National Oilwell Varco Reports Second Quarter 2018 Earnings

National Oilwell Varco, Inc. (NYSE: NOV) today reported second quarter
2018 net income of $24 million, or $0.06 per diluted share. Revenues for
the second quarter were $2.11 billion, an increase of 17 percent
compared to the first quarter of 2018 and an increase of 20 percent from
the second quarter of 2017. Operating profit for the second quarter of
2018 was $52 million, or 2.5 percent of sales, and Adjusted EBITDA
(operating profit excluding depreciation, amortization, and other items)
was $226 million, or 10.7 percent of sales.

“Our team executed well and delivered double-digit sequential sales
growth across all three of our business segments during the second
quarter,” commented Clay Williams, Chairman, President, and CEO. “We
achieved several notable milestones during the quarter, including
securing the largest land rig order ever placed, which was associated
with the creation of our previously announced drilling equipment joint
venture with Saudi Aramco.”

“Growing confidence in the sustainability of the ongoing recovery is
resulting in strong North American activity coupled with improving
activity and revenue growth in most international markets. Demand is
accelerating for the technologies and products we’ve developed through
the downturn that drive better safety and efficiency for our customers
around the world. NOV is well-positioned to capitalize on an expanding
global recovery.”

Wellbore Technologies

Wellbore Technologies generated revenues of $793 million in the second
quarter of 2018, an increase of 12 percent from the first quarter of
2018 and an increase of 29 percent from the second quarter of 2017. The
ongoing recovery in the U.S. and seasonal rebound in the Eastern
Hemisphere led sequential growth across every business unit in the
segment. Operating profit was $38 million, or 4.8 percent of sales.
Adjusted EBITDA was $133 million, or 16.8 percent of sales, an increase
of 29 percent sequentially and an increase of $67 million from the prior
year.

Completion & Production Solutions

Completion & Production Solutions generated revenues of $738 million, an
increase of 10 percent from the first quarter of 2018 and an increase of
13 percent from the second quarter of 2017. Improving demand for capital
equipment in North America and an increase in deliveries of pressure
pumping and composite pipe more than offset lower revenues from offshore
products. Operating profit was $40 million, or 5.4 percent of sales.
Adjusted EBITDA was $94 million, or 12.7 percent of sales, an increase
of 29 percent sequentially and a decrease of four percent from the prior
year.

Backlog for capital equipment orders for Completion & Production
Solutions at June 30, 2018 was $955 million. New orders booked during
the quarter were $398 million, representing a book-to-bill of 95 percent
when compared to the $418 million of orders shipped from backlog.

Rig Technologies

Rig Technologies generated revenues of $651 million, an increase of 35
percent from the first quarter of 2018 and an increase of 19 percent
from the second quarter of 2017. The sequential increase in revenue was
the result of better progress on the construction of offshore newbuild
drilling rigs, delivery of two land rigs in the Middle East and
improving aftermarket sales. Revenue shipped from backlog increased by
$123 million to $276 million during the quarter. Operating profit was
$62 million, or 9.5 percent of sales. Adjusted EBITDA was $84 million,
or 12.9 percent of sales, an increase of 87 percent sequentially and an
increase of 83 percent from the prior year.

New orders booked during the quarter totaled $2.03 billion, which
included $1.80 billion associated with the Company’s recently announced
joint venture agreement with Saudi Aramco. The Company also agreed with
a customer to cancel a long-dated drillship equipment package order in
exchange for commitments to continue forward with other projects and
other consideration. The agreement resulted in the deletion of $282
million from the segment’s backlog. At June 30, 2018 backlog for capital
equipment orders for Rig Technologies was $3.51 billion.

Other Corporate Items

Cash flow provided by operations for the second quarter of 2018 was $239
million. As of June 30, 2018, the Company had $1.1 billion in cash and
cash equivalents and total debt of $2.7 billion. NOV had $3.0 billion
available on its revolving credit facility as of June 30, 2018. The
unsecured credit facility matures in June of 2022 and is subject to one
primary covenant, a maximum debt-to-capitalization ratio of 60 percent.
As of June 30, 2018, NOV had a debt-to-capitalization ratio of 16.3
percent.

Significant Events and Achievements

NOV continued to expand its supply of directional measurement and
steerable technologies into new global markets in the second quarter.
NOV secured a large order for its Tolteq™ iSeries™
measurement-while-drilling (MWD) products, together with Vector™
drilling motors, from an operator in Turkey that is vertically
integrating to establish a new directional drilling service line in the
country. In China, NOV secured its first package sale of the VectorZIEL™
rotary steerable system and iSeries MWD and symmetric propagation
resistivity logging-while-drilling (LWD) tools and delivered the first
orders of its iNBS near-bit measurement system to multiple customers. In
India, NOV introduced FloDrift™ technology to an independent service
company that was struggling to execute wells for a major Indian operator
due to a formation causing a significant drift in the well path. Using
FloDrift tools, the service company obtained real-time data and
controlled drilling parameters, reducing the deviation from 30 degrees
to less than 17 degrees in the 8½-in. section.

NOV sold three complete 1,500-horsepower AC Ideal™ rigs to Argentinian
customers during the quarter. This sale also included the first NOVOS™
drilling process automation system in Latin America. The new rigs and
advanced NOVOS system will be critical for optimizing efficiency in the
Vaca Muerta field, one of the world’s largest deposits of unconventional
hydrocarbons. The basin continues to draw the attention of domestic and
international operators who will require the latest drilling and
completion technologies to develop this field.

