Bmo Ofs

January12,2017 | 04:56 ET | 04:56 ET~
Oil Services
Pricing to Drive OSX in 1H17; 2H17 Less Certain Due to Oil Services
Rising US Production DanielJ.Boyd, CFA Analyst
daniel.boyd@bmo.com (713) 547-0812
Bottom Line: We see near-term upside for stocks with US leverage via positive ThomasW.Shipp, CFA
estimate revisions. However, we do not think its time to go all in and buy later-cycle thomas.shipp@bmo.com (212) 885-4023
offshore drillers. OPEC cuts and record E&P equity issuance have pulled the upcycle BenjaminSchroeder, CFA
forward but we see risk of US oil production ramping faster than expected and causing Benjamin.Schroeder@bmo.com (713) 546-9741
some OPEC members to reverse course in 2H17. Our report takes a unique look at cost Legal Entity: BMO Capital Markets Corp.
inflation based on prior cycles and current bottoms-up economics. We see 15% inflation
by YE17 with frac leading the charge. HAL benefits and remains our top pick.
Key Points
The upcycle has been pulled forward due to coordinated OPEC and non-OPEC
production cuts. We expect a relatively range-bound WTI in '17 ($50 and $60) with
upside in 1H17 and downside risk in 2H due to surging US production and risk of
OPEC reversing course.
We expect some of the economic rent to shift to oil service companies via 15%
cost inflation by YE17 with frac pricing of 20-25% leading the charge. See our
report for analytical support. However, most of the stocks that benefit from this shift
have already outperformed. HAL (Op) remains our top pick and is one of the few
companies where the street is underestimating earnings power. Land drillers are the
momentum trade, which we admittedly missed, especially post OPEC, and we would
remain paired due to stretched valuations. PTEN (Mkt) is our favorite due to its pressure
pumping exposure, and HP (Und) is our preferred short due to valuation.
Our preference for diversified service companies, HAL (OP), SLB (Op), and BHI (Op)
stems from our expectation for greater FCF per share due to lower capital intensity this
cycle. For HAL, we expect greater FCF/share at $65 oil than at $90-$100 last cycle. We
like WFT (Op) for its turnaround potential. We remain Underperform-rated on most
Offshore Drillers (ATW, DO, NE, and RIG) and NOV as we think these companies need
an extended period of oil prices above $65 for earnings to grow into current valuations.
The current recovery rivals the strongest on record with the US land rig count up
69%. This has been partially funded by a record $32 billion of equity raised by E&Ps. We
are raising our US land rig count forecast by 16% to 708 in 2017 and 3% to 876 in 2018.
Our new forecast reflects 45% growth in 2017 and 24% growth in 2018 with 4Q17/4Q16
growth of 33% and 4Q18/4Q17 growth of 19%. With compounded cost inflation, this
implies E&P spending increases of roughly 40% in both 2017 and 2018.
We see a growing risk that the duration of the upcycle is limited due to surging
US production. Our new forecast suggests US land production growth of 550-650k
b/d by 4Q17 and another 900k-1.1mn b/d of growth by 4Q18 (YoY growth of
225-250k/900-950k in 2017/2018).
Revising Estimates. We are revising our 2017/2018 EBITDA estimates and raising
our price targets. Our estimates are based on US E&P capex growth of 42%/40% in
2017/2018. This assumes $55/$65 oil and reinvestment rates of 115%/110%. We expect
international spending to be slightly higher in 2017 with 10-15% growth in 2018.
Please refer to pages 57 to 59 for Important Disclosures, including Analyst's Certification. Please see page 56 for our coverage universe.
Table of Contents
2017 Summary Outlook & Assumptions, page 3
Cost Inflation Expectations, page 8
Oil Market Macroeconomics, page 13
E&P Financing & Capital Spend, page 16
International Market Outlook, page 18
Updated U.S. Rig Count Forecast, page 21
Offshore Drilling Macro Update, page 23
Revising Estimates & Targets, page 30
Valuation, page 32
Company Models, page 38
Oil Services | Page 2 January 12, 2017

Risk of a Brief Upcycle Keeps Us Focused on Diversifieds HAL
Top Pick
The upcycle has been pulled forward due to coordinated OPEC and non-OPEC production cuts and we are
positive on the near-term direction of oil prices. However, we expect a relatively range-bound year
between $50 and $60 for WTI. We expect relative estimate revisions to drive stock performance in this
environment, which was not the case in 2016. See Exhibit 8. While positive estimate revisions for US
levered service companies is buy-side consensus, we think the magnitude is underestimated, especially
for Halliburton, which remains our top pick. Land drillers are the momentum trade, which we admittedly
missed, but we would remain paired due to stretched valuations and US production growth risk at
higher-than-expected rig counts. PTEN (Market Perform) is our favorite due to its pressure pumping
exposure, and HP (Underperform) is our preferred short due to valuation. Our preference for diversified
service companies, HAL, SLB, and BHI stems from our expectation for greater FCF per share due to lower
capital intensity this cycle. For HAL, we expect greater FCF/share at $65 oil than at $90-$100 last cycle.
The current recovery rivals the strongest on record with the US land rig count up 69% since trough. This
has been partially funded by a record $32 billion of equity raised by E&Ps. We are raising our US land rig
count forecast by 16% to 708 on average in 2017 and by 3% to 876 in 2018. Our new forecast reflects
45% growth in 2017 and 24% growth in 2018 with 4Q17/4Q16 growth of 33% and 4Q18/4Q17 growth
of 19%.
We see a growing risk that the duration of the upcycle is limited with less amplitude to the upside. Our
new estimates suggest US land production growth of 550-650,000 b/d by 4Q17 and another 900,000-
1.1 million b/d of growth by 4Q18 (YoY growth of 225-250,000/900-950,000 b/d in 2017/2018). While
OPEC and non-OPEC production cuts should allow for large inventory draws in 1H2017, we see risk of
increased global production in 2H17 should US production growth resume as we expect, which may
cause some OPEC members to reverse course.
We remain Underperform-rated on most Offshore Drillers (ATW, DO, NE, and RIG) and NOV as we think
these companies need an extended period of oil prices above $65 for earnings to grow into current
valuations. Capital restraint and in some cases stretched balance sheets among major oil companies,
which represent 70-80% of deepwater demand, makes a strong recovery less likely.
We expect industry cost inflation of 15% over the next 12 months with trough-to-peak inflation of 25%
by YE2018. This would leave well costs ~30% below 2014 levels in 4Q17 and ~25% below in 4Q18. Our
forecast is based on a top-down analysis of the PPI for Oil & Gas Wells and bottom-up analysis of
pressure pumping and land rigs. We expect pressure pumping inflation of 20-25% based on our detailed
analysis of what is required for the industry to cover full-cycle R&M costs and re-activate stacked fleets.
A broad-based 10% increase is needed just to cover R&M capex. We expect high-spec land rig pricing to
increase 10-15%. We think it is important to highlight that 0-2% cost inflation is typical at this point in
the recovery so do not be alarmed by real-time E&P commentary of no inflation. See our PPI analysis on
page 9 for more detail.
Revising Estimates. We are raising our 2018 EBITDA estimates for our non-offshore coverage by 2%. Our
2018 estimates are on average in line with consensus. These estimates reflect our revised rig count
forecast as well as our expectation for activity consistent with a ~$65 oil environment. Our 2018
estimates are highest relative to consensus for large-cap service, consistent with our Outperform ratings.
For 4Q16, our EBITDA estimates are up 1% for non-offshore companies and -2% for offshore.

Exhibit 1: We Expect US E&P Capex to Increase 42% in 2017 and 40% in 2018
Summary of OFS Macro Assumptions
3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 4Q18 2018
Im plied Oil Price $ 43.38 $ 55.00 $ 65.00

US Land Rig Count 461 567 487 659 695 723 755 708 815 890 899 899 876
Horizontal 373 474 402 545 575 597 623 585 672 734 743 744 723
Oil 309 380 322 437 467 486 508 474 554 613 621 621 602
Gas 65 94 77 108 108 111 114 111 118 120 122 123 121
Vertical/Directional 880 930 860 1140 1200 1260 1320 1230 1430 1560 1560 1550 1530
E&P Reinvestm ent Rates 120% 115% 110%
Period Change
E&P Capex (0.8%) 18.3% (52.2%) 18.6% 8.7% 8.2% 8.6% 41.7% 12.8% 13.5% 1.1% 0.0% 40.5%
Total US Land Rig Count 15.9% 22.9% (48.5%) 16.2% 5.5% 4.0% 4.4% 45.3% 7.9% 9.2% 1.1% 0.0% 23.7%
Inflation 0.0% 1.3% 2.0% 3.0% 4.0% 4.0% 4.5% 4.0% 0.0% 0.0%
Cumulative Inflation 3.3% 6.3% 10.6% 15.0% 7.7% 20.2% 25.0% 25.0% 25.0% 13.6%
Source: Bloomberg, BMO Capital Markets
Exhibit 2: Current Recovery Rivals the Strongest on Record Exhibit 3: Which Should Drive a Strong US Production Response
Baker Hughes Land Rig Count Percent Change From Trough US Lower 48 Production Forecast
9,000
200% 8,373
8,500
% change in the US land rig count
1999/2000
180%
8,000 7,778
Daily Production (k b/d)
7,560
160% 7,500
2H16/17/18
140% 7,000
120% 6,500
6,697
100% 6,000
80% 2009/10/11 5,500
60% 5,000
40% 4,500
2002/03/04 4,000
20%
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16A
4Q16E
1Q17E
2Q17E
3Q17E
4Q17E
1Q18E
2Q18E
3Q18E
4Q18E
0%
0 10 20 30 40 50 60 70 80 90 100
Weeks after trough
US Oil Production Forecast Peak (May 2015) Sept and Oct 2016
Source: Baker Hughes, BMO Capital Markets Source: EIA, DOE, BMO Capital Markets

Exhibit 4: BMO Oil Service Risk Reward & Trading Ranges
Current % Upside Target EV/EBITDA Old % Trading Range

Company Rating Price Target (Downside) 2017E 2018E Target Chg. Low % up/down Mid % up/down High % up/down
LARGE CAP SERVICE

Baker Hughes OP 63.38 $69 9% 19.1x 11.0x $68 1% $55 -13% $68 7% $72 14%
Halliburton OP 55.39 $67 21% 18.0x 10.5x $58 16% $45 -19% $60 8% $75 35%
Schlumberger OP 85.66 $96 12% 18.2x 12.0x $93 3% $70 -18% $90 5% $110 28%
Weatherford OP 5.66 $7 24% 15.8x 8.6x $7 0% $4 -29% $7 24% $8 41%
Average 16% 17.8x 10.5x 5% -20% 11% 30%
CAP EQUIPMENT
FMC Technologies Mkt 36.67 $34 -7% 14.3x 10.9x $30 13% $28 -24% $34 -7% $40 9%
National Oilwell Varco Und 38.53 $30 -22% 26.6x 9.8x $27 11% $28 -27% $33 -14% $38 -1%
Average -15% 20.5x 10.4x 12% -25% -11% 4%
SMID CAP / OTHER

Oil States International Mkt 39.75 $36 -9% 27.4x 11.0x $30 20% $30 -25% $35.50 -11% $41 3%
LAND DRILLERS
Helmerich & Payne Und 79.63 $54 -32% 13.3x 9.3x $50 8% $50 -37% $60 -25% $77 -3%
Nabors Industries Mkt 18.19 $15 -18% 10.5x 7.9x $12 25% $11 -40% $15.50 -15% $20 10%
Patterson-UTI Energy Mkt 28.22 $26 -8% 15.0x 8.4x $22 18% $20 -29% $26 -8% $32 13%
Average -19% 12.9x 8.6x 17% -35% -16% 7%
OFFSHORE DRILLERS
Atwood Oceanics Und $13.97 $9 -36% 12.5x 32.1x $7 29% $6 -57% $10 -28% $14 0%
Diamond Offshore Und $19.47 $14 -28% 6.3x 7.1x $13 8% $14 -28% $17 -13% $20 3%
Ensco Mkt $11.79 $9 -24% 7.8x 9.8x $8 13% $7 -41% $9.50 -19% $12 2%
Noble Corp Und $7.56 $4.50 -40% 11.6x 11.4x $4 13% $4 -47% $5.75 -24% $7.50 -1%
Rowan Mkt $20.08 $15 -25% 8.6x 9.5x $12 25% $13 -35% $17 -15% $21 5%
Transocean Und $15.75 $10 -37% 8.3x 10.9x $7.50 33% $8 -49% $12 -24% $16 2%
Average -32% 9.2x 13.5x 20% -43% -21% 2%
Note: Near-term market volatility may cause the Expected Total Return to become temporarily misaligned relative to the hurdle for these stocks' ratings, as
defined under our current system.
Exhibit 5: BMO Oil Service Current Trading Multiples
P/E EV/EBITDA EV/GIC

Current 2009 5-Yr 2009 5-Yr 5-Yr
Company Name Ticker Rating Price 2017E 2018E High Avg 2017E 2018E High Avg 2016E Avg
LARGE CAP SERVICE
Baker Hughes BHI OP 63.38 N/A 27.0x 28.7x 29.3x 17.5x 10.1x 8.6x 7.0x 1.3x 1.5x
Baker Hughes - GE O&G PF BHI OP 63.38 55.6x 26.8x 15.9x 10.3x
Halliburton HAL OP 55.39 39.5x 15.8x 26.7x 14.4x 15.4x 8.9x 10.4x 6.8x 1.8x 1.6x
Schlumberger SLB OP 85.66 44.5x 20.0x 26.7x 17.9x 16.4x 10.90x 12.9x 6.8x 1.5x 1.9x
Weatherford WFT OP 5.66 N/A 67.7x 27.9x 14.6x 14.3x 7.8x 11.0x 6.8x 0.7x 0.9x
Average 42.0x 32.6x 27.5x 19.1x 15.9x 9.4x 10.7x 6.9x 1.3x 1.5x
CAP EQUIPMENT
FMC Technologies FTI Mkt 36.67 37.5x 23.9x 25.0x 20.4x 15.4x 11.8x 12.8x 11.6x 2.0x 5.5x
National Oilwell Varco NOV Und 38.53 N/A 50.5x 16.3x 13.6x 33.2x 12.4x 0.0x 0.0x 0.8x 1.3x
Average 37.5x 37.2x 20.7x 17.0x 24.3x 12.1x 6.4x 5.8x 1.4x 3.4x
SMID CAP / OTHER
Oil States International OIS Mkt 39.75 N/A 68.1x 20.3x 16.8x 30.2x 12.3x 0.0x 0.0x 1.0x 1.3x
LAND DRILLERS
Helmerich & Payne HP Und 79.63 N/A N/A 25.9x 18.9x 20.1x 14.0x 8.9x 5.9x 0.9x 1.5x
Nabors Industries NBR Mkt 18.19 N/A N/A 27.5x 12.9x 11.8x 8.8x 7.7x 5.1x 0.6x 0.9x
Patterson-UTI Energy PTEN Mkt 28.22 N/A N/A 22.6x 14.7x 16.1x 9.0x 16.5x 4.5x 0.6x 1.1x
Land Driller Average N/A N/A 25.3x 15.5x 16.0x 10.6x 11.0x 5.1x 0.7x 1.2x
OFFSHORE DRILLERS
Atwood Oceanics ATW Und 13.97 N/A N/A 9.7x 8.3x 9.4x 73.9x 7.6x 6.8x 0.4x 1.6x
Diamond Offshore DO Und 19.47 25.2x N/A 11.1x 13.3x 7.6x 8.7x 7.0x 6.4x 0.5x 1.4x
Ensco ESV Mkt 11.79 N/A N/A 11.7x 9.1x 9.0x 11.3x 6.5x 6.8x 0.5x 1.0x
Noble Corp NE Und 7.56 N/A N/A 7.8x 10.3x 13.2x 13.0x 5.2x 6.7x 0.4x 1.1x
Rowan RDC Mkt 20.08 N/A N/A 12.4x 11.9x 10.3x 11.5x 5.7x 7.1x 0.4x 0.9x
Transocean RIG Und 15.75 N/A N/A 8.6x 11.6x 10.2x 13.5x 6.6x 6.4x 0.4x 0.9x
Offshore Driller Average 25.2x N/A 10.2x 10.7x 9.9x 22.0x 6.4x 6.7x 0.4x 1.1x
Note: EV/EBITDA uses estimated forward balance sheets. Multiples less than zero or greater than 100 have been marked "N/A".
Source: Bloomberg, BMO Capital Markets. 5-year average multiples reflect 2011-2015.

Estimate Revisions and Cost Inflation in Focus
We see potential for positive estimate revisions in North America, particularly for pressure pumping. We
expect North American E&Ps to continue outspending cash flow and think cost inflation could boost
service revenue and margins. In fact, the positive revision cycle has already begun with land drillers
leading the way. See Exhibit 6.
Exhibit 6: Consensus 2018 EBITDA Estimates Are Up 4% Since Trough on Average for Our Coverage
Consensus EBITDA Revision

'16 Trough to Present
2016E 2017E 2018E
BHI 159% 22% 5%
HAL 4% 3% 5%
SLB 4% 0% 3%
WFT 0% 0% 0%
Large Cap Avg 42% 6% 3%
FTI 7% 1% 1%
NOV 24% 6% 0%
OIS 41% 8% 8%
Capital Equip Avg 24% 5% 3%
HP 2% 7% 6%
NBR 8% 7% 13%
PTEN 1% 5% 11%
Land Driller Avg 4% 6% 10%
ATW 12% 7% 1%
DO 2% 1% 2%
ESV 0% 0% 2%
NE 1% 1% 2%
RDC 7% 2% 0%
RIG 18% 22% 6%
Offshore Driller Avg 7% 6% 2%
Coverage Average 18% 6% 4%
Multiples Drove 2016 Performance; Earnings Revisions to Matter More in 2017
We are positive on the near-term direction of oil prices but expect a relatively range-bound year
between $50 and $60 for WTI. We expect relative estimate revisions to drive stock performance in this
environment, which was not the case in 2016. Stock performance during 2016 was driven by balance
sheets and multiple expansion; there was no correlation to estimate revisions. Land drillers performed
best in 2016 despite 2018 EBITDA revisions of -17% during the year (versus large cap at -1%) and
revisions off the trough only slighter better than average (+10% versus large cap at +3%). See Exhibits 6
and 8.
Versus other subsectors, our estimates vs. consensus show greatest potential for upward revisions in
large cap service, where our 2018E EBITDA is ~12% above consensus. Despite improving land rig counts
we are least optimistic on land driller estimates, which appear to fully discount recovery.

Exhibit 7: Our 2018 EBITDA Estimates Suggest Upward Revisions to Consensus in Large Cap Service
2017 Estimates 2018 Estimates

Company Ticker Rating BMO Cons. BMO Cons.
LARGE CAP SERVICE
Baker Hughes BHI OP $1,512 $1,491 1% $2,606 $2,396 9%
Halliburton HAL OP $3,745 $3,407 10% $6,314 $5,459 16%
Schlumberger SLB OP $8,014 $7,926 1% $12,216 $10,846 13%
Weatherford WFT OP $836 $807 4% $1,601 $1,451 10%
Large Cap Service Average 4% 12%
CAP EQUIPMENT
FMC Technologies FTI Mkt $548 $561 -2% $702 $691 1%
National Oilwell Varco NOV Und $490 $533 -8% $1,259 $1,218 3%
Cap Equipment Average -5% 2%
SMID CAP / OTHER
Oil States International OIS Mkt $67 $72 -7% $156 $152 3%
LAND DRILLERS
Helmerich & Payne (1) HP Und $366 $370 -1% $544 $570 -5%
Nabors Industries NBR Mkt $711 $701 1% $976 $1,020 -4%
Patterson-UTI Energy PTEN Mkt $291 $260 12% $504 $505 0%
Land Driller Average 4% -3%
Coverage Average (ex Offshore Drillers) 1% 5%
OFFSHORE DRILLERS
Atwood Oceanics (1) ATW Und $213 $197 8% $26 $104 -75%
Diamond Offshore DO Und $618 $613 1% $498 $468 7%
Ensco ESV Mkt $717 $752 -5% $570 $545 5%
Noble Corp NE Und $473 $501 -6% $463 $443 4%
Rowan RDC Mkt $384 $444 -14% $320 $274 17%
Transocean RIG Und $1,175 $1,197 -2% $852 $944 -10%
Offshore Driller Average -3% -9%
(1) 2017 and 2018 compare fiscal year end estimates

Exhibit 8: Multiple Expansion Drove 2016 Returns in Spite of Falling Estimates; Large Cap Benefited Least on 2018 EV/EBITDA
EV/EBITDA Using Current Balance Sheets
Stock Dividend Total in EBITDA Revisions Mult. Expansion Jan 1, 2016 Dec. 2016
Return Return Return EV 2016 2017 2018 2017 2018 2017 2018 2017 2018
Large Cap
Baker Hughes Inc 41% 1.5% 42% 22% -76% -44% -5% 119% 29% 8.4x 8.9x 18.4x 11.5x
Halliburton Co 59% 2.1% 61% 60% -46% -40% 0% 169% 59% 6.2x 6.5x 16.5x 10.3x
Schlumberger Ltd* 20% 2.9% 23% 36% -26% -25% 15% 80% 19% 9.0x 10.0x 16.3x 11.8x
Weatherford International PLC -41% 0.0% -41% -16% -78% -54% -14% 84% -3% 7.7x 8.1x 14.2x 7.9x
Average 20% 1.6% 21% 25% -56% -41% -1% 113% 26% 7.8x 8.4x 16.3x 10.4x
Capital Equipment
FMC Technologies Inc 22% 0.0% 22% 14% -29% -30% -14% 63% 32% 9.0x 9.1x 14.7x 12.0x
National Oilwell Varco Inc 12% 1.8% 14% 6% -84% -71% -45% 264% 91% 8.0x 6.7x 29.2x 12.9x
Average 17% 0.9% 18% 10% -56% -51% -29% 163% 62% 8.5x 7.9x 22.0x 12.5x
Mid-Cap / Land Drillers

Oil States International Inc 43% 0.0% 43% 37% -54% -57% -25% 217% 84% 8.7x 7.0x 27.6x 12.9x
Helmerich & Payne Inc 45% 5.2% 50% 43% -32% -43% -36% 150% 123% 8.7x 6.4x 21.8x 14.3x
Nabors Industries Ltd 93% 2.8% 96% 33% -26% -29% -3% 86% 37% 6.0x 5.6x 11.2x 7.7x
Patterson-UTI Energy Inc 79% 1.1% 80% 51% -29% -40% -4% 152% 58% 6.9x 5.7x 17.4x 9.0x
Average 65% 2.3% 67% 41% -35% -42% -17% 151% 75% 7.6x 6.2x 19.5x 11.0x
Offshore Drillers
Atwood Oceanics Inc 28% 0.7% 29% -13% 12% -25% -54% 16% 89% 8.9x 8.5x 10.3x 16.1x
Diamond Offshore Drilling Inc -16% 0.0% -16% -14% -9% -15% -31% 1% 25% 7.3x 7.7x 7.4x 9.6x
Ensco PLC -37% 0.3% -37% -30% -23% -37% -53% 11% 48% 7.0x 7.3x 7.8x 10.7x
Noble Corp plc -44% 1.8% -42% -23% -32% -50% -53% 55% 65% 7.6x 8.1x 11.7x 13.3x
Rowan Cos Plc 11% 0.0% 11% -14% -8% -29% -50% 22% 73% 7.4x 8.5x 9.0x 14.7x
Transocean Ltd 19% 0.0% 19% 1% 2% 2% -38% -1% 63% 9.7x 7.4x 9.6x 12.1x
Average -6% 0.5% -6% -16% -10% -26% -47% 17% 60% 8.0x 7.9x 9.3x 12.8x
*SLB not adjusted for CAM acquisition
Expect Cost Inflation of 15% by YE 2017 and 25% by YE 2018
The potential for cost inflation in the OFS supply chain is both a source of upside for NAM estimates and
a restraint on lower 48 production. Since ramping Lower 48 production is in our view the key risk to oil
supply & demand balance in 2017, cost inflation could be a stabilizer. Will cost inflation and
inefficiencies derail a ramp in US shale oil growth? We dont think so. We expect 15% cost inflation by
year-end 2017, which may prevent excessive US production but is not enough to derail production
growth of 550-650k/d YoY by 4Q17. We expect this level of growth to keep US oil prices from exceeding
$60/bbl during 2017 without an unforeseen geopolitical production disruption.
How do we get to 15%-25% cost inflation? We considered a bottom-up and a top-down approach to
arrive at a range of 15-25%. Even after an increase of 25%, well costs would still be below costs in
2014, prior to the downturn.
We expect U.S. production growth to continue despite cost inflation as most plays could absorb 15%-
25% higher costs and still remain competitive at $50s WTI. Our BMO E&P Team suggests that breakevens
fell to the $40s in 2016 (or for the Permian, lower) and are down ~40% from 2014. For more on
breakevens see page 12 and Exhibits 13 and 14.
Top-down Approach: Well PPI (Producer Price Index) Is Likely to Rise at Least 15% Based
on Prior Cycles
Top Down economic data support our cost-inflation estimate. We examined the Producer Price Indices
(PPI) for oil & gas wells and found that costs generally do not increase over the first seven months of a
new cycle, but in all historical cases accelerated thereafter. Therefore, the absence of significant cost

inflation in the current upcycle to date should not be a surprise and does not mean cost inflation will not
occur. We think costs could inflate 15%-20% and still be more than 20% below prior peak at the end of
2017.
Exhibit 9: We Expect Cost Inflation of 15% by Year-End 2017

BMO PPI Well Costs Historical Analysis
1995- 1999 - 2002 - 2009 -
1997 2001 2004 2011 Current *
PPI Comparison
Peak to Trough -2% -16% 21% -18% -34%
PPI Increase From Trough

7 months (Equivalent to Dec 2016) 2% 1% 1% 1%
19 months (Equivalent to Dec 2017) 17% 19% 6% 13% 15%-20%
Months for PPI to Bottom 2 11 2 3 5-7?

