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Oilfield Mergers

1,298 Views | 2 Replies | Last: 6 yr ago by FarmerJohn
FarmerJohn
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AG
So heard a rumor about NOV acquiring Dril Quip. Really don't know how much faith I put in that as it was one of those "I got a buddy" type and it was from the Dril Quip side of things. So understanding that, it did get me thinking. I was wondering what the advantage would be for NOV. Before their Technip merger, FMC made a lot of sense for NOV, but were priced too high, at least in terms of NOV getting value. In this case, I assume it would be primarily for Dril Quip's production equipment and wellhead offerings. How big of a market share does Dril Quip have on that side of things?

Anyway, just curious on people's general thoughts on if those two companies merging made much sense.
TxAg20
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AG
I don't have much insight, but we use/used NOV wellheads in the Permian which they recently sold off to Sentry. I don't know how the wellhead business they recently sold compares to Dril Quip, but it it's similar, I would doubt they're trying to acquire something similar to what they just sold.

NOV also sold off a fair size production equipment manufacturing facility in San Angelo. That facility manufactured tanks, separators, and heaters.
The Original AG 76
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AG
old rumor.
once anyone does a real due-diligence on DQ they find out its a horrible option. already happened with GE and CIW. Just hang around for 2-3 more years and pick its bones on a fire sale.
FarmerJohn
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AG
Would surprise me if the rumor started just because of some initial conversation. Probably happens every couple years. On the face of it, it does make some sense in terms of products offered. But if one doesn't have that big of a market presence, I just don't see much point unless you think a boom is coming. (One isn't.) So why pay a fortune for a product with a small customer base and limited aftermarket potential?

I would much rather equipment suppliers (which really both NOV and DQ are) would be more innovative in their thinking. THe whole "well, that's not our business" attitude is pretty self limiting. Mainly though, I would just want someone to avoid buying market share. That really screams, "We have no idea what to do!"
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