oilfield tech & innovation conference

Oilfield Tech & Innovation Conference A New Drilling Business Model

February 23, 2018

Presented by:

Joey Husband

Vice President

2

Commoditized industry takes energy price risk

(-) Low cost debt funded “fast barrels” during

period of low energy demand

(+) 2017 capex moderation/decline rate

(-) US DUC and international projects coming

(+) Demand > Supply 3 out of 4 last quarters

Upstream forecasting environment

Source: EIA, Baker Hughes, Nabors

95.0

95.8

96.6

97.4

98.2

99.0

1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17

MB

OP

D

World Oil Supply and Demand

supply demand Linear (supply) Linear (demand)

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

0

20

40

60

80

100

120

140

160

180

200

2010 2011 2012 2013 2014 2015 2016 2017

Na

tura

l Ga

s $

/MM

BTU

Cru

de

$/B

BL

an

d A

ctiv

e R

igs

rig count/10 Cushing WTI Henry Hub Natural Gas

3

Nabors journey focused on technology, people and performance

Operations

Organization

transformation

Creation of a new

R&D Group

Creation of

Nabors Drilling

Solutions

2015

APR

2015

Centralized

Engineering

People

Strategy

Operations

Excellence

2014

The Driller of

Choice

Integrated

Offering

Performance

focus

Best people

Competitive

Price

Customer

partnerships

2016

Oct

2011

Tony Petrello

CEO

Focus on

Technology

and

Performance

2017

2018

DD Ready™ Rig

Fully Automated

RP 800 Rig

completed

PACE M-800

build series

commences

AccuSteer™

commercialized

MPD Ready™ Rig

Saudi JV goes

Live

Tesco, RDS

Acquisitions

Closed

Orient Express

Rotary Steerable

D series Testing

CRT Ready™ Rig

Performance

Driller™ rollout

RigWatch ™

Navigator

commercialization

Rockit-Pilot

commercialization

Orient Express E

series

commercialization

4

• $100 million SG&A reduction

• Performance and efficiency improvements

• Nabors Drilling Solutions (NDS) accelerated growth

• Low volatility international upside – SANAD

• Automation of rig and downhole

5 levers to Performance Driller of Choice

5

Nabors Drilling Solutions – four unique product lines

Supported by Nabors IP Portfolio

Performance Drilling Tools

ROCKit® REVit®

DrillsmartTMRigWatch®

AccuSteer ®, BlueForce

Motors

Orient Express RSS

Wellbore Placement

MPD-Ready™

Non Stop Driller

BOP Testing, VBR, Chokes

Casing Drive System

Managed Pressure Tubular Services

6

The legacy model for well construction is a “dumb” rig

to pump fluids, torque and hoist pipe, while drilling and

evaluation technology is applied by third party service

companies and suppliers

• The rig and crew however execute most tasks

• Comprehensive well KPI’s lack transparency, not

actionable

• Traditional workflows embed cost and performance

variability

• Barriers exist for new workflows among separate

suppliers

Well construction norm

7

Rig mobility and configuration

• Solids control, pressure control

• Pipe handling and automation

Smart programming and automation

• Health check, high fidelity data

• Performance drilling, tripping apps

• Managed pressure, casing apps

• RigCloud hosting

Right people

• New automated workflows, roles,

responsibilities

• Well construct vs traditional crew

• Remote support, transparent KPI’s

Changing the game on performance

1

3

4

5 6

7

8

9

Performance Drilling Training

Increase P rate, BHA life

Downhole motor reliability

1

Voice/Chat/Video

Communication

Direct to driller, improve connection

time

RigWatch Navigator™

Automated instructions, decision

log, customer specific drilling rules

Performance Driller™

Reliable logging, decoder, reduced

rig up

2

Top Drive ROCKit®-Pilot,

REVit®, ECM enabled

Improve drilling performance

Reduce NPT

3

2

Integrated rig sensors

Reliable MWD telemetry

Calibrated EDR, data quality

4

Mud Pit best practices


Higher P rate

5

AC Mud Pump automation


Reduced shock and vibration

6

Automated Catwalk

Safe BHA handling, supervision,

specifications

7

Rig Grounding Practice

Improve MWD signal reliability8

RigWatch™ Daily DD KPI’s

Benchmark and improve directional

performance9

8

Automated Measurement of Rig Performance

ReportDescriptionReport Type

End of Well

Report

Custom

Performance

Reports

Daily

Performance

Report

ILT/IST

• Summary of SQKPIs, Torque and Drag, ILT, Days vs

Depth, Depth per Day, Fuel Usage, and SQKPI incidents

• KPI’s are owned by crew

• Rigs with ECM have fuel consumption data

• Rig performance previous 24 hours including SQKPI’s,

torque and drag, plan days vs actual, and drilling

parameters

• SQKPI’s split by day and night shift

• Differential actual time by activity versus target

• Consolidated rig technical limit

• ILT for tripping, casing, and connections available by

crew

• Detailed Well Time Analysis reports identify where

biggest improvement areas of activity

• KPI trends and rig comparisons over time quantify

continuous improvement

9

myWells® Analytics Dashboard

10

The product of directional drilling is a safely and

efficiently drilled deviated wellbore reliably placed in

the target production interval

One drilled to specifications that adjusts

automatically as new information is obtained in real

time and used to adjust the plan

Directional drilling is not directional drillers, MWD

tools, motors, rotary steerable tools

A Smart drilling rig is the most effective way

to deliver a deviated wellbore

Directional drilling example

11

Directional drilling - automation

RigWatch® NavigatorTask- Create plan for next stand and deliver detail to driller

