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Section 1: 8-K (FORM 8-K)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

Form 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): September 9, 2020

 

NABORS INDUSTRIES LTD.

(Exact name of registrant as specified in its charter)

 

Bermuda   001-32657   98-0363970
(State or Other Jurisdiction of
Incorporation or Organization)
  (Commission File Number)   (I.R.S. Employer
Identification No.)

 

Crown House
4 Par-la-Ville Road
Second Floor
Hamilton, HM08 Bermuda
  N/A
(Address of principal executive offices)   (Zip Code)

 

(441) 292-1510

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report.)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of exchange on which
registered
Common shares   NBR   NYSE
Preferred shares – Series A   NBR.PRA   NYSE

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

 

 

 

Item 7.01Regulation FD Disclosure.

 

On September 9, 2020, Mr. William Restrepo, the Chief Financial Officer of Nabors Industries Ltd., will participate in the Barclays CEO Energy-Power Conference. Presentation slides related Mr. Restrepo’s participation in the conference is attached hereto as Exhibit 99.1 and incorporated herein by reference.

 

The presentation slides referenced above contain forward-looking statements within the meaning of the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”).  Such forward-looking statements are subject to risks and uncertainties, as disclosed from time to time in the Company’s filings with the Securities and Exchange Commission.  As a result of these factors, actual results may differ materially from those indicated or implied by such forward-looking statements.

 

The information in this Item 7.01, including Exhibit 99.1, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act, of 1934 or otherwise subject to liabilities of that Section or Sections 11 and 12(a)(2) of the Securities Act of 1933.

 

Item 9.01Financial Statements and Exhibits.

 

(d)  Exhibits

 

Exhibit No.   Description
99.1   Presentation
104   Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101)

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  NABORS INDUSTRIES LTD.
   
Date: September 9, 2020 By: /s/ Mark D. Andrews
    Mark D. Andrews
    Corporate Secretary

 

 

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Section 2: EX-99.1 (EXHIBIT 99.1)

 

Exhibit 99.1

 

9/9/2020Nabors Industries Ltd. Barclays CEO Energy-Power ConferencePresented by: William Restrepo Chief Financial Officer1

 
 

 

Forward-Looking StatementsWe 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 relate to matters that are not historical facts, are “forward-looking statements” within the meaning of the safe harbor provisions of Section 27A of the U.S. Securities Act of 1933 and Section 21E of the U.S. Securities Exchange Act of 1934. These “forward-looking statements” are based on our analysis of currently available competitive, financial and economic data and our operating plans. They are inherently uncertain, and investors should recognize that events and actual results could turn out to be significantly different from our expectations.Factors to consider when evaluating these forward-looking statements include, but are not limited to: • the COVID-19 pandemic and its impact on our operations as well as oil and gas markets and prices; • fluctuations and volatility in worldwide prices of and demand for oil and natural gas; • fluctuations in levels of oil and natural gas exploration and development activities; • fluctuations in the demand for our services; • competitive and technological changes and other developments in the oil and gas and oilfield services industries; • our ability to renew customer contracts in order to maintain competitiveness; • the existence of operating risks inherent in the oil and gas and oilfield services industries; • the possibility of the loss of one or a number of our large customers; • the impact of long-term indebtedness and other financial commitments on our financial and operating flexibility; • our access to and the cost of capital, including the impact of a further downgrade in our credit rating, covenant restrictions, availability under our revolving credit facility, and future issuances of debt or equity securities; • our dependence on our operating subsidiaries and investments to meet our financial obligations; • our ability to complete, and realize the expected benefits, of strategic transactions;• our ability to retain skilled employees; • changes in tax laws and the possibility of changes in other laws and regulation; • the possibility of political or economic instability, civil disturbance, war or acts of terrorism in any of the countries in which we do business; • the possibility of changes to U.S. trade policies and regulations including the imposition of trade embargoes or sanctions; and • general economic conditions, including the capital and credit markets.Our businesses depend, to a large degree, on the level of spending by oil and gas companies for exploration, development and production activities. Therefore, sustained lower oil or natural gas prices that have a material impact on exploration, development or production activities could also materially affect our financial position, results of operations and cash flows.The above description of risks and uncertainties is by no means all-inclusive, but is designed to highlight what we believe are important factors to consider. For a discussion of these factors and other risks and uncertainties, please refer to our filings with the Securities and Exchange Commission ("SEC"), including those contained in our Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, which are available at the SEC's website at www.sec.gov.Non-GAAP Financial Measures This presentation refers to certain “non-GAAP” financial measures, such as adjusted EBITDA, adjusted operating income (loss), net debt and free cash flow. The components of these non- GAAP measures are computed by using amounts that are determined in accordance with accounting principles generally accepted in the United States of America (“GAAP”).2

