National Oilwell Expects Offshore Rig Demand To Slow
April 28 (Reuters) - National Oilwell Varco Inc, the largest U.S. oilfield equipment provider, said orders fell by nearly a quarter in the first quarter and it expects demand for new offshore rigs to slow during the second half of the year.
The company's shares fell about 7 percent.
Demand for contract drilling is softening as rigs ordered during boom times are being delivered now. Large oil companies are tightening spending after a decade of double-digit increase in budgets as oil prices stagnate and project costs rise.
National Oilwell said on a conference call on Monday that its day rates had come under pressure with demand slowing.
Rival Diamond Offshore Drilling Inc warned last week that the next two years could be a tough environment for offshore drillers.
National Oilwell booked $2.33 billion in new orders for oilfield equipment in the first quarter, down from $3.04 billion a year earlier.
Barclays had expected capital equipment orders worth $3.5 billion for the company for the first quarter, while JP Morgan Securities had expected $2.59 billion.
National Oilwell's rig technology business, which makes equipment to automate well construction and management, accounts for half of its total revenue.
It also provides drill pipes and bits, pressure pumping gear, as well as procurement, inventory management and logistics services.
National Oilwell, which is spinning off its distribution business to shareholders, said it expects to complete the restructuring in the second quarter.
First-quarter revenue rose 9 percent to $5.78 billion. Analysts on average had expected $5.8 billion, according to Thomson Reuters I/B/E/S.
Adjusted profit of $1.40 per share beat the estimate of $1.38.
The Houston-based company's shares fell to $77.38 on Monday on the New York Stock Exchange. They have risen about 9.5 percent in the last three months to Friday's close.
(Reporting by Sayantani Ghosh and Sneha Banerjee in Bangalore; Editing by Don Sebastian)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Weatherford CEO's Rebound Plan Relies On Getting Smaller
- Iran Says Oil Market Is Too Tight For US Zero Exports Target
- China's Squeezed 'Teapots' Eye Petchem Path To Riches
- Baker Hughes: US Drillers Add Oil Rigs For Second Week In Three
- Venezuela Hands China More Oil Presence, But No Mention Of New Funds
- ExxonMobil Racks Up Discoveries in Guyana Block Eyed by Chevron
- Oil Market Sentiment Has Improved Significantly
- EU, US Eye Collaboration on Nuclear Materials
- USA Driving Activity to Increase to All-Time Highs
- TC Energy to Sell Prince Rupert Gas Pipeline Project to First Nation
- EU Electricity Export to Ukraine Up 94 Percent in Two Years
- China Coal Output Falls for First Time since Government Ordered More
- BP Pulse Buys One of Europe's Largest Truck Stops
- UK CCUS Plans Outdated: Think Tank
- North America Enters Rig Loss Streak
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- EIA Drops 2024 Henry Hub Gas Price Forecast
- EIA and Standard Chartered Offer Up Latest Oil Price Predictions
- Red Sea Region Sees Another Watershed Incident
- Chevron Oil Project in Kazakhstan to Cost $48.5B
- OPEC Voices Encouragement after IEA Affirms Support for Oil Security
- Biden Govt Bares Strategy for Freight Charging, Hydrogen Fueling Infra
- Ukraine Hits Third Russian Refinery In Escalating Drone Strikes
- Rystad Looks at the Buzz Around White Hydrogen
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Is Peak Oil Demand Close?
- Vessel Sinks in Red Sea After Missile Strike
- JP Morgan, Standard Chartered Reveal Latest Oil Price Forecasts
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Rystad Forecasts Net Production of Top Permian Producers in 2024
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension