Welcome, everyone, to NOV's second quarter 2023 earnings conference call. With me today are Clay Williams, our Chairman, President, and CEO, and Jose Bayardo, our Senior Vice President and CFO. Before we begin, I would like to remind you that some of today's comments are forward-looking statements within the meaning of the federal securities laws. They involve risks and uncertainty, and actual results may differ materially. No one should assume these forward-looking statements remain valid later in the quarter or later in the year. For a more detailed discussion of the major risk factors affecting our business, please refer to our latest Forms 10-K and 10-Q, filed with the Securities and Exchange Commission. Our comments also include non-GAAP measures. Reconciliations to the nearest corresponding GAAP measures are in our earnings release, available on our website. On a U.S. GAAP basis for the second quarter of 2023, NOV reported revenues of $2.09 billion and net income of $155 million, or $0.39 per fully diluted share. Our use of the term EBITDA throughout this morning's call corresponds with the term adjusted EBITDA, as defined in our earnings release. Later in the call, we will host a question-and-answer session. Please limit yourself to one question and one follow-up to permit more participation. Now, let me turn the call over to Clay. Thank you, Blake. For the second quarter of 2023, NOV reported fully diluted earnings per share of $0.39 and EBITDA of $245 million on revenues of $2.1 billion. Adjusted EBITDA was the highest that we've seen since 2019, and earnings per share were the highest since the third quarter of 2015. Second quarter revenue increased 7% sequentially and increased 21% compared to the second quarter of 2022. EBITDA margin was 11.7% of revenue, up 180 basis points from the first quarter of 2023. Sequential EBITDA leverage was 38%, and year-over-year leverage was 26% on the 21% top line gain. Measuring from our pandemic low point in the first quarter of 2021, revenues have improved 68% off bottom, driving 29% EBITDA leverage. Combined book-to-bill came in just shy of one, Overall, combined orders in the second quarter were up slightly compared to the first quarter levels. While lower gas prices and tepid oil prices drove North American activity and ordering lower in the second quarter, international and offshore activity continued to gain momentum. Our customers are mobilizing for significant offshore and international drilling campaigns over the next few years, which will require NOV's support. We were pleased to see progress continue around the normalization of our supply chain in the quarter. Rapidly compressing delivery schedules for certain raw materials we buy led to higher inventories this quarter, up $163 million sequentially, as inbound inventory receipts jumped. While revenue grew 7% sequentially, inventory increased 8% sequentially, with the work-in-process portion of inventory growing 13% sequentially. There are three reasons for the increase. First, we are catching up on receipts of castings and forgings. The pandemic shutdown drove many foundries out of business, foundries which cast high-strength steel and specialized molds to make custom critical parts for our specialized products. Specifically, steel castings arriving during the quarter accelerated for top drive main shafts, IBOPs, spherical BOPs, mission flow products and elevators, which underpin high production levels at certain rig technologies plants. We will continue to reposition our supply chain for castings for additional product lines like pumps and iron roughnecks through the remainder of the year, which we expect to keep inventories elevated through the third quarter before rolling over in the fourth quarter, which should see substantially improved cash flow as a result. Second, Wellbore Technologies inventories increased sequentially as we received bar stock and heavy-wall green tubes related to the drill pipe disruptions we had in the first quarter. With drill pipe backlogs up nearly $90 million year-over-year, these inventories will flow out over the next couple of quarters, also contributing to improving cash flow. Finally, while supplier reliability and lead times are broadly improving, we are still fighting to catch up in certain component categories. We can't ship products unless they are 100% complete. If we have only 99% of components for one of our products in hand, it cannot be completed. Instead, it will reside in work-in-process inventory until the final part arrives. This supply chain challenge also increased our contract assets, another contributor to working capital, by $67 million sequentially, as milestone payments on large projects were delayed, pending receipt of final components. While we are pleased to see more critical inputs arriving at our plants, these supply chain-related increases contributed to a disappointing rise in consolidated working capital and working capital intensity, which increased from 31.1% of annualized revenue in the first quarter to 32.7% in the second quarter. Since our backlogs are strong and demand high, we expect this to be a temporary condition related to the normalization of our supply chains, which should begin to turn around later in the year. Turning back to the P&L, we can see the benefits of improving supply chain rolling through our results. Wellbore Technologies posted 8% sequential growth at 53% leverage on sharply improved sequential steel receipts and corresponding drill pipe shipments, which helped push EBITDA margins up to 20.4%. The Completion and Production Solutions segment posted 5% sequential top-line growth at 43% leverage, which improved EBITDA margins by 170 basis points from the prior quarter. Year-over-year, the group was up 18% at 33% leverage. Supply chain improvements within our Excel systems and fiberglass businesses helped drive the stronger results out of the Completion and Production Solutions segment. Rig Technology segment grew 10% sequentially, only had 4% leverage due to a couple of items. First, sequentially, higher expenses related to a full consolidation of our Keystone wind turbine tower startup business in the renewable energy space was a significant drag.... Additionally, poor mix within capital equipment, specifically more offshore crane revenue and less offshore rig revenue associated with 20,000 PSI upgrades, and a poor mix with an aftermarket, which saw a higher mix of lower margin service and repair revenue, contributed to the low leverage. Nevertheless, growing availability of castings, forgings, and other components are expected to lift Rig Technologies' fourth quarter exit margins up into the low to mid-teens. While it's encouraging to see NOV's consolidated EBITDA margins improve sequentially, margins still remain below where they should be. In a moment, Jose will offer you forward guidance, which points to stronger performance in the back half of the year, particularly in the fourth quarter. Nevertheless, we see opportunities for further improvement and have begun executing additional cost reduction measures, which will run throughout the next four quarters, which we estimate will contribute another $75 million annually to drive better