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Merrill LynchGlobal Energy Conference

November 3, 2004

Presenter:Gene IsenbergChairman & CEO

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NABORS COMPETITIVE STRENGTHS

Strong financial position

Broad global infrastructure

Extensive global experience and expertise

Large and diverse asset base with significant available capacity

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Balance Sheet Data as of September 30, 2004

A CONSERVATIVE AND FLEXIBLE FINANCIAL POSITION

S&P 500, OSXIndexesA-Standard & PoorsA3Moody’s Rating (1)164Weighted Average Shares Outstanding

23%Net Debt to Capitalization42%Total Debt to Total Capitalization2,772Stockholders’ Equity2,003Total Debt5,618Total Assets3,190Property, Plant and Equipment, Net1,117Working Capital480Accounts Receivable

1,194Cash & Marketable SecuritiesActual

($ in millions)

(1) Some debt issues are unrated

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A MORE BALANCED BUSINESS

Improved balance in our operating income stream– Strong growth in Canada– Consistent growth internationally– Growth less reliant on US land business– US land pricing and volume momentum is here– Good outlook in US Gulf of Mexico

Lower “Below the Line” cost– Reduced cost of capital– Lower diluted share count– Improved tax position

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FLEET STATUS AS OF OCTOBER 29, 2004

8102457Canada

88424947588Total W.O./Well Servicing216465165Canada66820342423US Lower 48 (2)

W.O./Well Servicing628.5120139.5369Total Drilling20.52216.5Int’l Offshore (1)951623.555.5Int’l Land (1)

International

4002812GOM Offshore37210052220US 48 Drilling202108Alaska

North AmericaTotalInventoryReady-to-RunWorkingDrilling

(1) Represents Nabors’ Net Interest in J.V. Rigs in Saudi @ 50%, operating rig count includes those leased from GOM Offshore(2) Decommissioning 75 rigs in 3Q and 4Q 2004 with $1.8 Million net book value

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STRONG FUNDAMENTALS UNDERPIN POSITIVE OUTLOOK

Supply challenges point to a more orderly and sustainable cycle

North American gas decline rates imply 20+ BCFPD/year

Timing of the supply impact of stranded and imported gas

Additional drilling is required in US & Canadian Basins

Longer term, LNG will ultimately become the marginal supply

Global oil supply challenges and increasing demand

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GLOBAL LAND DRILLING OUTLOOK

North America:

Effectively at full capacity utilization of available rigs

Rates & Margins at the inflection point

Demand appears to be continuing at a “Goldilocks” pace

This cycle will likely last throughout the decade and beyond with more moderate volatility

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NABORS HAS GAINED WITH INCREASED HORIZONTAL DRILLING AND A ROBUST MARKET IN THE ROCKIES

600650700750800850900950

100010501100

1/3/031 /24 /032/14 /03

3 /7/033/28 /034 /18 /03

5 /9/035 /30 /036/20 /037 /11 /03

8 /1/038 /22 /039 /12 /0310/3 /03

10/24/0311/14/03

12/5 /0312/26/03

1 /16 /042 /6/042 /27/043 /19 /04

4 /9/044 /30 /045 /21/046 /11 /04

7 /2/047 /23 /048 /13/04

9 /3/049 /24 /04

10/15/04

90100110120130140150160170180190200210220230

BHI NBR AREA NBR RIGS

Source: Baker Hughes – Excludes N.E. States, California and Alaska

NBR Incremental Share = 34% since 1/3/03

104%112220108NBR

49%3301005675BHI

Increase10/22/041/3/03

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INTERNATIONAL ACTIVITY IS HEATING UP, ESPECIALLY ON LAND, WITH 45-60 INCREMENTAL RIGS OVER NEXT 24 MONTHS

YemenLibyaVenezuelaIndia

Saudi ArabiaEgyptRussiaEcuadorMexicoColombiaOmanAlgeria

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SAUDI ARABIA RIG ACTIVITY INCREASINGNabors adding 10 of the 21 rig expected increase

40%32%45%36%40%33%Market ShareNabors & J.V.