After the Rig Count Bottomed
Rig Count Comparison

Peak to Trough -24% -57% -38% -58% -80%
Activty vs Trough
7 months (Equivalent to Dec 2016) 16% 73% 36% 45% 70%
19 months (Equivalent to Dec 2017) 29% 142% 52% 103% 104%
Activity vs Prior Peak

7 months (Equivalent to Dec 2016) -12% -26% -15% -38% -66%
19 months (Equivalent to Dec 2017) -2% 4% -5% -14% -59%
PPI vs Prior Peak

7 months (Equivalent to Dec 2016) 1% -17% -17% -19% -33%
19 months (Equivalent to Dec 2017) 15% -5% -13% -9% -22%
Source: U.S. Dept. of Labor, BMO Capital Markets * Last reported data as of Nov. 16
Exhibit 10: Well Costs (PPI) Track Lagged WTI, Suggesting Higher Costs Given Higher Oil
Historical Well PPI and WTI
500 $120 WTI - Lagged Six Months
$100
PPI - Oil & Gas Wells
450
$80
400
$60
350
$40
300 $20
250 $0
Jul-10
Jul-11
Jul-12
Jul-13
Jul-14
Jul-15
Jul-16
Apr-10
Apr-11
Apr-12
Apr-13
Apr-14
Apr-15
Apr-16
Oct-16
Oct-10
Oct-11
Oct-12
Oct-13
Oct-14
Oct-15
Jan-13
Jan-10
Jan-11
Jan-12
Jan-14
Jan-15
Jan-16
Producer Price Index - Drilling Oil & Gas Wells

Front Month WTI - Lagged Six Months
Source: U.S. Dept. of Labor, BMO Capital Markets
Bottom-up Approach: Pressure Pumping Up 20-25% With High-Spec Land rigs Up

10-15%
Well costs can be divided by completions (65-70% of the total) and drilling costs (30-35%). Completion
costs are dominated by pressure pumping (~25% of the total well cost), proppant (~15% of the total),

and completion fluids (10%). Drilling costs are split between land rigs & fluids (~15% of the total) and
casing & cementing (~10% of the total).
Exhibit 11: Completions (Frac, Fluids and Proppant) Are the Largest Cost Components of a Well
Weighted Average Cost Components
Other, 23%
Frac Pumps, Equipment,
24%
Drilling Fluid, 3%
Proppant, 14%
Rig Dayrates, 12%
Completion fluids,
Casing and cement, flow back, 12%
11%
Source: EIA, IHS, BMO Capital Markets estimates. Data as of 2014.
We See Pressure Pumping Pricing Rising 20-25%
We think pressure pumping prices will rise 20%-25%. The upper end is required for service companies
to cover full-cycle R&M costs (est. R&M cost is close to $100 per horse per year on average) as well as a
6-12 month payback on fleet reactivation costs. At least 10% is required to cover just maintenance
capex. Reaching mid-cycle gross margins would require ~35% higher pricing and imply newbuild
paybacks of 6-7 years. See Exhibit 12.
Reactivations costs are typically $1-$3 million for initial warm stacked fleets, with costs moving up as
progressively less-ready equipment is returned to the field. Patterson describes average costs near $2
million, most of which is labor. Halliburton says 20% of reactivations can be done for ~$1 million, 40%
from $3-$8 million, with the residual requiring significantly more investment. C&J Energy (not covered)
describes reactivation costs of ~$1.5-$3 million for most fleets but as much as $15 million for the oldest.
All operators say they need pricing to justify the capital investment. We expect that rising reactivation
costs will pressure pricing as activity increases. The high end (25%) of our 15%-25% pricing range is
based on a typical 6-12 month payback period for reactivations assuming $2 million per fleet if
improving activity were to require reactivations of older assets costing more than $2 million to
reactivate, pricing could rise towards our +35% midcycle estimate.
Fleet reactivations have increased active U.S. HHP to over 8 million (est.) from lows near 6 million in July
(still nearly 60% below peak activity of ~18 million HHP in 2014). This includes most of the best
horsepower (e.g., all of Halliburtons Q10 assets are working). Most of the remaining horsepower is still
available in one form or another assets have traded hands due to bankruptcy and older assets have
been rebuilt, but we think most could theoretically return to work if pricing were to justify the capital
investment required. That said, we estimate that 4-6 million HHP would require a material increase in
pricing to justify reactivation. We see risk of a temporary bump in the supply of active crews given
potential for a few companies to IPO in 2017.

Exhibit 12: BMO U.S. Pressure Pumping Cost Inflation Model
Pressure Pumping Pricing Model
PTEN Assuming Pricing Scenarios Post 90% Utilization
3Q16 90% Utilization 5% 10% 15% 20% 25% 30% 35%
Required to
Required to allow for a 7-
Cover Mid
10 month payback on
Full-Cycle Cycle
reactivations
R&M
Utilization 70% 90% 90% 90% 90% 90% 90% 90% 90%
Pressure Pumping pricing vs 3Q16 0% 5% 10% 15% 20% 25% 30% 35%
Revenue per HHP annualized (ex Sand) $399 $513 $539 $564 $590 $616 $641 $667 $693
Change in revenue per active HHP vs 3Q16 29% 35% 41% 48% 54% 61% 67% 74%
Active HHP 470,000 470,000 470,000 470,000 470,000 470,000 470,000 470,000 470,000
Total revenue (millions) $78.2 $100.5 $106 $111 $116 $121 $126 $131 $136
Pressure Pumping revenue (millions) $46.9 $60.3 $63 $66 $69 $72 $75 $78 $81
Sand/Proppant revenue (millions) $31.3 $40.2 $42 $44 $46 $48 $50 $52 $54
Sand/Proppant as a % 40% 40% 40% 40% 40% 40% 40% 40% 40%
Segment totals
Revenue per HHP $166 $214 $225 $235 $246 $257 $267 $278 $289
Revenue per HHP annualized $665 $855 $898 $941 $984 $1,026 $1,069 $1,112 $1,155
Pressure Pumping ex Sand

Revenue per HHP $100 $128 $135 $141 $148 $154 $160 $167 $173
Revenue per HHP annualized $399 $513 $539 $564 $590 $616 $641 $667 $693
Gross profit $0.9 $7 $10 $13 $16 $19 $22 $25 $28
Margin 1.2% 6.9% 9.5% 11.8% 13.9% 15.8% 17.6% 19.2% 20.7%
Incremental margin 27.0% 33.1% 37.2% 40.3% 42.6% 44.5% 46.0% 47.2%
Incremental margin on Pressure Pumping 45%

Incremental margin on Sand/Proppant 0%
Gross profit per HHP (based on 3Q16) $2 $15 $21 $28 $34 $40 $47 $53 $60
Annualized gross profit per HHP $8 $59 $85 $111 $136 $162 $188 $213 $239
Annual Full-Cycle R&M Capex per HHP -$100 -$100 -$100 -$100 -$100 -$100 -$100 -$100 -$100
Free Cash Flow per HHP (Illustrative) -$92 -$41 -$15 $11 $36 $62 $88 $113 $139
Payback on reactivations (months) 74.7 10.1 7.1 5.4 4.4 3.7 3.2 2.8 2.5
Payback on reactivations after R&M (months) NA NA NA 56 17 10 7 5 4
Payback on newbuilds after R&M (years)

$900 per HHP NA NA NA 84 25 15 10 8 6
$1,000 per HHP NA NA NA 94 28 16 11 9 7
Pricing vs 2014 (assuming peak-trough of -30%) -27% -23% -20% -16% -13% -9% -6%
Pricing vs 2014 (assuming peak-trough of -40%) -37% -34% -31% -28% -25% -22% -19%
Reactivated crew size 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000 40,000
Cost per crew (millions) $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0 $2.0
Implied GP per crew $0.32 $2.37 $3.40 $4.43 $5.45 $6.48 $7.51 $8.53 $9.56
Annual R&M per crew $4.0 $4.0 $4.0 $4.0 $4.0 $4.0 $4.0 $4.0 $4.0
Cashflow after R&M -$3.7 -$1.6 -$0.6 $0.4 $1.5 $2.5 $3.5 $4.5 $5.6
Source: Company Data, BMO Capital Markets
High-Spec Land Rig Pricing to Increase 10-15% to Incentivize Upgrades and Potentially
Newbuilds
We expect high spec land rig pricing to increase to ~$20k/d from leading edge rates of roughly $17-
$18k/d currently. This is in line with what we experienced during the 2009/2010 recovery. Spot market
increases are a response to tightening super spec rig supply (pad capable, high-hookload, 1,500 AC
rigs with upgraded mud pumps). As of 3Q16, industry participants estimated that there were ~250-300
such rigs in North America, of which ~190 were owned by our covered drillers. In 4Q16 we believe
utilization was near maximum. However, we think super-spec rig supply could grow 50%+ by year-end
2017 given the announced growth plans of our coverage. NBR plans to upgrade ~40 rigs by mid-2017 to
super spec vs. 3Q16 levels, plus additional rigs via newbuilds. PTEN says it can upgrade 76 rigs (actual
plans unknown), and HP signaled intent to upgrade 40 rigs by March if demand warrants and issued a
FY2017 capex budget that could support dozens more. Given 40+ rigs from NBR, ~50 from HP, and an
incremental 50 from PTEN, super spec supply among the Big 3 drillers would rise by ~140+ in 2017
versus current supply of ~190.

Management teams have characterized upgrades as the price of admission and payback periods on
investment have lengthened to roughly two years as of 3Q16. Given upgrade costs of $750k -$2 million,
the implied dayrate premium for an upgraded rig is just ~$1-$3k/d. We think super-spec demand will
drive only gradual increases in spot rates given increasing supply and low capital costs for upgrades.
Dayrate increases into the low-to-mid $20k range would likely incentivize newbuilds.
Higher Costs Are Unlikely to Deter US Production Growth
We expect U.S. Land production growth to continue despite cost inflation as even after 15%-25% cost
increases, most plays remain attractive. Breakevens in 2016 were down ~40% from 2014 highs on
average across U.S. land plays, per analysis from BMOs E&P team. The same analysis attributes 63% of
the reduction to lower oilfield service costs, with the remainder due to increased efficiency and well
productivity. Our E&P team estimates that breakevens would remain below 2014 levels even if OFS cost
inflation were as high as 50%. Even at the high end of our 15%-25% range, most U.S. land plays are
economic at $50s WTI, and Permian breakevens below $40 now suggest that inflation of 50% might be
required before the basin becomes uneconomic. The possibility that organic efficiency gains persist
through the upcycle could offset cost inflation and create additional headroom under breakevens.
Exhibit 14: Even After Inflation, US Land Remains Attractive at

Exhibit 13: Breakevens Have Fallen ~40% Since 2014
Current WTI
WTI Breakevens Over Time US Land Basins
Estimated Breakeven WTI after 10% & 20% D&C Cost Inflation
$90 $70 $12
Change in Breakeven - +10%/20% cost

$80 $60 $10
$70 $50
$8
Breakeven WTI
$60 $40
Breakeven WTI
2013 $6
$50 $30
2014 $4
$40 $20
2015
$30 $10 $2
2016
$20 $0 $0
Bakken Niobrara Eagle Ford Midland Delaware
$10
WTI Breakeven +10% D&C WTI Breakeven +20% D&C
$0
Bakken Niobrara EagleFord Midland Delaware Change +10% D&C Change +20% D&C
Source: HPDI, BMO Capital Markets. Analysis from BMO E&P Team Source: HPDI, BMO Capital Markets. Analysis from BMO E&P Team

Macro Outlook: Upcycle is Being Pulled Forward
The upcycle is being pulled forward due to coordinated OPEC and non-OPEC production cuts; US land rig
counts have increased 69% off the May bottom and returned to YoY growth in early January 2017. We
continue to expect cycles to be shorter in duration with less amplitude to the upside and now arguably
less downside risk due to OPECs resurgence.
Counter seasonal inventory drawdowns are likely in 1Q17, as long as OPEC compliance is at least 60%,
which is in line with historical compliance levels. We think greater adherence is likely during 1H17 given
that it appears to be in the best interest of Saudi Arabia to maintain discipline, OPEC spare capacity is at
historically low levels, and the agreed reduction is a smaller portion of capacity (2.8%) than it was
during initial cuts in prior cycles (~4%-5%).
Exhibit 15: Oil Markets Have Tightened During 2018 Exhibit 16: Oil Demand Remains Strong
$140 Brent Oil (LHS) Tight Market 3 3.0
( in Demand > in
YoY Change in Demand - YoY Change in
Global Oil Demand YoY (million b/d)

non-OPEC Supply) 2 2.5
$120
2.0
1
$100 Non-OPEC Supply
Brent Oil Price ($)
1.5
-
$80 1.0
Loose Market (1)
(S>D) 0.5
$60
(2) -
$40 (0.5)
(3)
Libya and Iran (1.0)
$20 outages prevented (4)
price weakness (1.5)
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16E
1Q17E
2Q17E
3Q17E
4Q17E
YoY Supply/Demand Imbalance (RHS)
$0 (5)
1Q08A
3Q08A
1Q09A
3Q09A
1Q10A
3Q10A
1Q11A
3Q11A
1Q12A
3Q12A
1Q13A
3Q13A
1Q14A
3Q14A
1Q15A
3Q15A
1Q16A
3Q16A
1Q17E
3Q17E
Total Oil Demand OECD Demand Non-OECD Demand
Source: IEA, BMO Capital Markets Source: IEA, BMO Capital Markets
Exhibit 17: Saudi Arabia Can Cut and Still Produce More Than Exhibit 18: OPEC Spare Capacity is at Historically Low Levels; Will
November 2014 Be Low Even if the Full Cut Is Implemented
8.0
11.00 Total OPEC Spare Capacity
7.0 Effective Spare Capacity - Saudi Arabia Only
10.50
Oil Prodiction (M b/d)
Current Spare Capacity if Production is Cut to 32.5M b/d

6.0
Spare Production Capacity (million bbls/d)
10.00
Indonesia added
5.0 to OPEC capacity
9.50 in Dec. 2015
4.0
9.00
3.0
8.50
2.0
8.00
Apr-13
Jul-13
Apr-14
Jul-14
Apr-15
Jul-15
Apr-16
Jul-16
Oct-13
Oct-14
Oct-15
Oct-16
Jan-13
Jan-14
Jan-15
Jan-16
1.0
0.0
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
1Q11
3Q11
1Q12
3Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16
Saudi Arabia Production New Saudi Arabia Quota
Source: IEA, BMO Capital Markets Source: IEA, BMO Capital Markets

Upside Risks to Oil Prices
We see three primary upside risks for oil prices that could push oil prices above our $60 high end for
2017. 1) Destabilization in the Middle East, particularly in Iran, given President Elect Trumps negative
rhetoric related to the Nuclear Accord. 2) A slower-than-expected ramp in US shale oil due to material
cost inflation, inefficiencies, and/or disciplined E&P spending to cash flow. We think our analysis
appropriately accounts for 15% well cost inflation and a decline in leading-edge productivity per rig. We
assume 15% outspend, which is below the recent shale revolution average of 30-40%. 3) A decline in
non-OPEC ex US/Russia production. Non-OPEC ex US/Russia fell ~700k b/d from 4Q15 to 4Q16. Current
IEA numbers project production increases in Non-OPEC ex-US/Russia in 2017; flat or down production
could produce upside.
Downside Risks to Oil Prices
We see three primary risks to lower oil prices that could keep WTI oil prices below $55 and potentially
back below $50 in 2017.
1) A stronger-than-expected ramp in US oil production that prevents counter seasonal inventory

draws is the primary risk, in our view. While US lower 48 land production declined by 1.03
million b/d from a peak of 7.63 million b/d in March 2015 to a low of 6.6 million b/d in
September 2016, production increased by 105,000 b/d in October 2016, and weekly DOE data
suggests a continued increase. The EIA expects US onshore production to increase by just
204,000 b/d between 4Q16 and 4Q17 (+16,000 b/d YoY between 2016/2017) and total US
production to increase by 306,000 b/d between 4Q16 and 4Q17 (+117,000 b/d YoY for
2016/2017). Our production per rig analysis suggests US land production growth of 550-
650,000 b/d by 4Q17 and another 900,000-1.1 million b/d of growth by 4Q18 (YoY growth of
225-250,000/900-950,000 in 2017/2018). See Exhibits 19-22.
Exhibit 19: US Lower 48 Land Production Growth (MoM) Exhibit 20: US Lower 48 Production Growth Has Continued
Monthly Change in US Lower 48 Land Only Oil Production Weekly and Monthly US Lower 48 Production
225 8.8
159
Monthly Change in Oil Prod. (k b/d)
175 143
Lower 48 Crude Production (Mil b/d)
145 8.7
123 115
125 108 99 106 8.6
76 8.5
75
8.4
25 0
8.3
(25) -7 8.2
-21 -3
-26 -45 -39 -35 8.1
(75) -53
-64 -55 -31
-57 -98 8.0
(125) -103 -74
-113 7.9
(175) -158 -153 7.8
May-16
Feb-16
Mar-16
Apr-16
Jul-16
Oct-16
Nov-16
Dec-16
Jan-16
Jun-16
Aug-16
Sep-16
(225) Jan-17
Oct
Nov
Dec
Oct
Nov
Dec
Aug
Sep
Mar
May
Aug
Sep
Mar
May
Oct
Apr
Aug
Sep
Jul
Jan
Apr
Jun
Jul
Jan
Jun
Jul
Feb
Feb
2015 2016 DOE Lower 48 Weekly Production EIA Supply Monthly
Source: EIA, BMO Capital Markets Source: DOE, EIA, BMO Capital Markets

Exhibit 21: US Lower 48 Land Production is likely to Rebound Exhibit 22: We See Risk US Land Oil Production Exceeding the
with Activity Prior Peak by 2Q18
Big 4 Oil Basins YoY Production Change & Rig Counts U.S. Lower 48 Production Forecast
1,400 1,200 9,000
8,373
8,500
YoY Change in oil production
1,200 1,100
8,000 7,778
Daily Production (k b/d)

1,000 1,000 7,560
7,500
from Big 4 (kb/d)
Big 4 Rig Count

800 900
7,000
600 800
6,500
400 700 6,697
6,000
200 600
5,500
- 500
5,000
(200) YoY Change in Production 400
4,500
from the Big 4 (LH)
(400) Big 4 Rig Count (RH) 300 4,000
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
4Q15
1Q16
2Q16
3Q16A
4Q16E
1Q17E
2Q17E
3Q17E
4Q17E
1Q18E
2Q18E
3Q18E
4Q18E
(600) 200
3Q12
1Q11
3Q11
1Q12
1Q13
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
3Q16A
1Q17E
3Q17E
1Q18E
3Q18E US Oil Production Forecast Peak (May 2015) Sept and Oct 2016
Source: EIA, BMO Capital Markets Source: EIA, DOE, BMO Capital Markets
2) Weaker-than-expected demand due to higher oil prices, a stronger dollar, and slower developing
market demand given global protectionism. We think this is a lower probability risk given prices still far
below peak and generally stable economic indicators globally (Manufacturing PMI indices are at one-
year highs in the US, five-year highs in Europe, and north of 50 in China [ > 50 signals growth]). IEA
estimates currently project 1.3M b/d of global demand growth between 4Q16 and 4Q17.
3) A strong recovery in Libya and Nigeria. We view this as the lowest probability risk but worth
monitoring given the magnitude of the risk. Violence and political instability brought Libyan production
down more than 1 million b/d between January and September 2013, and it is still 800k b/d below
January 2013 levels. Uncertainty in Nigeria has reduced Nigerian production by ~380k b/d since January
2013. A return to past production levels could revert oil markets back to oversupply. See Exhibit 23.
Exhibit 23: Risk to Oil Prices: Libya & Nigeria are Production Almost ~1.2M b/d Below 2013 Levels
Libya & Nigeria Monthly Crude Production
2.5
Nigeria: Nov. '16 380k b/d below Jan. '13 levels
Crude Production (M b/d)
2.0
1.5
1.0 Libya: Nov. '16 800k b/d below Jan. '13 levels
0.5
0.0
Jul-13
Apr-13
Apr-14
Jul-14
Apr-15
Jul-15
Apr-16
Jul-16
Oct-13
Oct-14
Oct-15
Oct-16
Jan-13
Jan-14
Jan-15
Jan-16
Libya Nigeria
Source: IEA, BMO Capital Markets

We Expect Continued US E&P Outspend to Fund NAM Growth
We expect US E&P capex growth of ~40% in both 2017 and 2018 assuming reinvestment rates of
115%/110% respectively. While many E&Ps discuss plans of spending within cash flow, we expect
capital markets to remain open for E&Ps to take advantage in the pursuit of growth. Note that our
forecast for reinvestment rates of 110-115% is well below the 2011-2015 average of 130%-150% but
above the 2000s average of near cash flow breakeven.
Equity capital markets allowed E&Ps to repair balance sheets with a record issuance of $32 billion during
2016. This allowed E&Ps to pre-fund drilling activity and sparked one of the strongest recoveries on
record. In total, public U.S. E&Ps raised more than $55 billion of equity, high-yield debt and unrated debt
during 2016, in line with peak capital markets access in 2014.
In 2017, a reduced need to repair balance sheets could allow outspend to surprise to the upside. In
2016, equity issuance that totaled roughly half of 2016 public E&P spend helped repair balance sheets
in a sample of 53 public U.S. E&Ps, net debt fell $26 billion between 1Q16 and 3Q16, despite
reinvestment rates over 150%. This is not typical during the prior upcycle, net debt grew while capital
raises far above 2000s averages went into the well. If capital markets access remains at current highs
and the focus shifts from balance sheet repair back to capital investment, reinvestment rates could fall
in line with the prior upcycle (130-150%) rather than our 115% base case.
Exhibit 24: We Expect US E&P Capex to Increase 42% in 2017 and 40% in 2018
Summary of OFS Macro Assumptions
3Q16 4Q16 2016 1Q17 2Q17 3Q17 4Q17 2017 1Q18 2Q18 3Q18 4Q18 2018
Im plied Oil Price $ 43.38 $ 55.00 $ 65.00

US Land Rig Count 461 567 487 659 695 723 755 708 815 890 899 899 876
Horizontal 373 474 402 545 575 597 623 585 672 734 743 744 723
Oil 309 380 322 437 467 486 508 474 554 613 621 621 602
Gas 65 94 77 108 108 111 114 111 118 120 122 123 121
Vertical/Directional 880 930 860 1140 1200 1260 1320 1230 1430 1560 1560 1550 1530
E&P Reinvestm ent Rates 120% 115% 110%
Period Change
E&P Capex (0.8%) 18.3% (52.2%) 18.6% 8.7% 8.2% 8.6% 41.7% 12.8% 13.5% 1.1% 0.0% 40.5%
Total US Land Rig Count 15.9% 22.9% (48.5%) 16.2% 5.5% 4.0% 4.4% 45.3% 7.9% 9.2% 1.1% 0.0% 23.7%
Inflation 0.0% 1.3% 2.0% 3.0% 4.0% 4.0% 4.5% 4.0% 0.0% 0.0%
Cumulative Inflation 3.3% 6.3% 10.6% 15.0% 7.7% 20.2% 25.0% 25.0% 25.0% 13.6%
Exhibit 25: We Expect E&Ps to Outspend by 15/10% in 17/18

Reinvestment Rates for Domestic-Focused Public E&Ps

Exhibit 26: US Public E&Ps Raised a Record $32B of Equity in 2016 Exhibit 27: Which Drove a Decline in Total Net Debt
Equity Issuance U.S. Domiciled E&Ps, Issues > $20 Million Quarterly Change in Net Debt, Sample of 53 Public E&Ps
$35 $120 $15
U.S. E&P Capital Raises - $Bil USD
Quarterly Change in E&P Net Debt

$30 $100 $10
$25
$80 $5
Brent Oil
$20
($bil)
$60
$0
$15
$40
$10 -$5
$5 $20
-$10
$0 $0
-$15
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
4Q13
4Q15
1Q13
2Q13
3Q13
1Q14
2Q14
3Q14
4Q14
1Q15
2Q15
3Q15
1Q16
2Q16
3Q16
Secondary IPO Convertible Brent Oil
Source: Bloomberg, Dealogic, BMO Capital Markets Source: Bloomberg, BMO Capital Markets
Exhibit 28: E&P Net Debt Fell More Than 15% Between 1Q16- Exhibit 29: High Yield Issuance Was Below Peak but Above the
3Q16 2000s Average
Total Net Debt, Sample of 53 U.S. E&Ps High Yield Debt Issuance, U.S. Domiciled E&Ps
$160 $50
U.S. Domicilied E&P High Yield At
$140 $45
Public E&P Net Debt ($Bil USD)
$40
$120
$35
Issuance ($Bil)
$100 $30
$25
$80
$20
$60 $15
$40 $10
$5
$20 $0
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
$0
1Q07
3Q10
1Q13
3Q16
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
1Q11
3Q11
1Q12
3Q12
3Q13
1Q14
3Q14
1Q15
3Q15
1Q16
US Domiciled E&P High Yield '11 to '15 Average '01 to '09 Average
Source: Bloomberg, BMO Capital Markets. Excludes the impacts of Source: Bloomberg, Dealogic, BMO Capital Markets
bankruptcies.
Exhibit 30: E&P Share of Market-wide High Yield Debt Declined Exhibit 31: Overall Equity & HY Capital Raises Remained at Peak
From Highs; Still Elevated vs 2000s Levels in 2016
Historical High Yield Issuance E&Ps and Full HY Market Equity and HY Debt Issuance, U.S. Domiciled E&Ps
$450 14% '05-'10
U.S. Domiciled High Yield Issuance
2011 2012 2013 2014 2015 2016

$400 12% Avg
Equity 7.7 8.7 10.2 14.2 17.3 16.5 32.3
E&P % of Issuance
$350
10% % YoY -9% 17% 39% 22% -5% 95%
$300
HY Debt 10.6 21.8 47.1 34.3 36.3 35.8 20.9
$250 8%
% YoY 9% 116% -27% 6% -1% -42%
$200
(Bil)
6% Unrated Debt 0.1 0.1 0.1 - 1.4 1.1 1.9

$150 Total 18.3 30.6 57.4 48.5 55.1 53.5 55.1
4%
$100 % YoY 3% 88% -16% 14% -3% 3%
$50 2%
$0 0%
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
'16 YTD
U.S. Oil & Gas HY Sum of Billions % Oil & Gas
Source: Bloomberg, BMO Capital Markets Source: Bloomberg, Dealogic, BMO Capital Markets.