margins and returns upon the completion of our cost reduction program. Many of our challenges have been symptomatic of the later cycle capital equipment sales nature of our business. While oil field service companies have pledged not to spend capital, their customers, the E&P companies, like what they see when they look at the technologies we've developed. They're requiring, and some demanding, their well construction service providers enhance the efficiency of their operations and reduce their greenhouse gas emissions with NOV technology. The result is that momentum in our business is building. Post-pandemic demand has been rising as a result. Backlog is up 32% for Rig Technologies, excluding the large Saudi order for 50 rigs we won in 2017, and up 96% for completion and production solutions since the low point of the first quarter of 2021. Wellbore Technologies is benefiting from high offshore and international interest in more environmentally sound drill cuttings management and greenhouse gas reduction technologies by E&Ps, which helped drive significant top-line growth and leverage for our well site services business unit. Turning to drill bits, advancements in PDC cutters have produced many record bit runs for Reed Hycalog, resulting in significant market share gains in a number of key markets at premium pricing, including wellbore enlargement reamers offshore during the second quarter. Our mechanical lock cutter technologies have reduced our cost and improved our utilization of under reamers. For PDC bits, we expect proprietary graphene cutter technology that we've been developing for the past few years to drive further gains through better performance at reduced costs for our bits, while also allowing NOV to capture premium pricing. NOV's presence in the digital space continues to grow as one of our major North Sea E&P customers extended its contract for wire drill pipe, high-speed data transmission from their bottom hole assemblies. It, along with other offshore E&P operators, continue to standardize on our proprietary wire drill pipe service for drilling efficiency and safety. Our cloud-based edge computing services also continue to gain traction. 18 coil tubing customers are using our max completions technology to monitor and optimize 169 units in the field, and users of this product more than doubled in the quarter to nearly 1,700. More major oil companies are utilizing our edge-to-cloud products to manage remote operations in real time, with nearly 1,200 assets connected to the cloud between E&P and oilfield service customers. Rig Technologies continues to see strong demand for real-time monitoring of rigs around the world, including performance optimization tracking required by some IOCs and automation lifecycle management for drilling contractors to achieve better asset efficiencies. Rig is also seeing high interest in its automated robotics products, having sold packages for six rigs, with the first offshore system installed and commissioned in the second quarter. Operators are pressing for reduced greenhouse gas emissions, leading to high interest in our PowerBlade product, which significantly reduces power consumption and diesel costs for offshore drillers. Looking ahead in the near term, we believe North America land operations will continue to slow in the third quarter, pending higher commodity prices. Our drilling contractor customers are keeping rigs ready for a resumption of higher activity in 2024. Importantly, we expect international and offshore markets to overcome these near-term North American headwinds, as most NOCs and offshore-focused IOCs are pressing forward with aggressive campaigns. Specifically, we are pleased to see growing activity in West Africa, Asia, the North Sea, and offshore Mexico, and continued strength in the Middle East, Guyana, Brazil, and North Africa. As major project FIDs grow, we see a strong sales pipeline emerging for our gas processing and FPSO products, which typically lag FIDs by 6-18 months. Having delivered our fourth new land rig into the Saudi market, and with lots of interest in NOV digital technologies across the region, we are ready to drive substantially improved drilling efficiencies for NOCs around the Gulf. As a leading independent provider of essential technologies and equipment for what is probably the world's most essential industry, NOV is positioned to benefit from years of underinvestment as the industry equips itself to meet the challenges of providing energy security. Before I turn it over to Jose, for those NOV employees listening today, I wanna thank you for all that you do to take care of our customers and keep their programs on track. You are simply the best. Our customers appreciate you. I want you to know that I do, too. With that, I'll turn it over to Jose. Thank you, Clay. NOV's consolidated revenue totaled $2.09 billion, a 7% sequential increase and a 21% increase compared to Q2 2022. Revenue related to offshore activity grew 18% sequentially, and revenue from international markets grew 9%. Despite industry activity levels that declined in the U.S. and a tougher than average Canadian spring breakup, revenues from North America improved 4% during Q2. Adjusted EBITDA for Q2 totaled $245 million, or 11.7% of sales, representing an incremental flow-through of 38% sequentially. While our margins are moving in the right direction and the later cycle nature of our business is starting to gain momentum from the significant growth in offshore and international markets, we're not content with our performance. As Clay mentioned, we're focusing on improving the margins in our business and have begun implementing strategic actions, which will lead to approximately $75 million of annualized savings within the next 12 months. These initiatives, coupled with a strong outlook for the fourth quarter, should lift our consolidated EBITDA margins into the low teens in the fourth quarter and set us up for stronger results in 2024. Clay covered the primary reasons for our increase in working capital, which resulted in a $72 million use of cash from operations during the quarter. This increase is transitory and should begin to unwind later this year. While working capital metrics are expected to improve by year-end, we do not expect to return to our normalized levels of working capital until mid-year 2024. We continue to expect a strong exit to the year, with revenues 5%-10% higher than Q2 levels. Additionally, we anticipate up to $50 million in cash expenses related to our cost savings program. The combination of these incremental cash costs, continued top-line growth, and above normal working capital levels will likely cause us to fall short of prior full-year free cash flow expectations. We now expect free cash flow to be roughly break even for the year. However, this leaves us very well positioned for 2024, during which we anticipate free cash flow will exceed 50% of our EBITDA. Moving on to segment results. Our Wellbore Technologies segment generated $804 million in revenue during the second quarter, an increase of $59 million, or 8% compared to the first quarter, and an increase of 21% compared to the second quarter of 2022. Revenue growth was supported by activity