NOV continues to advance its leadership position in high-performance
downhole technologies. In Russia, the Company provided a major operator
with Agitator™HE systems for directional applications. The 6¾-in.
Agitator system allowed the customer to drill the longest interval of
the 8⅝-in. liner section in one run and set a new record in the
Timano-Pechora region, improving efficiency while decreasing the risk of
potential bottomhole assembly (BHA) sticking. In a Haynesville Shale
extended-reach well, an Agitator system was added to the last BHA in the
challenging 6¾-in. lateral section to drive significantly improved
drilling performance. The Agitator system was critical in enabling the
operator to complete the final 1,657-ft interval in 42.75 hours,
resulting in an average rate of penetration (ROP) of 38.8 ft/hr. This
represented a 56.5 percent increase in ROP over the previous run.

NOV continues to see success in its bits, borehole enlargement, and
coring businesses in the Middle East. The Company was recently awarded a
four-year coring contract with a one-year extension covering all
conventional coring product solutions as well as all enhanced oil
saturation (sponge coring) and wireline systems. Additionally, the
Company achieved outstanding performance runs in Egypt, Saudi Arabia,
and Oman using bits outfitted with ION™ 3D PDC cutter technology in the
Chainsaw configuration, driving down customers’ cost per foot and
dramatically increasing their ROP. Deployment of the dogleg reamer also
continues, with the technology becoming a standard part of the BHA and
enabling more than 50 percent savings on normal trip-out times in open
hole.

NOV introduced the Genesis™ line of coiled tubing units, which bring
together design ingenuity and advanced coiled tubing equipment and
technology, to its portfolio of intervention and stimulation equipment.
The new unit offers a high-visibility control cabin—providing the
operator with an expanded line-of-sight for spooling and a panoramic
view of the wellsite—as well as the option to install electric controls.
In addition, HMI displays can be configured as needed to satisfy
operator preference. After debuting the product line at the SPE ICoTA
Coiled Tubing and Well Intervention Conference, the Company received
eight orders for new Genesis units. This validated the industry’s need
for a new, technologically advanced product that can carry the largest
tubing load possible for North American operators as they continue to
push the limits of extended-reach completions.

NOV recently helped an operator in the SCOOP play of Oklahoma achieve
numerous records by combining application-specific bit design with the
latest ION and shaped cutter technology. NOV’s Seeker™ bits were run in
Woodford laterals—challenging due to their high chert content—and
achieved interval records for laterals with depths of 15,000, 17,000,
and 20,000 ft. Bit runs of 4,856 and 4,233 ft represented improvements
of 1,600 ft over the closest offset while an ensuing bit run of 7,230 ft
improved the interval drilled by more than 2,000 ft. These improvements
resulted in considerable savings for the operator.

NOV’s drill bit and cutter technologies also allowed a customer to set a
state record in Oklahoma for the amount of footage drilled in one day.
The 8¾-in. DSC616M-X18 bit, equipped with ION cutters in the Chainsaw
configuration, drilled 6,071 ft in 24 hr for an average ROP of 253 ft/hr
on a well in Grady County. The customer continues to drill one mile per
day using NOV’s bits, a metric that has yet to be duplicated by other
vendors.

NOV was awarded a significant contract for the supply of TK™
glass-reinforced epoxy (GRE) lining services for a major operator in
Iraq. The contract is for the installation of GRE lined tubing over a
projected 90-well program. Commencement of the lining process is
anticipated to begin in Q3 of this year, and a continual flow of lining
will take place thereafter to meet the customer’s demand. This contract
also includes a requirement for NOV to provide practical hands-on
training to the customer’s operations and technical team, offering the
Company an opportunity to both strengthen the relationship with the
customer and ensure proper care and handling at the rigsite is performed
to NOV specifications.

Second Quarter Earnings Conference Call

NOV will hold a conference call to discuss its second quarter 2018
results on July 27, 2018 at 10:00 AM Central Time (11:00 AM Eastern
Time). The call will be broadcast simultaneously at www.nov.com/investors.
A replay will be available on the website for 30 days.

About NOV

National Oilwell Varco (NYSE: NOV) is a leading provider of technology,
equipment, and services to the global oil and gas industry that supports
customers’ full-field drilling, completion, and production needs. Since
1862, NOV has pioneered innovations that improve the cost-effectiveness,
efficiency, safety, and environmental impact of oil and gas operations.
NOV powers the industry that powers the world.

Visit www.nov.com
for more information.

Cautionary Statement for the Purpose of the “Safe Harbor” Provisions
of the Private Securities Litigation Reform Act of 1995

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 the
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.

Certain prior period amounts have been reclassified in this press
release to be consistent with current period presentation.

The Company discloses Adjusted EBITDA (defined as Operating Profit
excluding Depreciation, Amortization and Other Items) in its periodic
earnings press releases and other public disclosures to provide
investors additional information about the results of ongoing
operations. The Company uses Adjusted EBITDA internally to evaluate and
manage the business. Adjusted EBITDA is not intended to replace GAAP
financial measures, such as Net Income. Other items in the three and six
months ended June 30, 2018 were $0 and a net credit of $12 million,
pre-tax, respectively, primarily from the reversal of certain accruals,
partially offset by restructure charges and severance payments. Other
items in 2017 consisted primarily of restructure charges for inventory
write-downs, facility closures and severance payments.

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