NOV Wins ExxonMobil Guyana Contract, Bolstering Offshore Backlog Amid Soft Order Trends

What happened

NOV Inc. has been awarded a contract by ExxonMobil to supply an actively heated subsea flexible pipe system for the Hammerhead project offshore Guyana, supporting long-term output. This contract aligns with NOV's strategic exposure to offshore and international markets, which account for 52% and 92% of its $4.3 billion capital equipment backlog as of June 30, 2025. The award reinforces NOV's presence in Guyana, a key growth region highlighted in the DeepValue report's monitoring of offshore project awards. However, the company's recent book-to-bill ratio of 66% in the second quarter of 2025 signals near-term moderation in order intake, tempering optimism. While this win adds visibility, it does not fully offset the cyclical risks and execution challenges noted in the filings.

Implication

First, this award directly supports NOV's backlog conversion, with approximately 27% of the June 2025 backlog expected to convert in the remainder of the year. Second, it validates NOV's subsea capabilities and could lead to additional work in Guyana, aligning with the report's emphasis on offshore project awards as a catalyst. Third, given NOV's reliance on international markets, this contract reinforces its positioning but remains a small incremental addition relative to the total backlog. Fourth, investors should remain cautious, as the low book-to-bill ratio indicates persistent uncertainty in order flow and aftermarket demand. Fifth, therefore, while positive, this news underscores the need for consistent order wins and backlog execution to sustain the BUY thesis amid oil price and regulatory risks.

Thesis delta

The ExxonMobil contract provides a tangible example of NOV capturing offshore opportunities in Guyana, which was a watch item in the DeepValue report, reinforcing the upside from international awards. However, it does not shift the fundamental thesis, as the key risks—such as soft book-to-bill, backlog conversion slippage, and oil price volatility—remain unchanged. Investors should view this as a confirmation of NOV's strategy rather than a material catalyst, maintaining focus on broader order intake and margin trends.