International Recovery to be More Gradual
Expect 10-15% Growth 4Q16 to 4Q17; LatAM Has Potential to Lead
We expect international growth to be measured (YoY growth of ~1%) but with strong 4Q/4Q growth of
10-15%. International rig activity has historically followed oil price, with a slight delay. We think Latin
America has the greatest chance of surprising to the upside (from low levels today), followed by either
Europe, Africa, or Asia. We see risk of the Middle East lagging expectations given how well it has held up
during the downturn. See Exhibits 35-38.
Exhibit 32: We Expect ~15% Growth 4Q16 to 4Q17; 2017 YoY May Be Near Flat
BHI, HAL, SLB, WFT Revenue Growth Rates by Geo-Market
4Q17E YoY 2017E YoY 2018E YoY
Eur/Af/ Mid East Eastern All Eur/Af/ Mid East Eastern All Eur/Af/ Mid East Eastern All
Ticker LatAm CIS & Asia Hemis. Int'l LatAm CIS & Asia Hemis. Int'l LatAm CIS & Asia Hemis. Int'l
BHI 19% 12% 13% 13% 14% -1% -11% 4% -3% -3% 24% 15% 17% 16% 17%
HAL 9% 10% 12% 11% 11% -12% -3% 1% -1% -3% 22% 13% 12% 13% 14%
SLB 17% 13% 15% 14% 15% -4% -1% 12% 6% 4% 20% 18% 18% 18% 18%
WFT 14% 17% 17% 17% 16% -1% 0% 4% 2% 1% 19% 15% 17% 16% 17%
Average 15% 12% 14% 13% 14% -5% -3% 7% 3% 1% 21% 16% 16% 16% 17%
Source: BMO Capital Markets
Exhibit 33: International Rig Count is Down 33% From the Peak but Relatively Stable in Recent
Months
Baker Hughes International Rig Count
1,500
The Int'l rig count
BHI International Rig Count
1,400
fell 15% peak to
1,300 trough in 2008-09
1,200
1,100
1,000 The Int'l rig count is down

33% in the current downturn
900
800
Jul-10
Jul-15
May-11
Apr-09
Mar-12
Apr-14
May-16
Feb-10
Oct-11
Feb-15
Oct-16
Nov-08
Sep-09
Dec-10
Aug-12
Nov-13
Sep-14
Dec-15
Jan-08
Jun-08
Jan-13
Jun-13
Source: Baker Hughes, BMO Capital Markets
International Spending Plans Suggest Modest Recovery
We expect 2017 supermajor capex of -8% to +1% YoY in 2017. The high end of the range reflects
spending at 100% of cash flow (2011-2014 average was ~105%). Analyst consensus suggests ~-8%
lower capex in 2017, which implies a reinvestment rate of ~90%. We expect spending just under cash
flow or ~95% reinvestment suggesting modest ~4% declines in supermajor spend, and think NOCs are
likely to be the drivers of improvement in 2017. In 2018, analysts expect mid-single-digit improvement
in supermajor capex. Our higher (mid-teens) growth estimates in 2018 are predicated on a higher
(~$65) oil price environment and a continued recovery in NOC spending, especially in Latin America.

Exhibit 34: We Expect Supermajor Reinvestment to Decline to Just Below 100%
Supermajor Historical Reinvestment Rates (BP, CVX, TOT, RDSA, STL, XOM)
250% Reinvestment Rates: $120
Total Capex:
2000-2010 Avg: 81%
Supermajor Reinvestment Rates

2011-2015 Avg: 117% $100
200%
Cost Incurred:
2000-2010 Avg: 61% $80
150% 2011-2015 Avg: 107%
Brent Oil
'17/18E: $60
95%
100%
$40
50%
$20
0% $0
2005A
2000A
2001A
2002A
2003A
2004A
2006A
2007A
2008A
2009A
2010A
2011A
2012A
2013A
2014A
2015A
2016E
2017E
2018E
Cost Incurred Reinvestment Total Capex Reinvestment
Total Capex Avg '00-'10 Total Capex Avg. '11-'15
Exhibit 35: European Rig Counts Have Tracked Oil Closely Since
Exhibit 36: Asia-Pac Rig Activity Also Tracks Oil
2004
Historical Oil Prices & Asia Pacific Rig Activity
Historical Oil Prices & European Rig Activity
$160 180 $160 300
Brent Oil Spot Price (Montly Avg)
160 $140 280

$140
140 260
$120 $120
240
120
$100
Rig Count
Rig Count
$100 220
100
$80 $80 200
80
$60 $60 180
60
160
$40 40 $40
140
$20 20 $20 120
$0 0 $0 100
Jan-00
Mar-01
May-02
Jul-03
Apr-05
Jun-06
Jan-07
Mar-08
May-09
Jul-10
Apr-12
Jun-13
Jan-14
Mar-15
May-16
Oct-01
Feb-04
Oct-08
Feb-11
Oct-15
Aug-00
Dec-02
Sep-04
Nov-05
Aug-07
Dec-09
Sep-11
Nov-12
Aug-14
Dec-16
Mar-01
May-02
Jul-03
Feb-04
Apr-05
Mar-08
May-09
Jul-10
Apr-12
Feb-11
Mar-15
May-16
Oct-01
Oct-08
Oct-15
Dec-02
Nov-05
Dec-09
Nov-12
Dec-16
Jan-00
Aug-00
Sep-04
Jun-06
Jan-07
Aug-07
Sep-11
Jun-13
Jan-14
Aug-14
Oil (Brent) Europe Rig Count Oil (Brent) Asia Pacific Rig Count
Source: Baker Hughes, Bloomberg, BMO Capital Markets Source: Baker Hughes, Bloomberg, BMO Capital Markets

Exhibit 37: LatAM Overshot to the Downside; We See Upside Exhibit 38: Recent Middle East Outperformance Creates Risk of
Potential From Here Lagging on the Upside
Historical Oil Prices & Latin America Rig Activity Historical Oil Prices & Middle East Rig Activity
$160 500 $160 450

$140 450 $140 400
$120 $120
400 350
$100 $100
Rig Count
Rig Count
350 300
$80 $80
300 250
$60 $60
250 200
$40 $40
$20 200 $20 150
$0 150 $0 100
May-02
Mar-08
Mar-01
May-02
Jul-03
Feb-04
Apr-05
Mar-08
May-09
Jul-10
Apr-12
Feb-11
Mar-15
May-16
Mar-01
Jul-03
Feb-04
Apr-05
May-09
Jul-10
Feb-11
Apr-12
Mar-15
May-16
Oct-01
Oct-08
Oct-15
Oct-01
Oct-08
Oct-15
Dec-02
Nov-05
Dec-09
Nov-12
Dec-16
Dec-02
Nov-05
Dec-09
Nov-12
Dec-16
Jan-00
Aug-00
Sep-04
Jun-06
Jan-07
Aug-07
Sep-11
Jun-13
Jan-14
Aug-14
Jan-00
Aug-00
Sep-04
Jun-06
Jan-07
Aug-07
Sep-11
Jun-13
Jan-14
Aug-14
Oil (Brent) Latin America Rig Count Oil (Brent) Middle East Rig Count
Source: Baker Hughes, Bloomberg, BMO Capital Markets Source: Baker Hughes, Bloomberg, BMO Capital Markets

Raising U.S. Land Rig Count Forecast We Expect 45% YoY Growth
in 2017
We expect the U.S. land rig count to increase by 45% YoY in 2017 and 24% in 2018. After a 69% ramp
off of the trough, we expect gradual increases throughout 2017 to bring year-end land rig counts to
around ~775 and horizontal rig counts to ~620. We expect further rig additions to boost the land rig
counts to near 900 by mid-2018, 40% above current levels. Our 2018 estimates assume a $65 oil
environment. Our new 2017/2018 forecasts are 16%/3% higher than our prior forecasts. See Exhibits
39-42.
Exhibit 39: Our New Forecast Is for US Land Rig Count Growth of 45%/24% in 2017/2018
BMO Old vs New Rig Count Forecast
BMO US Land Rig Count Forecast - Old vs. New YoY Change
3Q16A 4Q16A 2016A 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018E 2017 2018
NEW
US Land 461 567 487 659 695 723 755 708 815 890 899 899 876 45% 24%
% Change YoY -45% -22% -49% 26% 75% 57% 33% 45% 24% 28% 24% 19% 24%
% Change QoQ 16% 23% 16% 6% 4% 4% 8% 9% 1% 0%
Oil 374 449 390 527 563 586 613 572 668 740 749 749 727 47% 27%
Gas 85 117 97 132 132 137 142 136 147 150 150 150 149 40% 10%
Horizontal 373 474 402 545 575 597 623 585 672 734 743 744 723 46% 24%
Oil 309 380 322 437 467 486 508 474 554 613 621 621 602 47% 27%
Gas 65 94 77 108 108 111 114 111 118 120 122 123 121 44% 9%
Vertical / Directional 88 93 86 114 120 126 132 123 143 156 156 155 153 43% 24%
Oil 66 69 67 90 96 100 105 98 114 127 128 128 124 45% 27%
Gas 21 23 20 24 24 26 27 25 28 29 28 27 28 22% 13%
OLD - US Land 460 503 471 533 571 631 708 611 793 868 871 871 850 30% 39%
Absolute Change 1 64 16 126 124 92 47 97 22 22 28 28 25
% Difference 0% 13% 3% 24% 22% 15% 7% 16% 3% 3% 3% 3% 3%
Exhibit 40: Rig Count Is Up 69% Since Trough; We Expect Gradual Exhibit 41: Key Difference vs Last Cycle We Expect Full-Cycle
Improvement Throughout 2017 Recovery Well Below Prior Peak
Historical Rig Count Upcycle Changes, Percent Increase From Trough Historical Rig Count Cycles, Change from Prior Peak
200% 140%
% change in the US land rig count
1999/2000
BHI Land, Peak Indexed to 100%
180% 120%
160%
2H16/17/18 100%
140%
120% 80%
100%
60%
80% 2009/10/11
40%
60%
40% 20%
2002/03/04 1997-99 2001-02 2008-09 Current Cycle
20%
0%
0% 1 27 53 79 105 131 157 183 209
0 10 20 30 40 50 60 70 80 90 100
Weeks From Peak
Weeks after trough
Source: Baker Hughes, BMO Capital Markets Source: Baker Hughes, BMO Capital Markets

Exhibit 42: BMO U.S. Rig Count Forecast
2014A 2015A 1Q16A 2Q16A 3Q16A 4Q16A 2016A 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018E
US Rig Count Forecast

Total 1,862 982 551 422 479 589 510 681 719 746 778 731 840 917 928 929 904
% Change YoY 6% -47% -61% -54% -45% -22% -48% 24% 70% 56% 32% 43% 23% 28% 24% 19% 24%
% Change Seq. -27% -23% 14% 23% 16% 5% 4% 4% 8% 9% 1% 0%
Oil 1,527 754 441 334 390 471 409 548 584 607 634 593 690 763 773 774 750
% Change YoY 11% -51% -60% -51% -41% -17% -46% 24% 75% 56% 35% 45% 26% 31% 27% 22% 26%
% Change Seq. -22% -24% 17% 21% 16% 7% 4% 4% 9% 11% 1% 0%
Gas 333 227 109 87 88 117 100 133 134 139 144 137 150 154 155 155 153
% Change YoY -13% -32% -62% -61% -58% -37% -56% 21% 54% 59% 23% 37% 13% 15% 12% 8% 12%
% Change Seq. -41% -21% 1% 33% 14% 1% 4% 4% 4% 3% 1% 0%
Misc 3 1 - 1 2 1 1 0 0 0 0 0 0 0 0 0 0
US Land Rig Count
Land - Total 1,804 947 524 398 461 567 487 659 695 723 755 708 815 890 899 899 876
% Change YoY 6% -48% -61% -55% -45% -22% -49% 26% 75% 57% 33% 45% 24% 28% 24% 19% 24%
% Change Seq. -28% -24% 16% 23% 16% 6% 4% 4% 8% 9% 1% 0%
Abs. Change YoY 99 (858) (829) (478) (372) (157) (459) 135 297 262 188 221 156 194 176 144 168
Abs. Change Seq. (200) (126) 63 106 92 36 28 32 60 75 9 -
Oil 1,485 728 420 316 374 449 390 527 563 586 613 572 668 740 749 749 727
% Change YoY 11% -51% -61% -52% -41% -17% -46% 25% 78% 57% 37% 47% 27% 31% 28% 22% 27%
% Change Seq. -23% -25% 19% 20% 17% 7% 4% 5% 9% 11% 1% 0%
Abs. Change YoY 151 (758) (653) (344) (260) (95) (338) 107 247 212 164 183 141 176 163 136 154
Abs. Change Seq. (124) (104) 59 75 78 36 23 27 55 72 9 -
Gas 318 218 104 82 85 117 97 132 132 137 142 136 147 150 150 150 149
% Change YoY -13% -31% -63% -61% -57% -35% -56% 26% 60% 60% 21% 40% 11% 14% 10% 6% 10%
% Change Seq. -42% -21% 4% 37% 13% 0% 4% 4% 4% 2% 0% 0%
Abs. Change YoY (49) (100) (177) (131) (114) (64) (121) 28 49 51 25 38 15 18 13 8 14
Abs. Change Seq. (76) (22) 3 31 15 - 5 5 5 3 - -
Balancing item 1 1 (0) (0) 1 1 0 1 1 1 1 - 1 1 1 1 -
% Oil 82% 77% 80% 79% 81% 79% 80% 80% 81% 81% 81% 81% 82% 83% 83% 83% 83%
Well Type
Vertical 376 140 63 51 62 63 60 84 91 97 103 94 116 131 133 134 129
Directional 211 95 53 45 45 52 49 52 52 52 52 52 52 52 52 52 52
Horizontal 1,275 748 434 326 373 474 402 545 575 597 623 585 672 734 743 744 723
% Change YoY 16% -41% -59% -54% -43% -18% -46% 25% 77% 60% 31% 46% 23% 28% 24% 19% 24%
% Change Seq. -25% -25% 15% 27% 15% 5% 4% 4% 8% 9% 1% 0%
% Horizontal 68% 76% 79% 77% 78% 80% 79% 80% 80% 80% 80% 80% 80% 80% 80% 80% 80%
Horizontal Oil Rigs 1,029 571 348 261 309 380 322 441 471 490 513 478 559 619 626 626 607
% of Horizontal 81% 76% 80% 80% 83% 80% 81% 81% 82% 82% 82% 82% 83% 84% 84% 84% 84%
% Change YoY -45% -58% -51% -39% -13% -44% 27% 80% 59% 35% 48% 27% 31% 28% 22% 27%
% Change Seq. 0% 31% -19% -40% 3% 11% 5% 13% 16% 17% 19% -20% 14% 12% 6% 0% -5%
Horizontal Gas Rigs 246 170 87 64 65 94 77 104 104 107 110 106 114 115 116 117 116
% of Horizontal 19% 23% 20% 20% 17% 20% 19% 19% 18% 18% 18% 18% 17% 16% 16% 16% 16%
% Change YoY -31% -60% -62% -58% -33% -55% 20% 62% 66% 17% 39% 9% 11% 9% 6% 9%
% Change Seq. 0% 0% -38% -26% 0% 45% 0% 11% 0% 3% 3% 0% 3% 1% 1% 1% 0%
Misc. Rigs 0 7 - 0 - - 3 - - - - - 0% 0% 0% 0% -

Offshore Drilling Macro Update
Floater Demand to Fall Another 16%; Continue to See Trough in Mid-2017
We expect contract rollovers to drive the floater rig count lower over the next 6 months. There are
currently 115 working floaters globally, and this has remained relatively flat over the last three months.
Stable working rig demand sounds positive but 151 rigs are currently contracted, suggesting downside
to the number of rigs generating revenue for offshore drillers. While the short-cycle US rig count
continued to ramp following OPECs decision and oil price strength, the offshore rig market is
characterized by longer lead-time projects and slower moving major oil companies. We think any
resulting increase in activity will take at least 3-6 months to materialize. Thus, we expect the working
rig count to be flat to down, ranging from 105-115 over the next six months.
The primary driver in further declines in the contracted floater rig count will be driven by contract
rollovers. There are 34 contract rollovers in 1H17 (17 in each quarter) and we assume just five net
renewals, suggesting a decline of 29 contracted floaters over the next six months. This expected
tightening of the working vs. contracted is a continuation of the current trend and similar to prior cycles.
See Exhibits 43-44. This supports our view of a demand bottom at mid-year 2017.
We are updating our floater supply and demand model for 2016 data, though our forward estimates are
largely unchanged. We expect floating rig demand (contracted) to continue to fall over the next two-
three quarters, by approximately 29 rigs (19%) to 122 at the end of 2Q17 from the current 151
contracted floaters. Our new forecast suggests average sequential (quarterly) declines of 9%, 10%, and
1% in 1Q17 3Q17, for a total decline of 16% from the current count of 151. We expect demand to
bottom roughly between 2Q17 and 3Q17, driven by contract rollovers, with the 3Q17 quarterly average
of 127 floaters representing the trough. See Exhibit 53.
Our 2017 average floater demand (measured by contracted floaters) forecast is 132 rigs, in line with our
prior forecast of 132 and down 25% from the 2016 average of 176. Our 2018 average floater demand
forecast is 147 rigs, in line with our prior forecast and represents 11% growth versus 2017.
There are currently 151 floaters contracted in the market of 288 delivered floaters, yielding a total
current utilization of 52%. Of the 288 floaters, 67 are currently cold stacked and not marketed. Thus,
there are currently 226 marketed floaters in the market, for a marketed utilization of 72%, leaving 63
floaters idle (i.e., hot or warm stacked). Since the downcycle began (4Q14), 68 floaters have been
scrapped and we expect another 52 floaters to be scrapped through 2018, for total attrition this cycle of
120 floaters. See Exhibits 48-50.
There are currently 48 undelivered newbuild floaters, 31 (65%) of which are not supported by future
contracts. This total includes 14 newbuild floaters contracted with Petrobras that have uncertain futures
regarding whether they will get completed and delivered. Due to this uncertainty, we still do not
forecast any of these rigs getting delivered in our supply forecasts. Excluding these 14 Brazilian
newbuilds, only three out of the 34 newbuild floaters (9%) have contracts in place; 24 of these rigs are
scheduled to be delivered in 2017. Our supply forecast assumes each of the 31 uncontracted newbuilds
are delayed by one year. See Exhibits 51-52.

Exhibit 44: The Level of Contracted But Not Working Has
Exhibit 43: Of the 151 Contracted Floaters, Just 115 (76.2%) Are
Declined Since April 2016, but Remains Above the 10-year
Currently Working; or 23.8% Are Contracted but Not Working
Average
300
280 35%
260 30%
Floater Rig Count
240 25% 23.8%

220 18.6%
20%
200
180 15%
160 10%
151
140 138 5%
120 115
0%
Current
100
Current
Apr-08
Oct-10
Apr-13
Oct-15
May-15
May-10
Jul-14
Feb-09
Jul-09
Mar-11
Feb-14
Mar-16
Nov-07
Sep-08
Dec-09
Aug-11
Nov-12
Sep-13
Dec-14
Aug-16
Jan-07
Jun-07
Jan-12
Jun-12
Mar-14
Mar-15
May-14
Jul-14
May-15
Jul-15
Mar-16
May-16
Jul-16
Nov-14
Nov-15
Nov-16
Jan-14
Sep-14
Jan-15
Sep-15
Jan-16
Sep-16
% Not Working / Total Contracted 10 Year Avg.
Working Currently Contracted Total Contracted
Source: IHS Petrodata, BMO Capital Markets Source: IHS Petrodata, BMO Capital Markets
Exhibit 45: There Are 34 Floater Rollovers Over the Next Two Exhibit 46: And We Assume Minimal (15%) Contract Renewals
Quarters. in That Period; Renewals Increase Dramatically in 2H17 2018
30 50 250%
45 44
192%
Flaoter Contract Rollovers
25 40 200%
34
35 152%
20 29
17 17 30 150%
Floaters
25
15 25
9 8
20 100%
10 8 13
15
2 5
5 7 5 10 50%
3 5 15%
6 1 5
0 2 2 2
- 0%
1Q17 2Q17 3Q17 4Q17 1H17 2H17 2018
Midwater Deepwater Ultra-deepwater Recontraced Rollovers % Recontracted (rhs)
Exhibit 47: Floater Demand Has Fallen 46%; We Forecast a Exhibit 48: Total Floater Utilization to Fall Below 50% in 1H17;
Further 16% Decline Implying a 55% Peak-to-Trough Decline Cold Stacking Will Keep Marketed Utilization Near 70% in 2017
310 100%
282 Forecast 90%
290 We forecast another 360
Floater Supply and Demand
270 16% decline in Marketed 80%

Floaters Contracted
demand Total utilization (rhs)

250
Floater Utilization
310 utilization 70%

230 (rhs) Floater supply 60%
210 260 50%
190
40%
170 210 Floater demand
151 30%
150
127
130 160 20%
151 Currently
110 Contracted 10%
Jul-14
Feb-15
Current
Mar-15
Mar-16
Low (Est.)
Apr-15
May-15
Apr-16
May-16
Jun-16
Jul-16
Oct-14
Jan-15
Jun-15
Jul-15
Oct-15
Jan-16
Feb-16
Oct-16
Aug-14
Sep-14
Nov-14
Dec-14
Aug-15
Sep-15
Nov-15
Dec-15
Aug-16
Sep-16
Nov-16
Dec-16
110 0%
1Q10A
3Q10A
1Q11A
3Q11A
1Q12A
3Q12A
1Q13A
3Q13A
1Q14A
3Q14A
1Q15A
3Q15A
1Q16A
3Q16A
1Q17E
3Q17E
1Q18E
3Q18E

Exhibit 49: 205 Floaters Are Currently Idle, Cold Stacked or Exhibit 50: We Expect an Additional 52 Floaters to be Scrapped
Retired (Since 4Q14) Through 2018
Current Uncontracted Floaters 140

120
120
Retired Floaters
100
Idle 80
Retired 70 Idle
68
68 60 52
Cold Stacked
Retired 40
20
0
Cold Retirements Through Forecast Additional Forecast Total
Stacked 2016 Retirements Through Retirements Through
67 2018 2018
Exhibit 51: There Are 34 Floaters Under Construction (ex-Brazil Exhibit 52: 24 Newbuild Floaters Are Scheduled For Delivery in
Newbuilds) and Only 3 Are Contracted 2017; We See Continued Delays for Uncontracted Rigs
Contracted
25 24
3
Undelivered Newbuild Floaters
9% 3
20
(ex Sete Brazil)
15
10 21
5 4
3 - 3
- -
3 4 3
-
2017 2018 2019 2020
Uncontracted
31 Uncontracted Contracted
91%

Exhibit 53: Floater Supply and Demand Forecast
BMO Floater Supply and Demand Forecast Summary
2013A 2014A 2015E 1Q16A 2Q16A 3Q16A 4Q16A 2016A 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018E Current
Total Floater Demand 275 279 241 200 181 169 155 176 141 128 127 134 132 139 145 152 154 147 151
YoY Change 4% 2% -14% -25% -27% -26% -30% -27% -29% -30% -25% -14% -25% -2% 14% 20% 15% 11% -24%
Seq change -9% -9% -7% -8% -9% -10% -1% 6% 3% 5% 4% 1% -3%
Total Supply 306 324 313 307 299 295 289 297 279 269 261 256 266 255 256 257 259 257 288
Utilization 90% 86% 77% 65% 61% 57% 54% 59% 51% 47% 48% 52% 50% 54% 57% 59% 59% 57% 52%
Marketed Supply 286 298 285 264 245 231 221 240 203 184 176 171 184 170 171 172 174 172 221
Utilization 96% 94% 85% 76% 74% 73% 70% 73% 69% 69% 72% 78% 72% 81% 85% 88% 88% 86% 68%
Warm Stacked / Idle 12 18 44 65 64 63 66 64 62 56 50 37 51 32 26 20 21 25 70

Cold Stacked 19 26 28 43 54 63 68 57 76 85 85 85 83 85 85 85 85 85 67
Total Stacked 31 45 72 107 118 126 134 121 138 141 135 122 134 117 111 105 106 110 137
Newbuilds - - 14 1 - 2 - 3 1 1 1 2 5 8 6 5 4 23
Retirements - 15 30 6 8 3 6 23 13 10 7 6 36 6 6 4 - 16
Retirements (since 2013) - 15 45 51 59 62 68 68 81 91 98 104 104 110 116 120 120 120
Idle/Hot Stacked 4% 6% 14% 21% 21% 21% 23% 22% 22% 21% 19% 14% 19% 12% 10% 8% 8% 10% 24%
Cold Stacked/Idle 62% 59% 39% 40% 46% 50% 51% 47% 55% 60% 63% 70% 62% 73% 77% 81% 81% 78% 49%
Demand Breakdown
US GOM 41 48 47 42 36 32 30 35 29 26 26 29 27 30 31 31 30 30 30
West Africa 37 43 34 28 22 21 18 22 17 15 15 15 15 14 14 15 17 15 18
Norway 28 26 22 21 19 17 15 18 15 13 12 13 13 13 14 15 16 14 15
North Sea (ex Norway) 18 19 18 14 14 14 12 13 11 8 7 7 8 7 8 9 10 8 12
SE Asia 14 16 12 12 9 12 8 10 7 6 6 7 6 10 13 15 16 14 7
ROW 61 61 55 39 41 40 41 40 36 34 35 37 35 39 39 40 38 39 38
Subtotal 198 213 188 156 141 135 124 139 113 101 100 107 105 111 117 124 126 119 120
YoY Change 8% 8% -12% -25% -27% -25% -28% -26% -27% -29% -26% -13% -24% -2% 16% 24% 17% 13% -31%
Seq change -10% -9% -4% -9% -9% -11% -1% 8% 4% 5% 6% 2% -11%
Brazil 76 66 53 44 40 34 32 37 28 27 27 27 27 28 28 28 28 28 31
YoY Change -5% -14% -20% -25% -27% -33% -34% -29% -36% -34% -19% -15% -27% -2% 6% 4% 4% 3% -35%
Seq change 0 0 0% -8% -9% -16% -6% 0% -11% -5% 2% 0% 0% 2% 2% 0% 0% 0% -8%
Seq Change
US GOM -10% -13% -11% -7% -3% -12% 0% 14% 2% 3% 0% -3% 0%
West Africa -10% -22% -4% -11% -10% -12% 0% 0% -7% 0% 11% 13% -2%
Norway 2% -10% -13% -10% -4% -10% -8% 4% 4% 4% 7% 7% -1%
North Sea (ex Norway) -15% -5% 1% -15% -11% -24% -13% 0% -7% 15% 20% 6% 2%
SE Asia 17% -18% 23% -33% -16% -8% 0% 17% 43% 30% 15% 7% -9%
ROW -18% 5% -2% 2% -11% -6% 1% 7% 4% 1% 1% -4% -7%
YoY Change
US GOM 15% 19% -2% -16% -22% -31% -36% -26% -31% -30% -21% -3% -22% 2% 20% 20% 2% 10% -28%
West Africa 15% 17% -21% -26% -37% -38% -40% -35% -40% -33% -30% -21% -32% -18% -7% 3% 17% -2% -35%
Norway 13% -7% -14% -11% -17% -15% -28% -17% -32% -33% -29% -17% -28% -10% 4% 21% 24% 9% -30%
North Sea (ex Norway) -5% 6% -5% -24% -26% -26% -31% -26% -27% -42% -49% -41% -39% -38% -6% 29% 36% 0% -17%
SE Asia -15% 17% -27% -34% -14% 37% -22% -14% -44% -36% -48% -9% -37% 54% 117% 150% 129% 112% -39%
ROW 8% 0% -10% -35% -31% -23% -14% -27% -8% -17% -14% -9% -12% 7% 15% 14% 3% 10% -2%
Re-Contracting Summary
Contracts Expiring 80 33 14 19 23 89 17 17 5 8 47 9 6 7 7 29
Renewals 10 9 -5 7 9 20 0 5 13 12 30 12 15 9 8 44
% Recontracted 13% 27% -36% 37% 39% 22% 0% 29% 260% 150% 64% 133% 250% 129% 114% 152%

