• NOV today reported second quarter 2019 revenues of $2.13 billion, an increase of 10% compared to the first quarter of 2019 and an increase of 1% from the second quarter of 2018. Net loss for the second quarter of 2019 was $5.39 billion, which included non-cash, pre-tax charges of $5.77 billion. Adjusted EBITDA (operating profit excluding depreciation, amortization, and other items) increased $55 million sequentially to $195 million, or 9.1% of sales.

    "NOV continues to face challenging cross-currents as it navigates a generational oilfield downturn. International and offshore markets are exhibiting growth, while North America land markets are declining as customers slash spending. Nevertheless, consolidated results improved sequentially in each of our three business segments as we pivot to higher-growth areas," commented Clay Williams, Chairman, President, and CEO. "We were pleased to see demand for NOV's technology and equipment from international and offshore customers drive our third consecutive quarter of rising bookings for capital equipment."

    "Though we are well-positioned to support growth in the offshore and international markets as customers increase activity after years of curtailed spending, severe capital austerity and lower activity in North America are resulting in a rapid change in our business mix. This presents NOV with both opportunities and challenges. Growing backlogs will allow us to better balance loading and improve absorption across NOV's global footprint, while the mix shift creates potential for temporary inventory and payment dislocations. We are nevertheless resolute on improving the working capital intensity of our business as we execute through the second half of the year."

    "The increased emphasis on capital discipline from our customer base is driving them to do more with less, and it has become clear in the second quarter that this approach is not going away anytime soon. Recognition of this challenging market dynamic, as well as lower equity values and diminished availability of capital for the energy sector led to the Company's significant impairment charge this quarter. In this environment NOV is focused on cutting our cost structure and managing working capital to improve cash flow and return on capital, while we continue to address our customers' most challenging needs with the critical technology and equipment that NOV provides."

    NOV had several significant achievements this quarter:
    NOV secured a sizeable jacking system order from Jan de Nul, an offshore construction company based in Belgium. The 96 BLM-D130 jacking units, which are designed for heavy duty and long lifecycles, will be installed on a wind turbine installation vessel to be delivered in Q4 2020. The new vessel will have a total lifting capacity of 48,000 tons, making it the first installation unit suitable for wind turbine generation above 10 MW.

    NOV was awarded a contract for a monoethylene glycol (MEG) regeneration module for the Tortue project. The scope includes engineering, design, and fabrication of proprietary NOV technology for MEG regeneration with a capacity of 12 m³/h. The module will be installed on the Tortue FPSO located in Mauritania close to the Senegal border.

    NOV's SelectShift™ downhole adjustable motor reached a major milestone, having drilled over 100,000 ft. On a recent run, the SelectShift drilled a 12,985-ft lateral, which was the longest SelectShift run in terms of footage drilled to date. The tool now has 29 field runs, 1,298 drilling and circulating hours, and more than 262 straight/low bend mode shifts downhole.

    NOV was awarded a significant contract for the supply of TK™ glass-reinforced epoxy (GRE) lining products for the Dutch geothermal market. This initial order of Tuboscope's market-leading corrosion-control system allows the Company to enter into a previously unexplored market, building on NOV's core competencies while expanding its expertise and footprint into a new sector.

    NOV installed and commissioned five additional NOVOS™ offshore automation packages during the quarter, further expanding the presence and impact of our premier automation technologies in the offshore market. These latest systems are going to work for an array of drilling contractors and their operators, with eleven additional systems slated for installation during the second half of 2019. NOV also received orders for ten land systems during the second quarter.

    NOV was awarded the contract to supply a large submerged turret production (STP™) system for Samsung Heavy Industries Co. Ltd in the second quarter. The STP system, a unique, innovative, and flexible turret mooring system for FPSO vessels, will be used for Reliance Industries' FPSO on a major deepwater gas and condensate project off India's east coast in the Bay of Bengal.

    NOV secured the sale of 22,000 ft of IntelliServ™ wired drill pipe to an independent pipe rental company operating in the offshore Europe market. The wired drill pipe string is already deployed for an operator on a 2-year drilling automation project that incorporates our NOVOS™ automation platform, eVolve™ optimization services, and BlackStream™ drilling dynamics tools.

    NOV has been awarded a multi-year drilling fluids and solids control service supply contract by a major IOC operating in the Vaca Muerta shale play in Argentina. The operator will be drilling with synthetic-based mud and has entrusted NOV to provide this critical path service for their unconventional drilling operations.

    NOV sold two 20,000-psi (20K) BOP stacks to Transocean, becoming the first oilfield equipment manufacturer to successfully design, engineer, and sell such a package. The historic sale of this equipment and technology package is the culmination of 5 years of extensive work and marks another advancement for the offshore industry as it seeks to safely and efficiently drill the world's most challenging deepwater and ultradeepwater reservoirs.

    The market acceptance of NOV's NXT™ upgrade modules for the Tolteq™ measurement-while-drilling (MWD) platform continued. Based on excellent performance in a harsh application in Oklahoma, a directional driller awarded NOV multiple orders for its top-mount pulser. We also successfully demonstrated the new fast pulsing capability provided by the NXT mud-pulse system, which enables directional drillers to receive real-time data at twice the frequency of legacy MWD systems.

    NOV was awarded two separate multi-year contracts with long-standing IOCs operating offshore West Africa. The contracts' scope of work consists of installation, rental, and service of drill cuttings handling systems that utilize the Brandt FreeFlow™ positive pressure system.

    Read the full press release.

    Published Date: 2019-07-30
    Source: National Oilwell Varco