“The oil & gas industry is bearing the full brunt of the economic damage wrought by the COVID-19 pandemic that has driven drilling activity to record lows,” commented Clay Williams, Chairman, President, and CEO. “Against this backdrop, NOV is continuing to aggressively reduce its cost structure and boost cash flow through more efficient operations and better working capital management.”
“We are determined to re-size the organization to fit lower levels of demand and continue to make good progress executing the numerous initiatives required to meet our objective. During the second quarter, we exceeded our cost reduction targets and generated $378 million in cash flow from operations, further solidifying our balance sheet and positioning us well to capitalize on future opportunities.”
“To the extent oil and gas companies and oilfield service companies continue to work, we find them gravitating to NOV as their supplier of choice. They know they can depend on us for superior quality, technology, value, and to be there to support their efforts for the long-term. With our market-leading technology, global footprint, diverse product portfolio, and customer-centric business model, NOV is positioned to exit this down-cycle stronger than ever before.”
NOV had several significant achievements this quarter:
- NOV continued to gain market adoption and expand the capabilities of its eVolve™ optimization and automation services. NOV’s M/D Totco business unit commenced operations on two new multi-year projects in the North Sea. Each contract calls for the use of NOV’s full suite of optimization services, downhole drilling tools, and sensors. Additionally, during the quarter, M/D Totco introduced several new wired drill pipe web applications that provide enhanced equivalent fluid density and vibration views, real-time torque & drag from a NOVOS™ friction test, and envelope protection.
- NOV successfully completed the first commercial run of its fully-integrated rotary steerable system (RSS) and logging-while-drilling (LWD) system with a customer in Russia. The system combines NOV’s VectorZIEL™ 400 tool with an integrated symmetric propagation resistivity LWD tool and was used to successfully drill an entire 4,900-foot horizontal section while providing real-time LWD measurements within 35 feet from the bit. The combination of a rotary steerable device and a logging-while-drilling instrument into the same tool significantly improves the capabilities of NOV’s independent directional driller customers.
- NOV continued to adapt and disseminate its leading technologies, which helped drive the critical efficiency gains that enabled the shale revolution, for use in international markets. During the second quarter, a Vector™ Series 36E drilling motor with a 5-in., 6/7 lobe 8.0 stage ERT™ power section, a drilling motor configuration from our Downhole business unit that had previously never been used in the Middle East, set a field rate-of-penetration (ROP) record in Saudi Arabia, driving a 20 percent improvement in ROP over four offset wells.
- NOV booked an order for a three-million-pound landing string, the first in the history of the industry that will be used for a 20k PSI project in the Gulf of Mexico. This will be the largest landing string ever manufactured and will help enable the operator to drill in some of the most challenging conditions in the world.
- NOV successfully commercialized its new large-bore FracMaxx™ articulated frac arm, which completes its Elmar™ big-bore QuickLatch™ system and Anson™ flow iron for multi-well frac pads. To date, the FracMaxx™ has completed 120 stages with pressures reaching 9,000 PSI and rates up to 90 BPM. By significantly reducing time between stages and removing excess flow iron from the wellsite, this technology aids operators in their effort to improve efficiencies while significantly reducing crew exposure to unnecessary risks.
- NOV completed a milestone project for the first mechanically-connected pipeline offshore Malaysia, utilizing our mechanical-interference Zap-Lok™ connection system technology. The 62-kilometer pipeline project, took full advantage of the time-saving characteristics of the Zap-Lok™ technology, reaching completion in just 18 days and a best average lay-rate of 4.7km/day, three times faster than traditional pipelay methods.
- NOV deployed the ReedHycalog™ 8⅜-in. TKC59 Tektonic™ Sabretooth™ drill bit in response to a request from a key customer in Oman for bit technology that would enable improved ROP and drilling efficiencies relative to the competition. Utilizing the latest ION™ 4D-cutter technology, this NOV design completed an entire section to a total depth of 2,874 feet with a ROP of 75.8 feet/hour, one of the best performances ever seen in salt applications in Oman.