 
 

 

Largest Global Land Driller10,000Employees60+Nationalities15+COUNTRIESIN MARKETS COMPRISING70%OF GLOBAL O&G PRODUCTION United States Saudi Arabia Colombia Argentina Kazakhstan Oman Canada Mexico Kuwait India Algeria Norway UAE Malaysia350+Land Rigs30+Platform Rigs Russia Indonesia3

 
 

 

Nabors Industries – Generating Value for StakeholdersEnsure client success• Enhance drilling performance • Increase reservoir contact • Deliver better wellsForward looking innovator• Leading the digital drilling revolution • Portfolio of integrated servicesPrioritize FCF and debt reductionNabors’ vision is to extend our position as the Global Performance Driller of Choice.Committed to achieving Operational Excellence and Mission Zero.Concentration on safety and ESG4

 
 

 

Strategically Positioned With Our Diversified PortfolioDrilling OperationsSTRONG MULTI-DIMENSIONAL GLOBAL SCALEDrilling SolutionsRig Technologies46% Int’l2019 TotalREVENUE58% Int’l1H 2020Working in tandem to generate superior drilling performance2019 Total54% DomesticREVENUE7% Offshore1H 202042% Domestic10% OffshoreINTEGRATED DRILLING AND TECHNOLOGY SOLUTIONS93% Onshore90% Onshore5

 
 

 

Redefining the Drilling EcosystemAdd gray swooshDIGITALIZATIONAUTOMATION INTEGRATIONFOUNDATION Enabled by rig and reduces cycle time Consolidates workflows Replaces 3rd party providers Reduces staffing at the wellsite Pad optimal Integrated subsystems Modular controls6

 
 

 

Nabors’ Three Pillars of StrategyKeys to Nabors’ SuccessDrive Operational Excellence and Improve SafetyLead Digital Revolution in DrillingImprove Financial Strength with Free Cash FlowDriving progress on all three pillars simultaneously7

 
 

 

First Pillar of StrategyFOCUS ON OPERATIONAL EXCELLENCEDeliver operational excellence in all aspects of our business: operations, financial and ESGFirst Half 2020 Update• Growing market share in key basins of the Lower 48• Industry’s highest Lower 48 margins supported by fleet quality, leading drilling performance, innovations in automation and superior safety• Strongest international performance in the industry• Reinforcing and expanding prior ESG initiatives8

 
 

 

Growing Share with Top 20 L48 E&PsDRIVE OPERATIONAL EXCELLENCEFebruary 202018%31%33%June 202023%NBR HP PTEN5% 13%33%3% 15%25%PDS OtherSource: EnverusClients increasingly prefer Nabors rigs,even as market decline increases customers’ optionality among drillers9

 
 

 

Strong Growth in the Lower 48 MarginDRIVE OPERATIONAL EXCELLENCE$11,000$10,000$9,000$8,000$7,000$6,000$5,000Lower 48 Gross Margin per DayUp 51%Solid Margin Growth Driven by: Fleet quality Drilling performance Technology Safety10

 
 

 