gains in the international and offshore markets, particularly in the Middle East and Africa, and by a strong recovery from the disruptions we had in our drill pipe business during the first quarter. The segment also notched solid revenue growth in North America, despite softening activity levels due to continued market share gains in several business lines. EBITDA improved $31 million to $164 million, or 20.4% of revenue, representing 53% EBITDA flow through, resulting from strong execution by our team, which was able to capitalize on rapid, if uneven, improvements in the global supply chain and obtain more appropriate pricing for our differentiated technologies. Our MDTOTCO business posted double-digit sequential revenue growth with very strong EBITDA flow through, achieving record-high revenue in EBITDA. The unit capitalized on improving demand in the Eastern Hemisphere, with strong sales into the Middle East, Asia, and Africa, which more than offset revenues from North America that declined in line with drilling activity levels. The business unit continues to see growing adoption rates for its digital solutions and realized 32% sequential growth in revenues from its Max Digital platform, and as highlighted in the earnings release, also entered into a global cloud agreement with a major IOC that will utilize a broad spectrum of the capabilities from our MAX platform, including our Kaizen Intelligent Driller Optimizer, WellData 4.0 Remote Drilling Monitor, and RigSense 4.0 Electronic Drilling Recorder to improve its operational efficiencies. Our Downhole Tools business reported revenue growth in the low single digits with outsized incremental margins. Mid-teens growth in the Eastern Hemisphere, driven by strong fishing and drilling tool sales in key Middle Eastern markets and Asia, more than offset softer results in the Western Hemisphere. Revenues in the U.S. declined only 1%, despite a 5% decrease in drilling activity levels. An improving supply chain enabled the operation to significantly ramp manufacturing throughput of its high-spec rotors and stators for its Series 55 drilling motor, enabling the business to capitalize on ample demand for the product and capture additional market share. Our motor runs per active U.S. drilling rig increased double digits sequentially, and the premium product helped drive the improved margins for the business unit. We expect continued market uptake of our premium technologies and typical seasonal activity increases to drive continued growth for this business through the back half of the year. Our Reed Hycalog drill bit business posted strong sales into the Middle East and Africa, and continued market share gains in North America offset activity declines in the U.S. and Canada. Like our downhole business, Reed Hycalog's revenue per rig increased double digits, the result of the business's technology leadership, which drives better bit performance in the world's most challenging formations. As previously disclosed, we are currently pursuing litigation against several companies involving royalties due under licenses related to certain bit leaching technologies developed by Reed Hycalog. During the second quarter of 2023, the company accrued an incremental $10 million of receivables owed by non-paying licensees, which represents approximately one half of the revenues recognized during the quarter related to leaching technology licensing agreements. For decades, the Reed Hycalog team has been responsible for developing generations of industry-leading drill bit technology. As Clay highlighted, we continue to push the leading edge of the bit space and expect our upcoming generation of technology to continue driving outsized performance for our customers. Our Well Site Services business reported high single-digit sequential revenue growth with strong incremental flow through. Improving demand for solid control equipment and services in the Eastern Hemisphere and growing demand for our managed pressure drilling product offering more than offset a slowing North American market. As the offshore recovery continues to gather momentum, this business is very well positioned to benefit. Recent investments in MPD and waste disposal technology, along with strategic investments in key markets such as Guyana, should result in outsized growth for this business in the coming quarters. Our Tuboscope pipe coating and inspection business posted mid-single-digit sequential revenue growth with solid incrementals. Inspection service operations posted improved revenues in all regions, including the U.S., where drill pipe that is increasingly run hard in extended lateral wells is driving greater demand for drill pipe threading machining services. Coating revenues improved on higher demand for drill pipe coating services, partially offset by lower sales of pipe sleeves and glass-reinforced epoxy liners relative to the very strong shipments in the first quarter. We're also realizing strong demand for our TK340TC low thermal conductivity coating, which was originally introduced for geothermal applications. While demand has been solid in geothermal markets, more oil and gas operators are realizing excellent value from our proprietary coating in hot rock formations. This coating protects bottom hole assemblies by maintaining lower fluid temperatures, which has led to operators realizing 20% improvements in rates of penetration in these harsh environments. While we believe lower OCTG manufacturing activity and continued softening of drilling activity in the U.S. will negatively impact the second half, key international markets, including Brazil and the Middle East, should more than offset these declines, driving modest revenue growth and a slightly improved sales mix. Our Grant Prideco Drill Pipe business executed a meaningful recovery from the vendor disruption that left the operation short on bar stock for tool joints in the first quarter, resulting in the business achieving its highest revenue in the last 8 years and its highest level of profitability since 2014. After an exceptional first quarter of bookings, orders declined modestly. Demand in the eastern hemisphere and offshore markets remained solid, but lower drilling activity in the U.S. is resulting in contractors beginning to use pipe from stacked rigs and defer new orders. Looking ahead, we anticipate a slight decline in revenues for this business during the third quarter, but a solid backlog and demand from international markets has the business well positioned to deliver a sizable increase in revenues in the fourth quarter. For our Wellbore Technologies segment, we expect building momentum in international and offshore activity to offset declines in the US, resulting in third quarter revenue and EBITDA that is approximately in line with the second quarter. We also expect the building momentum in international and offshore markets to more than offset bottoming North American activity, resulting in the segment delivering fourth quarter revenue that is 5%-10% higher than the second quarter. Our Completion and Production Solutions segment generated revenues $753 million in the second quarter of 2023, an increase of 5% compared to the first quarter, and an increase of 