67 WALL STREET, New York - July 3, 2014 - The Wall Street Transcript has just published its Oil & Gas Review 2014 Report offering a timely review of the sector to serious investors and industry executives. This special feature contains expert industry commentary through in-depth interviews with public company CEOs and Equity Analysts. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Oil & Gas Review 2014
Companies include: National Oilwell Varco (NOV) and many more.
In the following excerpt from the Oil & Gas Review 2014 Report, the Chairman and CEO of National Oilwell Varco (NOV) discusses company strategy and the outlook for this vital industry:
TWST: On your last earnings call you talked about North American E&Ps evolving towards a more industrial efficiency-based approach, and you said on the call that is not 100% good news for you. Can you talk elaborate one that?
Mr. Miller: I think what we are really talking about right there is, as you do more pad drilling - and you're really kind of walking the rigs around on a pad - is really good for the industry because it's much more efficient. But the severity, or I would say the velocity, of using some of the products that we produce are really not necessarily always going to be there. If you work on drilling one well, we are providing a lot of things in that particular rig. If you are doing a lot of this pad drilling, that one rig is going to be moving around, and it's going to take over for what another couple of rigs could have done. So just by definition, the volume of the products that we sell will be reduced.
Now having said that I understand while it may be a little bit on the margin for us, it's really good for the industry because we are able to drill much more efficiently. So we actually are starting to look at things other than the rig count. We are starting to look at well count as we take a look at what that is going to mean for our business for the future.
TWST: What is happening in the macro environment and/or within your customers' businesses that you think could be catalysts for growth for National Oilwell Varco?
Mr. Miller: I think the biggest thing in the macro environment is really going to be the LNG exports from this country. I think you should take a look at some of the companies like Cheniere and others that have export permits to start in the 2015 time frame. If that happens, I think what that does is opens up an awful lot of opportunity to drill gas wells. If you notice today, there was the largest withdrawal of natural gas because of the cold weather that we've ever had. But I think as you take a look at some of the opportunity to move gas out of this country, that means it's going to see more gas wells drilled. Because today most of the rigs that are working, the majority is working on oil drilling, and I think as that gas drilling improves and LNG is on the horizon, that's very positive for us. That's one.
The second macro is really the places like the Bakken and the Eagle Ford that you are actually getting oil shales, and that's making the United States become a much bigger producer of oil, less dependent upon foreign sources, and I think that for the industry is going to be very positive as that continues on.
TWST: How have your utilization rates been trending and what indicators do you have about where they will go in 2014?
For more of this interview and many others visit the Wall Street Transcript - a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs, portfolio managers and research analysts. This special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.