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Nabors NBR

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Since 1987, Nabors Industries, Ltd has been under the same management team. ... Industry 3.71. Price / Book. Price/Book Ratio ... – PowerPoint PPT presentation

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Title: Nabors NBR


1
Nabors(NBR)
  • By Cameron Shunta

2
General Information
  • Largest provider of land and platform drilling
    contracting services for exploration development
    of oil, gas and geothermal wells.
  • Also conduct drilling them selves.

3
Types of Oil Rigs
  • Barge Rigs - 3
  • Jack-up Rigs - 19
  • Marine Vessels - 28
  • Platform Rigs - 43
  • Land Drilling Wells - 588
  • Land work over Rigs - 781

4
Position of Rigs
  • Alaska
  • United States (Lower 48)
  • U.S. Gulf of Mexico
  • Canada
  • International (South America, Middle East, and
    Africa)

5
Other Services Provided
  • Selling Mud Density Sensors extremely accurate,
    little maintenance required. Detects the level
    of Mud in the pit of the Oil Well.
  • Quantitative Fluorescence Technique technology
    to detect lighter fraction aromatic hydrocarbons.
    (Used in Drill Cuttings)

6
(Cont)
  • Projection Acceleration Software System Build
    operational plans while graphically attaching
    activities and resources.
  • Moreover, this software facilitates technical
    limits, safety concerns, and learning
    initiatives.

7
Current Board of Directors
  • Eugene M. Isenberg, 76 CEO since 1987. Highest
    paid CEO in 2005.
  • Anthony G. Petrello, 51 Deputy Chairman, Chief
    Operating Officer.
  • Bruce P. Koch, 46 CFO Principal Accounting
    Officer

8
(Cont.)
  • Daniel Mclachlin, 68 Vice President of
    Administration.
  • Mickey M. Sheinfield Senior Counsel
  • 3 other Counsel members
  • Other Full Time Employees 22,599

9
Competitive Edge
  • Hires the best employees (8 year straight
    winner of for safety of employees. Pays
    employees better then competitors).
  • Provides other services besides drilling unlike
    competitors.
  • Many newer rigs that are more efficient unlike
    other companies whos oil wells are getting old.
  • Future Advancements

10
Future Advancements
  • New Technology 5c Rig incorporates
    programmable logical control systems, their
    safer, more efficient, more durable, and easier
    to operate.
  • Plan on providing 40 of these innovative rigs in
    the next 2 years.

11
Market Capitalization
  • 9.81 Billion
  • Large Cap Company (2 10 million)
  • This was derived by following equation (stock
    price X Number of Shares)

12
Expected Growth Rate
13
Evaluating The Company
  • Things Warrant Buffet looks for in a company.
  • Has the company consistently performed well?
  • Has the company avoided excess debt?
  • Are profit margins high? Are they increasing?
  • How long has the company been public?

14
(Continued)
  • Do the company's products rely on a commodity?
  • Is the stock selling at a 25 discount to its
    real value?
  • Also will include other analyst opinion on what
    to look for.

15
History of the Company
  • Since 1987, Nabors Industries, Ltd has been
    under the same management team.
  • During 1987 it was limited to just US operations.
    However, as explained, today it is now a world
    wide company having operations across the globe.

16
ROE
  • Nabors ROE
  • 29.01
  • As Shown ROE Is above average compared to its
    competitors.
  • Also, Nabors meets 15 ROE standard
  • Globalsantafe Corp. (GSF)
  • 17.36
  • Patterson-UTI Energy Inc. (PTEN)
  • 47.33
  • Pride International Inc. (PDE)
  • 11.34

17
ROA
  • Nabors ROA
  • 11.14
  • As Shown ROA Is above average compared to its
    competitors.
  • Nabors 11.14 ROA meets the lt5 standard
  • GSF 8.76
  • PTEN - 33.96
  • PDE - 7.13

18
Debt / Equity
  • Total Debt/Equity Ration (mrq) 1.2
  • Ideally we would a company to have a smaller debt
    to equity ratio however, 1.2 falls within the
    analyst standards of being between .5 1.5.
  • Although it is 1.2, as shown taking on this debt
    the company has provided a great return on asset
    and equity with this debt. Thus, it has been
    beneficial.
  • In the near future, they plan on paying off more
    of the long term debt.

19
Current Ratio
  • Current Ratio (Current Assets / Current
    Liabilities) is 3.73
  • This number is significantly high, which means
    the company has a large amount of cash to pay off
    short term debt.
  • However, I would expect this number to go down
    slightly in the future as the company starts to
    use some of the cash to pay off the long term
    debt.

20
Prices / Sales
  • Nabors Price to Sales
  • Ratio - 2.1
  • Share Price/Revenue Per Share
  • Tells a limited story, but helps show that the
    company is undervalued. Were looking for a low
    price to sales ratio. As shown. Its below the
    Industry average
  • Comparing this to its Competitors
  • GSF 4.45
  • PTEN 1.68
  • Industry 3.71

21
Price / Book
  • Price/Book Ratio
  • Stock Price / (Total Asset Intangible Asset and
    Liabilities)
  • Nabors - P/B Ratio 2.69
  • Ratio tells you if the company is under valued or
    if there is something fundamentally wrong with
    the company.
  • Price to Book Ratio of Competitors
  • GSF - 2.75
  • PTEN 2.75
  • PDE - 2. 01

22
PE/G
  • PE/G Ratio
  • Nabors - .26
  • Were looking for a low number, which shows the
    company is under valued.
  • Competitors PE/G
  • GSF - .33
  • PTEN .33
  • PDE - .53
  • Industry - .51

23
Earning/Share
  • Earning / Share
  • Nabors 3.18
  • Looking for a high number.
  • Competitors Earning/Share
  • GSF 3.39
  • PTEN 3.794
  • PDE - 1.561

24
BETA
  • Nabors Beta 1.2
  • This means that this company will be 20 more
    volatile compared to the market as a whole.
  • Thus, this stock choice should be combined with
    other stocks with much smaller beta in order to
    balance out the portfolio volatility.

25
Risks with Investment
  • Things to consider before investing into this
    company
  • How the price of oil and natural gas and industry
    expectations will be in the future?
  • Political Stability in the countries that they
    operate.
  • Change in Laws and Regulations.
  • Electric / Fuel-Efficient Cars

26
Answer to these Risks
  • Although these concerns may seem to hamper
    investment, Nabors Incorporated specifically is
    the best oil company ready to handle these
    challenges.
  • Specifically If oil prices rise, there is a
    great chance that revenue will increase
    dramatically because oil is an inelastic good.
  • Political Stability Having a diverse set of
    locations helps mitigate political instability in
    one area. However, if political instability
    arises where they are not drilling it will force
    prices to rise and generate greater revenues.

27
(Continued)
  • The Change in laws and regulations will only help
    this company because they have a completive edge
    in safety products.
  • The last concern Efficient Fuel Cars / Electric
    Cars - This is a probably the strongest concern.
    However, I strongly believe electric cars will
    not be highly produced for several years, which
    means the United States will still be dependent
    on oil.
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