Jackup Demand Likely to Trough in 1H17
Demand declines continue to slow in the jackup market, and we see the market bottoming in the next
2-4 months. This is consistent with the historical relationship between jackup demand and oil prices.
Jackup markets traditionally recover 6-9 months following the trough in oil. The slowdown in the
sequential declines in the market reflects this, which is in contrast to the increasing pace of declines in
the floater market, which typically lags oil prices by 12 months.
Our jackup demand forecast is unchanged, and we continue to forecast a quarterly trough of 304
contracted jackups in 1Q17, down 7 rigs from the current 311. Our 2017 average forecast demand is
315, or -5% YoY. The current contracted jackup count of 311 is down 32% from a peak of 458 rigs in
April 2014. We expect a sequential decline of 3% in 1Q17 before starting to slowly grow off the bottom
in 2Q17. Our current trough forecast of 304 implies an estimated peak-to-trough decline of 34%. Our
2018 forecast of 349 contracted jackups implies an 11% increase from the 2017 average. See Exhibit 54.
We continue to project a less dramatic YoY decline in 2017 demand for the global jackup market (down
5%) compared to floaters (down 25%), due to the shorter-cycle nature of shallow water projects and
the larger NOC presence (particularly in the Middle East) in the jackup market. Our utilization estimate
troughs at 56% in 1H17, and does not assume any uncontracted newbuilds coming into the market or
any rig retirements.
Exhibit 54: BMO Jackup Supply and Demand Forecast

BMO Offshore Jackup Rig Supply and Demand Forecast Summary
2013A 2014A 2015A 1Q16A 2Q16A 3Q16A 4Q16A 2016A 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018E
Total Jackup Demand 429 450 400 350 335 322 312 330 304 307 319 330 315 339 347 353 357 349
YoY Change 10% 5% -11% -18% -18% -18% -16% -18% -13% -8% -1% 6% -5% 11% 13% 11% 8% 11%
Seq Change 0% 0% -6% -4% -4% -3% -3% 1% 4% 4% 3% 2% 2% 1%
Total Supply 495 524 539 539 537 537 540 538 544 546 546 546 545 546 546 546 546 546
Utilization 87% 86% 74% 65% 62% 60% 58% 61% 56% 56% 58% 60% 58% 62% 64% 65% 65% 64%
Marketed Supply 452 487 485 470 462 455 456 461 460 462 462 462 462 462 462 462 464 462
Utilization 95% 92% 82% 74% 73% 71% 68% 72% 66% 66% 69% 71% 68% 73% 75% 76% 77% 75%
Total Stacked 66 74 140 189 202 215 228 208 240 239 227 216 230 207 199 193 189 197
Warm Stacked / Idle 23 37 85 120 127 133 144 131 156 155 144 132 147 124 116 110 107 114
% of Supply 5% 7% 16% 22% 24% 25% 27% 24% 29% 28% 26% 24% 27% 23% 21% 20% 20% 21%
Cold Stacked 43 37 54 68 75 82 84 77 84 84 84 84 84 84 84 84 82 83
% of Supply 9% 7% 10% 13% 14% 15% 15% 14% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
Retirements 8 4 10 9 6 1 2 18 - - - - - - - - - -
Newbuilds 38 30 17 7 4 1 5 18 4 2 - - 6 - - - - -
Source: IHS Petrodata, BMO Capital Markets

Dayrate Outlook Unchanged From Prior Offshore Driller Update
Our dayrate estimates for floaters and jackups are unchanged, and remain at approximately cash
breakeven levels through 2017. Dayrates for floaters have fallen to around cash-flow breakeven levels,
though recent fixtures with disclosed rates have been few are far between. Channel checks from service
providers suggest that some of these undisclosed rates have been due to multi-party negotiations
between rig contractors, service providers and operators that allow for lower rates as operating costs go
lower. We expect the current dayrate environment to persist throughout 2017 and expect few long-term
contracts. Many deals that do move forward will likely continue to be inked at undisclosed rates given
the highly competitive state of the market.
Our trough dayrate forecast for 7th generation UDW rigs remains $160k/day, and we continue to
forecast trough rates until 1Q18. Our normalized 7th generation UDW dayrate forecast of $325k/day is
unchanged, and we do not expect rates to reach normalized until 4Q19. Our jackup dayrate forecast is
also unchanged with a trough rate of $50k-110k/day (based on class) in place until 1Q18 (in line with
floaters), and a return to normalized jackup dayrates ($150k/day for top tier N-Class rigs) in 4Q19. See
Exhibit 55.
Exhibit 55: BMO Offshore Rig Dayrate Forecast Quarterly

1Q17E 2Q17E 3Q17E 4Q17E 1Q18E 2Q18E 3Q18E 4Q18E 1Q19E 2Q19E 3Q19E 4Q19E
Dayrates
Floaters
7th Gen 160 160 160 160 180 200 220 240 260 280 300 325
6th Gen 150 150 150 150 168 186 204 221 239 257 275 300
5th Gen - High Spec 140 140 140 140 152 164 176 189 201 213 225 250
5th Gen - Low Spec 135 135 135 135 144 154 163 172 181 191 200 225
4/3rd Gen - NS 130 130 130 130 137 144 151 159 166 173 180 200
4/3rd Gen 120 120 120 120 123 126 129 131 134 137 140 160
2nd Gen 110 110 110 110 111 113 114 116 117 119 120 140
UDW (6G, 7G) 155 155 155 155 174 193 212 231 250 269 288 313
DW (4/3G, 5GL) 135 135 135 135 145 154 164 173 183 192 202 225
MW (2G) 110 110 110 110 111 113 114 116 117 119 120 140
Jackups
N-Class 110 110 110 110 120 120 120 125 131 138 144 150
Hi-Spec/HDHE 85 85 85 85 100 100 100 100 106 113 119 125
Premium (350+) 70 70 70 70 80 85 85 85 93 100 108 115
Standard - North Sea 85 85 85 85 85 85 90 95 96 98 99 100
Standard (250-349) 50 50 50 50 55 60 60 65 68 70 73 75
Commodity 50 50 50 50 55 60 60 65 64 63 61 60
Jackups - N Class 110 110 110 110 120 120 120 125 131 138 144 150
Jackups - Prem 78 78 78 78 90 93 93 93 99 106 113 120
Jackups - Std 50 50 50 50 55 60 60 65 66 66 67 68

Revising Offshore Driller NAVs
We are raising our offshore driller NAVs by 8-33%, or 20% on average. The changes are due to pro
forma balance sheet estimates due to recent capital market activity by ATW, ESV, NE, and RDC; lower
normalized operating expenses for premium and high-spec jackups; and changes to assumptions for the
option value related to cold stacked rigs for ATW and RIG to 75% from 50%, which is in line with the
rest of our coverage.
We maintain our cautious view of the offshore drilling sub-sector, and our Underperform ratings on ATW,
DO, NE, and RIG. Our NAVs drive our price targets, and now imply 32% downside on average. Our
Underperform-rated offshore drillers have 28-40% downside, or 35% on average. See Exhibit 56.
Exhibit 56: BMO Offshore Driller Normalized NAV Analysis

Normalized NAV Analysis
Normalized Backlog Backlog Implied EBITDA Multiples @ NAV Current EBITDA Multiples EBITDA Estimates
Current L-Edge Upside / % of % of Normalized Normalized Normalized
Ticker Price NAV Downside Total NAV Equity NAV CY2016 FY2017 FY2018 L-Edge CY2016 FY2017 FY2018 L-Edge CY2016 FY2017 FY2018 L-Edge
ATW $13.97 $9 -36% 8% 17% 4.3x 8.1x 53.4x 4.9x 4.9x 9.6x 65.9x 6.7x 489 213 26 374
DO $19.47 $14 -28% 23% 47% 6.2x 6.3x 7.1x 6.1x 7.4x 7.6x 8.7x 11.2x 656 618 498 583
ESV $11.79 $9 -24% 16% 35% 5.7x 7.8x 9.8x 5.8x 6.3x 9.0x 11.3x 8.5x 1,171 717 570 1,060
NE $7.56 $4.50 -40% 13% 61% 6.5x 11.6x 11.4x 6.8x 7.4x 13.2x 13.0x 9.1x 888 473 463 774
RDC $20.08 $15 -25% 10% 19% 5.0x 8.6x 9.5x 5.1x 5.8x 10.3x 11.5x 7.3x 823 384 320 592
RIG $15.75 $10 -37% 33% 81% 6.1x 8.2x 10.9x 7.3x 7.4x 10.1x 13.5x 11.0x 1,651 1,175 852 1,684
Assumptions Individual Rig Level NAVs (Excluding Backlog)*
Dayrate Utilization ATW DO ESV NE RDC RIG
Floaters
7th Gen 325 95% 324 360 364 357 404 378
6th Gen 300 95% 291 289 293 278 312
5th Gen - High Spec 250 90% 209 206
5th Gen - Low Spec 225 85% 114 195 106 114
4/3rd Gen - NS 200 85% 29 74 51
4/3rd Gen 160 85% 34 39 35
2nd Gen 140 80% 0 6
Jackups
N-Class 150 95% 184 257
Hi-Spec/HDHE 125 90% 97 80 77 89
Premium (350+) 115 85% 81 90 70 92 91
Standard - North Sea 100 85%
Standard (250-349) 75 75% 23 19
Commodity 60 70%
* Our NAV adds excess backlog and accounts for company specific items such as differing cost structures and tax rates

Revising Estimates & Price Targets
We are raising our 2018E EBITDA estimates for our non-offshore coverage by 2%. Our 2018E estimates
for offshore range from flat (RDC, RIG) to -75% (ATW). Our 2018 estimates are on average in line with
consensus. These estimates reflect our revised rig count forecast as well as our expectation for activity
consistent with a ~$65 oil environment. Our 2018 estimates are highest relative to consensus for large-
cap service, consistent with our Outperform ratings. For 4Q16, our EBITDA estimates are up 1% for non-
offshore companies and -2% for offshore.
We are increasing our price targets for our non-offshore driller coverage group by 0-25%, or 12% on
average. We see 16% average upside to our new Large Cap Service price targets. We are raising our
offshore driller targets, which are based on our NAVs, by 8-33% or 20% on average (as highlighted in
prior section).
Our FY2018E EBITDA estimate for Atwood Oceanics (Underperform) is down 75% this is primarily due
to the loss of high-margin backlog on the Atwood Achiever after a blend-and-extend agreement with
Kosmos Energy (KOS, $7.06, Outperform rated by Brendan Warn1) was cancelled, pulling ~$45-50 million
in operating cash flow out of FY2018E.
Exhibit 57: Price Targets & Trading Ranges Old vs New
Current % Upside Target EV/EBITDA Old % Trading Range

Company Rating Price Target (Downside) 2017E 2018E Target Chg. Low % up/down Mid % up/down High % up/down
LARGE CAP SERVICE

Baker Hughes OP 63.38 $69 9% 19.1x 11.0x $68 1% $55 -13% $68 7% $72 14%
Halliburton OP 55.39 $67 21% 18.0x 10.5x $58 16% $45 -19% $60 8% $75 35%
Schlumberger OP 85.66 $96 12% 18.2x 12.0x $93 3% $70 -18% $90 5% $110 28%
Weatherford OP 5.66 $7 24% 15.8x 8.6x $7 0% $4 -29% $7 24% $8 41%
Average 16% 17.8x 10.5x 5% -20% 11% 30%
CAP EQUIPMENT
FMC Technologies Mkt 36.67 $34 -7% 14.3x 10.9x $30 13% $28 -24% $34 -7% $40 9%
National Oilwell Varco Und 38.53 $30 -22% 26.6x 9.8x $27 11% $28 -27% $33 -14% $38 -1%
Average -15% 20.5x 10.4x 12% -25% -11% 4%
SMID CAP / OTHER

Oil States International Mkt 39.75 $36 -9% 27.4x 11.0x $30 20% $30 -25% $35.50 -11% $41 3%
LAND DRILLERS
Helmerich & Payne Und 79.63 $54 -32% 13.3x 9.3x $50 8% $50 -37% $60 -25% $77 -3%
Nabors Industries Mkt 18.19 $15 -18% 10.5x 7.9x $12 25% $11 -40% $15.50 -15% $20 10%
Patterson-UTI Energy Mkt 28.22 $26 -8% 15.0x 8.4x $22 18% $20 -29% $26 -8% $32 13%
Average -19% 12.9x 8.6x 17% -35% -16% 7%
OFFSHORE DRILLERS
Atwood Oceanics Und $13.97 $9 -36% 12.5x 32.1x $7 29% $6 -57% $10 -28% $14 0%
Diamond Offshore Und $19.47 $14 -28% 6.3x 7.1x $13 8% $14 -28% $17 -13% $20 3%
Ensco Mkt $11.79 $9 -24% 7.8x 9.8x $8 13% $7 -41% $9.50 -19% $12 2%
Noble Corp Und $7.56 $4.50 -40% 11.6x 11.4x $4 13% $4 -47% $5.75 -24% $7.50 -1%
Rowan Mkt $20.08 $15 -25% 8.6x 9.5x $12 25% $13 -35% $17 -15% $21 5%
Transocean Und $15.75 $10 -37% 8.3x 10.9x $7.50 33% $8 -49% $12 -24% $16 2%
Average -32% 9.2x 13.5x 20% -43% -21% 2%
Near-term market volatility may cause the Expected Total Return to become temporarily misaligned relative to the hurdle for these stocks' ratings, as defined
under our current system.
1
Brendan Warn is employed by BMO Capital Markets Limited, authorized and regulated by the Financial Conduct
Authority in the UK. The analyst is not registered as a research analyst under FINRA rules.

Exhibit 58: Old vs New EBITDA Estimates and Comparison to Consensus
4Q16 EBITDA Estimate 2017 EBITDA Estimate 2018 EBITDA Estimate
Company Ticker Rating New Old % Chg. Cons. vs. Cons. New Old % Chg. Cons. vs. Cons. New Old % Chg. Cons. vs. Cons.
LARGE CAP SERVICE
Baker Hughes BHI OP $246 $240 2% $244 1% $1,512 $1,434 5% $1,491 1% $2,606 $2,611 0% $2,396 9%
Halliburton HAL OP $600 $571 5% $587 2% $3,745 $3,326 13% $3,407 10% $6,314 $5,815 9% $5,459 16%
Schlumberger SLB OP $1,593 $1,573 1% $1,605 -1% $8,014 $7,910 1% $7,926 1% $12,216 $11,810 3% $10,846 13%
Weatherford WFT OP $73 $73 0% $103 -30% $836 $821 2% $807 4% $1,601 $1,588 1% $1,451 10%
Average 2% -7% 5% 4% 3% 12%
CAP EQUIPMENT
FMC Technologies FTI Mkt $133 $132 1% $136 -2% $548 $540 1% $561 -2% $702 $704 0% $691 1%
National Oilwell Varco NOV Und $57 $59 -3% $54 5% $490 $483 1% $533 -8% $1,259 $1,213 4% $1,218 3%
Average -1% 2% 1% -5% 2% 2%
SMID CAP / OTHER
Oil States International OIS Mkt $14 $14 0% $13 13% $67 $72 -8% $72 -7% $156 $177 -12% $152 3%
Oil Service Average 1% -2% 2% 0% 1% 8%
LAND DRILLERS
Helmerich & Payne (1) HP Und $75 $73 2% $77 -2% $366 $333 10% $370 -1% $544 $507 7% $570 -5%
Nabors Industries NBR Mkt $147 $147 0% $145 1% $711 $694 2% $701 1% $976 $950 3% $1,020 -4%
Patterson-UTI Energy PTEN Mkt $42 $42 1% $39 9% $291 $262 11% $260 12% $504 $492 2% $505 0%
Average 1% 3% 8% 4% 4% -3%
Coverage Average (ex Offshore Drillers) 1% 0% 4% 1% 2% 5%
OFFSHORE DRILLERS
Atwood Oceanics (1) ATW Und $75 $75 0% $72 4% $213 $190 12% $197 8% $26 $105 -75% $104 -75%
Diamond Offshore DO Und $145 $148 -2% $138 5% $618 $645 -4% $613 1% $498 $517 -4% $468 7%
Ensco ESV Mkt $188 $186 1% $189 0% $717 $686 5% $752 -5% $570 $581 -2% $545 5%
Noble Corp NE Und $175 $199 -12% $172 2% $473 $506 -7% $501 -6% $463 $529 -12% $443 4%
Rowan RDC Mkt $126 $128 -2% $130 -3% $384 $372 3% $444 -14% $320 $320 0% $274 17%
Transocean RIG Und $361 $361 0% $363 -1% $1,175 $1,164 1% $1,197 -2% $852 $852 0% $944 -10%
Average -2% 1% 2% -3% -16% -9%
Oil Service / Drilling Coverage Average 0% 0% 3% 0% -5% 0%
Exhibit 59: Old vs New EPS Estimates and Comparison to Consensus

4Q16 EPS Estimate 2017 EPS Estimate 2018 EPS Estimate
Company Ticker Rating New Old % Chg. Cons. vs. Cons. New Old % Chg. Cons. vs. Cons. New Old % Chg. Cons. vs. Cons.
LARGE CAP SERVICE
Baker Hughes BHI OP ($0.14) ($0.12) NA ($0.11) NA $0.58 $0.43 36% $0.50 15% $2.35 $2.35 0% $2.04 15%
Halliburton HAL OP $0.02 $0.01 168% $0.02 40% $1.40 $1.02 38% $1.05 34% $3.51 $3.07 14% $2.74 28%
Schlumberger SLB OP $0.27 $0.26 5% $0.27 2% $1.93 $1.86 4% $1.91 1% $4.29 $4.04 6% $3.63 18%
Weatherford WFT OP ($0.36) ($0.36) NA ($0.32) NA ($0.81) ($0.83) NA ($0.73) NA $0.08 $0.07 14% ($0.02) NA
Average 87% 21% 26% 16% 9% 21%
CAP EQUIPMENT
FMC Technologies FTI Mkt $0.27 $0.26 3% $0.26 4% $0.98 $0.95 3% $0.97 0% $1.53 $1.54 -1% $1.42 8%
National Oilwell Varco NOV Und ($0.26) ($0.26) NA ($0.29) NA ($0.56) ($0.51) NA ($0.52) NA $0.76 $0.76 1% $0.75 2%
Average 3% 4% 3% 0% 0% 5%
SMID CAP / OTHER
Oil States International OIS Mkt ($0.20) ($0.20) NA ($0.21) NA ($0.63) ($0.57) NA ($0.55) NA $0.58 $0.80 -27% $0.47 24%
LAND DRILLERS
Helmerich & Payne (1) HP Und ($0.38) ($0.39) NA ($0.37) NA ($1.06) ($1.26) NA ($1.03) NA $0.02 ($0.20) NA $0.19 -89%
Nabors Industries NBR Mkt ($0.39) ($0.38) NA ($0.34) NA ($1.24) ($1.17) NA ($0.98) NA ($0.58) ($0.40) NA $0.01 NA
Patterson-UTI Energy PTEN Mkt ($0.54) ($0.54) NA ($0.55) NA ($1.44) ($1.57) NA ($1.61) NA ($0.57) ($0.62) NA ($0.59) NA
Average NA NA NA NA NA -89%
Coverage Average (ex Offshore Drillers) 59% 15% 20% 12% 1% 1%
OFFSHORE DRILLERS
Atwood Oceanics (1) ATW Und $0.20 $0.20 0% $0.17 18% ($0.31) ($0.66) NA ($0.72) NA ($2.27) ($1.79) NA ($2.09) NA
Diamond Offshore DO Und $0.14 $0.16 -8% $0.11 25% $0.77 $1.04 -26% $0.81 -4% $0.12 $0.25 -54% ($0.01) NA
Ensco ESV Mkt $0.05 $0.05 -5% $0.05 -11% ($0.04) ($0.03) NA $0.14 NA ($0.51) ($0.41) NA ($0.44) NA
Noble Corp NE Und ($0.19) ($0.10) NA ($0.21) NA ($1.37) ($1.15) NA ($1.37) NA ($1.37) ($1.05) NA ($1.47) NA
Rowan RDC Mkt ($0.09) ($0.08) NA ($0.08) NA ($1.08) ($1.11) NA ($0.67) NA ($1.54) ($1.38) NA ($1.75) NA
Transocean RIG Und $0.03 $0.04 -32% $0.06 -55% ($0.50) ($0.42) NA ($0.42) NA ($0.98) ($0.88) NA ($0.93) NA
Average -11% -6% -26% -4% -54% NA
Oil Service / Drilling Coverage Average 19% 3% 11% 9% -6% 1%

Valuation is Supportive of Our Large Cap Preference
Our valuation methodology remains rooted in a returns-based approach that recognizes the cyclicality of
the industry and the inverse relationship between earnings multiples and returns. Current valuations
support our preference for large-cap service, which is less expensive based on forward EV/EBITDA
relative to the sector and is arguably less risky given that it is supported at cyclical troughs by book
value (see Exhibit 69). Land drilling is most expensive and valuations are disconnected from returns (the
typically direct EV/GIC and CROCI relation is disjointed see Exhibit 65).
Exhibit 60: Earnings Multiples & Returns Have an Inverse Relationship

1-Year Forward EV/EBITDA and CROCI
27 x 20%
1 year forward EV-EBITDA multiple
CROCI
CROCI (Estimates 2016-2018)

Avg. 2017 price target
22 x multiple
15%
EV/EBITDA
17 x
10%
Avg. 2018 price target
12 x multiple
5%
7x
Includes - BHI, HAL, SLB, FTI, WFT, NOV, CAM, Excludes CAM post deal
2x 0%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016E
2017E
2018E
Exhibit 61: Forward Valuations for Large Cap Are High... Exhibit 62: ... But Not Relative to Capital Equipment
Historical EV/EBITDA BHI/HAL/SLB Historical EV/EBITDA Capital Equipment(FTI, NOV, FET)
60x
22x
20x
50x
18x
EV-to-Forwad 4Q EBITDA
16x 40x
14x
12x Average (5yrs 2011-'15) 30x Average (5yrs 2011-'15)
10x
+1 Std. 20x
8x
+1 Std.
6x
10x
4x -1 Std. Deviation
-1 Std. Deviation
2x 0x
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
Source: Bloomberg, BMO Capital Markets Source: Bloomberg, BMO Capital Markets

Exhibit 64: ... Offshore Driller Multiples Are Lower Due to Expiring
Exhibit 63: ... Or Land Drillers
Backlog
Historical EV/EBITDA Land Drillers (HP, PTEN, NBR)
Historical EV/EBITDA Offshore Drillers
18x
22x
16x
20x
18x 14x
16x
12x Average (5yrs 2011-'15)

14x
12x 10x
10x
8x +1 Std. Deviation
8x +1 Std. Deviation
6x Average (5yr)
6x
-1 Std. Deviation
4x
4x
-1 Std. Deviation
2x
Jan-97
Jan-10
Jan-12
Jan-96
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-11
Jan-13
Jan-14
Jan-15
Jan-16
2x
Jan-98
Jan-96
Jan-97
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Source: Bloomberg, BMO Capital Markets Source: Bloomberg, BMO Capital Markets
Exhibit 65: Subsectors Trade Together When Comparing Book Multiples to Returns
2018E CROCI vs Current EV/GIC
2.0x
Large Cap Service/Captial Equipment FTI
1.8x
Offshore Drillers
1.6x Land Drillers/SMID Service
HAL
SLB
1.4x
Current EV/GIC
1.2x
BHI
1.0x OIS
HP
0.8x NOV
WFT
0.6x NBR PTEN
ESV DO
0.4x ATW NE
RDC RIG
0.2x
0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0%
2018 CROCI

Exhibit 66: Valuation & Returns Large Cap & Capital Equipment: HAL & WFT Trade at Discounts to Group on 2018 Returns
CROCI (2016E, 2017E, 2018E) vs. Current EV/GIC - Large Caps and Cap Equipment
2.5x 2.2x
2.0x FTI
2.0x FTI 1.8x HAL
HAL
Current EV/GIC
1.6x
Current EV/GIC
1.5x SLB 1.4x SLB

BHI 1.2x
BHI
1.0x 1.0x
NOV
0.8x
NOV WFT
0.5x WFT 0.6x
0.4x
0.0x 0.2x
-2% 0% 2% 4% 6% 8% 10% 12% 2% 4% 6% 8% 10%
2016 CROCI 2017 CROCI
2.0x 4.5x Large Cap / Cap Equip. - EV/GIC (lhs) 25%

FTI
Large Cap / Cap Equip. - CROCI (rhs)
1.8x 4.0x
1.6x 3.5x 20%
HAL
Current EV/GIC
1.4x 3.0x
BHI SLB EV / GIC 15%
CROCI
1.2x 2.5x
1.0x 2.0x
10%
0.8x NOV 1.5x
WFT 1.0x 5%
0.6x
0.5x
0.4x
0.0x 0%
0.2x
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
4% 6% 8% 10% 12% 14%
2018 CROCI

Exhibit 67: SMID Cap Valuations Appear to Have Disconnected From Returns 2017/18 EV/GIC vs CROCI are Inverted
CROCI (2016E, 2017E, 2018E) vs. Current EV/GIC Land Drillers & SMID Cap
1.1x 1.2x
1.0x OIS
1.0x
0.9x HP OIS
HP
Current EV/GIC
0.8x
Current EV/GIC
0.8x
0.7x
PTEN
0.6x 0.6x
PTEN
0.5x NBR NBR
0.4x
0.4x
0.3x
0.2x
0.2x
0.1x 0.0x
2.0% 3.0% 4.0% 5.0% 3.0% 3.5% 4.0% 4.5% 5.0%
1.0x
4.0x SMID / Land - EV/GIC (lhs) 23%
0.9x OIS SMID / Land - CROCI (rhs)
HP 3.5x 21%
0.8x 19%
3.0x
0.7x
Current EV/GIC
17%
0.6x 2.5x 15%
EV / GIC
CROCI
NBR
0.5x PTEN 2.0x 13%
0.4x 1.5x 11%
9%
0.3x 1.0x
7%
0.2x 0.5x 5%
0.1x
0.0x 3%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
0.0x
5.0% 5.5% 6.0% 6.5% 7.0%
2018 CROCI

