Last quarter, I wrote the following with regards to the fate of uber-oilfield supplier National Oilwell Varco's
"If big customers like Petrobras
If, indeed. That target is now looking iffy after the first quarter, which saw only $240 million in rig technology orders. With a book-to-bill ratio of just 0.14, the company's backlog tumbled 13% sequentially, to $9.6 billion.
What could we expect, with oil majors like ConocoPhillips
The good news for National Oilwell Varco is that $9.6 billion is still a lot of money. The bad news is that the firm expects $5.5 billion of revenue to come out of backlog this year, which could deflate that cushion pretty quickly if orders don't start to flow again sometime soon. Like shipyard sultan Keppel and driller Transocean
A slowdown in new orders is the primary issue here, but cancellations are a concern as well. $32 million worth of orders were lost this quarter, and the "at-risk" category has ticked up to $380 million. These shoddily financed customers are a nuisance, but not the core driver of NOV's business.
Aside from perhaps ExxonMobil
In short, as long as the AIGs of the world are able to pull back from the abyss, I think this big rig business can get back to something approximating normal.