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MERRILL LYNCH

GLOBAL ENERGY CONFERENCE

NOVEMBER 5, 2003

Presenter:Gene IsenbergChairman & CEO

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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

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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

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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%

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GROWING INTERNATIONAL CONTRIBUTION

Actual 2001

Actual2002

Implied ByConsensus 2003

Average No. Rigs Working

Land 53 45 47

Offshore 1 7 15

Segment Results ($Millions)

Revenues $282 $320 $400

EBITDA $90 $114 $135

% NBR Segment Total 12% 28% 30%