Exhibit 68: Offshore: DO Trades at Slight Discount; ESV at Premium to Returns
CROCI (2016E, 2017E, 2018E) vs. Current EV/GIC Offshore Drillers
0.6x 0.5x
ESV
DO
0.5x DO ESV 0.5x
NE
Current EV/GIC
Current EV/GIC
0.5x 0.4x
RDC RIG
NE
RIG RDC ATW
0.4x ATW 0.4x
0.4x 0.3x
0.3x 0.3x
5.0% 6.0% 7.0% 8.0% 9.0% 2.0% 3.0% 4.0% 5.0% 6.0%
0.5x
ESV 3.5x Offshore - EV/GIC (lhs) Offshore - CROCI (rhs) 25%
0.5x 3.0x
DO 20%
NE
Current EV/GIC
0.4x 2.5x
RDC RIG 15%
EV / GIC
CROCI
ATW 2.0x
0.4x
1.5x 10%
0.3x
1.0x
5%
0.3x 0.5x
0.2x 0.0x 0%
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
1.0% 2.0% 3.0% 4.0% 5.0% 6.0%
2018 CROCI

Price-to-Book
Price-to-Book
0.0x
0.5x
1.0x
1.5x
2.5x
3.0x
3.5x
4.0x
4.5x
5.0x
2.0x
0.0x
1.0x
3.0x
4.0x
5.0x
6.0x
7.0x
2.0x
12/31/99
12/31/99
12/31/00
12/31/00
12/31/01
12/31/01
Oil Services | Page 37

12/31/02
12/31/02
12/31/03
12/31/03
12/31/04
12/31/04
12/31/05
12/31/05
Subsector Historical Price / Book
12/31/06
12/31/06

12/31/07
Large Cap
Offshore Drillers
12/31/07
12/31/08
12/31/08
1.6x
12/31/09
12/31/09
12/31/10
12/31/10
12/31/11
12/31/11
12/31/12
1.6x
12/31/12
12/31/13
12/31/13
12/31/14
12/31/14
12/31/15
1.6x
12/31/15
Exhibit 69: Large Cap Typically Supported by Book Value at Trough
Price-to-Book
Price-to-Book
0.0x
0.5x
1.0x
1.5x
2.0x
2.5x
3.0x
3.5x
4.0x
4.5x
0.0x
1.0x
2.0x
4.0x
5.0x
7.0x
3.0x
6.0x
12/31/99
12/31/99
12/31/00
12/31/00
12/31/01
12/31/01
12/31/02
12/31/02
12/31/03
12/31/03
12/31/04
12/31/04
12/31/05
12/31/05
12/31/06
12/31/06
Land Drillers
12/31/07
12/31/07
Capital Equipment
12/31/08
12/31/08
12/31/09
12/31/09
12/31/10
12/31/10
12/31/11
12/31/11
12/31/12
12/31/12
12/31/13
12/31/13
12/31/14
12/31/14
12/31/15
12/31/15
January 12, 2017

Appendix: Company Models
Exhibit 70: BHI Company Model ($ millions, except per-share data)

2014A 2015A 1Q16A 2Q16A 3Q16A 4Q16E 2016E 1Q17E 2Q17E 3Q17E 4Q17E 2017E 2018E
Baker Hughes - Income Statement
Total Revenues: $ 24,551 $ 15,742 $ 2,670 $ 2,408 $ 2,353 $ 2,346 $ 9,777 $ 2,386 $ 2,531 $ 2,696 $ 2,886 $ 10,498 $ 13,236
North America 12,078 6,009 819 668 674 762 2,923 868 938 1,003 1,074 3,883 5,489
Latin America 2,236 1,799 277 235 243 226 981 221 233 244 269 967 1,202
Europe/Africa/CIS 4,417 3,278 611 581 519 477 2,188 444 466 499 534 1,943 2,230
Middle East/Asia 4,456 3,441 718 651 649 655 2,673 642 674 708 744 2,769 3,237
Industrial and Other 1,364 1,215 245 273 268 225 1,011 209 220 242 266 937 1,078
EBITDA 4,843 1,815 108 61 224 246 639 286 340 408 478 1,512 2,606
% of Revenues 20% 12% 4% 3% 10% 10% 7% 12% 13% 15% 17% 14% 20%
Operating income 3,029 73 (246) (244) (38) (7) (535) 33 90 160 230 514 1,597
% of Revenues 12% 0% -9% -10% -2% 0% -5% 1% 4% 6% 8% 5% 12%
Incremental Margin (Annually) 46% 34% 13% 17% 9% -3% 10% -98% 272% 58% 44% 145% 40%
Incremental Margin (Sequentially) 28% -1% -375% -419% 102% 39% 43% 37%
North America 1,508 (457) (174) (153) (102) (61) (490) (17) 9 40 75 107 779
Latin America 305 156 (66) (25) 13 - (78) - 5 12 24 41 131
Europe/CIS/W.Africa 675 183 (19) (42) 8 5 (48) 7 14 27 43 91 232
Middle East/Asia Pacific 691 229 49 (6) 57 69 169 67 81 92 104 345 502
Eliminations/Other 120 108 (4) 11 23 17 47 14 18 25 21 78 124
General Corporate (270) (146) (32) (29) (37) (37) (135) (37) (37) (37) (37) (148) (170)
Net Interest Income (Expense) (232) (217) (55) (48) (39) (39) (181) (39) (39) (39) (39) (156) (156)
Minority Interest (Expense) (12) 7 - 1 1 - 2 - - - - - -
Net Income 1,851 (209) (199) (223) (98) (60) (580) (6) 34 81 128 238 965
Weighted Average Shares 439 438 442 438 430 421 433 414 411 411 411 412 411
Adjusted EPS (Diluted) $ 4.22 $ (0.48) $ (0.45) $ (0.51) $ (0.23) $ (0.14) $ (1.34) $ (0.01) $ 0.08 $ 0.20 $ 0.31 $ 0.58 $ 2.35
yoy growth (%) 57% -111% 515% 257% 354% -32% 180% -97% -116% -187% -317% -143% 307%
Adjustments $ (0.30) $ (4.01) $ (1.77) $ (1.57) $ (0.77)
GAAP EPS $ 3.92 $ (4.49) $ (2.22) $ (2.08) $ (1.00)
Dividend per Share $ 0.64 $ 2.68 $ 0.17 $ 0.17 $ 0.17 $ 0.17 $ 0.68 $ 0.17 $ 0.17 $ 0.17 $ 0.17 $ 0.68 $ 0.68
Other Details
Tax Rate 33% -50% 34% 23% -28% -30% 19% 0% 33% 33% 33% 34% 33%
ROE - Recurring (Adjusted for cash tax) 10% -1% NA NA NA NA -4% NA NA NA NA 2% 8%
CROCI 12% 6% NA NA NA NA 3% NA NA NA NA 6% 8%
Revenue Change - Period over Period
Total Energy Services Group 10% -36% -21% -10% -2% 0% -38% 2% 6% 7% 7% 7% 26%
North America 11% -50% -28% -18% 1% 13% -51% 14% 8% 7% 7% 33% 41%
Latin America -3% -20% -35% -15% 3% -7% -45% -2% 5% 5% 10% -1% 24%
Europe/Africa/CIS 15% -26% -15% -5% -11% -8% -33% -7% 5% 7% 7% -11% 15%
Middle East/Asia 10% -23% -12% -9% 0% 1% -22% -2% 5% 5% 5% 4% 17%
EBIT Margins
North America 12.5% -7.6% -21.2% -22.9% -15.1% -8.0% -16.8% -2.0% 1.0% 4.0% 7.0% 2.8% 14.2%
Latin America 13.6% 8.7% -23.8% -10.6% 5.3% 0.0% -8.0% 0.0% 2.0% 5.0% 9.0% 4.2% 10.9%
Europe/Africa/CIS 15.3% 5.6% -3.1% -7.2% 1.5% 1.0% -2.2% 1.5% 3.0% 5.5% 8.0% 4.7% 10.4%
Middle East/Asia 15.5% 6.7% 6.8% -0.9% 8.8% 10.5% 6.3% 10.5% 12.0% 13.0% 14.0% 12.4% 15.5%
Baker Hughes - Balance Sheet

Selected Balance Sheet Data:
Cash 1,740 2,324 2,192 3,910 3,736 3,247 3,247 3,032 2,945 2,963 2,895 2,895 3,459
Working Capital (5,888) (4,320) (4,279) (3,290) (3,169) (3,185) (3,185) (3,240) (3,440) (3,561) (3,815) (3,815) (4,145)
Net PP&E 9,063 6,693 6,323 5,229 4,874 4,716 4,716 4,563 4,413 4,286 4,158 4,158 3,949
Total Assets 28,827 24,080 22,936 20,319 19,491 18,856 18,856 18,559 18,582 18,660 18,795 18,795 19,746
Gross Debt 4,133 4,041 4,047 3,026 3,022 3,022 3,022 3,022 3,022 3,022 3,022 3,022 3,022
Net Debt 2,393 1,717 1,855 (884) (714) (225) (225) (10) 77 59 127 127 (437)
Minority Interest 105 84 83 83 78 78 78 78 78 78 78 78 78
Total Shareowners' Investment 18,625 16,298 15,319 13,883 13,159 12,527 12,527 12,214 12,178 12,189 12,248 12,248 12,933
Book Value Per Share $ 42.43 $ 37.21 $ 34.66 $ 31.70 $ 30.60 $ 29.78 $ 28.95 $ 29.53 $ 29.60 $ 29.63 $ 29.77 $ 29.73 $ 31.44
Net Debt-to-Capital Ratio 11.3% 9.5% 10.7% -6.8% -5.7% -1.8% -1.8% -0.1% 0.6% 0.5% 1.0% 1.0% -3.5%
Net Debt/NTM EBITDA 1.3 x 2.7 x 2.3 x -0.8 x -0.6 x -0.1 x -0.1 x 0.0 x 0.0 x 0.0 x 0.0 x 0.0 x -0.1 x
Baker Hughes - Cash Flow

Cash From Operating Activities 3,594 3,101 196 1,072 285 177 1,730 192 83 208 122 606 1,644
Cash Used In Investing Activities (1,791) (965) (86) (70) (70) (95) (321) (100) (100) (120) (120) (440) (800)
Cash From Financing Activities and Other (1,462) (1,552) (242) 717 (389) (572) (486) (307) (70) (70) (70) (517) (280)
Net Change in Cash 341 584 (132) 1,718 (174) (489) 923 (215) (87) 18 (67) (351) 564
Capex 1,791 965 86 70 70 95 321 100 100 120 120 440 800

Exhibit 71: HAL Company Model ($ millions, except per-share data)
Halliburton - Income Statement
Total Revenues: $ 32,870 $ 23,633 $ 4,198 $ 3,835 $ 3,833 $ 4,154 $ 16,020 $ 4,381 $ 4,691 $ 5,028 $ 5,441 $ 19,541 $ 26,370
North America 17,698 10,856 1,794 1,516 1,658 1,990 6,958 2,348 2,559 2,789 3,040 10,736 16,294
Latin America 3,875 3,149 541 476 415 407 1,839 374 393 413 443 1,623 1,984
Europe/Africa/CIS 5,490 4,175 778 795 744 722 3,039 675 715 751 796 2,937 3,326
Middle East/Asia 5,807 5,453 1,085 1,048 1,016 1,036 4,185 985 1,024 1,075 1,161 4,245 4,766
EBITDA 7,174 4,156 571 458 503 600 2,132 727 858 995 1,165 3,745 6,314
% of Revenues 22% 18% 14% 12% 13% 14% 13% 17% 18% 20% 21% 19% 24%
Operating income 5,048 2,321 225 62 128 230 645 357 484 616 782 2,239 4,718
% of Revenues 15% 10% 5% 2% 3% 6% 4% 8% 10% 12% 14% 11% 18%
Incremental Margin (Annually) 22% 30% 17% 28% 22% 26% 22% 72% 49% 41% 43% 45% 36%
Incremental Margin (Sequentially) 28% 45% -3300% 32% 56% 41% 39% 40%
North America 3,216 458 (39) (124) (66) 50 (179) 211 307 404 517 1,440 3,515
Latin America 431 440 48 22 11 11 92 4 12 20 35 71 207
Europe/Africa/CIS 689 523 57 64 76 72 269 59 72 83 98 311 452
Middle East/Asia 1,074 1,167 205 160 154 157 676 143 154 169 197 663 826
Corporate and other (362) (267) (46) (60) (47) (60) (213) (60) (60) (60) (65) (245) (282)
Minority Interest (Expense) (1) (4) 6 (3) (1) - 2 - - - - - -
Net Income 3,423 1,333 64 (121) 6 19 (32) 152 247 346 471 1,216 3,042
Adjusted EPS (Diluted) $ 4.02 $ 1.56 $ 0.07 $ (0.14) $ 0.01 $ 0.02 $ (0.04) $ 0.18 $ 0.28 $ 0.40 $ 0.54 $ 1.40 $ 3.51
yoy growth (%) 28% -61% -85% -132% -98% -93% -102% 135% -303% 5647% 2330% -3924% 150%
Adjustments $ (0.02) $ 2.11 $ (2.88) $ (3.59) $ -
GAAP EPS $ 4.00 $ 3.67 $ (2.81) $ (3.73) $ 0.01
Other Details
Tax Rate 27% 25% 31% 5% 113% 65% 8% 25% 25% 25% 25% 25% 26%
ROE - Recurring (Adjusted for cash tax) 20% 7% -22% -27% 0% 1% -12% 6% 10% 14% 19% 12% 27%
Total Energy Services Group 12% -28% -17% -9% 0% 8% -32% 5% 7% 7% 8% 22% 35%
North America 16% -39% -17% -15% 9% 20% -36% 18% 9% 9% 9% 54% 52%
Latin America -1% -19% -22% -12% -13% -2% -42% -8% 5% 5% 8% -12% 22%
Europe/Africa/CIS 5% -24% -19% 2% -6% -3% -27% -6% 6% 5% 6% -3% 13%
Middle East/Asia 15% -6% -15% -3% -3% 2% -23% -5% 4% 5% 8% 1% 12%
EBIT Margins
North America 18.2% 4.2% -2.2% -8.2% -4.0% 2.5% -2.6% 9.0% 12.0% 14.5% 17.0% 13.4% 21.6%
Latin America 11.1% 14.0% 8.9% 4.6% 2.7% 2.7% 5.0% 1.0% 3.0% 4.8% 8.0% 4.3% 10.4%
Europe/Africa/CIS 12.6% 12.5% 7.3% 8.1% 10.2% 10.0% 8.9% 8.8% 10.0% 11.0% 12.3% 10.6% 13.6%
Middle East/Asia 18.5% 21.4% 18.9% 15.3% 15.2% 15.2% 16.2% 14.5% 15.0% 15.8% 17.0% 15.6% 17.3%
Halliburton - Balance Sheet

Cash 2,291 10,077 9,593 3,108 3,289 2,879 2,879 3,015 3,344 3,797 4,117 4,117 5,761
Working Capital (6,894) (6,832) (5,286) (5,757) (4,992) (5,428) (5,428) (5,433) (5,336) (5,209) (5,366) (5,366) (6,569)
Net PP&E 12,475 10,911 9,252 8,961 8,741 8,596 8,596 8,476 8,377 8,298 8,215 8,215 8,319
Total Assets 32,240 36,942 33,932 27,737 26,755 26,766 26,766 26,878 27,135 27,518 28,078 28,078 31,732
Gross Debt 7,840 15,346 15,393 12,921 12,315 12,315 12,315 12,315 12,315 12,315 12,315 12,315 12,315
Net Debt 5,549 5,269 5,800 9,813 9,026 9,436 9,436 9,300 8,971 8,518 8,198 8,198 6,554
Net Debt-to-Capital Ratio 25.4% 25.4% 30.8% 50.1% 48.1% 49.5% 49.5% 49.1% 47.9% 46.0% 44.1% 44.1% 32.9%
Net Debt/NTM EBITDA 1.3 x 2.5 x 2.5 x 3.7 x 2.8 x 2.5 x 2.5 x 2.1 x 1.8 x 1.5 x 1.3 x 1.3 x NA
Halliburton - Cash Flow

Cash From Operating Activities 4,977 3,230 1,956 (196) 1,146 (28) 2,878 542 760 909 776 2,987 3,969
Cash Used In Investing Activities (3,283) (2,184) (234) (213) (178) (225) (850) (250) (275) (300) (300) (1,125) (1,700)
Cash From Financing Activities and Other (1,759) 6,740 (2,206) (6,076) (787) (156) (9,225) (156) (156) (156) (156) (625) (625)
Net Change in Cash (65) 7,786 (484) (6,485) 181 (410) (7,198) 136 329 453 320 1,237 1,645
Capex 3,283 2,184 234 213 178 225 850 250 275 300 300 1,125 1,700

Exhibit 72: SLB Company Model ($ millions, except per-share data)
Schlumberger - Income Statement
Total Revenues: $ 48,580 $ 35,474 $ 6,520 $ 7,164 $ 7,019 $ 7,075 $ 27,778 $ 7,070 $ 7,511 $ 8,022 $ 8,689 $ 31,292 $ 39,699
Cameron 1,536 1,341 1,225 4,102 1,169 1,168 1,202 1,272 4,811 5,668
Reservoir Characterization 12,224 9,430 1,747 1,593 1,689 1,706 6,735 1,569 1,632 1,697 1,850 6,749 7,582
Production 18,111 12,500 2,348 2,099 2,083 2,187 8,717 2,406 2,646 2,911 3,202 11,166 15,900
Drilling 18,463 13,683 2,493 2,034 2,021 2,061 8,609 2,041 2,184 2,337 2,500 9,061 11,153
Eliminations / Other (218) (139) (68) (98) (115) (105) (386) (115) (120) (125) (135) (495) (605)
EBITDA 13,517 9,642 1,677 1,619 1,546 1,593 6,435 1,590 1,829 2,120 2,476 8,014 12,216
% of Revenues 28% 27% 26% 23% 22% 23% 23% 22% 24% 26% 28% 26% 31%
Operating income 9,492 5,564 710 506 548 589 2,353 575 803 1,081 1,426 3,884 7,879
% of Revenues 20% 16% 11% 7% 8% 8% 8% 8% 11% 13% 16% 12% 20%
Incremental Margin (Annually) 29% 30% 28% 52% 50% 68% 42% -25% 86% 53% 52% 44% 48%
Incremental Margin (Sequentially) 27% -29% 74% 302% 52% 55% 52%
Cameron 243 215 180 638 167 178 202 220 766 1,130
Reservoir Characterization 3,607 2,423 331 266 322 325 1,244 267 302 339 416 1,325 1,825
Production 3,227 1,576 208 90 98 131 527 192 311 451 608 1,563 3,818
Drilling 3,873 2,573 371 171 218 237 997 230 295 374 469 1,367 2,431
Eliminations / Other (1,213) (1,008) (200) (264) (305) (284) (1,053) (281) (283) (285) (288) (1,137) (1,324)
Minority Interest (Expense) (67) (64) (22) (14) (14) (14) (64) (14) (14) (14) (14) (56) (60)
Net Income 7,282 4,290 501 316 353 383 1,553 353 535 758 1,033 2,679 5,898
Weighted Average Shares 1,308 1,275 1,259 1,389 1,401 1,399 1,362 1,396 1,392 1,389 1,385 1,390 1,375
Adjusted EPS (Diluted) $ 5.57 $ 3.36 $ 0.40 $ 0.23 $ 0.25 $ 0.27 $ 1.14 $ 0.25 $ 0.38 $ 0.55 $ 0.75 $ 1.93 $ 4.29
yoy growth (%) 16% -40% -62% -74% -68% -58% -66% -37% 69% 117% 172% 69% 123%
Adjustments $ (1.25) $ (1.74) $ - $ (1.78) $ (0.13)
GAAP EPS $ 4.31 $ 1.63 $ 0.40 $ (1.56) $ 0.13
Other Details
Tax Rate 22% 20% 16% 16% 16% 16% 16% 20% 20% 20% 20% 20% 20%
ROE - Recurring (Adjusted for cash tax) 18% 10% 4% 2% 4% 4% 4% 3% 5% 8% 10% 7% 15%
Total Revenue 7% -27% -16% 10% -2% 1% -22% 0% 6% 7% 8% 13% 27%
Cameron -13% -9% -5% 0% 3% 6% 18%
Reservoir Characterization -1% -23% -19% -9% 6% 1% -29% -8% 4% 4% 9% 0% 12%
Production 9% -31% -12% -11% -1% 5% -30% 10% 10% 10% 10% 28% 42%
Drilling 11% -26% -16% -18% -1% 2% -37% -1% 7% 7% 7% 5% 23%
EBIT Margins
Cameron 16% 16% 15% 16% 14% 15% 17% 17% 16% 20%
Reservoir Characterization 30% 26% 19% 17% 19% 19% 18% 17% 19% 20% 23% 20% 24%
Production 18% 13% 9% 4% 5% 6% 6% 8% 12% 16% 19% 14% 24%
Drilling 21% 19% 15% 8% 11% 12% 12% 11% 14% 16% 19% 15% 22%
Schlumberger - Balance Sheet
Cash 7,501 13,034 14,432 11,192 10,756 9,741 9,741 9,500 8,565 8,060 7,549 7,549 6,393
Working Capital (5,782) (4,314) (4,642) (4,765) (4,436) (4,829) (4,829) (4,245) (4,526) (4,638) (5,046) (5,046) (6,419)
Net PP&E 15,396 13,415 13,259 13,226 13,004 12,910 12,910 12,855 12,813 12,735 12,644 12,644 12,648
Total Assets 66,904 68,005 69,141 81,171 80,594 79,953 79,953 79,066 78,963 79,179 79,883 79,883 81,627
Gross Debt 13,330 18,999 21,487 21,623 21,277 21,277 21,277 21,277 21,277 21,277 21,277 21,277 21,277
Net Debt 5,829 5,965 7,055 10,431 10,521 11,536 11,536 11,777 12,712 13,217 13,728 13,728 14,884
Net Debt/NTM EBITDA 0.6 x 0.9 x 1.1 x 1.6 x 1.5 x 1.4 x 1.4 x NA NA NA NA 1.1 x NA
Schlumberger - Cash Flow

Cash From Operating Activities 12,638 9,836 1,140 1,306 1,680 994 5,120 1,952 1,281 1,684 1,676 6,592 8,862
Cash Used In Investing Activities (5,037) (3,849) (1,313) (747) (707) (910) (3,677) (960) (985) (960) (960) (3,865) (4,340)
Cash From Financing Activities (8,470) (454) 1,571 (3,799) (1,409) (1,099) (4,736) (1,233) (1,231) (1,229) (1,227) (4,920) (5,677)
Net Change in Cash (869) 5,533 1,398 (3,240) (436) (1,015) (3,293) (241) (935) (505) (512) (2,193) (1,155)
Capex 5,037 3,849 1,313 747 707 910 3,677 960 985 960 960 3,865 4,340

Exhibit 73: WFT Company Model ($ millions, except per-share data)
Weatherford - Income Statement (Adjusted)
Total Revenues: $14,911 $ 9,433 $ 1,585 $ 1,402 $ 1,356 $ 1,407 $ 5,750 $ 1,448 $ 1,465 $ 1,588 $ 1,734 $ 6,236 $ 8,101
North America 6,852 3,494 543 401 449 505 1,898 546 524 602 693 2,364 3,592
Middle East/North Africa/Asia Pacific 3,095 1,947 361 400 329 342 1,432 346 363 381 400 1,489 1,742
Europe/CIS/W.Africa 2,584 1,533 257 243 225 216 941 218 229 241 253 940 1,083
Latin America 2,380 1,746 305 249 255 250 1,059 245 252 265 286 1,048 1,251
Land Drilling Rigs 713 119 109 98 94 420 94 97 100 103 394 433
EBITDA 2,974 1,307 57 58 68 73 256 126 187 232 290 836 1,601
% of Revenues 20% 14% 4% 4% 5% 5% 4% 9% 13% 15% 17% 13% 20%
Operating income 1,603 107 (193) (191) (174) (163) (721) (108) (46) (0) 59 (96) 675
% of Revenues 11% 1% -12% -14% -13% -12% -13% -7% -3% 0% 3% -2% 8%
Incremental Margin (Annually) -101% 27% 26% 21% 22% 20% 22% -62% 231% 75% 68% 129% 41%
Incremental Margin (Sequentially) 35% -1% -37% 22% 133% 374% 37% 40%
North America 1,028 (224) (128) (101) (95) (83) (407) (44) (14) 15 48 5 491
Middle East/North Africa/Asia Pacific 261 211 6 - (8) 3 1 7 22 30 40 99 201
Europe/CIS/W.Africa 422 217 (1) 1 (3) (5) (8) (4) 7 13 20 36 134
Latin America 360 315 44 1 14 11 70 11 15 20 27 73 165
Land Drilling Rigs 13 (26) (17) (19) (21) (83) (15) (13) (11) (9) (48) (30)
R&D/Corporate Expenses (468) (425) (88) (75) (63) (68) (294) (63) (63) (68) (68) (262) (287)
Minority Interest (45) (34) (7) (3) (4) (4) (18) (6) (6) (6) (6) (24) (24)
Net Income 785 (254) (239) (253) (349) (341) (1,182) (284) (222) (176) (117) (799) 82
Adjusted EPS (Diluted) $ 1.01 $ (0.33) $ (0.29) $ (0.28) $ (0.39) $ (0.36) $ (1.33) $ (0.29) $ (0.23) $ (0.18) $ (0.12) $ (0.81) $ 0.08
yoy growth (%) 68% -132% 593% 184% 620% 178% 308% -2% -20% -54% -67% -39% -110%
Adjustments $1.76 $ 2.22 $0.32 $0.35 $1.57
GAAP EPS ($0.75) ($2.55) ($0.61) ($0.63) ($1.98)
Dividend per Share $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other Details
Tax Rate 34% 39% 24% 21% -10% -12% 6% -14% -19% -26% -46% -22% 20%
ROE - Recurring (Adjusted for cash tax) 10% -12% -29% -36% 36% -57% -22% -49% -43% -38% -27% -39% 5%
Total Oilfield -2% -37% -21% -12% -3% 4% -39% 3% 1% 8% 9% 8% 30%
North America 7% -49% -22% -26% 12% 13% -46% 8% -4% 15% 15% 25% 52%
Middle East/North Africa/Asia Pacific -7% -37% -20% 11% -18% 4% -26% 1% 5% 5% 5% 4% 17%
Europe/CIS/W.Africa -4% -41% -24% -5% -7% -4% -39% 1% 5% 5% 5% 0% 15%
Latin America -16% -27% -19% -18% 2% -2% -39% -2% 3% 5% 8% -1% 19%
EBIT Margins
North America 15.0% -6.4% -23.6% -25.2% -21.2% -16.5% -21.5% -8.0% -2.8% 2.5% 7.0% 0.2% 13.7%
Middle East/North Africa/Asia Pacific 8.4% 10.8% 1.7% 0.0% -2.4% 1.0% 0.1% 2.0% 6.0% 8.0% 10.0% 6.7% 11.6%
Europe/CIS/W.Africa 16.3% 14.2% -0.4% 0.4% -1.3% -2.5% -0.9% -2.0% 3.0% 5.5% 8.0% 3.8% 12.4%
Latin America 15.1% 18.0% 14.4% 0.4% 5.5% 4.5% 6.6% 4.5% 6.0% 7.5% 9.5% 7.0% 13.2%
Weatherford - Balance Sheet
Cash 474 467 464 452 440 1,087 1,087 982 1,115 1,041 875 875 974
Working Capital (4,170) (2,648) (2,636) (2,359) (1,993) (1,825) (1,825) (1,831) (1,654) (1,730) (1,950) (1,950) (2,459)
Net PP&E 7,123 5,679 5,471 5,247 4,708 4,529 4,529 4,344 4,166 3,988 3,817 3,817 3,291
Total Assets 18,889 14,787 14,516 14,112 12,635 12,961 12,961 12,697 12,483 12,368 12,323 12,323 12,661
Gross Debt 7,525 7,461 7,058 7,233 7,492 7,685 7,685 7,685 7,685 7,685 7,685 7,685 7,685
Net Debt 7,051 6,994 6,594 6,781 7,052 6,598 6,598 6,703 6,570 6,644 6,810 6,810 6,711
Net Debt/NTM EBITDA 5.4 x 27.4 x 20.3 x 14.9 x 11.4 x 7.9 x 7.9 x 6.4 x 5.4 x 4.8 x 4.3 x 4.3 x 3.3 x
Weatherford - Cash Flow (Adjusted)