Focus on Environmental, Social and GovernanceDRIVE OPERATIONAL EXCELLENCEPositively impacting our employees, contractors, customers, and the communities we serves• Reduced engine oil use by >300,000 gallons• Completed 17 environmental awareness reviews• Introduced noise-limiting Canrig® Sigma topdrive• 2019: TRIR company-record low of 0.54• 2019: 116 rigs LTI-Free• Community outreach in Education, Safety & Environment, Health & Hunger, Arts• Formed Board-level ESG Committee• Regular shareholder outreach and engagement at Board and Management levelsDual-fuel rigs…Advanced fuel management systems…Sponsorship of Saudi Arabia Drilling Academy…Nabors’s history is marked by significant ESG initiatives11

 
 

 

Focus on Mission ZeroDRIVE OPERATIONAL EXCELLENCEStriving to achieve Mission Zero• Nabors is the TRIR leader among major drilling contractors • Nabors TRIR continues to improve while IADC U.S. Land TRIR worsened significantly from 0.89 (Q1 2020) to 1.83 (Q2 2020)2.52.01.51.00.5TRIR Comparison1.84 1.830.940.590.01Q 2019 2Q 2019 3Q 2019 4Q 2019 1Q 2020 2Q 2020NBR IADC U.S. Land Competitor A Competitor B12

 
 

 

Second Pillar of StrategyEXTEND SUPERIOR TECHNOLOGY ROADMAP WITH DIGITALIZATION AND NEXT-GEN EQUIPMENTAdvance leadership of the technology transformation to improve safety & performance, while reducing costFirst Half 2020 Update• Introduced RigCLOUD® into the market• Continued penetration of SmartNAV™ and SmartSLIDE™ Rapid growth of SmartDRILL™ since 2020 introduction• Initial units of next-gen equipment in the field: Canrig® Sigma topdrive TM-100 wrench PC-3000 wheeled catwalkLeading the Industry in Technology Rigs Drilling automation13

 
 

 

Growing Smart Apps in a Difficult MarketLEAD DIGITAL REVOLUTIONTotal Wells Drilled (1) SmartSLIDE™ 515 SmartNAV™ 1,165SmartApps Penetration RatesNabors Lower 48 Rigs39%Market acceptance of Nabors apps increasing based on:• Technology that generates real value for customers• Optimal mix of scalability and customization• Delivers on customers’ agenda to reduce personnel and automate17%17%18%1%21%4%30%5%11%• Line-of-sight to add additional automation technologies on existing Nabors rigs before year-endJan-20Feb-20 Mar-20 Apr-20May-20Jun-20SmartNAV™/SmartSLIDE™ SmartDRILL™(1) Through June 30, 202014

 
 

 

The Future of Wellbore Placement is HereLEAD DIGITAL REVOLUTIONLegacy Service24 people / 6 rigs 5 to 8 people / 6 rigs6 RIGS MANAGED PER POD IN SmartDOCTM3 to 6 field personnel support 6 rigs= DIRECTIONAL DRILLER (DD)= MWD ENGINEERREMOTE DIGITAL SPECIALIST DAY AND NIGHTRIGLINE 24/7 Digital Operations Center (SmartDOCTM)= SKILLS OF BOTH DD AND MWDReduces staffing and mitigates human error15

 
 

 

RigCLOUD® PlatformLEAD DIGITAL REVOLUTIONDRIVES APP GROWTH – DIFFERENTIATES NABORS IN THE MARKETData is delivered from edge devices 2 to the cloudEcosystem with Real-time Collaborative Apps3 Real-time visibility and analytics drive performanceRigCLOUD ® EdgeRemote VisualizationRigCLOUD ® LiveOpsRigCLOUD ® MetricsDRILLING ENGINEERMANAGER DATA ANALYSTField crew executes drilling plan 1 using RigCLOUD ® applicationsDigital Operations CenterCybersecurityPartner AppsSmartPLAN™ SmartNAV™ MWD Suite™4 Remote team in Digital Operations Center manages instructionsFIELD CREWREMOTE OPERATOR16

