National Oilwell Varco Announces Plan to Pursue Spin-Off of Distribution Business into Separate Publicly Traded Company

National Oilwell Varco (NYSE: NOV) announced today that its Board of Directors has authorized Company management to move forward with exploration of a plan to spin off NOV’s distribution business from the remainder of the Company, creating two stand-alone, publicly traded corporations. The Company believes that the separation of the distribution business can be accomplished via a tax-efficient spin off to NOV shareholders.

Pete Miller, Chairman and CEO of National Oilwell Varco, remarked, “Through the hard work and dedicated efforts of its employees, and with last year’s acquisitions of Wilson Supply and C.E. Franklin, we believe the Company’s distribution business now has the market size and scale to operate as a standalone, world class, distribution company. As a separate company, the distribution group would have over 415 locations and operations in 26 countries, representing approximately 85% of the revenue of NOV’s Distribution and Transmission Segment for the six months ending June 30, 2013. This distribution company will be a leading, pure play, provider of maintenance, repair and operating supplies to the global energy and industrial markets, and poised for continued profitable growth.

We believe that the contemplated spin-off is very consistent with NOV’s strategy and commitment to continue to grow the Company and create significant shareholder value. This is the right business move for both companies. As separate companies, the distribution business and the remainder of NOV will each be better positioned and have the enhanced operational flexibility to focus on their specific products, services and customers.”

The spin-off is expected to be completed in the first half of 2014 and is subject to market conditions, customary regulatory approvals, the execution of separation and intercompany agreements and final board approval. The separation of the distribution business from the rest of NOV does not require shareholder approval.

Credit Suisse Securities (USA) LLC is serving as the financial advisor to the Company and Locke Lord LLP is serving as its legal advisor.

National Oilwell Varco is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.

Statements made in this press release that are forward looking in nature are intended to be "forward-looking statements" within the meaning of Section 21E of the Securities Exchange Act of 1934 and may involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to documents filed by National Oilwell Varco with the Securities and Exchange Commission, including the Annual Report on Form 10-K, which identify significant risk factors which could cause actual results to differ from those contained in the forward-looking statements.

Source: National Oilwell Varco, Inc.

National Oilwell Varco, Inc.
Jeremy Thigpen, (713) 346-7301

Ready to start trading crude oil? Start right here....Advanced Crude Oil Study – 15 Minute Range

Heat Wave Can't Get You $8 Natural Gas in 2012

Test drive our video analysis and trade idea service for only $1.00

From the staff at EconMatters.......

The Energy Department reported that natural gas in storage grew by 26 billion cubic feet to 3.189 trillion cubic feet for the week ended July 20. The inventory level was 15.8% above the five year average of 2.754 trillion cubic feet, and 18% above last year's level.

Low natural gas prices in the U.S. this year has not only tanked the stocks of many gas weighted producers, but also dragged down profits of U.S based oilfield services companies as a result of reduced gas drilling activity (See Chart Below). However, since hitting a 10 year low of below $2/mmbtu in April, Henry Hub benchmark prices has surged 69% hitting $3.214/mmbtu on Monday, July 30, the high of the year.



The latest bullish sentiment is fueled mostly by forecasts for more unusual heat this summer to increase air conditioning use. In addition, there's also an increase in usage/demand as lower natural gas prices have also attracted many utilities to switch from coal to natural gas for power generation. According to the EIA, electricity generated using natural gas was roughly even with coal for the first time ever in April. Historically, natural gas typically supplied just over 20% of the domestic electricity needs.


These positive indicators have prompted at least one article at Forbes to predict $8.00/mcf natural gas by "the approaching winter", that means another 160% rise in about four months.

Well, EIA did raise its estimate for domestic natural gas consumption this year, expecting demand to climb 3.3 bcfd, or 4.9%, from 2011 to 69.91 bcf daily driven mainly by a 21% jump in utilities coal-to-gas switching for power generation in 2012, offsetting declines in residential and commercial use, primarily due to a weak U.S. economy.



Nevertheless, the problem is natural gas starts to lose its cost advantage to coal at around $2.40 to $2.50 per mmbtu. So the current $3.20/mmbtu levels, if sustained, could take away one significant bullish swing factor in the natural gas fundamentals--demand from the power gen sector. If that happens, it is very likely there could be another record storage level before "the approaching winter," let alone $8/mmbtu.



The natural-gas market this year is now outpacing even the returns in oil and copper (i.e. Every dog has its day). However, our observation is that the NYMEX natural gas market a lot of times could be in a somewhat irrational "trend trading" mode driven mostly by traders totally disregarding the fundamentals. The current run-up seems to be in one of those "trend-trading" momentum, and likely will not last long after reality sets in. For now, we see Henry Hub continue to hover within the $2-$3/mmbtu range in the next twelve months barring a super sized hurricane knocking out production in the U.S. Gulf.

Check out more articles at EconMatters.Com

Get our Free Trading Videos, Lessons and eBook today!

National Oil Well Varco and Ameron Announce Merger Agreement

National Oilwell Varco, Inc. (NYSE:NOV) and Ameron International Corporation, (NYSE:AMN) have entered into an agreement under which NOV will acquire Ameron in an all cash transaction that values Ameron at approximately $772 million. Under the agreement, Ameron's stockholders would receive $85.00 per share in cash in return for each of the approximately 9.1 million shares outstanding. The boards of directors of NOV and Ameron have unanimously approved the transaction, which is subject to customary closing conditions, including the approval of holders of at least a majority of Ameron's outstanding shares. Closing could occur as early as the 4th quarter of 2011.

Ameron is a multinational manufacturer of highly engineered products and materials for the chemical, industrial, energy, transportation and infrastructure markets. Ameron is a leading producer of fiberglass composite pipe for transporting oil, chemicals and corrosive fluids, and specialized materials and products used in infrastructure projects, such as poles and construction materials in Hawaii. Ameron is also a leading provider of water transmission lines and fabricated steel products, such as wind towers.

Ameron operates businesses in North America, South America, Europe and Asia, has a presence through affiliated companies in the Middle East, and has approximately 2,900 employees and 25 manufacturing locations on a worldwide basis.

NOV is a worldwide leader in the design, manufacture and sale of equipment and components used in oil and gas drilling and production operations, the provision of oilfield services, and supply chain integration services to the upstream oil and gas industry.....Read the entire article.

Schlumberger Profit Falls as Clients Slash Budgets

Schlumberger Ltd., the world’s largest oilfield-services provider, said second-quarter profit fell 57 percent after a plunge in energy prices prompted petroleum producers to cut spending. Net income dropped to $613 million, or 51 cents a share, from $1.42 billion, or $1.16, a year earlier, Schlumberger, based in Houston and Paris, said today in a statement. Excluding costs for job cuts, profit was 68 cents a share, 4 cents higher than the average of 24 analyst estimates compiled by Bloomberg. Sales fell 18 percent to $5.53 billion.....Complete Story



Futures ALERT's Everyday In your Inbox