268181688Total (3)844844Joint Venture (2)

18414844Wholly-OwnedNabors

652540442024Rigs Working (1)TotalGasOilTotalGasOil

Est. 2Q 2005May 2004

(1) 31 rigs drilling plus 13 drilling rigs doing re-entry, sidetracks, re-drilling and workovers(2) Nabors has 50% interest in these rigs(3) In addition, Nabors also owns and operates three accommodation jack-ups

Source: BHI Saudi rig count , Nabors

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INCREASED USE OF HORTIZONTAL& MULTILATERAL WELLS

HIGHER SPECIFICATION RIGS YIELD IMPROVED EFFICIENCY

Increased hydraulic horsepower (psi x gpm) to facilitate optimalbit and mud motor performance7,500 psi pump pressure capabilityTop drives facilitate directional orientationOpti-Drill™ automatic driller with proprietary Drill Smart™Algorithms– Continuous analysis of drilling conditions to maximize ROP– Improved directional motor life– Maximize benefit of rotary steerable drilling

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NABORS’ INITIATIVES INRIG EFFECIENCY & INNOVATION

Reducing moving times - drilling days vs. moving days

Upgrading rig capabilities – higher hydraulic horsepowers

Incorporating technology innovations where cost effective

Overall performance improvements in safety and efficiency

Setting new records in drilling days & cost

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LOWER CYCLE TIME PER WELLLess days per well requires shorter moving times

Nabors is cutting 30-70% off move times with simplelow cost initiatives:– 24 hour moves– Better pre-planning and sequencing

• Less dead time• Less cost for cranes and trucking

– More optimal unitization of modules• Modest structural changes to minimize loads• Less labor intensive disconnect/reconnect

– Nabors’ controlled trucking resource

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INCREASED INTEREST IN PAD DRILLINGMultiple wells drilling directionally from sites

in environmentally sensitive areas

Nabors pioneered pad drilling in the 1970’s – 1990’s on the North Slope of AlaskaAdapting new generation “Lift and Roll” skid systems from North Slope applicationsApplications:– McKenzie Delta– Tar Sands– US Rocky Mountains – Various International venues

Advantages:– Faster moves– Smaller environmental impact– Faster field development

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EFFICIENCY EMPHASIS LEADSTO LAND RIG INNOVATION

Building leading edge rigs, utilizing existing components, yields favorable returns

• Fast moving “Commander” class rigs

• 800–2,000 horsepower electric A/C drive

• Four currently working,10 under construction

• PLC (Programmable Logic Controls)

• Modularized skidded rigs for pad drilling

• New A/C coiled tubing/stem drilling rig under construction with term contract

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INCREASED DEEPWATER DEVELOPMENTA NEW DEEPWATER CLASS PLATFORM RIG AT FAVORABLE COSTS

MODS (Modular Offshore Dynamic Series)– A/C drives based on Commander

class drilling rig design– PLC controls provide extra safety

features to protect crews and equipment

The only A/C platform rigs in the Gulf of MexicoCapable of rigging up on conventional platforms, TLPs and Spars

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WORKOVER WELL SERVICINGMORE EMPHASIS ON HARVESTING OIL RESOURCES

Nabors is pushing an old industry forward

New generation 500 HP PLC rigs

Make up torque monitor

Rig Instrumentation– Monitor on going operations in real-time via internet.– Built in safety alerts and hazardous operations monitoring

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A MORE BALANCED BUSINESSHigher earnings at less U.S. land drilling activity

First Call Estimates

$4,750$3,850$2,700$4,840GM/Rig/Day

US Lower 48 Metrics230230197210Average Rig Years

$550220

110115$110

$2.71

Mean2005

$110$92$30Canada

$37092

9888

$1.83

Mean2004

$625$588Total290286US Lower 48 Drilling

110211Other US Businesses11558International

$3.00$2.24Earnings Per Share

High2005

Actual2001

Operating Unit EBITBefore Corp & Consolidation