How the Rig Count Can Affect National Oilwell Varco in 2017



National Oilwell Varco’s US and international revenues

In 2016, National Oilwell Varco’s (NOV) revenue share from the US was 25%, which remained unchanged over 2015. In comparison, Weatherford International’s (WFT) North America revenue share was ~37%, while Halliburton’s (HAL) 4Q16 North America revenue share was 45%. Baker Hughes’s (BHI) North America revenue share was 32% in 4Q16.

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Rig count

On December 30, 2016, the US rig count had declined 6% over the previous year. The US rig count reached its multiyear high in September 2014. Since then, it has dropped 61% through March 3, 2017.

From December 30, 2016, until the week ended March 3, 2017, the US rig count gained 15% to close at 756. A higher rig count can increase NOV’s revenues and earnings in 2017. In January 2017, the international rig count increased 0.4% over December 2016.

Next, we’ll discuss how upstream companies’ capex decisions can affect oilfield services companies like National Oilwell Varco.


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