Wellbore Placement Services Largest component of the NDS upside Rapidly increasing activity in the Lower 48 and currently
Slide 22: AccuSteer MWD Enhances Performance in Unconventional Wells
23 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. Nabors AccuSteer® MWD Standard L48 MWD Continuous inclination provides major benefits to operators: Less tortuous hole (reduces drill pipe wear, improves casing running time) More accurate placement in the pay zone Reduce
Slide 23: AccuSteer MWD & Continuous Inclination Features Video
24 4 Nabors Drilling Solutions AccuSteer® MWD & Continuous Inclination Features VIDEO
Slide 24: Case Study: AccuSteer MWD & Continuous Inclination
25 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. Summary: Location Formation Time Saved: Estimated Costs Saved Tools Deployed - Approx. $90k Footage Drilled - 36 hours - 8,000 feet - AccuSteer MWD - Wolfcamp - Permian Basin Challenge: Stay within the center of the reser
Slide 25: Rigwatch Navigator Well Path
26 Steering automation integrates the directional drilling workflow into Nabors’ proprietary Rigwatch® system Combined with our ROCKit® PILOT automation, and Rigline 24/7TM support systems, existing rig crews can execute directional drilling with superior results Patent Pending 4 Nabors Drilling Sol
Slide 26: Rotary Steerable System Overview
Development Status: Performing field trials Revising design to increase reliability Expect to reach commerciality by end of 2017 Commence build-out in 2018 27 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. Major Features: Designed for 7-7/8” to 8-3/4” hole size applicati
Slide 27: iRacker Automated Tubular Handling System
Development Status: Prototype Testing Commercialized with initial deployment 2H 2017 Build-out 2017-18 28 Please refer to the disclaimers on slides 2 and 3 of the presentation deck. Additional System Components: Rotating Mousehole with Integrated Slips Powerslips - Hands-Free Drill String Slips Colu
Slide 28: Nabors Drivers of 2020 EBITDA
29 Nabors Drivers of 2020 EBITDA Nabors global average rigs working, 2020 2020 EBITDA Illustrations $m Percent of 2014 Margin Percent of 2014 average rigs working $1,760 $1,600 $1,440 $1,900 $1,730 $1,560 $1,620 $1,470 $1,320 124% 113% 101% 73% 80% 86% 270 295 320 $16.0 $14.5 $13.0 Weighted Global M
Slide 29: Nabors Primary Focus
30 Nabors Primary Focus ROCE Improvement Free Cash Flow Reduce Leverage
Slide 30: Nabors Primary Focus
Nabors Primary Focus Free Cash Flow Q\) NABORS Reduce ROCE Leverage Improvement NL, x» 4) NABORS
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