18% compared to the second quarter of 2022. Revenue growth was the result of an improving supply chain for XL Systems and Fiberglass, progress on projects and backlog, and opportunities in international markets. EBITDA for the second quarter was $69 million, or 9.2% of sales, up $15 million from the first quarter and up $37 million from the second quarter of 2022. Sequentially, EBITDA flow through of 43% resulted from a better sales mix and improved project execution. While capital equipment orders for North America have softened and certain large offshore FIDs have slipped, demand from international and offshore markets remains solid, driving $450 million in orders, an increase of 11% compared to the first quarter, and bringing the portion of our backlog related to international projects up to 75%. Our XL Systems Conductor Pipe Connection business continues to capitalize on the early stages of a robust offshore recovery, posting a strong sequential increase in revenues in its fourth straight quarter with a book-to-bill of over 100%, led by growing demand from West Africa. Quoting activity remains high, which should result in continued solid intake during the third quarter. We expect results for our XL Systems business to decline modestly in the third quarter, but the operation is preparing for a significant increase in shipments in the fourth quarter that will support significant drilling programs in 2024. Our Subsea Flexible Pipe business posted a low single-digit increase in sequential revenue during the second quarter. While order intake declined, we do not believe our bookings were representative of underlying fundamentals. We see rapidly growing demand for flexible pipe at a time when excess industry capacity has been absorbed. Operators are struggling to understand the rapid change in pricing dynamics, which resulted in multiple large tenders not being awarded after bids came in at pricing that was well above operators' budgets. We do not believe this reflects lost work, and these projects are expected to move forward. However, there are likely to be slight delays in the award processes as operators adjust their budgets for a flexible pipe market that has quickly gone from having ample excess capacity to industry demand exceeding capacity. We're increasingly confident that our deliberate approach in which projects we sign up will allow us to realize meaningful improvements in this operations margins as we transition from projects that originated during the depth of the downturn to projects that are now being signed in a much healthier market environment. Our Process and Flow Technologies business posted a mid-single-digit sequential increase in revenue, with improved progress on our wellstream processing projects, partially offset by small declines in the business unit's APL and production and midstream operations. Orders for the business unit increased more than threefold sequentially, representing the best bookings quarter for this business in 2 years. Our Wellstream Processing operation booked an order for a sizable monoethylene glycol regeneration and reclamation unit for the North Sea, and our APL operation received an order for a submerged swivel and yoke destined for a project in West Africa. While operators remain somewhat cautious due to global economic uncertainties, the pipeline of potential offshore projects continues to grow. Similar to our Subsea business, we expect the rapidly improving market environment for this business to result in meaningful margin expansion during 2024. Our Intervention and Stimulation Equipment business realized a slight sequential decrease in revenue, with lower deliveries of pressure pumping equipment, mostly offset by higher aftermarket sales and strong deliveries of coil tubing equipment. This more favorable business mixture of a modest sequential increase in EBITDA. Declining completions related activity in North America broke the business unit's streak of six straight quarters with a book-to-bill of greater than one. While quoting activity declined only 4% and the average size of opportunities increased, orders for new equipment pushed out as service companies focused on their existing asset base, driving incremental demand for aftermarket spare parts and services. Demand from international and offshore markets remained healthy, which led to solid orders for our coil tubing, wireline, and pressure control equipment.... Our fiberglass systems business posted a high single-digit increase in revenue with strong incrementals. Softening demand in the North American oil and gas market was more than offset by robust sales into chemical and industrial markets, which included the business's initial shipments of FM 4922 compliant fume and smoke exhaust composite ducts for a major semiconductor manufacturer's chip foundry. The first of several large projects we believe our fiberglass systems business will support. Additionally, the operation realized higher demand for scrubber systems in Asia. While the North American oil and gas markets have softened, demand remains robust in the Middle East and North Africa, which we expect will drive strong results in the second half of 2023 for the business unit. For our completions and production solutions segment, we expect growing demand from improving offshore markets will offset softer conditions in North America, resulting in third quarter results that are in line with the second quarter. Building momentum in offshore markets are giving us growing confidence in the segment's ability to achieve low double-digit EBITDA margins by year-end. Our rig technology segment generated revenues of $606 million in the second quarter, an increase of $56 million or 10% compared to the first quarter, and an increase of $144 million or 31% compared to Q2 2022. The sequential increase in revenue was driven by greater levels of service and repair work in our aftermarket business and higher revenue conversion from our backlog of capital equipment projects. Adjusted EBITDA increased $2 million sequentially and $30 million year-over-year to $71 million or 11.7% of revenue. As Clay mentioned, incremental EBITDA flow-through was limited, due in part to a less favorable sales mix and higher start-up costs related to our new wind tower venture. New orders totaled $222 million, representing a book to bill of 108%, total backlog for the segment at quarter end was $2.89 billion. Bookings declined $29 million sequentially due to sizable order for wind installation vessel equipment in the first quarter that did not repeat. Orders for our rig equipment were solid, and we booked 11 top drives and 10 iron rough necks for land rigs in the Middle East, several automation packages for offshore rigs, and eight of our new electric lattice boom cranes for multiple operators. We're capturing a strong market position in this growing zero emission market niche for our all-electric cranes based on our unmatched reliability. The early phase of a robust recovery in offshore exploration and development is underway, driving an increasing pace of offshore drilling tendering activity. After numerous bankruptcies and 38 drill ships, a number equal to over half the drill ships working today, that were