Filed by C&J Energy Services, Inc.
Pursuant to Rule 425 of the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities Exchange Act of 1934
Subject Company: C&J Energy Services, Inc.
Commission File No: 001-35255
Combination of C&J Energy Services with Nabors Completion and Production Businesses
July 7, 2014
© C&J Energy Services, Inc. 2014
Disclaimer
Important Information for Investors and Stockholders
This communication does not constitute an offer to sell or the solicitation of an offer to buy any securities or a solicitation of any vote or approval. In connection with the proposed merger, Nabors Red Lion (“Red Lion”), a subsidiary of Nabors Industries Ltd. (“Nabors”) will file with the Securities and Exchange Commission (“SEC”) a registration statement on Form S-4, which will include a prospectus of Red Lion and a proxy statement of C&J Energy Services, Inc. (“C&J”). Nabors, Red Lion and C&J also plan to file other documents with the SEC regarding the proposed merger. After the registration statement has been declared effective by the SEC, a definitive proxy statement/prospectus will be mailed to the stockholders of C&J. INVESTORS AND SECURITY HOLDERS OF C&J ARE URGED TO READ THE PROXY STATEMENT/PROSPECTUS (INCLUDING ALL AMENDMENTS AND SUPPLEMENTS THERETO) AND OTHER DOCUMENTS RELATING TO THE PROPOSED MERGER THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED MERGER. Investors and stockholders will be able to obtain free copies of the proxy statement/prospectus and other documents containing important information about Nabors, Red Lion and C&J, once such documents are filed with the SEC, through the website maintained by the SEC at http://www.sec.gov. Copies of the documents filed with the SEC by Nabors and Red Lion will be available free of charge on Nabors’s internet website at www.nabors.com under the tab “Investor Relations” and then under the tab “SEC Filings” or by contacting Nabors’s Investor Relations Department at 281-775-8038. Copies of the documents filed with the SEC by C&J will be available free of charge on C&J’s internet website at www.cjenergy.com under the tab “Investor Relations” and then under the tab “SEC Filings” or by contacting C&J’s Investor Relations Department at 713-260-9986.
Participants in the Solicitation
C&J, its directors and certain executive officers may be deemed to be participants in the solicitation of proxies from the stockholders of C&J in connection with the proposed transaction. Information about the directors and executive officers of C&J is set forth in C&J’s proxy statement for its 2014 annual meeting of stockholders, which was filed with the SEC on April 10, 2014. Other information regarding the participants in the proxy solicitation and a description of their direct and indirect interests, by security holdings or otherwise, will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC when they become available. Free copies of these documents can be obtained using the contact information above.
© C&J Energy Services, Inc. 2014
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Disclaimer
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. These include statements regarding the effects of the proposed merger, estimates, expectations, projections, goals, forecasts, assumptions, risks and uncertainties and are typically identified by words or phrases such as “may,” “will,” “anticipate,” “estimate,” “expect,” “project,” “intend,” “plan,” “believe,” “target,” “forecast,” and other words and terms of similar meaning. For example, statements regarding future financial performance, future competitive positioning and business synergies, future acquisition cost savings, future accretion to earnings per share, future market demand, future benefits to stockholders, future economic and industry conditions, the proposed merger (including its benefits, results, effects and timing), the attributes of C&J as a subsidiary of Red Lion and whether and when the transactions contemplated by the merger agreement will be consummated, are forward-looking statements within the meaning of federal securities laws.
These forward-looking statements are subject to numerous risks and uncertainties, many of which are beyond the companies’ control, which could cause actual benefits, results, effects and timing to differ materially from the results predicted or implied by the statements. These risks and uncertainties include, but are not limited to: the failure of the stockholders of C&J to approve the proposed merger; the risk that the conditions to the closing of the proposed merger are not satisfied; the risk that regulatory approvals required for the proposed merger are not obtained or are obtained subject to conditions that are not anticipated; potential adverse reactions or changes to business relationships resulting from the announcement or completion of the proposed merger; uncertainties as to the timing of the proposed merger; competitive responses to the proposed merger; costs and difficulties related to the integration of C&J’s business and operations with Red Lion’s business and operations; the inability to obtain or delay in obtaining cost savings and synergies from the proposed merger; unexpected costs, charges or expenses resulting from the proposed merger; the outcome of pending or potential litigation; the inability to retain key personnel; uncertainty of the expected financial performance of C&J following completion of the proposed merger; and any changes in general economic and/or industry specific conditions.
Nabors and C&J caution that the foregoing list of factors is not exclusive. Additional information concerning these and other risk factors is contained in Nabors’s and C&J’s most recently filed Annual Reports on Form 10-K, subsequent Quarterly Reports on Form 10-Q, recent Current Reports on Form 8-K, and other SEC filings, which are available at the SEC’s website, http://www.sec.gov. All subsequent written and oral forward-looking statements concerning Nabors, C&J, the proposed transaction or other matters attributable to Nabors and C&J or any person acting on their behalf are expressly qualified in their entirety by the cautionary statements above. Each forward looking statement speaks only as of the date of the particular statement, and neither Nabors nor C&J undertakes any obligation to publicly update any of these forward-looking statements to reflect events or circumstances that may arise after the date hereof.