Cash From Operating Activities 2,292 2,468 23 273 280 66 642 (90) 212 (70) (52) (1) 494
Cash From Financing Activities and Other (803) (1,793) 17 (254) (230) 637 170 35 (24) 51 (54) 9 5
Net Change in Cash 39 (7) (3) (12) (12) 647 620 (105) 133 (74) (165) (212) 99
Capex 1,450 682 43 31 62 56 192 50 55 55 60 220 400

Exhibit 74: FTI Company Model ($ millions, except per-share data)
FMC Technologies - Income Statement
Total Revenues: $ 7,943 $ 6,363 $ 1,209 $ 1,150 $ 1,091 $ 1,097 $ 4,547 $ 1,048 $ 1,088 $ 1,104 $ 1,131 $ 4,371 $ 4,715
Subsea Tech 5,266 4,509 864 854 798 782 3,299 728 728 699 678 2,831 2,760
Surface Tech 2,131 1,488 266 219 218 241 944 253 284 318 356 1,211 1,556
Energy Infrastructure 558 395 84 85 77 76 322 70 79 90 99 338 409
Intercompany Eliminations (12) (29) (5) (8) (2) (2) (17) (2) (2) (2) (2) (10) (10)
EBITDA 1,307 944 144 137 145 133 560 118 130 142 158 548 702
% of Revenues 16% 15% 12% 12% 13% 12% 12% 11% 12% 13% 14% 13% 15%
Operating Income 1,075 692 81 77 88 76 322 62 75 87 103 327 491
% of Revenues 14% 11% 7% 7% 8% 7% 7% 6% 7% 8% 9% 7% 10%
Incremental Margin (Annually) 37% 24% 23% 19% 21% 17% 20% 11% 3% -9% 80% -3% 48%
Incremental Margin (Sequentially) 24% 7% -19% -210% 28% 30% 76% 61%
Subsea Tech 748 675 113 120 125 100 459 84 84 80 78 326 325
Surface Tech 393 162 13 (17) (5) 2 (7) 6 17 30 48 102 258
Energy Infrastructure 53 16 (1) 8 4 3 14 2 4 6 9 22 37
Corporate Expenses (119) (161) (44) (34) (36) (30) (144) (30) (30) (30) (32) (122) (128)
Minority Interest (5) (2) - 0 0 0 1 0 0 0 0 1 1
Net Income 700 516 51 49 80 62 242 41 50 59 71 221 341
yoy growth (%) 33% -25% -65% -59% -42% -42% -52% -18% 3% -26% 16% -8% 57%
Adjustments $ - $ (0.54) $ (0.13) $ (0.21) $ (0.15)
GAAP EPS $ 2.95 $ 1.69 $ 0.09 $ 0.01 $ 0.20
Other Details
Tax Rate 33% 22% 31% 29% 1% 10% 17% 25% 25% 26% 26% 26% 26%
ROE - Recurring (Adjusted for cash tax) 29% 16% 6% 9% 12% 9% 9% 6% 8% 9% 11% 8% 13%
Total Energy Systems 11% -20% -15% -5% -5% 1% -29% -4% 4% 1% 2% -4% 8%
Subsea Tech 11% -14% -15% -1% -7% -2% -27% -7% 0% -4% -3% -14% -3%
Surface Tech 18% -30% -16% -18% 0% 11% -37% 5% 12% 12% 12% 28% 28%
Energy Infrastructure -10% -29% -12% 1% -9% -2% -19% -8% 14% 14% 10% 5% 21%
EBIT Margins
Subsea Tech 14% 15% 13% 14% 16% 13% 14% 12% 12% 12% 12% 12% 12%
Surface Tech 18% 11% 5% -8% -2% 1% -1% 3% 6% 10% 14% 8% 17%
Energy Infrastructure 9% 4% -1% 9% 5% 5% 4% 4% 5% 7% 9% 6% 9%
Inbound Orders
Subsea Tech 5,547 3,103 346 334 401 475 1,556 500 600 600 800 2,500 3,500
Surface Tech 2,070 1,290 259 143 242 250 894 250 275 300 300 1,125 1,650
Book-to-Bill
Subsea Tech 1.1x 0.7x 0.4x 0.4x 0.5x 0.6x 0.5x 0.7x 0.8x 0.9x 1.2x 0.9x 1.3x
Surface Tech 1.0x 0.9x 1.0x 0.7x 1.1x 1.0x 0.9x 1.0x 1.0x 0.9x 0.8x 0.9x 1.1x
Energy Infrastructure 0.8x 1.0x 0.9x 0.7x 0.7x 0.8x 0.8x 1.1x 1.1x 1.1x 1.0x 1.0x 1.1x
Backlog (End-of-Period)
Subsea Tech 5,793 3,762 3,373 2,899 2,534 2,227 2,227 1,999 1,871 1,773 1,895 1,895 2,635
Surface Tech 654 433 429 357 379 388 383 380 371 353 297 297 391
FMC Technologies - Balance Sheet
Cash 639 916 1,032 1,075 1,074 1,198 1,198 1,282 1,246 1,293 1,304 1,304 1,277
Working Capital (1,026) (711) (782) (870) (801) (770) (770) (703) (762) (745) (769) (769) (953)
Net PP&E 1,458 1,372 1,341 1,329 1,310 1,278 1,278 1,253 1,229 1,209 1,194 1,194 1,179
Total Assets 7,176 6,438 6,313 6,161 5,964 6,027 6,027 6,002 6,016 6,030 6,060 6,060 6,261
Gross Debt 1,309 1,156 1,242 1,326 1,264 1,264 1,264 1,264 1,264 1,264 1,264 1,264 1,264
Net Debt 670 240 210 251 190 66 66 (18) 18 (29) (40) (40) (12)
Net Debt-to-Capital Ratio 21.3% 8.7% 7.4% 8.7% 6.6% 2.3% 2.3% -0.7% 0.6% -1.1% -1.5% -1.5% -0.4%
Net Debt/NTM EBITDA 0.7 x 0.4 x 0.4 x 0.5 x 0.4 x 0.1 x 0.1 x 0.0 x 0.0 x 0.0 x -0.1 x -0.1 x
FMC Technologies - Cash Flow

Cash From Operating Activities 958 1,082 43 22 206 150 421 164 47 131 102 443 367
Cash Used In Investing Activities (404) (251) (35) (32) (26) (26) (119) (30) (32) (35) (40) (137) (195)
Cash From Financing Activities and Other (314) (554) 108 52 (181) (0) (20) (50) (50) (50) (50) (200) (200)
Net Change in Cash 240 277 116 43 (1) 124 282 84 (35) 46 12 106 (28)
Capex 404 251 35 32 26 26 119 30 32 35 40 137 195

Exhibit 75: NOV Company Model ($ millions, except per-share data)
National Oilwell Varco - Income Statement
Total Revenues: $ 22,328 $14,757 $ 2,189 $ 1,724 $ 1,646 $ 1,633 $ 7,192 $ 1,644 $ 1,745 $ 1,850 $ 1,977 $ 7,216 $ 9,092
Rig Systems 9,848 6,964 926 564 470 440 2,400 425 414 408 420 1,666 1,894
Rig Aftermarket 3,222 2,515 391 364 322 299 1,376 284 270 289 309 1,153 1,442
Wellbore Technologies 5,722 3,718 631 511 526 526 2,194 579 625 662 702 2,568 3,261
Completion & Production Solutions 4,645 3,365 558 538 543 582 2,221 580 673 731 791 2,775 3,561
Eliminations (1,997) (1,805) (317) (253) (215) (215) (1,000) (224) (238) (240) (244) (947) (1,067)
Distribution / Other 888 - - - - - - - - - - - -
EBITDA 4,613 2,381 127 25 68 57 277 56 98 142 193 490 1,259
% of Revenues 20.7% 16.1% 5.8% 1.5% 4.1% 3.5% 3.9% 3.4% 5.6% 7.7% 9.8% 6.8% 13.8%
Operating Income 3,831 1,634 (48) (153) (108) (118) (427) (124) (83) (37) 13 (231) 543
% of Revenues 17.2% 11.1% -2.2% -8.9% -6.6% -7.2% -5.9% -7.6% -4.7% -2.0% 0.7% -3.2% 6.0%
Incremental Margin (Annually) -83% 29% 28% 28% 27% 24% 27% 14% 340% 35% 38% 814% 41%
Incremental Margin (Sequentially) 35% 23% -58% 75% -59% 42% 43% 40%
Rig Systems 1,996 1,318 119 30 32 17 198 16 13 11 11 51 119
Rig Aftermarket 882 617 77 67 75 61 280 57 54 61 69 240 353
Wellbore Technologies 1,047 162 (53) (96) (70) (69) (288) (51) (32) (14) 5 (90) 248
Completion & Production Solutions 700 286 (4) 5 (10) 13 4 (4) 31 53 78 159 490
Eliminations (856) (749) (187) (159) (135) (140) (621) (143) (149) (149) (150) (591) (667)
Distribution / Other 62 - - - - - (0) - - - - 0 -
Minority Interest (Expense) (5) - (1) - 2 - 1 - - - - - -
Net Income 2,656 1,086 (22) (112) (129) (100) (362) (97) (69) (40) (7) (213) 291
Adjusted EPS (Diluted) $ 6.18 $ 2.80 $ (0.06) $ (0.30) $ (0.34) $ (0.26) $ (0.96) $ (0.26) $ (0.18) $ (0.11) $ (0.02) $ (0.56) $ 0.76
yoy growth (%) 12% -55% -105% -139% -156% -215% -134% 346% -39% -69% -93% -42% -236%
Adjustments $ 0.35 $ 4.79 $ (0.26) $ (0.28) $ (3.28)
GAAP EPS $ 5.70 $ (1.98) $ (0.32) $ (0.58) $ (3.62)
Other Details
Tax Rate 29% 29% 77% 43% 16% 30% 38% 35% 35% 35% 35% 35% 35%
ROE - Recurring (Adjusted for cash tax) 11% 4% -5% -10% -2% -3% -5% -3% -2% -1% 0% -2% 2%
Total Revenues 12% -31% -20% -21% -5% -1% -51% 1% 6% 6% 7% 0% 26%
Rig Systems 17% -29% -9% -39% -17% -6% -66% -3% -3% -2% 3% -31% 14%
Rig Aftermarket 20% -22% -31% -7% -12% -7% -45% -5% -5% 7% 7% -16% 25%
Wellbore Technologies 10% -35% -17% -19% 3% 0% -41% 10% 8% 6% 6% 17% 27%
Completion & Production Solutions 8% -28% -25% -4% 1% 7% -34% 0% 16% 9% 8% 25% 28%
EBIT Margins
Rig Systems 20.3% 18.9% 12.9% 5.3% 6.8% 3.9% 8.3% 3.8% 3.2% 2.6% 2.7% 3.1% 6.3%
Rig Aftermarket 27.4% 24.5% 19.7% 18.4% 23.3% 20.5% 20.4% 20.0% 19.9% 21.0% 22.2% 20.8% 24.5%
Wellbore Technologies 18.3% 4.4% -8.4% -18.8% -13.3% -13.1% -13.1% -8.7% -5.0% -2.0% 0.8% -3.5% 7.6%
Completion & Production Solutions 15.1% 8.5% -0.7% 0.9% -1.8% 2.1% 0.2% -0.6% 4.6% 7.3% 9.9% 5.7% 13.8%
Book-to-Bill
Rig Systems 0.6x 0.1x 0.1x 0.1x 0.4x 0.4x 0.2x 0.4x 0.4x 0.5x 0.6x 0.5x 0.6x
Completion & Production Solutions 0.6x 0.4x 0.6x 0.5x 0.3x 0.5x 0.5x 0.6x 0.5x 0.5x 0.5x 0.5x 0.5x
Backlog (End-of-Period)
Rig Systems 12,540 6,080 3,313 2,938 2,760 2,625 2,625 2,474 2,360 2,306 2,264 2,264 2,061
Completion & Production Solutions 1,780 969 994 947 812 762 762 828 872 890 927 927 1,251
National Oilwell Varco - Balance Sheet
Cash 3,536 2,080 1,759 1,661 1,510 1,588 1,588 1,855 2,023 2,117 2,300 2,300 2,088
Working Capital (5,713) (5,474) (4,861) (4,608) (4,592) (4,490) (4,490) (4,199) (4,027) (3,960) (3,835) (3,835) (4,578)
Net PP&E 3,362 3,124 3,303 3,277 3,261 3,166 3,166 3,075 2,990 2,905 2,820 2,820 2,504
Total Assets 33,562 26,725 24,754 23,784 22,194 22,072 22,072 21,959 21,895 21,860 21,825 21,825 22,105
Gross Debt 3,166 3,930 3,379 3,280 3,216 3,216 3,216 3,216 3,216 3,216 3,216 3,216 3,216
Net Debt (370) 1,850 1,620 1,619 1,706 1,628 1,628 1,361 1,193 1,099 916 916 1,128
Net Debt-to-Capital Ratio -1.8% 10.1% 9.0% 9.1% 10.3% 9.9% 9.9% 8.5% 7.6% 7.0% 5.9% 5.9% 7.1%
Net Debt/NTM EBITDA -0.2 x 6.7 x 7.9 x 5.8 x 4.8 x 3.3 x 3.3 x 2.1 x 1.4 x 1.1 x 0.7 x 0.7 x 0.6 x
National Oilwell Varco - Cash Flow

Cash From Operating Activities 3,981 2,072 767 319 63 177 1,326 375 283 207 298 1,163 265
Cash From Financing Activities and Other (3,212) (3,075) (1,004) (340) (154) (19) (1,517) (19) (19) (19) (19) (76) (76)
Net Change in Cash 100 (1,456) (321) (98) (151) 78 (492) 266 169 93 184 712 (212)
Capex 669 453 84 77 60 80 301 90 95 95 95 375 400

Exhibit 76: OIS Company Model ($ millions, except per-share data)
Oil States - Income Statement
Total Revenues: $ 2,072 $ 1,100 $ 170 $ 176 $ 179 $ 181 $ 706 $ 168 $ 169 $ 169 $ 176 $ 682 $ 887
Offshore Products 962 724 126 135 133 127 521 104 97 90 90 382 451
Completion Services 657 308 41 37 39 45 162 53 59 65 72 249 368
Drilling 201 68 3 4 7 9 23 11 13 14 14 51 67
Accomodations 253 - - - - - - - - - - - -
Tubular Services - - - - - - - - - - - - -
EBITDA 529 193 12 13 16 14 56 13 15 17 21 67 156
% of Revenues 26% 18% 7% 8% 9% 8% 8% 8% 9% 10% 12% 10% 18%
Operating income 365 65 (18) (16) (14) (14) (63) (15) (13) (10) (7) (46) 47
% of Revenues 18% 6% -11% -9% -8% -8% -9% -9% -8% -6% -4% -7% 5%
Incremental Margin (Annually) 13% 31% 32% 28% 26% 48% 32% -236% -42% -33% -144% -72% 45%
Incremental Margin (Sequentially) 46% 39% 77% -34% 7% 403% 1603% 52%
Offshore Products 200 153 24 23 24 18 89 12 10 9 9 40 66
Completion Services 149 (23) (23) (21) (20) (17) (81) (12) (9) (5) (2) (28) 38
Drilling 30 (18) (8) (6) (5) (5) (24) (4) (3) (3) (2) (12) (6)
Accomodations 56 - - - - - - - - - - - -
Tubular Services - - - - - - - - - - - - -
Corporate (70) (47) (11) (11) (12) (11) (46) (11) (11) (12) (12) (46) (50)
Minority Interest 4 - - - - - - - - - - - 0
Net Income 232 42 (12) (11) (10) (10) (43) (10) (9) (7) (5) (32) 29
yoy growth (%) -29% -81% -154% -247% -271% -256% -201% -16% -19% -22% -51% -26% -193%
Adjustments ($1.35) ($0.28) ($0.02) ($0.01) ($0.02)
GAAP EPS $3.02 $0.56 ($0.26) ($0.23) ($0.22)
Other Details
Tax Rate 33% 30% 38% 35% 36% 36% 36% 36% 36% 33% 33% 35% 35%
ROE - Recurring (Adjusted for cash tax) 10% 3% -5% -8% 10% -3% -1% -4% -3% -3% -2% -3% 0%
CROCI 14% 8% NA NA NA NA 5% NA NA NA NA 4% NA
Total Revenues (Current Segments) 12% -40% -28% 4% 2% 1% -36% -7% 0% 0% 4% -3% 30%
Offshore Products 9% -25% -26% 7% -2% -4% -28% -18% -7% -7% 0% -27% 18%
Completion Services 14% -53% -24% -10% 6% 15% -48% 18% 12% 10% 10% 54% 48%
Drilling 18% -66% -75% 40% 91% 26% -66% 19% 14% 8% 4% 120% 32%
EBIT Margins
Offshore Products 20.8% 21.1% 19.1% 16.7% 18.1% 14.2% 17.0% 11.4% 10.4% 10.0% 10.5% 10.6% 14.5%
Completion Services 22.7% -7.5% -57.2% -57.7% -50.7% -38.0% -50.4% -23.0% -15.0% -8.0% -3.0% -11.4% 10.3%
Drilling 14.7% -26.4% -292.4% -153.8% -74.3% -48.9% -103.4% -37.1% -26.8% -20.1% -14.8% -23.9% -9.3%
Additional Information
Offshore Products - Book-to-Bill 0.9x 0.8x 0.7x 0.8x 0.5x 0.8x 0.7x 1.0x 1.1x 1.3x 1.3x 1.1x 1.3x
Offshore Products - Backlog (End-of-Period) 490 340 306 268 203 172 172 172 177 200 222 222 335
Oil States - Balance Sheet
Cash 53 36 43 52 54 46 46 80 110 134 148 148 126
Working Capital (503) (422) (375) (358) (347) (361) (361) (336) (314) (298) (294) (294) (368)
Net PP&E 650 639 623 601 577 559 559 540 521 505 489 489 462
Total Assets 1,810 1,599 1,516 1,483 1,435 1,427 1,427 1,405 1,396 1,387 1,385 1,385 1,436
Gross Debt 147 129 90 84 67 67 67 67 67 67 67 67 67
Net Debt 94 93 47 32 13 21 21 (13) (43) (67) (81) (81) (60)
Minority Interest - - - - - - - - - - - - -
Net Debt-to-Capital Ratio 6.6% 6.9% 3.6% 2.6% 1.1% 1.7% 1.7% -1.1% -3.8% -6.1% -7.4% -7.4% -5.2%
Net Debt/NTM EBITDA 0.5 x 1.7 x 0.8 x 0.5 x 0.2 x 0.3 x 0.3 x 0.0 x 0.0 x 0.0 x -0.5 x -0.5 x -0.3 x
Oil States - Cash Flow

Cash From Operating Activities 447 251 65 35 32 4 136 44 41 36 27 148 65
Cash From Financing Activities and Other (674) (154) (47) (18) (25) (1) (91) (1) (1) (1) (1) (4) (4)
Net Change in Cash (546) (17) 7 9 2 (8) 10 34 30 24 14 102 (21)
Capex 319 115 10 8 5 11 35 9 10 11 12 42 82

Exhibit 77: HP Company Model Fiscal Year Quarters ($ millions, except per-share data)
2014A 2015A 2016A 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018E
Helmerich & Payne- Fiscal Year - Income Statement
Total Revenues: $ 3,720 $ 2,944 $ 1,405 $ 341 $ 386 $ 421 $ 450 $ 1,598 $ 480 $ 503 $ 543 $ 569 $ 2,095
Drilling 3,706 2,930 1,392 338 383 418 447 1,585 477 500 540 565 2,082
US Land 3,100 2,341 1,024 250 298 330 354 1,233 380 397 431 451 1,659
US Offshore 251 241 139 34 35 35 36 139 35 38 39 40 152
International 356 348 230 53 50 53 57 213 61 65 70 75 271
Real Estate/Other 13 14 13 3 3 3 3 12 3 3 3 3 12
EBITDA 1,559 1,124 393 75 85 99 107 366 116 126 144 158 544
% of Revenues 41.9% 38.2% 28.0% 22% 22% 23% 24% 23% 26%
Operating income 1,035 554 (167) (59) (47) (31) (20) (158) (14) (3) 14 28 25
% of Revenues 27.8% 18.8% -11.9% -17% -12% -7% -5% -10% -3% -1% 3% 5% 1%
Incremental Margin (Annually) 29% 62% 47% 62% -22% 34% 29% 5% 33% 37% 37% 41% 37%
Incremental Margin (Sequentially) 10% 28% 44% 38% 23% 43% 44% 55%
Drilling 1,132 653 (62) (31) (18) (2) 8 (43) 15 26 43 58 142
US Land 1,026 562 (75) (32) (20) (6) 2 (56) 9 15 31 43 98
US Offshore 70 68 17 6 6 6 7 26 7 9 9 10 36
International 36 23 (4) (4) (5) (3) (2) (13) (0) 1 3 5 9
Real Estate/Other - - - - - - - - - - - - -
Corporate (97) (99) (105) (29) (29) (29) (29) (115) (29) (29) (29) (30) (117)
Net Income 679 357 (111) (41) (33) (23) (17) (115) (12) (6) 6 14 2
Adjusted EPS (Diluted) $ 6.19 $ 3.25 $ (1.02) $ (0.38) $ (0.31) $ (0.22) $ (0.15) $ (1.06) $ (0.11) $ (0.05) $ 0.05 $ 0.13 $ 0.02
yoy growth (%) 9% -47% -131% -912% 11% -54% -53% 4% -102%
Other Details
Tax Rate 35% 34% 41% 36% 36% 36% 36% 36% 36% 36% 36% 36% 36%
Total Revenues 10% -21% -52% 13% 13% 9% 7% 14% 7% 5% 8% 5% 31%
US Land 10% -21% -52% 13% 13% 9% 7% 14% 7% 5% 8% 5% 31%
US Offshore 11% -24% -56% 20% 19% 11% 7% 20% 7% 4% 9% 5% 35%
International 13% -4% -42% 7% 2% 0% 3% 0% -1% 8% 2% 3% 10%
US Land
Activity Days 100,638 75,866 36,984 9,887 12,012 13,511 14,763 50,173 15,867 16,602 17,879 18,535 68,883
% Change YoY 14% -25% -51% -17% 25% 81% 86% 36% 60% 38% 32% 26% 37%
% Change Sequentially 24% 21% 12% 9% 7% 5% 8% 4%
Average Rig Margin per day 15,136 14,045 12,033 9,300 8,691 8,649 8,355 8,701 8,430 8,446 8,735 9,040 8,677
% Change YoY -1% -7% -14% -30% -26% -23% -25% -28% -9% -3% 1% 8% 0%
% Change Sequentially -16% -7% 0% -3% 1% 0% 3% 3%
US Offshore
Activity Days 2,920 3,067 2,708 644 644 644 644 2,576 669 694 719 719 2,801
% Change YoY 0% 5% -12% -13% -7% 1% 0% -5% 4% 8% 12% 12% 9%
% Change YoY 9% -34% -52% 42% 67% 53% 35% 49% 9% 0% 0% 0% 2%
International
Activity Days 8,303 7,474 5,364 1,302 1,202 1,292 1,382 5,178 1,472 1,562 1,652 1,742 6,428
% Change YoY -5% -10% -28% -8% -8% 1% 1% -3% 13% 30% 28% 26% 24%
% Change Sequentially -5% -8% 7% 7% 7% 6% 6% 5%
% Change YoY 2% 8% 0% -32% -24% -13% -20% -23% 11% 17% 19% 22% 18%
% Change Sequentially -25% 0% 3% 3% 5% 5% 5% 5%
Helmerich & Payne- Fiscal Year - Balance Sheet
Cash 361 718 906 936 925 893 869 869 859 856 826 811 811
Working Capital (449) (409) (377) (318) (303) (315) (320) (320) (312) (299) (319) (327) (327)
Net PP&E 5,189 5,567 5,145 5,056 4,974 4,894 4,821 4,821 4,751 4,686 4,627 4,572 4,572
Total Assets 6,722 7,152 6,832 6,728 6,634 6,547 6,464 6,464 6,386 6,312 6,256 6,203 6,203
Gross Debt 80 532 532 532 532 532 532 532 532 532 532 532 532
Net Debt (281) (186) (374) (405) (393) (361) (337) (337) (327) (324) (294) (279) (279)
Net Debt-to-Capital Ratio -6.1% -4.0% -8.9% -10.0% -10.0% -9.3% -8.9% -8.9% -8.8% -8.9% -8.1% -7.8% -7.8%
Net Debt/NTM EBITDA -0.2 x -0.5 x -1.0 x -1.0 x -0.9 x -0.7 x -0.6 x -0.6 x -0.6 x NA NA NA NA
Helmerich & Payne- Fiscal Year - Cash Flow

Cash From Operating Activities 1,253 1,099 713 160 121 97 110 488 129 140 116 136 521
Cash Used In Investing Activities (953) (1,133) (257) (45) (50) (50) (55) (200) (60) (65) (70) (75) (270)
Cash From Financing Activities and Other (387) 392 (268) (85) (82) (79) (79) (324) (79) (79) (76) (76) (309)
Net Change in Cash (87)
- 357
- 188
- 31 (11) (32) (24) (37)
- (10) (3) (30) (15) (58)
-
Capex 953 1,133 257 45 50 50 55 200 60 65 70 75 270

