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Presenter:Denny SmithDirector, Corporate Development

Credit Suisse First Boston

February 4, 2005

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Strong financial position

Broad global infrastructure

Extensive global experience and expertise

Large and diverse asset base with significant available capacity

NABORS COMPETITIVE STRENGTHS

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Balance Sheet Data as of December 31, 2004

A CONSERVATIVE AND FLEXIBLE FINANCIAL POSITION

(1) Some debt issues are unrated

ActualCash & Marketable Securities 1,263Accounts Receivable 540Working Capital 386Property, Plant and Equipment, Net 3,273Total Assets 5,850Total Debt 2,006Stockholders’ Equity 2,923Total Debt to Total Capitalization 41%Net Debt to Capitalization 20%Weighted Average Shares Outstanding 165Moody’s Rating (1) A3Standard & Poors A-Indexes S&P 500, OSX

($ in millions)

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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

A MORE BALANCED BUSINESS

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Drilling Working Ready-to-Run Inventory TotalNorth AmericaAlaska 10 8 2 20US 48 Drilling 223 48 100 371GOM Offshore 15 25 0 40Canada 73 4 6 83InternationalInt’l Land (1) 61 19 16 96Int’l Offshore (1) 20.5 1 1 22.5

Total Drilling 402.5 105 125 628.5W.O./Well Servicing

US Lower 48 (2) 435 35 203 668Canada 161 9 46 216

Total W.O./Well Servicing 596 44 249 884

FLEET STATUS AS OF JANUARY 28, 2005

(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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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

STRONG FUNDAMENTALS UNDERPIN POSITIVE OUTLOOK

Supply challenges point to a more orderly and sustainable cycle

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International:

Middle East - Sharp Increases

North Africa - Improving

Latin America - “So So”

Russia & Caspian - Maybe Someday

GLOBAL LAND DRILLING OUTLOOK

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North America:

Effectively at full capacity utilization of available rigs

Rates & Margins moving up sharply

Demand appears to be continuing at a “Goldilocks” pace

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

GLOBAL LAND DRILLING OUTLOOK

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MORE GAS RIGS ARE WORKINGIN 2004 THAN IN 2001

TODAY – 1069Y-T-D – 1075

Source: Baker Hughes, Bloomberg

376463

564 563484

717

691

939

870

1025

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ADDED VALUE THROUGH DRILLING EFFECIENCY IMPROVEMENTS

Shorter moving times, higher hydraulic horsepower and other rig technologies are enabling lower drilling costs

Bossier Conventional 12,500’ TD2001 2004

Average days on well 30 days 22 daysDrilling costs $0.8 $0.5Completion costs 0.2 0.4Total well cost $1.0 $0.9

Cotton Valley – Carthage 9,200’ – 10,200’ TDAverage days on well 20 days 12 daysDrilling costs $0.6 $0.4Completion costs 0.2 0.4Total well cost $0.8 $0.8

Average Henry Hub Cash Price $3.96 $5.90

$millions $millions

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Barnett Shale Area2001 2004

Well type Vertical Horizontal

Average days on well 15 days 25 daysDrilling costDrilling cost $0.4 $1.1Typical well cost $0.8 $2.5

Production/day 1.0 mcf 3.5 mcfCapital cost/mcfpd $0.8 $0.7

Average Henry Hub $/mcf $3.96 $5.90

$millions $millions

ADDED VALUE THROUGH MORE CAPABLE RIGSShorter moving times and higher hydraulic horsepower are facilitating

improved economics with horizontal wells

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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 /3/0310 /24 /0 311 /14 /0 3

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

9/3/049/24/0410 /15 /0 4

11 /5/0411 /26 /0412 /17 /04

1/14/05

90100110120130140150160170180190200210220230

BHI NBR AREA NBR RIGS

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

1/3/03 01/28/05 Increase

BHI 675 1007 332 49%

NBR 108 223 115 106%

NBR Incremental Share = 35% since 1/3/03

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

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

Algeria OmanColombia MexicoEcuador Russia

Egypt Saudi ArabiaIndia VenezuelaLibya Yemen

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

May 2004 Est. 2Q 2005Oil Gas Total Oil Gas Total

Rigs Working (1) 24 20 44 46 30 76

NaborsWholly-Owned 4 4 8 14 4 18Joint Venture (2) 4 4 8 4 4 8Total (3) 8 8 16 18 8 26

Market ShareNabors & J.V. 33% 40% 36% 40% 27% 34%

(1) 31 rigs drilling plus 13 drilling rigs doing re-entry, sidetracks, re-drilling and workovers (does not include 6 Aramco owned rigs)

(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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INTERNATIONALLY – STRONG OIL FUNDAMENTALS ALSO POINT TO AND INCREASINGLY STRONG OUTLOOK

Supply - Increasing more difficult and rig intensive

Aging and declining fields

New supply limited after 2006

(MMBOPD)2003 2004 2005 2006 2007 2008

Mega projects 7 11 18 11 3 3Est. Peak 1.2 2 3 2 >1 >1

Saudi Appears to be putting the “pedal-to-the-metal”

Demand – Staying strong despite higher pricesWTI average for 2002 & 2003 ⇒$28.27

2003 & 2004 ⇒$34.152004 Y.T.D. ⇒$38.62

Source: OADC Organization and Bloomberg

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DRILLING EFFICIENCY INITIATIVES ENABLE LOWER CYCLE TIMES AND COSTS PER WELL

Safety and Training – Further initiatives

Moving times reduced (30 – 70%) on conventional fleet

Capacity upgrades to existing fleet

•Higher hydraulic horsepower (psi x gpm)•Increased engine power and electronic controls

Technology adoption where cost effective

•Auto driller•Top Drives

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DRILLING EFFICIENCY INITIATIVES ENABLE LOWER CYCLE TIMES AND COSTS PER WELL

Innovative new rig configurations

•Pad development (lift and roll moving system)

•Fast moving (1.5 – 2 days) “Commander” Class AC/PLC

•New A/C Coiled Tubing/STEM Drilling Rig

•MODS (modular Offshore Dynamics Series) Platform Rig for deepwater SPAR & TLP platforms

•New generation workover rig – 500 horsepower “Millennium” rig

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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 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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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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$7,000NABORS' RIG COUNT AVG MARGIN PER RIG DAY

1999 2003 2004 2005 20062000 2001 2002

WE ARE FASTLY APPROACHING DEJAVU 2001MARGINS VS. RIGS WORKING

NABORS US LOWER 48 DRILLING

Add 2 rigs per month

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First Call EstimatesOperating Unit EBITBefore Corp & Consolidation

Actual2001

Mean2004

Mean2005

$1.86 $2.74

$120125140

220$605

US Lower 48 Metrics

GM/Rig/Day $4,840 $2,700 $3,700 $4,500Average Rig Years 210 197 240 240

Canada $30 $92 $1208898

92$370

High2005

Earnings Per Share $2.24 $3.00

International 58 125Other US Businesses 211 140

US Lower 48 Drilling 286 290Total $585 $675

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