scrapped over the past 8 years, available rigs are increasingly hard to come by. We have seen offshore drilling day rates continue to inflect higher, with some of our key customers announcing drill ship contracts north of $500,000 per day in recent weeks. Expectations are for rates to continue to rise in order to incentivize additional rig reactivations, as the low-hanging fruit has mostly been pulled out of the stack. Confidence in the long-term sustainability of the cycle, combined with concerns related to rig availability, is also causing the length of contract terms to inflect, with a recent contract extending out to 2029. There are a limited number of remaining drill ships that are not spoken for and are either warm stacked or in yards waiting to be completed. Cold stacked rigs will require significantly more capital to get back into proper working condition and to outfit with the latest technologies that operators desire. As we help our customers dig deeper into the stack of rigs to reactivate, we expect to see an increasing number of opportunities with larger scopes and expect projects to include a growing amount of associated capital equipment orders. While the outlook is promising, our aftermarket business is already benefiting from growing rig reactivations and the continued normalization of maintenance capital spending by drilling contractors. Spare part bookings increased for the sixth consecutive quarter. Revenues from both our service and repair operations grew approximately 17% sequentially. With increasing manufacturing throughput, we expect to realize a greater pace of higher margin spare part deliveries in the second half of the year. While orders for our marine and construction business were down sequentially due to the lack of a wind installation vessel award during the quarter, we're actively engaged in a number of tenders and are optimistic about the order outlook for this piece of the business in the second half of 2023 and beyond. Looking out to the latter part of this decade, there's still a projected shortfall in vessel capacity for the number of projects that have been sanctioned. Developers continue to list the inability to contract adequate wind construction vessel supply as one of their chief operational concerns, a fear we are more than happy to help alleviate. Looking forward, we believe accelerating production and an improved mix in both our aftermarket and our capital equipment operations will translate into improved results for our rig technology segment in the coming quarters. For the third quarter, we expect revenue for the segment to grow approximately 5%, with incremental margins in the 30% range. We expect the segment to have an additional 5%-10% sequential growth into the fourth quarter and end the year with low teen EBITDA margins. While the midpoint of our segment-level guidance implies a very modest improvement in our consolidated company results during the third quarter, we believe the combination of improving international and offshore markets and the proactive measures we're taking to improve our profitability will drive meaningful improvements in the fourth quarter, resulting in EBITDA in the $300 million range and setting us up for even better performance and stronger cash flows in 2024. With that, we'll open the call to questions. Thank you. As a reminder, to ask a question, please press star 11 on your telephone, then wait for your name to be announced. To withdraw your question, please press star 11 again. As a reminder, we ask that you please limit yourself to one question and one follow-up question before returning to the queue. One moment while we compile our Q&A roster.... Our first question is going to come from the line of Mark Bianchi with TD Cowen. Your line is open. Please go ahead. Hey, thanks. I wanted to first ask about the supply chain challenges that you guys have had. You know, there, there have been a few different ones. I think they're probably very, you know, unique in their in their description. Just broadly speaking, why do you think NOV has struggled so much with this over the past several quarters? What gives you confidence that, you know, we won't see that going forward? First, Mark, as we noted in our prepared remarks, we made good headway, particularly through the last 2 quarters, on accessing, in particular, castings and forgings, which has been a particular supply chain challenge. The pandemic, as I noted, drove a lot of foundries out of business, NOV is out there with other industrial manufacturers trying to reposition supply chains, qualify new foundries, obtain the castings that we need. These are all very specialized, custom, parts that these foundries cast for, for all of us. Stepping back and looking at NOV, we're, I think, the largest manufacturer in oilfield services with a very broad portfolio of products. Within rig technologies alone, we have something like 250,000 different discrete things that we buy to support our product lines out there. Included in that are very exotic steel that maybe only 1 mill in the world produces. Included in that are very high-performance polymers, Vuitton, for instance, and gaskets and O-rings, and items like that. We're also a major purchaser of fiberglass, for instance. I think we buy 1 million, we buy a lot of fiberglass annually. When the world shuts down its economies, as it did during... more disruptive to our business model within the oil field than just about anybody else out there. If you look more broadly at other industrials, I know many are still pointing to reverberations coming out of that shutdown, affecting their businesses in aircraft supply and automobiles, in a land crane manufacturer that I'm aware of. There's a lot going on out there. The good news is, you know, our teams are getting better at managing it. We're making progress there. We're starting to see the logjam break, and that gave rise to higher inventory levels, our balance sheet this quarter and last quarter, but also gave rise to stronger incrementals and margins out of our business as we battle through this turmoil. Okay, great. That's helpful context. Maybe switching over to orders, you expressed some optimism for the second half, particularly as it relates to international and offshore. I was hopeful you could maybe help quantify what that might look like, either on a book-to-bill basis or year-over-year growth. Yeah some sort of help with the quantification would be great. I'm going to stop short of quantifying. Orders aren't landed until we actually sign contracts. We're very optimistic, but I'm going to shy away from wrapping numbers around that. What I would tell you is that the general trends that we're seeing in the 2 segments that we report backlogs for are both positive. If you look at the second quarter for completion and production solutions, we saw offshore accelerating. Our process and flow technologies business, which sells gas processing technologies and components into FPSOs, had a book-to-bill approaching 190%, with strong orders coming out of the North Sea and West Africa. Our Excel Systems Conductor Pipe business, which sells into the offshore as well, saw strong bookings on strong shipments in the quarter. Booked