Exhibit 78: HP Company Model - Calendar Year Quarters ($ millions, except per-share data)
Helmerich & Payne - Calendar Year - Income Statement
Total Revenues: $ 3,864 $ 2,370 $ 359 $ 286 $ 302 $ 341 $ 1,287 $ 386 $ 421 $ 450 $ 480 $ 1,736 $ 2,194
Drilling 3,850 2,356 355 283 299 338 1,275 383 418 447 477 1,724 2,181
US Land 3,235 1,794 270 204 209 236 924 298 330 354 380 1,363 1,734
US Offshore 261 213 34 30 32 34 131 35 35 36 35 140 157
International 353 348 51 48 58 53 211 50 53 57 61 221 290
Real Estate/Other 15 14 3 3 3 3 12 3 3 3 3 12 12
EBITDA 1,622 838 101 61 75 75 312 85 99 107 116 408 591
% of Revenues 42.0% 35.3% 28.1% 21.4% 24.9% 21.9% 24.2% 22% 23% 24% 24% 23% 27%
Operating income 1,081 263 (41) (77) (63) (59) (240) (47) (31) (20) (14) (112) 71
% of Revenues 28.0% 11.1% -11.3% -27.1% -20.9% -17.4% -18.7% -12% -7% -5% -3% -6% 3%
Drilling 1,178 361 (16) (47) (35) (31) (129) (18) (2) 8 15 3 189
US Land 1,070 294 (17) (46) (38) (32) (134) (20) (6) 2 9 (15) 135
US Offshore 73 54 3 3 3 6 15 6 6 7 7 27 39
International 36 13 (2) (4) (0) (4) (10) (5) (3) (2) (0) (9) 15
Real Estate/Other - - - - - - - - - - - - -
Corporate (97) (97) (25) (30) (28) (29) (112) (29) (29) (29) (29) (115) (118)
Net Income 696 175 (30) (51) (35) (41) (157) (33) (23) (17) (12) (85) 32
yoy growth (%) 9% -75% -129% -277% -201% -912% -191% 11% -54% -53% -70% -46% -137%
Adjustments $ 0.39 $ 0.74 $ (0.51) $ (0.27) $ 0.35
GAAP EPS $6.79 $2.36 $ 0.23 $ (0.20) $ (0.67)
Other Details
Tax Rate 37% 30% 33% 39% 50% 36% 40% 36% 36% 36% 36% 36% 36%
ROE - Recurring (Adjusted for cash tax) 18% 4% -2% 2% -3% -4% -2% -3% -2% -2% -1% -2% 1%
Total Revenues 13% -39% -22% -20% 6% 13% -46% 13% 9% 7% 7% 35% 26%
US Land 13% -39% -22% -20% 6% 13% -46% 13% 9% 7% 7% 35% 27%
US Offshore 15% -45% -21% -24% 2% 13% -49% 26% 11% 7% 7% 48% 27%
International 17% -18% -18% -11% 5% 7% -39% 2% 0% 3% -1% 7% 12%
US Land
Activity Days 104,529 60,456 9,601 7,483 7,955 9,887 34,926 12,012 13,511 14,763 15,867 56,153 71,735
% Change YoY 16% -42% -54% -47% -41% -17% -42% 25% 81% 86% 60% 61% 28%
US Market Share 16% 17% 20% 21% 19% 19% 20% 20% 21% 22% 23% 22% 22%
% Change YoY -2% -13% -17% -10% -11% -30% -17% -26% -23% -25% -9% -21% 4%
% Change Sequentially -12% -4% -2% -16% -7% 0% -3% 1%
US Offshore
Activity Days 2,993 2,994 691 637 644 644 2,616 644 644 644 669 2,601 2,851
% Change YoY 2% 0% -13% -13% -13% -13% -13% -7% 1% 0% 4% -1% 10%
% Change YoY -1% -42% -61% -44% -32% 42% -35% 67% 53% 35% 9% 38% 0%
% Change Sequentially -7% 9% 14% 24% 9% 0% 0% 0%
International
Activity Days 8,227 6,805 1,307 1,274 1,372 1,302 5,255 1,202 1,292 1,382 1,472 5,348 6,788
% Change YoY -5% -17% -29% -32% -18% -8% -23% -8% 1% 1% 13% 2% 27%
% Change Sequentially -7% -3% 8% -5% -8% 7% 7% 7%
% Change YoY -2% 9% 0% -28% 35% -32% -11% -24% -13% -20% 11% -13% 20%
% Change Sequentially -11% -10% 12% -25% 0% 3% 3% 5%
Helmerich & Payne - Calendar Year - Balance Sheet
Cash 252 848 898 907 906 936 936 925 893 869 859 859 806
Working Capital (552) (259) (230) (343) (377) (318) (318) (303) (315) (320) (312) (312) (329)
Net PP&E 5,400 5,531 5,446 5,306 5,145 5,056 5,056 4,974 4,894 4,821 4,751 4,751 4,517
Total Assets 6,802 7,130 7,025 6,977 6,832 6,728 6,728 6,634 6,547 6,464 6,386 6,386 6,148
Gross Debt 81 532 532 532 532 532 532 532 532 532 532 532 532
Net Debt (171) (316) (366) (375) (374) (405) (405) (393) (361) (337) (327) (327) (274)
Net Debt-to-Capital Ratio -3.6% -7.0% -8.3% -8.7% -8.9% -10.0% -10.0% -10.0% -9.3% -8.9% -8.8% -8.8% -7.8%
Net Debt/NTM EBITDA -0.2 x -1.0 x -1.2 x -1.1 x -1.0 x -1.0 x -1.0 x -0.9 x -0.7 x -0.6 x -0.6 x -0.6 x NA
Helmerich & Payne - Calendar Year - Cash Flow

Cash From Financing Activities and Other (434) 397 (85) (50) (47) (85) (267) (82) (79) (79) (79) (319) (306)
Net Change in Cash (330) 597 50 9 (1) 31 88 (11) (32) (24) (10) (77) (53)
Capex 1,181 879 66 39 38 45 188 50 50 55 60 215 285

Exhibit 79: NBR Company Model ($ millions, except per-share data)
Nabors Industries - Income Statement
Total Revenues: $6,798 $3,789 $ 570 $ 542 $ 508 $ 570 $2,189 $ 607 $ 614 $ 670 $ 751 $ 2,641 $ 3,343
Drilling & Rig Services 4,806 3,654 621 558 537 599 2,315 637 644 700 781 2,761 3,483
U.S. 2,160 1,257 149 130 116 164 559 196 205 231 273 905 1,275
Canada 335 137 17 7 10 18 53 25 8 14 26 73 105
International 1,623 1,868 401 382 351 352 1,486 345 352 368 388 1,453 1,637
Rig Services 687 391 54 39 59 65 217 71 78 86 95 331 465
All Other (81) (28) 0 0 0 (28) 0 0 0 0 0 0
Reconciliation (260) (150) (24) (16) (29) (29) (98) (30) (30) (30) (30) (120) (140)
EBITDA 1,743 1,134 162 130 137 147 576 162 156 176 217 711 976
% of Revenues 26% 30% 28% 24% 27% 26% 26% 27% 25% 26% 29% 27% 29%
Operating Income 598 163 (54) (83) (84) (77) (298) (60) (64) (44) (3) (171) 97
% of Revenues 9% 4% -9% -15% -17% -13% -14% -10% -10% -7% 0% -6% 3%
Incremental Margin (Sequentially) 37% 105% 3% 12% 45% -53% 35% 50%
Drilling & Rig Services 713 382 (19) (55) (51) (43) (167) (26) (30) (10) 31 (35) 263
U.S. 370 87 (48) (59) (59) (56) (221) (43) (48) (41) (17) (149) (3)
Canada 52 (7) (7) (11) (10) (7) (35) (4) (9) (8) (3) (24) (9)
International 243 308 47 35 31 30 143 30 33 40 49 152 236
Rig Services 48 (13) (11) (20) (13) (10) (54) (8) (5) (2) 1 (14) 39
Reconciliation (194) (160) (35) (28) (34) (34) (131) (34) (34) (34) (34) (136) (166)
Other Income (Expense) 196 (0) (5) 8 (10) - (8)
Equity Income - CJES - (81) (28) - - - (28) - - - - - -
Minority Interest (Expense) (3) (0) (1) 3 (1) (1) (0) (1) (1) (1) (1) (5) (5)
Net Income 335 (89) (108) (96) (108) (107) (419) (98) (104) (87) (53) (343) (159)
Adjusted EPS (Diluted) $ 1.14 $ (0.29) $ (0.39) $ (0.35) $ (0.39) $ (0.39) $ (1.51) $ (0.35) $ (0.38) $ (0.32) $ (0.19) $ (1.24) $ (0.58)
yoy growth (%) 12% N/A N/A N/A N/A N/A N/A -10% 8% -19% -50% -18% -54%
Adjustments $ 3.42 $ 0.85 $ 1.02 $ 0.30 $ (0.04)
GAAP EPS $ (2.28) $ (1.14) $ (1.41) $ (0.65) $ (0.35)
Other Details
Tax Rate 46% 53% 23% 18% 24% 15% 20% 15% 15% 15% 15% 15% 15%
ROE - Recurring 1% -6% -16% NA NA NA NA -11% -6%
CROCI 7% 5% 3% NA NA NA NA 5% 6%
Drilling & Rig Services
U.S.
Rig years 213 120 65 54 57 70 61 84 92 102 113 97 132
% Change YoY 9% -44% -61% -55% -44% -23% -49% 29% 71% 77% 61% 58% 35%
Avg daily gross margin 11.7 12.7 10.0 9.1 8.5 8.0 8.9 8.6 7.1 7.2 8.8 7.9 9.0
% Change YoY 0% 8% -26% -34% -24% -35% -30% -15% -22% -15% 10% -11%
% Change Sequentially -18% -10% -6% -5% 7% -18% 2% 22%
Lower 48 land rig years 197 105 54 44 50 62 53 74 84 94 102 89 122
US Market Share - US land 11% 11% 10% 11% 11% 11% 11% 11% 12% 13% 14% 13% 14%
International
Rig years 127 124 111 101 97 96 101 95 96 99 104 99 111
% Change YoY 2% -2% -15% -20% -20% -18% -18% -14% -5% 2% 8% -2% 12%
% Change Sequentially -6% -8% -4% -1% -1% 1% 3% 5%
Avg daily gross margin 15 18 16 16 17 17 17 18 18 18 18 18 18
% Change YoY 13% 15% -13% -7% -9% 4% -6% 6% 9% 4% 4% 6% 1%
% Change Sequentially 1% -2% 6% 0% 3% 0% 1% 1%
Nabors Industries - Balance Sheet

Cash 536 275 222 256 201 276 276 616 559 502 596 596 1,371
Working Capital (644) (201) (172) (67) (84) (85) (85) (120) (132) (160) (222) (222) (327)
Net PP&E 8,599 7,028 6,942 6,765 6,617 6,553 6,553 6,474 6,397 6,320 6,243 6,243 5,963
Total Assets 11,880 9,538 8,950 8,656 8,425 8,463 8,463 8,775 8,656 8,574 8,688 8,688 9,346
Gross Debt 4,355 3,662 3,590 3,503 3,476 3,614 3,614 4,026 4,026 4,026 4,176 4,176 5,004
Net Debt 3,819 3,387 3,369 3,247 3,275 3,338 3,338 3,410 3,467 3,525 3,580 3,580 3,633
Book Value Per Share $16.89 $15.13 $14.15 $13.44 $12.98 $12.53 $12.54 $ 12.11 $ 11.67 $ 11.29 $ 11.03 $ 11.03 $ 10.20
Net Debt/NTM EBITDA 3.4 x 5.9 x 5.8 x 5.4 x 5.1 x 4.7 x 4.7 x 4.4 x 4.1 x 3.8 x 3.7 x 3.7 x NA
Nabors Industries - Cash Flow

Cash From Financing Activities and Other 366 (595) (21) (39) (23) 121 66 396 (17) (17) 133 496 762
Net Change in Cash 29 (262) (53) 34 (55) 75 1 340 (57) (57) 94 320 775
Capex 1,821 867 130 63 90 160 443 143 143 143 143 572 600

Exhibit 80: PTEN Company Model ($ millions, except per-share data)
Patterson-UTI - Income Statement
Total Revenues: $3,182 $1,875 $ 269 $ 194 $ 206 $ 233 $ 902 $ 275 $ 306 $ 344 $ 377 $1,303 $ 1,890
Contract Drilling 1,839 1,138 169 115 124 135 542 158 166 191 208 724 998
Pressure Pumping 1,293 712 96 74 78 94 342 113 135 149 163 560 869
Oil and Natural Gas 50 25 4 5 4 4 17 4 5 5 5 19 23
EBITDA 986 568 82 47 40 42 210 56 66 79 91 291 504
% of Revenues 31% 30% 30% 24% 20% 18% 23% 20% 21% 23% 24% 22% 27%
Operating income 362 (137) (93) (124) (123) (116) (456) (97) (81) (68) (56) (301) (102)
% of Revenues 11% -7% -35% -64% -60% -50% -51% -35% -27% -20% -15% -23% -5%
Contract Drilling 320 40 (35) (70) (68) (67) (240) (57) (51) (42) (36) (186) (99)
Pressure Pumping 89 (108) (44) (46) (47) (39) (176) (31) (21) (16) (11) (79) 37
Oil and Natural Gas 11 (6) (1) 1 1 1 2 1 1 1 1 4 7
Other (58) (59) (13) (9) (10) (10) (42) (10) (10) (10) (10) (40) (48)
Other Income (Expense) 14 14 0 0 1 - 1 - - - - - -
Net Income 235 (106) (69) (86) (83) (79) (317) (67) (57) (47) (39) (211) (83)
Adjusted EPS (Diluted) $ 1.61 $ (0.73) $ (0.47) $ (0.58) $ (0.57) $ (0.54) $ (2.17) $ (0.46) $ (0.39) $ (0.32) $ (0.27) $ (1.44) $ (0.57)
yoy growth (%) 36% -145% -865% 411% 111% 37% 198% -3% -33% -43% -51% -33% -61%
Adjustments ($0.50) $1.30 $ (0.01) $ - $ (0.01)
GAAP EPS $ 1.11 ($2.03) $ (0.48) $ (0.58) $ (0.58)
Other Details
Tax Rate 32% 33% 33% 36% 37% 36% 36% 36% 36% 38% 39% 37% 39%
ROE - Recurring (Adjusted for cash tax) 7% -6% -13% -22% -17% -19% -18% -17% -15% -13% -11% -14% -6%
Contract Drilling
Activity Days 77,000 45,142 6,657 4,996 5,655 6,256 23,564 7,553 7,917 9,108 9,844 34,422 46,334
% Change YoY 10% -41% -57% -55% -44% -25% -48% 13% 58% 61% 57% 46% 35%
US Market Share 11% 13% 14% 14% 13% 12% 13% 12% 13% 13% 13% 13% 14%
Average Rig Margin per day $10,031 $10,538 $10,660 $9,210 $8,490 $7,560 $9,009 $7,243 $7,243 $7,243 $7,315 $7,263 $7,445
% Change YoY 8% 5% -4% -13% -11% -28% -15% -32% -21% -15% -3% -19% 3%
% Change Sequentially 2% -14% -8% -11% -4% 0% 0% 1%
Pressure Pumping
Revenue 1,293 712 96 74 78 94 342 113 135 149 163 560 869
% Change YoY 32% -45% -61% -58% -49% -29% -52% 17% 83% 90% 74% 64% 55%
EBIT 89 (108) (44) (46) (47) (39) (176) (31) (21) (16) (11) (79) 37
% of Revenues 7% -15% -46% -62% -60% -42% -51% -28% -16% -11% -7% -14% 4%
Incremental Margin (Annually) 1% 34% 19% 27% 13% 4% 18% 80% 41% 43% 41% 45% 37%
Incremental Margin (Sequentially) 17% 9% -13% 48% 43% 45% 35% 37%
Patterson-UTI - Balance Sheet
Cash 43 113 187 210 37 45 45 59 88 124 165 165 333
Working Capital (310) (129) (71) (40) (7) (14) (14) (35) (45) (58) (70) (70) (123)
Net PP&E 4,131 3,921 3,787 3,641 3,512 3,414 3,414 3,309 3,210 3,111 3,015 3,015 2,699
Total Assets 5,394 4,533 4,398 4,211 3,909 3,837 3,837 3,784 3,736 3,701 3,672 3,672 3,631
Gross Debt 986 855 842 827 598 598 598 598 598 598 598 598 598
Net Debt 942 742 655 617 561 553 553 539 511 475 433 433 265
Total Shareowners' Investment 2,906 2,561 2,489 2,402 2,339 2,257 2,257 2,186 2,126 2,076 2,034 2,034 1938.78
Book Value Per Share $19.96 $17.61 $17.08 $16.46 $15.99 $15.42 $ 15.42 $14.94 $14.53 $14.19 $13.90 $13.90 $ 13.25
Net Debt/NTM EBITDA 1.7 x 3.5 x 3.5 x 3.0 x 2.3 x 1.9 x 1.9 x 1.6 x 1.3 x 1.0 x 0.9 x 0.9 x N/A
Patterson-UTI - Cash Flow

Cash From Financing Activities and Other 171 84 (54) (17) (238) 28 (280) 24 20 17 15 75 26
Net Change in Cash (206) 70 73 23 (173) 8 (68) 14 29 36 41 120 168
Capex 1,088 744 21 31 29 60 140 48 48 48 50 194 291

Exhibit 81: ATW Company Model - Fiscal Year Quarters ($ millions, except per-share data)
2014A 2015A 2016A 1Q17E 2Q17E 3Q17E 4Q17E 2017E 1Q18E 2Q18E 3Q18E 4Q18E 2018E
Atwood Oceanics - Fiscal Year Income Statement
Total Revenues: $ 1,174 $ 1,396 $ 1,021 $ 158 $ 131 $ 120 $ 106 $ 514 $ 64 $ 76 $ 89 $ 114 $ 344
Ultra-Deepwater 463 721 707 152 129 106 88 475 42 44 57 81 223
Deepwater 333 336 131 - - - - - - 7 8 8 24
Jackups 308 285 138 2 - 12 16 30 20 23 23 23 89
Reimbursables 71 54 44 4 2 2 2 10 2 2 2 2 8
Operating Costs 624 616 453 83 74 67 77 302 65 77 82 94 318
% of Revenues 53% 44% 44% 53% 57% 56% 73% 59% 100% 101% 92% 83% 92%
Contract Drilling 506 520 375 67 62 55 65 249 51 66 71 83 270
Ultra-Deepwater 167 264 227 59 55 45 53 212 37 47 53 64 201
Deepwater 200 127 74 1 1 1 1 5 1 6 6 6 20
Jackups 132 125 78 7 5 9 11 32 13 13 12 12 49
Other 8 3 (4) - - - - - - - - - -
Reimbursables 56 39 28 3 1 1 1 7 1 1 1 1 6
SG&A 61 57 51 13 11 11 11 46 12 10 10 10 42
EBITDA 550 779 567 75 57 52 28 213 (0) (1) 7 20 26
% of Revenues 47% 56% 56% 47% 43% 44% 27% 41% 0% -1% 8% 17% 8%
Operating income 403 608 401 33 15 10 (14) 45 (42) (43) (35) (22) (143)
% of Revenues 34% 44% 39% 21% 11% 9% -13% 9% -66% -56% -39% -20% -42%
Minority Interest (Expense) - - - - - - - - - - - - -
Net Income 315 501 304 13 (3) (7) (27) (24) (51) (52) (45) (34) (182)
Adjusted EPS (Diluted) $ 4.84 $ 7.71 $ 4.69 $ 0.20 $ (0.04) $ (0.08) $ (0.34) $ (0.31) $ (0.64) $ (0.65) $ (0.56) $ (0.42) $ (2.27)
yoy growth (%) -9% 59% -39% -85% -102% -108% -154% -107% -415% 1584% 591% 25% 632%
Adjustments $ 0.40 $ (1.05) $ (0.60)
GAAP EPS $ 5.24 $ 6.65 $ 4.09
Dividend per Share $ - $ 0.75 $ 0.33 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other Details
Tax Rate 13% 9% 9% 15% 15% 15% 15% 15% 15% 15% 15% 15% 15%
Atwood Oceanics - FY Balance Sheet
Cash 80 114 145 42 327 363 372 372 395 359 315 285 285
Working Capital (262) (358) (198) (165) (137) (124) (108) (108) (64) (77) (91) (117) (117)
Net PP&E 3,967 4,172 4,128 4,223 4,193 4,163 4,143 4,143 4,113 4,083 4,068 4,039 4,039
Total Assets 4,507 4,809 4,540 4,494 4,717 4,709 4,680 4,680 4,623 4,572 4,529 4,498 4,498
Gross Debt 1,754 1,686 1,228 1,173 1,173 1,173 1,173 1,173 1,173 1,173 1,173 1,173 1,173
Net Debt 1,674 1,572 1,082 1,131 846 810 801 801 778 814 858 888 888
Book Value Per Share $ 39.18 $ 45.39 $ 49.73 $ 49.94 $ 44.55 $ 43.03 $ 42.70 $ 42.70 $ 42.06 $ 41.41 $ 40.85 $ 40.43 $ -
Net Debt/NTM EBITDA 2.1 x 2.8 x 5.1 x 6.9 x 1.0 x 0.6 x 0.6 x 0.6 x 29.8 x 30.1 x 43.2 x #DIV/0! 0.0 x
Atwood Oceanics - FY Cash Flow

Cash From Operating Activities 408 577 630 89 67 48 31 235 35 (24) (16) (17) (22)
Cash Used In Investing Activities 976 448 224 137 12 12 22 183 12 13 28 13 65
Cash From Financing Activities and Other 559 (46) (353) (55) 229 0 (0) 174 (0) (0) 0 0 (0)
Net Change in Cash (9) 34 31 (103) 284 36 9 226 23 (36) (44) (30) (87)
Capex 976 448 224 137 12 12 22 183 12 13 28 13 65

Exhibit 82: ATW Company Model - Calendar Year Quarters ($ millions, except per-share data)
Atwood Oceanics - Calendar Year Income Statement
Total Revenues: $ 1,241 $ 1,352 $ 296 $ 228 $ 189 $ 158 $ 871 $ 131 $ 120 $ 106 $ 64 $ 420 $ 396
Ultra-Deepwater 542 736 189 182 154 152 677 129 106 88 42 365 264
Deepwater 324 310 59 - - - 59 - - - - - 32
Jackups 301 254 34 36 27 2 99 - 12 16 20 48 92
Reimbursables 74 52 14 10 7 4 35 2 2 2 2 8 8
Operating Costs 638 605 111 98 91 83 383 74 67 77 65 283 350
% of Revenues 51% 45% 37% 43% 48% 53% 44% 57% 56% 73% 100% 67% 88%
Ultra-Deepwater 195 262 54 54 58 59 225 55 45 53 37 190 228
Deepwater 192 129 19 10 2 1 32 1 1 1 1 5 25
Jackups 126 120 19 16 17 7 59 5 9 11 13 37 48
Other 6 3 (2) 1 (4) - (5) - - - - - -
Reimbursables 60 35 9 5 5 3 23 1 1 1 1 6 6
SG&A 59 55 11 12 12 13 48 11 11 11 12 45 42
EBITDA 603 747 186 130 98 75 489 57 52 28 (0) 137 47
% of Revenues 49% 55% 63% 57% 52% 47% 56% 43% 44% 27% 0% 33% 12%
Operating income 444 577 145 89 57 33 324 15 10 (14) (42) (31) (122)
% of Revenues 36% 43% 49% 39% 30% 21% 37% 11% 9% -13% -66% -7% -31%
Minority Interest (Expense) - - - - - - - - - - - - -
Net Income 341 478 114 64 40 13 231 (3) (7) (27) (51) (88) (164)
Adjusted EPS (Diluted) $ 5.24 $ 7.35 $ 1.76 $ 0.98 $ 0.62 $ 0.20 $ 3.56 $ (0.04) $ (0.08) $ (0.34) $ (0.64) $ (1.10) $ (2.04)
yoy growth (%) -5% 40% -11% -43% -73% -85% -51% -102% -108% -154% -415% -131% 85%
Adjustments $ (0.57) $ (0.80) $ 0.13 $ 0.55 $ (0.56)
GAAP EPS $ 4.67 $ 6.54 $ 1.89 $ 1.53 $ 0.07
Dividend per Share $ - $ 1.00 $ 0.08 $ - $ - $ - $ 0.08 $ - $ - $ - $ - $ - $ -
Other Details
Tax Rate 13% 9% 11% 8% -5% 15% 8% 15% 15% 15% 15% 15% 15%
ROE - Recurring (Adjusted for cash tax) 14% 17% 15% 8% 5% 2% 7% 0% -1% -3% -6% -3% -5%
CROCI 12% 14% 9% NA NA NA NA 3% 1%
Atwood Oceanics - CY Balance Sheet
Cash 122 116 227 199 145 42 42 327 363 372 395 395 278
Working Capital (226) (285) (282) (212) (198) (165) (165) (137) (124) (108) (64) (64) (120)
Net PP&E 4,013 4,208 4,210 4,198 4,128 4,223 4,223 4,193 4,163 4,143 4,113 4,113 4,009
Total Assets 4,550 4,748 4,835 4,715 4,540 4,494 4,494 4,717 4,709 4,680 4,623 4,623 4,466
Gross Debt 1,748 1,608 1,595 1,375 1,228 1,173 1,173 1,173 1,173 1,173 1,173 1,173 1,173
Net Debt 1,626 1,493 1,368 1,176 1,082 1,131 1,131 846 810 801 778 778 895
Book Value Per Share $ 40.06 $ 45.90 $ 47.90 $ 49.69 $ 49.73 $ 49.94 $ 49.98 $44.55 $43.03 $42.70 $42.06 $ 42.40 $ 40.02
Atwood Oceanics - CY Cash Flow

Cash From Operating Activities 450 589 158 175 94 89 517 67 48 31 35 181 (52)
Cash From Financing Activities and Other 202 (164) (3) (181) (122) (55) (361) 229 0 (0) (0) 229 (0)
Net Change in Cash (11) (6) 111 (28) (54) (103) (73) 284 36 9 23 352 (117)
Capex 662 431 45 22 25 137 229 12 12 22 12 58 65

