National Oilwell Seeks Bargains In Depressed Oilfield Market
April 28 (Reuters) - National Oilwell Varco Inc is slowing down its share buyback program to preserve cash for acquisitions, driven by the need for consolidation in an industry beset by low crude prices.
The largest U.S. oilfield equipment maker is in talks over several potential deals, its chief executive said on Tuesday, which would add to two acquisitions already completed this year.
"We are currently slowing our share repurchases in view of the potential acquisition candidates coming into sharper focus," Clay Williams said on a conference call with analysts after the company reported first-quarter results.
National Oilwell's $3 billion share buyback program has begun at a blistering pace, with just $900 million remaining under a three-year program announced last September. As of March 31, the company had $3 billion in cash and cash equivalents.
But a 44 percent drop in global crude prices since June has prompted oil producers to scale back spending, weighing heavily on demand for oilfield services and equipment.
National Oilwell's first-quarter revenue was lower than analysts had expected and the company forecast declining revenue for the next few quarters. Its shares fell as much as 8 percent to $50.18.
For an acquisitive company such as National Oilwell, which has spent more than $13 billion on acquisitions in the last 10 years, according to Thomson Reuters data, the downturn could throw up some bargains.
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