© C&J Energy Services, Inc. 2014 3
A Powerful Combination of
Complementary Businesses
NABORS | ||||
C&J Energy Services | Pro Forma | Completion & | ||
C&J Energy Services | Production Services |
The combination of C&J Energy and Nabors Completion & Production Services Businesses creates the 5th largest completion and production services provider, positioned to capitalize on opportunities through its greater scale, enhanced offerings and significant operating efficiencies
~1.1 million HHP of pressure pumping capacity across the US
683 workover rigs in the US and Canada
~1,500 fluid management trucks
~$3.2 billion combined LTM revenue
Over 10,000 employees
© C&J Energy Services, Inc. 2014 4
The Combined Company
Vertically Integrated & Other Services Equipment
Manufacturing
Completion Services
Specialty Chemicals
Production Services
Hydraulic Fracturing
Downhole Tools &
Fluids Management
Coiled Tubing
Directional Drilling
Workover &
Wireline &
Data Control Systems
Well Servicing
Related Services
Research & Technology
Special Services
Cementing
© C&J Energy Services, Inc. 2014 5
Compelling Financial Benefits for Shareholders of Both Companies
Transaction expected to be accretive to C&J Energy’s cash earnings for the first full year of combined operations
Annual run-rate synergies of more than $100 million are expected to be fully realized by 2017
Combined company retains strong balance sheet and preserves leverage capacity for further expansion
Transaction enhances financial flexibility as the combined company becomes a more global enterprise
© C&J Energy Services, Inc. 2014 6
Strategic Rationale
Creates Leading Diversified Services Provider
· Creates a leading diversified completion and production service provider
– Fifth largest completion services provider with 1.1 million HHP, 38 coiled tubing units and over 100 wireline trucks
– Largest fluid services fleet with 1,500 fluid trucks
– Over 650 workover rigs
Combines Complementary Completion Businesses
· Creates immediate opportunity to capitalize on attractive market dynamics and improved activity levels in completions
– Provides access to attractive new regions, including the Rockies and Marcellus
– Provides additional assets within existing C&J Energy Services’ markets such as Eagle Ford and Permian
– Adds cementing, which is complementary to C&J Energy Services’ existing completion services
Diversifies Operations with New Service Lines
· Expands service line into fluid management and workover services, an estimated $6 billion per year business
– Unconventional plays requires greater production services
– Growing population of mature wells
Increases Scale to Drive Ongoing Growth Initiatives
· Broadens geographic reach across all major US basins
· Accelerates international expansion
· Accelerates current growth initiatives through Nabors’ established platform
· Consolidates manufacturing of fluid ends and componentry
Potential Cost Savings
· Reduces duplicative field and operational resources
· Improves cost structure through leveraging existing C&J Energy Services’ supply chain
· Replaces planned growth capex with immediate capacity
Revenue Enhancements
· Improves utilization of combined fleet
· Improves customer base due to increased size
Source: C&J Energy Services and Nabors managements.
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Acceleration of Long-Term Growth Strategy
Ability to capitalize on attractive market dynamics and improved activity levels in completions
Diversifies product and service offerings to serve customers better
Strengthens presence in all major domestic basins
Improved scale further harnesses vertical integration and technological advancement
Enhances ability to capitalize on international growth opportunities
Opportunity to leverage complementary strengths of each company
© C&J Energy Services, Inc. 2014 8
A Combination of Two Premium
Oilfield Service Providers
NABORS
C&J Energy Services Completion & Production Services
Premium, best-in-class completion services provider Diversified provider of completion and production services
Superior track record and execution across most of the major plays, including the Eagle Ford and Permian basins Broad footprint and significant presence in all basins across the US and Canada
Over 800,000 HHP pressure pumping capacity
Vertically integrated with in-house manufacturing capabilities Over 650 workover rigs
Rapidly expanding capacity and geographic reach in response to robust customer demand Largest fluids management fleet in the US, with ~1,500 trucks
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Combination Broadens Reach to Most of the Major US Basins and Canada
Fort St. John
Clairmont (Grande Prairie)
Slave Lake
Leduc
Lloydminster
Drayton Valley
Sylvan Lake
Calgary
Brooks
Nabors Completion & Production Facilities
Nabors Completion & Production SWDs
C&J Facilities
© C&J Energy Services, Inc. 2014 10
Transaction Overview
C&J Energy to combine with Nabors Completion & Production Services in stock-for-stock transaction (creating New C&J)
C&J Energy stockholders to receive one share of New C&J common stock for each share of C&J Energy common stock
Total consideration of $2.86 billion, including the value of shares held by Nabors and ~$940 million cash payment
New C&J will retain C&J Energy Services name and will be headquartered in Bermuda with corporate offices remaining in Houston
Nabors: ~53%
C&J Energy stockholders: ~47%
C&J Energy executive team to lead the Company
Josh Comstock to continue as Chairman of the Board and CEO
Randy McMullen to continue as President and CFO
New C&J Energy Board will consist of seven members
C&J Energy shareholder vote
Customary closing conditions, including regulatory approvals
Closing expected by year-end
Transaction Overview
Pro Forma Ownership
Board of Directors and Management
Closing Conditions and Timing
© C&J Energy Services, Inc. 2014
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Transaction Structure Overview
C&J Energy Services Nabors Industries Ltd.
Shareholders (Bermuda)
47.0% 53.0%
“Red Lion” / ~940MM
New C&J1
Luxco (Luxembourg)
~$1.3 Bn2 US Acquisition Co NPS Canada
Third-Party Debt
(US) (Alberta)
Nabors C&P
C&J Energy Services
(US)
C&J Energy Services
Foreign Ops
Source: Draft, dated June 23, 2014, of Agreement and Plan of Merger and C&J Energy Services management.
1. To be renamed C&J Energy Services Limited
2. Includes $909 MM of intercompany debt incurred to finance the ~$940MM payment to Nabors Industries Ltd.
© C&J Energy Services, Inc. 2014
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Financial Profile Comparison
NABORS
LTM as of 3/31/14 Completion &
($mm) Production Services
Revenue $1,111 $2,073
EBITDA $175 $322
% EBITDA Margin 15.7% 15.5%
Capex $178 $324
Total Assets(1) $1,132 $2,395
Source: Public filings.
(1) As of 12/31/2013. Nabors Completion & Production for US business only.
© C&J Energy Services, Inc. 2014
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Pro Forma C&J Energy Outlook
2015E Revenue — $4.1 - $4.5 billion
2015E EBITDA margin of ~19%
Long term EBITDA margin of 20%+ with full run rate synergies
Anticipating reduction in capex during initial phases of integration
© C&J Energy Services, Inc. 2014
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Capital Structure and Liquidity
Estimated Total Debt at Closing ~$1.3 billion
Estimated Debt/TTM EBITDA at Closing ~2.2x
Generation of free cash flow will allow C&J Energy to de-lever its balance sheet following closing of the transaction
Cost synergies
Utilization improvement
Capex reductions
Significant Liquidity including Revolver Availability of $600 Million
© C&J Energy Services, Inc. 2014
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Experienced and Proven Leadership
Josh Comstock, Chairman and Chief Executive Officer, C&J Energy Services
Larry Heidt, President, Nabors Completion and Production Services
Randy McMullen, President and Chief Financial Officer, C&J Energy Services
Ronnie Witherspoon, Executive Vice President, Nabors Completion Services
Don Gawick, Chief Operating Officer, C&J Energy Services
Steve Johnson, Executive Vice President, Nabors Production Services
© C&J Energy Services, Inc. 2014
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Completion Services Overview
NABORS Completion Services C&J Energy Services C&J Energy Services Combined
HHP (‘000) 340+ 800+ 1,150+
Wireline Trucks(1) 77 30+ 100+
Coiled Tubing Units(1) 23 15 38
Cementing Units(1) — 70+ 70+
Extends pressure pumping capabilities to prolific basins where C&J Energy is not currently present (Bakken, Marcellus)
Note: Data as of 6/24/2014.
(1) Does not include international assets, assets to be sold, or assets under refurbishment.
© C&J Energy Services, Inc. 2014
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Production Services Overview
NABORS
Production Services U.S. Canada Total
Workover Rigs 518 165 683
Fluid Trucks 1,483 – 1,483
Frac Tanks 5,266 – 5,266
Salt Water Disposal Facilities 29 – 29
Attractive and growing industry estimated to be $6.0 billion in 2014(1)
Positive long-term outlook supported by growing population of maturing conventional wells and increasing number of unconventional wells
Increasing production services intensity
Continued shift by E&P companies from land acquisition to full-scale well development
Note: Data as of 6/24/2014.
(1) Spears & Associates April 2014 Oilfield Market Report.
© C&J Energy Services, Inc. 2014
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One of the Largest Independent Service
Providers in North America
2013 EBITDA ($MM)
$1,076
190%+ Increase
$556
$491
$255
$221
$189 $173 $167
$61
SPN Pro Forma RES KEG BAS C&J CFW TCW ESN
C&J
Source: Company filings.
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A Powerful Combination
Bringing together complementary portfolios to create an industry leader
Meaningful financial benefits that will drive shareholder value and future growth
Strongly positioned to capitalize on industry trends and future acquisition opportunities
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