the bill north of 100%. I think Jose detailed in flexibles, we're really pushing price. That slowed down orders this quarter. Our longer-term outlook is very strong. Offshore portion of caps is trending up, whereas in the second quarter, not surprisingly, given the softness in activity in North America, we saw orders slow. Our intervention and stimulation equipment group, which sells, you know, frack equipment, well, dummy equipment, mostly to the North American market, saw a book-to-bill down around 60% or so. As we look forward to Q3, we expect those two trends to continue. Our outlook for the offshore remains very strong. Again, gas processing technologies that we sell, we think we're close to landing some more meaningful work in the North Sea, as well as other offshore markets around the world. Expect North America to continue to be soft. This is kind of a hair trigger group of customers here in the U.S. and Canada. They respond very quickly to commodity price movements and declines in activity that we've seen, not surprisingly, they're curtailing their spending. I would say, I think maybe there's upside a little later in the year. We're seeing more demand out of international markets along with continuing demand for lower emission technologies. DGB, frack fleets, e-frack technologies, turbine direct drive, and so forth. Possibility of surprise to the upside, but we're right now not foreseeing it. Overall, pretty strong international offshore outlook driving the completion of production solutions backlog. Before I leave that segment, I also do want to point out what we're trying to accomplish here in caps. is to high-grade our contracts here. We have on our long-term projects, we have a lot of inflation protection, but it's never perfect, and COVID was a significant disruption to projects that we've discussed on prior calls, and we're still battling through inflation coming out of COVID and so forth. We're trying to push for better pricing margin, better contract terms, and continue to high-grade that backlog as we've been doing for the past, you know, year plus. Turning to rig, again, in the second quarter, we had a touch more land orders than we had offshore, and as Jose mentioned, strong demand for top drives, iron roughnecks, spherical BOPs, out of the Middle East and some from North America. But also, continued demand for our Adam RTX rig automation, offering. The offshore this quarter was characterized by mostly pipe handling, electric cranes, BOPs, no-go systems. When we look to the third quarter, we expect that to flip around. We think, land demand is probably gonna slow just a pad, but offshore, should continue to be strong. Specifically, we're looking at partial upgrade packages for two floating rigs, our customers are thinking about reactivating. We have line of sight on another wind turbine installation vessel, that I think Jose mentioned, that would be pretty meaningful Q3 addition, and a couple of platform, offshore platform rig upgrades that we're looking at. The dynamic that's at work there, you know, rig is mostly offshore, and as more owners of floating rigs look at reactivating rigs, particularly cold stack rigs that have been cold stacked for a long time, it's a much more meaningful revenue opportunity for NOV. Given all the, the flurry of contract signings and the tightening supply-demand picture for floaters, in particular, with, I think there are 29 semis and drill ships out there that are cold stacked, that potentially could come back to work, I think that is gonna be a good order opportunity for NOV's rig technologies segment. Is that helpful? Yeah, very thorough. Thank you. Thank you. Maybe just to quickly sort of wrap all that up, I mean, with the crosscurrents, it would seem that the bias is for third quarter to be above the first quarter, first half run rate. Is that maybe a fair conclusion, if we could sort of wrap all that into? Yeah, I'm gonna heavily asterisk that as we always do. Until these contracts are signed, they're not signed. Again, and across the board, we're really trying to push pricing to stay up with the significant inflation that we have seen out there coming out of the pandemic. It's always a dogfight. Yeah, I think the backdrop is improving and our outlook is very bullish. Great. Thanks so much, Clay. Yeah. Thank you. One moment for our next question. Our next question is gonna come from the line of Luke Lemoine with Piper Sandler. Your line is open. Please go ahead. Hello, Luke? Luke, you there? Hey, sorry, I was on mute. Good morning. Clay, could you maybe elaborate on the additional $75 million of cost cuts, and are these weighted disproportionately to one segment? No. What I would tell you is, we've talked about this, I think, last quarter, that, we really think our margins need to be a little higher than we've been posting. We're always looking at opportunities to cut costs and become more efficient. Given some of the headwinds that we've had out there, some of these lingering, inflationary impacts of COVID, and other things that we face, we recognize that we probably need to take action around trying to become even more efficient and, in the manufacture and delivery of our products and more efficient in the delivery of our services. You know, worth noting, since 2019, we've had a significant cost reduction effort here at NOV, which resulted in, you know, the closure of, like, 700 facilities, reduced our workforce by about 13% and so forth. When we look at further opportunities, you know, a lot of the easy opportunities have been harvested already, it's gonna take us a little while to get these, but over the past quarter, we've looked at where we can focus on becoming more efficiency. There's a, it's a number of items out there, we feel pretty confident that it's gonna flow out or flow into our P&L, I should say, over the NexTier I, I do think if you're wondering, Q3 impact will be pretty limited, maybe just you know, a couple of million dollars. As we, as we execute these actions, you'll see more of this in, the out quarters. Okay. Jose, thanks for outlining the free cash flow trajectory in the back part of the year and into next. You talked about greater than 50% free cash flow conversion NexTier, which is partly a working capital catch-up. How do you think about normalized kind of free cash flow conversion after that? Yeah, Luke, it's a good question. Obviously, we're running hot as it relates to working capital. You know, we were down in the mid-20% range from a working capital to revenue run rate, not too long ago. This quarter, we're at 32. As we talked about in the prepared remarks, we expect to effectively crest during Q3, and then start to see an unwind back to more normalized levels. Realistically, that'll take a few quarters to play out, probably through the middle part of next year. That will, of course, drive a considerable amount of free cash flow in and of itself, plus our levels of EBITDA, we expect to continue to improve our profitability, drive more to the bottom line, which should also flow through from a cash perspective. Not giving free cash flow guidance for 2025, really beyond 2024, beyond the sort of greater than 50% of EBITDA, because it's highly dependent