• Detailed drill down instructions

• 3D visualization of wellbore for drillingand geology

RigWatch® / myWells KPIsTask- Record survey and other data to understand performance

• Review position and adherence to plan

• Analyze effectiveness of slide

• Analyze drilling KPIs

• Document performance and decisions

ROCKit® Pilot Task- consistently execute slide

• Automation of directional control

• Steer on Target

• Repeatable consistent performance

RigWatch® NavigatorTask- Obtain positional data

•Take Survey

•Validate/Accept Survey

•Advanced survey management,as required

Determine position

Record and analyze result

Create plan for next stand

Execute plan

1 2

3

4

12

Automated Directional Drilling decision making and guidance system that provides:

Directional drilling - RigWatchTM Navigator

• Automated drilldown

instructions

• 3D Visualization and

Reporting

• Documented adjustment of

instruction to adhere to rules

set forth by the Operator

• Collaborative communication

and workflow platform

13

Directional drilling - Rockit™-Pilot automated execution

Trapped Torque

• Limit toolface movement once tagging bottom

Oscillation• Oscillate to improve WOB transfer and ROP

Tag Bottom

• Adjust drilling parameters start the slide

Align Toolface

• Bring toolface to desired target

Maintain Position

• Steering corrections to maintain target toolface

Evaluate Slide

• Evaluate slide and adjust drilling speed

Off

Bottom

Steps

On

Bottom

Steps

14

Pre Slide Time

• Time to work out trapped torque, adjust

drilling parameters and target toolface

Toolface Setting Time

• Quill adjustments to adjust toolface

position

Burn Footage

• Initial footage drilled in the wrong

direction

Slide Score

• Metric to evaluate toolface control

Effective ROP

• Total time to execute slide versus on

bottom ROP

Directional drilling - new KPI’s

15

Directional drilling - automated service

20162 x DD, 2 x MWD, 5 x rig

crew = 9 personnel plus rig

up surface acquisition

2017 DD Ready™1 day,1 night supervisor, 5

man crew = 7 personnel, rig

integrated acquisition

Expert DD in Rigline™ 24/7

supporting 6 rigs

Centralized well planning,

engineering support,

geosteering

16

MPD Ready® Rig

1

3

4

5

6

7

8

MPD Training

Increase P rate, reduce cost

Choke Automation

Kick detection, reduce personnel

1

Voice/Chat/Video Communication

Direct to driller, improve ROP

Rig Integrated MPD Choke Manifold

Reduce engineering, rig up time

Lower 3rd party cost

2

Piping Package

Reduce engineering cost, footprint

Reduce rig up/fit up time

Walks with rig

3

2

Rig Integrated RCD

Lower personnel


Engineered to BOP

handling

4

Rig integrated mud gas separator,

ultrasonic gas metering

Reduce rig up, footprint


Walks with rig

5

AC Mud Pump automation

Early Kick detection

Reduce operator errors

Divert flow on connections

6

Rig integrated Coreolis Meter

Reduce 3rd party cost

Early Kick Detection

Walks with rig

7

RigWatch™ Daily MPD KPI’s

Benchmark / improve performance

8

3

17

MPD-Ready® performance case

10 wells in highly fractured Lower Lance andMesa Verde formations characterized by influxand fluid losses in the production section byholding back pressure while drilling, duringconnections, running and cementing pipe

Results

• No kicks in reservoir section, incident-freeoperations

• Drilled to TD without losses (Mud / Cement)

• Drilled with hydrostatic underbalanced mud ~ 1.0ppg

• No ballooning/breathing by maintaining constantEMW at the bit during connections

• All return gas controlled and diverted to MGS

• Alignment of rig/mpd crew on well control andMPD operating procedures

• Managed pressure casing running and cementingoperations for wellbore stability and reliableisolation

WY

18

CRT Ready™ Rig

1

2

CRT Training

Increase running speed, reduce

personnel, reduce cost

Torque Automation

Reduce damaged pipe

1 2 Top Drive integration

Reduce engineering cost

Reduce footprint, rig up/fit up

time, reduce service loop

3

4

Integrated Cementing

Reduce rig up


Cement integrity

RigWatch™ Daily CRT KPI’s

Benchmark and improve

performance

4

3

Torque Turn

Control makeup speed, spec

5

5

Powered Walking

Catwalk

Reduce rig up


Reduce NPT

6

6

19

The rig of the future is now

$0

$1,000

$2,000

$3,000

0%

30%

60%

90%

2017 NDS Penetration US NBR Fleet

% Penetration Margin/Day/Rig

20

• Trips per well decrease

• Man-hours/well decrease

• Days per well decrease, wells/rig increase

Repeatable performance impact on wells 2Q to 3Q 2017

Source: EIA, Baker Hughes, Drilling PerformanceUSA-L48: Benchmarking Report

BASIN# OF WELLS

DRILLED

CHANGE VS

PRIOR

QUARTER

# OF

ACTIVE

RIGS

CHANGE

VS PRIOR

QUARTER

WELLS

PER RIG

CHANGE

VS PRIOR

QUARTER

Permian 1384 291 355 58 3.9 0.02

Eagle Ford 540 99 82 21 6.6 -0.7

Niobrara 422 66 34 3 12.3 0.9

Bakken 266 76 46 8 5.8 0.7

Haynesville 134 27 39 6 3.4 0.2

~ Sequential 25% increase in wells drilled in 5-major L48 basins

21

• Safer floor, better well control

− Lower turnover, opex, downtime, flat time

• Less rig demand for same wells

− Engineered service integration enables new

capex model

• Day rate models discount performance

− Predictable performance enables new

commercial models

Impact on the business model

22

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Thank You

oilfield tech & innovation conference

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