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2
Balance Sheet Data as of September, 2003
A CONSERVATIVE AND FLEXIBLE FINANCIAL POSITION
Cash and Marketable SecuritiesAccounts ReceivableWorking CapitalProperty, Plant and Equipment, NetTotal Assets
Actual1,517349931
2,8205,487
2,2852,399 49% 24%
153
A3A-
S&P 500, OSX
Total DebtStockholder’s EquityTotal Debt to Total CapitalizationNet Debt to CapitalizationWeighted Avg. Shares Outstanding
Moody’s Rating (1)
Standard & Poors
($Millions)
(1) Some debt issues are unrated
3
AVAILABLE CAPACITY AT OCTOBER 31, 2003
Drilling Working Ready-to-Run Inventory Total North America
Alaska 8 10 2 20 US 48 Drilling 168 121 94 383 GOM Offshore 14 27 0 41 Canada 37 45 0 82 International
Int’l Land (1) 56 38 2.5 96.5 Int’l Offshore (1) 22 0 0 20.5Total Drilling 305 241 98.5 643W.O./Well Servicing
US Lower 48 432 63 247 742 Canada 139 18 52 209Total W.O./Well Servicing 571 81 299 951
(1) Represents Nabors’ Net Interest in J.V. Rigs in Saudi @ 50%, operating rig count includes those leased from GOM Offshore
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NATURAL GAS OUTLOOKSupply challenges point to a more orderly and sustainable cycle
» North American Gas Decline Rates Imply 20+ BCFPD Production Decline Per Year
» Timing of the Supply Impact of Gas From:• Deepwater• McKenzie Delta• Alaska• LNG
» US & Canadian Basins are the only alternatives for incremental supply of natural gas over the next five to eight years. Longer term, LNG will ultimately become the marginal supply
5
GLOBAL OILSupply Demand Balance Appears Favorable But Less Visible Than Gas
Supply:
»Aging and Declining Fields
•North Sea, North Slope, US, Latin America, Middle East
»Prospective New Supplies
• Deep Water – US GOM, West Africa
•Middle East – Exploration and Development
•Russia – Rehabilitation and New Developments•Former Soviet Union States
Demand:
»Global GDP – China, India and Emerging Economics
»North American Gas Alternatives
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INCREMENTAL GASDRILLING CHALLENGES
»Existing Reserves
– Higher Recovery Efficiency
– Increased Technology
»Incremental Reserves– Deeper Horizons– More Complex – Higher Risks– More Remote– Less Accessible
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U.S. GAS RIG ACTIVITY
Source: Baker Hughes, Bloomberg
376
463
564 563
484
717
691
939
TODAY – 944
YTD 03 – 855
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U.S. NATURAL GAS PRODUCTIONYEAR-OVER-YEAR % CHANGE
EOG_BS0503-3
-10%
-8%
-6%
-4%
-2%
0%
2%
4%
2000
-4.8ACT
Quarterly YOY % Change
53.0 53.0 52.2 51.9 50.5 50.3 49.7 48.7 49.4 49.0 48.8 48.5
-5.2ACT
-2E -3E -2E -1E
2001 2002 2003E
52.0 51.6 52.0 52.1
Quarterly Bcfd:
Annual Change +1.2% -5.3% -1 to -3%
-4.9ACT
Assumes BHI Gas Rig Count 1,000 Year End 2003
Storm Related
-6.2ACT
717 Gas Rigs717 Gas Rigs 939 Gas Rigs939 Gas Rigs 691 Gas Rigs691 Gas Rigs
Est. 1,000 at year endToday = 944
Y-T-D Avg. = 855
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LAND RIG SUPPLYCYCLE-TO-CYLCE
» August 2000 Effective 100% Utilization at 850 US Land Rigs
» Today Effective 100% Utilization at 1100+ US Land Rigs
» Increased Operating Costs
» Increased Capital Costs
» None the less, we expect significantly lower dayrates than the 2001 peak
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FOCUSING ON RIG EFFECIENCY & INNOVATION
US LOWER 48
» Reducing moving times • From 5 – 7 days to 3.5 – 5 days• 24 hour moves, pre-planning, load unitizations, and Nabors controlled Trucking
» Upgrading rig capabilities• Higher hydraulic horsepower• Iron ruffnecks
» Incorporating technology innovations where cost effective• Noble OptiDrill ™
– 8 systems expanding to 12 by end of year
» Overall performance improvements in safety and efficiency
• El Paso’s Robert Guerra #1 well in South Texas set new industry record to 19,000 feet in 38 days - 11 days and more than $1 million under AFE
• El Paso’s Casa de Nylon well in South Texas drilled to 17,000 feet - 11 days and $750,000 under AFE
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FOCUSING ON RIG EFFICIENCY & INNOVATION
» Data acquisition and management:• Real-time and historical rig and well parameters• Real-time drilling engineering functions• Automation of rig accounting functions
» Top drives for directional, horizontal and problem wells:• AC drive implementation – 750 to 275 ton capacities• New 175 ton DC easily convertible to AC• New remote diagnostics and trouble shooting system• New directional steering control system
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NEW AND REMODELED RIGS
CANADA: Seven rigs from September 2002 – March 2004
• AC – PLC technologies in house
• 800 – 3,000 HP highly mobile rigs
• In house design and construction expertise
U.S. LOWER 48: •Two modularized pad rigs for Shell Pinedale Anticline
•Upgraded and refurbished rig for Shell South Texas
OFFSHORE: •Three Gulf of Mexico platform rigs for deepwater development projects
•Eight international platform rigs since mid 2003
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U.S. LOWER 48 AND CANADIANSIGNIFICANT RELATIONSHIPS
Lower 48 Canada Possible 1Q04
Apache 2 6 20
Anadarko 9 2 15
Burlington 5 3 15
Chesapeake 16 0 18
Devon 11 1 15
El Paso 15 2 18
EnCana 6 5 16
Shell 7 3 16
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GROWING CANADIAN CONTRIBUTION
Actual2001
Proforma2001
Actual2002
Implied ByConsensus 2003
Average No. Rigs Working
Drilling (rig years) 20 - 23 40
Workover (000’s hrs/year) 0 - 166 310
Segment Results ($Millions)
Revenues $86 $450 $142 $250
EBITDA $38 $158 $38 $80
% NBR Segment Total 5% - 9% 18%