 
 

 

Advancing AutomationLEAD DIGITAL REVOLUTIONLeading Robotic Technology• Leading change to next generation of robotic rig equipment through partnerships driving further digital transformation • Full size simulation capabilities and “twin”• All electric, environmentally friendlyCanrig® Sigma PC-3000 Wheeled Catwalk TM-100 WrenchAdvancing Product LeadershipRobotic Pipe HandlerRobotic RoughneckDrill Floor RobotMulti-size Elevator• Continuous product improvements to satisfy industry demand for best in class performance • Next Generation equipment- Top Drive- Wheeled Catwalk- Automated Wrench• Integrates with RigCLOUD®• Advanced operating system17

 
 

 

Third Pillar of StrategyIMPROVE FINANCIAL STRENGTHReduce Debt with Free Cash FlowFirst Half 2020 Update• Building on 2019 free cash flow(1)• 2020 YTD net debt reduction of nearly $100 million• Extended nearly $1 billion in debt maturities• Cash, cash equivalents and S-T investments total $494 million (2)• Availability under credit facility of 454 million (2)(1) Free Cash Flow defined as Net cash provided by operating activities less Net cash used for investing activities. (2) As of June 30, 202018

 
 

 

Strong Focus on Overhead Costs and Capital DisciplineIMPROVE FINANCIAL STRENGTHActions Supporting 2020 Free Cash Flow Totaling $220 millionConsistent reductions in capital spending($ in Millions)Reduced overhead costsRe-evaluated structure and processes$600 $500 $400 $300 $200 $100 $0Capital ExpendituresDown 58%Reduced capital20172018201920202020spendingActualActualActualOriginal Current19

 
 

 

Significant Improvement in Net DebtIMPROVE FINANCIAL STRENGTHApproaching $1 billion net debt reduction since 2017 $2.2 billion target$3.9$3.7$3.5$3.3$3.1$2.9$2.7$2.5Net Debt (1)Down 25% since 20177.0x6.0x5.0x4.0x3.0x2.0xNet Debt to EBITDA(2)3+ Turn Improvement2017 2018 2019 1H 20202012 2013 2014 2015 2016 2017 2018 2019 1H 2020(1) As of year-end, except for 2020 which was as of 06/30/2020. (2) Trailing 12-month EBITDA.20

 
 

 

Debt Maturity Profile as of June 30, 2020IMPROVE FINANCIAL STRENGTH$1,000$800$600$400560484775600484454Debt @ 6/30/2020Total Debt $3.28Bn(2)Cash & Cash Equivalents $0.48Bn$200139 155 193400Total Debt less Cash & Cash Equivalents$2.79Bn(2)$0 2020 2021 2022 2023 2024 2025 2026 2027 2028 Available Liquidity (1)Undrawn RCF Capacity $0.45BnNotes Outstanding(2)Revolving Credit FacilityCash and Cash Equivalents(1) Remaining RCF capacity plus cash and cash equivalents. (2) Debt balances reflect carrying values as of June 30, 2020.21

 
 

 

Investment ThesisDriving the Evolution of Drilling Technology with the Leading Position in Automated Drilling Systems and Digitalization, the Largest Footprint on a Global Scale and the Most Advanced Rig Fleet22

 
 

 

Investment ThesisHIGH-VALUE GROWTH WHILE IMPROVING LEVERAGEMultiple avenues for growth • Global drilling • Drilling Automation • RoboticsDiversification • Targeting lines of business with high margins and low capital intensityImproving leverage and liquidity • Reducing debt with free cash flow • Extended debt maturityNabors strives to continuously improve its position as the global performance driller of choice• Growing with new technologies• Creating value for customers• Generating returns for investors23

 
 

 

Contact us:William C. Conroy, CFAEmail: William.conroy@nabors.comKara K. PeakEmail: kara.peak@nabors.comHouston Office515 West Greens Road, Suite 1200 Houston, TX 77067nabors.com

 

 

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