on what our growth rate will be in 2024, right? I think 50% should be the bottom end of the range in terms of conversion relative to EBITDA, but if you end up in a flattish environment, it could be well beyond that number. Hopefully, that at least helps frame it a little bit better. Yeah, definitely. Thanks much. Thanks, Luke. Thank you, and one moment for our next question. Our next question is gonna come from the line of Jim Rollyson with Raymond James. Your line is open. Please go ahead. Good morning, guys. Good morning, Jim. There's been a lot of talk this quarter. You know, the offshore and international theme has obviously been kind of moving up into the right for the last handful of quarters, but there's kind of been more discussion around it this quarter from a strength and particularly a duration standpoint. Since you fly all over the world and, and talk to a lot of folks, I would love to kind of get your thoughts and, and, and what you're seeing from customers, maybe that supports this kind of duration comment and, and, and maybe just you know, out of all of that, what's, you know, what are you seeing that, that gets you the most excited about this? That's a great question, Jim. First, I don't think I'm gonna provide any different view than you've heard from the big three and others in the space. We're all pretty excited. We're seeing rising demand for offshore drilling assets broadly, and deepwater drilling assets, specifically. I think that's generating a lot of excitement. What's behind that are IOCs and NOCs both, that they see the need to develop their offshore fields and move forward with very aggressive drilling campaigns, and notably, the offshore's been pretty absent, frankly, since about 2014. We feel like we're moving through an inflection point. What's interesting about that, I mean, there's been a lot of cost rationalization, not just here at NOV, but elsewhere around the world. Activity levels today, we're still not quite back to where we were, even in 2019. A lot of room to run, and with rising demand for E&P customers, I think that points to a cycle that's gonna have a lot of longevity to it. I'm gonna also add a little more color. I think there's sort of two parts to this wave. The early part, I think, is gonna be a little more brownfield, tieback focused. Following that, though, I think you're gonna see a lot more FIDs. I've seen estimates of $500 billion in offshore FIDs through 2026, which point to more greenfield developments in both brownfield as well as greenfield, fit sort of our product offering. NOV is prepared to, to really meet that, that demand. Looking at our situation, you know, I feel like we're on the cusp of really kind of three things that are gonna help improve results. The first is, I think the resumption of offshore activity and the continued building of international land activity is gonna bring pricing leverage back to NOV. We've raised prices, but it's been hard to carve out margin expansion based on that. I think, with rising demand, that's gonna help on pricing leverage. Secondly, some of these lower margin contracts I mentioned earlier, we're continuing to burn those off and high grade our backlog with higher margin contracts, and that's gonna continue to proceed into 2024. Thirdly, this is probably the biggest thing, is just getting all the supply chain turmoil behind us. This normalization of supply chain and kind of getting back to more normal sort of lead times on our products. When we get more normal lead times from our vendors, I think is gonna help a lot. But if you kind of round out the picture, you know, we've spent a lot of the last decade investing in technologies, we've talked on the call today about wired drill pipe and its continued adoption for offshore operators in the North Sea, for Middle East operators on land. Investments in bits technology, which is driving better performance, new downhole tools with zero pressure drop agitators and on-demand agitators and better performing drilling motors. Low emissions fracking equipment with our ideal eFrac. Our rig automation offering, which has mechanical robot arms tripping pipe on a rig floor. All of our digital products, our edge to cloud, Max platform, condition-based monitoring. These are all things that improve the efficiency and safety of drilling operations, and they're most impactful in the offshore because it's a high-cost environment, and they're most impactful in low efficiency land drilling operations. Which is still occurring in lots of places outside of North America, which really didn't upgrade their rigs to AC rigs. Operators are looking at that. They're looking at this as a way to drive better efficiency in these drilling programs and looking at NOV's port-... portfolio of technologies that we can bring, and they are pulling those through their oil field service customers. Even though our oil field service customers are pledging capital discipline and not spending, I think operators are going to force the issue. Historically, they've sponsored and promoted new entrants and to come in with these new technologies, and they've pushed on the incumbents to bring these new technologies. I think it's a good setup for NOV for the next several years, and that's what I'm excited about. Excellent. From a margin perspective, obviously, margins have been, you know, creeping higher, certainly a better improved quarter versus last, with some of those issues kind of unwinding. As we think about this going forward, between your kind of additional cost savings opportunity over the next four quarters, the pricing push that you guys are working towards, and just kind of building momentum from an order uptake perspective, You know, where do you think normalized margins should be on a consolidated basis? If you kind of bucket it into the different categories that would get you there, like, how do you get there? We made good progress in Q2. I think margins on a consolidated basis, up 180 basis points to 11.7%. Wellbore strong against where caps made good progress this quarter, but has a ways to go. Rig backed up a bit, but we think with offshore coming back, it'll continue to push higher. I think we get into, I think Jose mentioned low teens by year-end, in 2024, squarely in the mid-teens, certainly by the end of 2024, is sort of what our outlook calls for. Great. Thanks for the answers, Clay. You bet. Thanks, Jim. Thank you. One moment for our next question. Our next question comes from the line of Steven Giangro with Stifel. Your line is open. Please go ahead. Thanks. Good morning, everybody. Good morning, Steven. The, I think the first, just to follow up on the prior question. When we think about the backlog, and obviously there's a lot of different pieces in the backlog over the last year plus, how is that pricing versus kind of what you've been realizing over the last year within Rig Tech, especially? Is it... So what I'm getting at, is the margin expansion coming from just better overhead absorption, or is it better margin flow through from what's in the backlog? Yeah, in Rig Tech, I would say margins have been pretty, pretty steady and stable. They vary a lot by product category. Some of the products that we sell are