Exhibit 83: DO Company Model ($ millions, except per-share data)
Diamond Offshore - Income Statement
Total Revenues: $ 2,815 $ 2,419 $ 471 $ 389 $ 349 $ 362 $ 1,570 $ 406 $ 363 $ 363 $ 324 $ 1,455 $ 1,317
Contract Drilling 2,737 2,360 444 357 340 352 1,493 396 353 353 314 1,417 1,279
Ultra Deepwater 988 1,339 326 214 217 230 988 273 258 277 277 1,084 1,084
Deepwater 494 549 59 67 66 65 258 68 52 34 27 181 121
Midwater 1,077 388 48 57 56 57 217 48 35 36 7 126 53
Jackups 178 85 11 19 - - 30 7 8 6 4 25 21
Reimbursables 78 59 27 31 10 10 77 10 10 10 10 38 38
Operating Costs 1,682 1,352 255 233 210 216 914 223 216 204 193 836 819
% of Revenues 60% 56% 54% 60% 60% 60% 58% 55% 60% 56% 59% 57% 62%
Ultra Deepwater 537 620 124 127 124 122 497 127 125 124 124 500 492
Deepwater 292 278 48 35 36 40 159 40 41 30 26 138 131
Midwater 535 231 24 26 18 23 91 22 16 16 9 63 62
Jackups 111 66 6 7 2 2 16 5 5 5 4 19 15
Other Offshore 49 34 12 4 7 5 27 5 5 5 5 20 20
Reimbursables 76 58 27 17 8 9 61 9 9 9 9 37 37
General & Administrative 82 66 15 18 15 15 64 15 15 15 15 60 61
EBITDA 1,133 1,067 216 156 139 145 656 182 146 158 131 618 498
% of Revenues 40% 44% 46% 40% 40% 40% 42% 45% 40% 44% 41% 43% 38%
Operating Income 677 574 111 51 53 55 270 89 53 65 38 245 122
% of Revenues 24% 24% 24% 13% 15% 15% 17% 22% 15% 18% 12% 17% 9%
Net Income 432 417 87 22 14 20 143 47 21 30 9 106 16
yoy growth (%) -34% -3% 29% -75% -90% -84% -66% -47% -8% 113% -53% -26% -85%
Adjustments $ (0.33) $ (5.04) $ - $ 4.46 $ -
GAAP EPS $ 2.81 $ (2.00) $ 0.64 $ (4.30) $ 0.10
Dividend per Share $ 3.50 $ 0.50 $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Other Details
Tax Rate 28% 14% -5% -85% 60% 33% 10% 25% 25% 25% 25% 25% 25%
ROE - Recurring (Adjusted for cash tax) 10% 10% 7% -7% 2% 2% 1% 5% 2% 3% 1% 3% 0%
Diamond Offshore - Balance Sheet

Cash 250 131 134 103 81 98 98 105 157 248 341 341 526
Working Capital (43) (200) (100) (142) (98) (103) (103) (140) (107) (104) (78) (78) (85)
Net PP&E 6,946 6,379 6,219 5,848 5,819 5,756 5,756 5,698 5,640 5,581 5,523 5,523 5,347
Total Assets 8,021 7,165 6,945 6,505 6,409 6,369 6,369 6,359 6,315 6,345 6,350 6,350 6,367
Gross Debt 2,244 2,281 1,980 2,308 2,163 2,102 2,102 2,041 1,981 1,981 1,981 1,981 1,981
Net Debt 1,995 2,151 1,846 2,204 2,081 2,004 2,004 1,936 1,824 1,733 1,639 1,639 1,455
Diamond Offshore - Cash Flow

Cash From Operating Activities 998 779 275 (9) 147 105 519 105 147 127 129 509 385
Cash From Financing Activities and Other (813) (68) (214) 453 (104) (62) 73 (63) (61) (1) (0) (125) (1)
Net Change in Cash (1,847) (119) 3 (31) (22) 16 (33) 7 52 91 94 244 184
Capex 2,033 831 58 475 65 27 625 35 35 35 35 140 200

Exhibit 84: ESV Company Model ($ millions, except per-share data)
Ensco plc - Income Statement
Total Revenues: $ 4,811 $ 3,997 $ 814 $ 705 $ 548 $ 510 $ 2,577 $ 471 $ 457 $ 476 $ 447 $ 1,852 $ 1,726
Floaters 2,869 2,400 513 431 319 300 1,563 276 267 283 261 1,087 924
Jackups 1,849 1,446 278 251 214 195 938 181 176 178 171 706 743
Other 92 152 24 22 15 15 75 15 15 15 15 60 60
Operating Costs 2,358 1,971 387 378 319 321 1,406 283 277 291 283 1,135 1,157
% of Revenues 49% 49% 48% 54% 58% 63% 55% 60% 61% 61% 63% 61% 67%
Floaters 1,329 1,036 211 209 154 164 738 137 133 138 136 543 546
Jackups 828 694 135 122 133 123 513 113 112 120 115 459 477
Other 69 123 18 19 11 11 59 10 10 10 10 41 40
General & administrative 132 118 23 27 25 24 100 24 23 24 22 93 93
EBITDA 2,453 2,026 427 327 229 188 1,171 188 180 185 164 717 570
% of Revenues 51% 51% 52% 46% 42% 37% 45% 40% 39% 39% 37% 39% 33%
Operating Income 1,874 1,454 314 215 119 79 727 76 65 67 46 254 87
% of Revenues 39% 36% 39% 30% 22% 15% 28% 16% 14% 14% 10% 14% 5%
Net Income 1,505 1,054 176 155 64 16 412 11 (2) (1) (17) (9) (154)
Adjusted EPS (Diluted) $ 6.43 $ 4.47 $ 0.74 $ 0.51 $ 0.21 $ 0.05 $ 1.42 $ 0.03 $ (0.01) $ (0.00) $ (0.06) $ (0.04) $ (0.51)
yoy growth (%) 4% -31% -50% -57% -76% -95% -68% -96% -101% -101% -221% -102% 1359%
Adjustments $ (19.17) $ (10.83) $ - $ 1.53 $ 0.07
GAAP EPS $ (12.74) $ (6.35) $ 0.74 $ 2.04 $ 0.28
Dividend per share $ 3.00 $ 0.60 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.04 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.04 $ 0.04
Other Details
Tax Rate 12% 16% 29% 4% 6% 25% 17% 20% 20% 20% 20% 20% 20%
ROE - Recurring (Adjusted for cash tax) 12% 12% 13% 8% 3% 1% 6% 1% 0% 0% -1% 0% -2%
CROCI 11% 11% 7% NA NA NA NA 4% 4%
Ensco plc - Balance Sheet
Cash 1,422 1,301 1,379 1,800 1,767 2,355 2,355 2,096 2,184 2,268 2,349 2,349 2,348
Working Capital (443) (208) (306) (144) (134) (116) (116) (106) (101) (105) (95) (95) (86)
Net PP&E 12,535 11,088 11,097 11,021 10,960 10,940 10,940 11,197 11,110 11,018 10,927 10,927 10,770
Total Assets 16,060 13,637 13,610 13,765 13,602 14,142 14,142 14,119 14,110 14,112 14,083 14,083 13,911
Gross Debt 5,920 5,895 5,861 4,906 4,703 5,255 5,255 5,235 5,235 5,235 5,235 5,235 5,235
Net Debt 4,498 4,594 4,482 3,105 2,935 2,901 2,901 3,139 3,051 2,967 2,887 2,887 2,887
Ensco plc - Cash Flow

Cash Used In Investing Activities (1,569) (1,620) (158) (51) (46) (90) (346) (369) (27) (27) (27) (450) (325)
Cash From Financing Activities and Other 814 (362) 44 42 (170) 535 451 (23) (3) (3) (3) (32) (12)
Net Change in Cash 1,257 (121) 78 421 (33) 587 1,054 (258) 87 84 81 (6) (0)
Capex 1,569 1,620 158 51 46 90 346 369 27 27 27 450 325

Exhibit 85: NE Company Model ($ millions, except per-share data)
Noble Corp. - Income Statement
Total Revenues: $ 4,125 $ 3,070 $ 612 $ 502 $ 385 $ 397 $ 1,896 $ 362 $ 284 $ 266 $ 270 $ 1,182 $1,246
Contract Drilling Services 4,005 2,980 591 484 373 382 1,830 347 269 251 255 1,122 1,186
Reimbursibles 104 91 21 18 12 15 66 15 15 15 15 60 60
Operating Costs 2,114 1,390 287 267 232 222 1,008 194 181 167 168 709 783
% of Revenues 51% 45% 47% 53% 60% 56% 53% 53% 64% 63% 62% 60% 63%
Contract Drilling Services 1,915 1,243 251 233 207 194 885 167 154 140 141 601 675
Reimbursibles 80 70 16 14 9 12 52 12 12 12 12 48 48
EBITDA 2,011 1,681 325 235 153 175 888 169 102 100 102 473 463
% of Revenues 49% 55% 53% 47% 40% 44% 47% 47% 36% 37% 38% 40% 37%
Operating Income 1,182 1,046 175 84 (2) 22 280 16 (50) (52) (50) (136) (144)
% of Revenues 29% 34% 29% 17% -1% 6% 15% 4% -18% -20% -18% -12% -12%
Minority Interest (Expense) (75) (72) (19) (23) (11) (18) (70) (15) 1 (4) (4) (22) (22)
Net Income 773 644 78 1 (55) (46) (22) (52) (90) (96) (94) (332) (333)
Adjusted EPS (Diluted) $ 3.01 $ 2.61 $ 0.31 $ 0.01 $ (0.23) $ (0.19) $ (0.11) $ (0.22) $ (0.37) $ (0.40) $ (0.39) $ (1.37) $ (1.37)
yoy growth (%) 5% -13% -57% -99% -132% -137% -104% -170% -6736% 74% 103% 1166% 0%
Adjustments $ (2.98) $ (0.55) $ 0.11 $ 1.27 $ -
GAAP EPS $ 0.03 $ 2.06 $ 0.42 $ 1.28 $ (0.23)
Dividend per Share $ 1.50 $ 1.28 $ 0.15 $ 0.02 $ 0.02 $ - $ 0.19 $ - $ - $ - $ - $ - $ -
Other Details
Tax Rate 17% 15% 17% 9% 18% 21% 10% 20% 20% 20% 20% 20% 20%
ROE - Recurring (Adjusted for cash tax) 10% 9% 3% -4% -2% -3% -2% -3% -5% -6% -6% -5% -5%
CROCI 11% 10% 5% NA NA NA NA 4% 4%
Noble Corp. - Balance Sheet
Cash 69 512 236 823 426 687 687 471 546 583 609 609 392
Working Capital (191) (165) (286) (12) (73) (76) (76) (61) (19) (8) (9) (9) (51)
Net PP&E 12,113 11,484 11,388 11,276 11,592 11,502 11,502 11,380 11,258 11,136 11,014 11,014 10,607
Total Assets 13,287 12,892 12,455 12,739 12,584 12,761 12,761 12,398 12,285 12,184 12,091 12,091 11,532
Gross Debt 4,869 4,489 4,164 4,129 4,130 4,367 4,367 4,067 4,067 4,067 4,067 4,067 3,817
Net Debt 4,801 3,977 3,927 3,306 3,704 3,680 3,680 3,595 3,521 3,483 3,458 3,458 3,425
Book Value Per Share $ 25.96 $ 27.67 $ 27.89 $ 29.18 $ 28.96 $ 28.70 $ 28.72 $ 28.49 $ 28.12 $ 27.72 $ 27.34 $ 27.34 $25.97
Noble Corp. - Cash Flow

Cash From Financing Activities and Other 298 (439) (331) 229 36 220 155 (300) - 0 0 (300) (250)
Net Change in Cash (46) 444 (276) 587 (397) 261 174 (215) 74 38 26 (77) (217)
Capex 1,978 423 51 69 472 63 655 30 30 30 30 120 200

Exhibit 86: RDC Company Model ($ millions, except per-share data)
Rowan Companies - Income Statement
Total Revenues: $ 1,824 $ 2,137 $ 500 $ 492 $ 379 $ 346 $ 1,718 $ 328 $ 273 $ 269 $ 263 $ 1,133 $ 1,134
Operating Costs 1,117 1,109 232 234 210 221 895 182 177 195 196 749 813
% of Revenues 61% 52% 46% 47% 55% 64% 52% 55% 65% 72% 74% 66% 72%
EBITDA 707 1,028 268 258 170 126 823 146 96 74 67 384 320
% of Revenues 39% 48% 54% 53% 45% 36% 48% 45% 35% 28% 26% 34% 28%
Operating income 385 637 170 158 68 26 422 49 (1) (23) (30) (5) (74)
% of Revenues 21% 30% 34% 32% 18% 7% 25% 15% 0% -9% -11% 0% -6%
Net Income 266 442 123 95 38 (12) 245 9 (33) (53) (59) (136) (195)
Adjusted EPS (Diluted) $ 2.13 $ 3.53 $ 0.98 $ 0.75 $ 0.30 $ (0.09) $ 1.94 $ 0.07 $ (0.26) $ (0.42) $ (0.47) $ (1.08) $ (1.54)
yoy growth (%) 9% 66% -1% 7% -66% -110% -45% -93% -135% -238% 396% -156% 43%
Adjustments $ (3.06) $ (2.79) $ - $ 0.96 $ (0.26)
GAAP EPS $ (0.93) $ 0.74 $ 0.98 $ 1.72 $ 0.04
Other Details
Tax Rate 6% 9% 3% 19% -47% 5% 5% 13% 13% 13% 13% 13% 13%
ROE - Recurring (Adjusted for cash tax) 2% 10% 10% 9% 2% -1% 5% 1% -3% -5% -5% -3% -4%
CROCI 6% 10% 8% NA NA NA NA 3% 3%
Rowan Companies - Balance Sheet
Cash 339 484 595 761 1,038 1,273 1,273 1,265 1,358 1,388 1,409 1,409 1,436
Working Capital (269) (108) (169) (273) (148) (113) (113) (99) (48) (41) (35) (35) (27)
Net PP&E 7,432 7,406 7,332 7,255 7,143 7,079 7,079 7,005 6,930 6,855 6,780 6,780 6,566
Total Assets 8,411 8,347 8,392 8,620 8,665 8,794 8,794 8,694 8,649 8,595 8,535 8,535 8,338
Gross Debt 2,807 2,692 2,676 2,645 2,646 2,682 2,682 2,555 2,555 2,555 2,555 2,555 2,555
Net Debt 2,468 2,208 2,081 1,884 1,608 1,408 1,408 1,290 1,197 1,167 1,146 1,146 1,120
Rowan Companies - Cash Flow

Cash From Financing Activities and Other 803 (126) (18) 107 35 148 272 (105) (0) 0 (0) (105) 0
Net Change in Cash (754) 145 111 166 276 236 789 (8) 93 29 21 135 27
Capex 1,958 723 33 31 24 36 125 23 23 23 23 90 180

Exhibit 87: RIG Company Model ($ millions, except per-share data)
Transocean - Income Statement
I like $ 9,174 $ 7,386 $ 1,132 $ 943 $ 903 $ 780 $ 3,758 $ 757 $ 761 $ 669 $ 645 $ 2,832 $ 2,562
Contract Drilling 8,936 6,802 1,111 918 883 760 3,672 737 741 649 625 2,752 2,482
Ultra deepwater floaters 4,496 3,366 621 556 580 505 2,262 514 523 461 426 1,925 1,715
Deepwater floaters 1,021 644 85 51 43 36 215 36 37 37 37 147 126
Harsh environment floaters 1,099 891 181 100 103 128 512 114 102 84 95 396 385
Midwater floaters 1,722 1,359 138 133 87 22 380 12 26 26 26 89 92
High spec jackups 598 526 82 74 66 65 287 57 49 37 37 179 148
Intangible Revenue 16 16 4 4 4 4 16 4 4 4 4 16 16
Reimbursables 173 138 21 16 11 11 59 10 10 10 10 40 40
Other 49 446 - 9 9 9 27 10 10 10 10 40 40
Operating Costs 5,344 3,925 703 542 443 419 2,107 416 422 411 408 1,657 1,710
% of Revenues 58% 53% 62% 57% 49% 54% 56% 55% 55% 61% 63% 59% 67%
Reimbursables 173 138 21 16 11 11 59 10 10 10 10 40 40
Other 35 14 5 8 8 8 29 8 8 8 8 32 32
SG&A 234 182 43 42 39 40 164 38 38 38 38 150 150
EBITDA 3,830 3,461 429 401 460 361 1,651 341 339 257 237 1,175 852
% of Revenues 42% 47% 38% 43% 51% 46% 44% 45% 45% 39% 37% 41% 33%
Operating Income 2,691 2,498 212 176 235 131 754 110 108 25 4 247 (84)
% of Revenues 29% 34% 19% 19% 26% 17% 20% 14% 14% 4% 1% 9% -3%
Minority Interest 1 (35) (6) (11) (15) (7) (39) (3) (3) (3) (3) (12) (1)
Net Income 1,817 1,732 93 64 93 11 261 (8) (9) (82) (95) (194) (381)
Adjusted EPS (Diluted) $ 4.99 $ 4.76 $ 0.25 $ 0.17 $ 0.25 $ 0.03 $ 0.68 $ (0.02) $ (0.02) $ (0.21) $ (0.25) $ (0.50) $ (0.98)
yoy growth (%) 22% -5% -78% -85% -72% -98% -86% -108% -113% -186% -947% -173% 96%
Adjustments $ (10.28) $ (2.62) $ 0.43 $ 0.03 $ 0.37
GAAP EPS $ (5.29) $ 2.14 $ 0.68 $ 0.21 $ 0.62
Other Details
Tax Rate 17% 16% 23% 17% 21% 9% 17% 15% 15% 15% 15% 15% 15%
ROE - Recurring (Adjusted for cash tax) 11% 12% 3% 2% 2% 0% 2% 0% 0% -2% -3% -1% -3%
CROCI 10% 10% 5% NA NA NA NA 4% 3%
Transocean - Balance Sheet
Cash 2,635 2,339 2,574 2,153 2,534 2,751 2,751 2,822 2,887 2,997 2,511 2,511 1,639
Working Capital (629) (870) (738) (840) (720) (549) (549) (549) (554) (441) (409) (409) (358)
Net PP&E 21,538 20,818 20,889 21,089 21,100 21,120 21,120 21,001 20,882 20,762 20,642 20,642 20,081
Total Assets 28,413 26,329 26,245 25,839 26,167 26,200 26,200 26,149 26,102 25,952 25,306 25,306 23,812
Gross Debt 10,092 8,490 8,453 8,218 8,260 8,547 8,547 8,507 8,467 8,427 7,883 7,883 6,780
Net Debt 7,457 6,151 5,879 6,065 5,726 5,796 5,796 5,685 5,580 5,430 5,372 5,372 5,141
Transocean - Cash Flow

Cash From Operating Activities 2,604 2,473 444 194 449 415 1,502 223 217 262 169 871 591
Cash Used In Investing Activities (2,165) (2,001) (368) (458) (246) (250) (1,322) (113) (113) (113) (113) (450) (375)
Cash From Financing Activities and Other (888) (768) 159 (157) 178 52 232 (39) (39) (39) (543) (660) (1,088)
Net Change in Cash (449) (296) 235 (421) 381 217 412 71 65 110 (486) (240) (872)
Capex 2,165 2,001 368 458 246 250 1,322 113 113 113 113 450 375

Coverage Universe
Mkt
Jan-11 Annual Total Cap.
Company Name Ticker Analyst Rating Price Target Div. Yield Book Mkt/Bk Return (mm)
Oil Services
Atwood Oceanics ATW DB Und $13.97 $9.00 $0.00 0.0% $49.85 0.3x -35.6% 1,096
Baker Hughes BHI DB OP $63.38 $69.00 $0.68 1.1% $31.11 2.0x 9.9% 26,797
Diamond Offshore DO DB Und $19.47 $14.00 $0.00 0.0% $26.48 0.7x -28.1% 2,671
Ensco plc ESV DB Mkt $11.79 $9.00 $0.04 0.3% $26.46 0.4x -23.3% 3,573
FMC Technologies FTI DB Mkt $36.67 $34.00 $0.00 0.0% $11.87 3.1x -7.3% 8,276
Halliburton HAL DB OP $55.39 $67.00 $0.72 1.3% $11.21 4.9x 22.3% 47,882
Helmerich & Payne HP DB Und $79.63 $54.00 $2.80 3.5% $42.20 1.9x -28.7% 8,614
Nabors Industries NBR DB Mkt $18.19 $15.00 $0.24 1.3% $12.68 1.4x -16.2% 5,155
National Oilwell Varco NOV DB Und $38.53 $30.00 $0.20 0.5% $39.23 1.0x -21.6% 14,550
Noble NE DB Und $7.56 $4.50 $0.08 1.1% $28.96 0.3x -39.4% 1,839
Oil States International OIS DB Mkt $39.75 $36.00 $0.00 0.0% $23.68 1.7x -9.4% 2,042
Patterson - UTI Energy PTEN DB Mkt $28.22 $26.00 $0.08 0.3% $15.69 1.8x -7.6% 4,180
Rowan Companies RDC DB Mkt $20.08 $15.00 $0.00 0.0% $41.13 0.5x -25.3% 2,519
Schlumberger SLB DB OP $85.66 $96.00 $2.00 2.3% $30.36 2.8x 14.4% 119,179
Transocean RIG DB Und $15.75 $10.00 $0.00 0.0% $41.27 0.4x -36.5% 6,131
Weatherford WFT DB OP $5.66 $7.00 $0.00 0.0% $2.59 2.2x 23.7% 5,552
DB - DanielBoyd - BMO Capital Markets Corp.
Stock Rating System: OP - Outperform; Mkt - Market Perform; Und - Underperform; R - Restricted; NR - Not Rated; (S) -Speculative.
Source: BMO Capital Markets.

IMPORTANT DISCLOSURES
Analyst's Certification
I, Daniel J. Boyd, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or
issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views
expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and
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Distribution of Ratings (January 11, 2017)
Rating category BMOCM US BMOCM US IB BMOCM US IB BMOCM BMOCM IB StarMine

BMO rating
Universe* Clients** Clients*** Universe**** Clients***** Universe
Buy Outperform 42.4% 20.8% 54.7% 42.5% 55.2% 52.9%
Hold Market Perform 53.9% 13.2% 44.2% 54.0% 43.2% 41.4%
Sell Underperform 3.6% 4.8% 1.0% 3.2% 1.6% 5.7%
* Reflects rating distribution of all companies covered by BMO Capital Markets Corp. equity research analysts.
** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking services
as percentage within ratings category.
*** Reflects rating distribution of all companies from which BMO Capital Markets Corp. has received compensation for Investment Banking
services as percentage of Investment Banking clients.
**** Reflects rating distribution of all companies covered by BMO Capital Markets equity research analysts.
***** Reflects rating distribution of all companies from which BMO Capital Markets has received compensation for Investment Banking services
as percentage of Investment Banking clients.
Ratings Key (as of October 2016)
We use the following ratings system definitions:
OP = Outperform - Forecast to outperform the analysts coverage universe on a total return basis;
Mkt = Market Perform - Forecast to perform roughly in line with the analysts coverage universe on a total return basis;
Und = Underperform - Forecast to underperform the analysts coverage universe on a total return basis;
(S) = Speculative investment;
Spd = Suspended - Coverage and rating suspended until coverage is reinstated;
NR = No Rated - No rating at this time; and
R = Restricted - Dissemination of research is currently restricted.
BMO Capital Markets' seven Top 15 lists guide investors to our best ideas according to different objectives (CDN Large Cap, CDN Small Cap, US
Large Cap, US Small Cap, Income, CDN Quant, and US Quant have replaced the Top Pick rating).
Prior BMO Capital Markets Rating System
(April 2013 October 2016)
http://researchglobal.bmocapitalmarkets.com/documents/2013/rating_key_2013_to_2016.pdf
(January 2010 April 2013)
http://researchglobal.bmocapitalmarkets.com/documents/2013/prior_rating_system.pdf
Other Important Disclosures

For Important Disclosures on the stocks discussed in this report, please go to http://researchglobal.bmocapitalmarkets.com/Public/
Company_Disclosure_Public.aspx or write to Editorial Department, BMO Capital Markets, 3 Times Square, New York, NY 10036 or Editorial
Department, BMO Capital Markets, 1 First Canadian Place, Toronto, Ontario, M5X 1H3.

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January12,2017 | 04:56 ET | 04:56 ET~

Cost Inflation Expectations, page 8

Oil Market Macroeconomics, page 13

E&P Financing & Capital Spend, page 16

International Market Outlook, page 18

Updated U.S. Rig Count Forecast, page 21

Offshore Drilling Macro Update, page 23

Revising Estimates & Targets, page 30

Company Models, page 38

Oil Services | Page 2 January 12, 2017

Oil Services | Page 3 January 12, 2017

Im plied Oil Price $ 43.38 $ 55.00 $ 65.00

Oil Services | Page 4 January 12, 2017

Current % Upside Target EV/EBITDA Old % Trading Range

LARGE CAP SERVICE

SMID CAP / OTHER

Exhibit 5: BMO Oil Service Current Trading Multiples

P/E EV/EBITDA EV/GIC

Oil Services | Page 5 January 12, 2017

Consensus EBITDA Revision

Source: Bloomberg, BMO Capital Markets

Multiples Drove 2016 Performance; Earnings Revisions to Matter More in 2017

Oil Services | Page 6 January 12, 2017

2017 Estimates 2018 Estimates

Source: Bloomberg, BMO Capital Markets

Oil Services | Page 7 January 12, 2017

Mid-Cap / Land Drillers

*SLB not adjusted for CAM acquisition

Source: Bloomberg, BMO Capital Markets

Expect Cost Inflation of 15% by YE 2017 and 25% by YE 2018

Oil Services | Page 8 January 12, 2017

Exhibit 9: We Expect Cost Inflation of 15% by Year-End 2017

PPI Increase From Trough

Months for PPI to Bottom 2 11 2 3 5-7?

Rig Count Comparison

Activity vs Prior Peak

PPI vs Prior Peak

Producer Price Index - Drilling Oil & Gas Wells

Source: U.S. Dept. of Labor, BMO Capital Markets

Bottom-up Approach: Pressure Pumping Up 20-25% With High-Spec Land rigs Up

Oil Services | Page 9 January 12, 2017

Source: EIA, IHS, BMO Capital Markets estimates. Data as of 2014.

We See Pressure Pumping Pricing Rising 20-25%

Oil Services | Page 10 January 12, 2017

Pressure Pumping ex Sand

Incremental margin on Pressure Pumping 45%

Payback on newbuilds after R&M (years)

Oil Services | Page 11 January 12, 2017

Higher Costs Are Unlikely to Deter US Production Growth

Exhibit 14: Even After Inflation, US Land Remains Attractive at

Change in Breakeven - +10%/20% cost

Oil Services | Page 12 January 12, 2017

YoY Change in Demand - YoY Change in

Global Oil Demand YoY (million b/d)

Total Oil Demand OECD Demand Non-OECD Demand

Current Spare Capacity if Production is Cut to 32.5M b/d

Saudi Arabia Production New Saudi Arabia Quota

Oil Services | Page 13 January 12, 2017

Downside Risks to Oil Prices

1) A stronger-than-expected ramp in US oil production that prevents counter seasonal inventory

2015 2016 DOE Lower 48 Weekly Production EIA Supply Monthly

Oil Services | Page 14 January 12, 2017

Daily Production (k b/d)