more, frankly, they're just more competitive than others. Where we have proprietary technology, we tend to do the best. That's why we've been investing in technology. You know, we recognized a long time ago, we need to make smart iron, not just iron. We continue to make our smarter. I think Rig's been pretty, pretty stable. I think that there's again, we're optimistic as demand comes back in the offshore, particularly for capital equipment. I think there's good potential for that to improve. Caps has been more challenged. We, if you go back a year or two, we discussed some challenged projects that we had in completion of production solutions, where we were executing projects in Asian shipyards, relying on the Asian supply chain and a lot of Asian plants in Malaysia and Indonesia, that were all disrupted. We learned that. We, you never get perfect sort of inflation protection in any contract, but as a result of that turmoil and the inflation, higher cost that came out of it, the margins for the low or for the for the long term, a long cycle portion of the caps backlog, you know, we've got some headwinds. What we've been booking since then are far better margins. There is a distinct sort of high grading process underway for that, for that backlog. That's, you know, that's call it two-thirds or so, the caps backlog. The other one-third's quick term. It doesn't reside in there very long. We've had the ability to sort of reprice in the inflationary environment that we've been in the last couple of years. That's already... I'd say that's already recovered. thanks. My other question was around just order flow on the cap side, but particularly on this sort of transition to E fleets and with the NexTier Patterson merger, I think you guys had some equipment with NexTier, I'm not positive, but are you seeing much there? I mean, where do you think that, that sort of stands right now as people kind of work toward that transition and the impact it has on, on your products? Yeah. What we hear from our pressure pumping customers is that their low emissions fleets are the ones that are continuing to work, and that most of the utilization and pricing pressure has been on the tier 2 diesel fleet to kind of the other end of the scale, and the expectation is that'll continue. Now, I would point out that many of the E-fleets, the EFRAK fleets, are long-term contracts. That's part of the reason that they're utilization. To answer your question, there's a lot of interest in continued adoption of electric technologies and as well, direct drive turbine technologies, both of which reduce emissions, along with sort of Tier 4 DGB fleets that are driving interest out there. Despite the tick down in orders for equipment in that area in the second quarter, we're continuing to talk about a few operators about these low emission fleets. That could be, you know, some upside surprise in the second half of the year and into 2024. Overall, I think the whole pressure pumping space continues to target reducing emissions. What we also hear is that they're being pressed by their E&P customers to help with plan distributions. I think that'll keep part in this. One last comment on this, 'cause we have a product that we introduced in equipment that we just ordered, which is designed to power e-frac pumpers. Sort of rather than pull the trigger on a very large capital expenditure on a brand new E fleet, this enables pressure pumpers to step down their greenhouse and gas emissions by substituting out high conventional frac pumps for e-frac pumps, and also benefit from a smaller footprint on a kind of a unit-by-unit basis. Hey, hey, Stephen, sort of weave in to think about a little bit is, you know, we mentioned in the prepared remarks that the quoting activity has continued to be really strong within the North American marketplace for pressure pumping due to what Clay commented about. I'd also add that part of it is, you know, equipment has been run extremely hard. There's still a lot of pent-up demand for major overhauls, replacements, and refurbishments. Time will tell how this plays out, I'm pretty optimistic that this will pull back, that we're seeing in North America, will be pretty short-lived as it relates to demand for the products and services that we sell into that space, because there was not a lot of excess capacity. The, the pumpers have a little bit of white space and a little bit of a pullback. If we see a tick up in activity and the confidence sort of comes back in, I think the orders will start flowing back in pretty quickly, even for, you know, the DGP fleets and the repairs and refurbishments of traditional Tier Four fleets. Right. Stephen, here. Thanks. Michelle, can I have the next question? Just one moment. Our next question and last question will come from the line of Scott Gruber with Citigroup. Your line is open. Please go ahead. Yes, good morning. Thanks for squeezing me in. Good morning, Scott. Clay, I just want to follow up on a comment I think you made earlier. Did you comment that you thought you could get to a mid-teens margin in late 2024? It's an important point, so I'll make sure I heard that correct. Yeah, we did. We think we'll be kind of low teens, in Q4 this year and, continue to push that up in 2024. Gotcha. Jose, you'd mentioned, you know, getting back to a normalized level of working capital. I think the last target for working capital as a percent of revenues was around 25%. Is that the level we should think about in terms of normalized in, in mid 2024? Yeah. We were 25.2% in Q4. It's moved up pretty significantly through the first six months of the year. We've demonstrated we can land in that mid 20% range, as Jose pointed out earlier, a lot depends on kind of the future outlook. Building backlogs and so forth might push that in, would you say, high 20% range? Yeah, I think the normal range is gonna be between sort of that mid-20s and mid to upper 20s is where we should be, Scott. As Clay touched on, it's gonna depend on the market environment, just like the environment that we're in right now. Yes, it's compounded by the fact that we've seen just sort of the cork get unleashed to a certain extent related to supply chain. Also, we would normally be at a slightly elevated level just due to the backdrop where we're anticipating in the fourth quarter. You know, when we're gearing up for large deliveries, you can see that tick up. In a more normalized environment, you'd be more towards the mid to lower end of that range. I think that's how, a good way to sort of think about it. It'll, it'll ebb and flow, but we certainly should be in that sort of mid to upper 20% range in terms of, working capital as a percentage of revenue run rate. Got it. That provides a good framework. Appreciate it. Thanks, Scott. Thank you. This does conclude the question and answer session, and I would like to turn the conference back over to Chairman and CEO, Clay Williams, for any further remarks. Thank you, Michelle. Thanks. Thank you all for joining us this morning, and we look forward to updating you on our third quarter results in October. Hope everyone has a nice day. This concludes today's conference call. Thank you for participating. You may now disconnect.