New York-listed subsea player Dril-Quip has withdraw its first quarter 2020 guidance, which was only issued late last month, due to Covid-19 market disruptions and the oil price collapse.
Chief executive Blake DeBerry said: “In response to the Covid-19 outbreak and for the wellbeing of our customers, employees and vendors, we have implemented our business continuity plan which includes staggered shifts in our manufacturing and after-market operations, working from home where practical, self-quarantine of offshore service personnel on return and cancellation of all non-essential travel.”
He said the sudden and sharp decline in oil prices has forced Dril-Quip's customers to swiftly reconsider capital spending plans for 2020, adding that there is a high degree of uncertainty in our industry as to the future direction of oil prices and related capital investment.
DeBerry said Dril-Quip is well-positioned to weather this downturn, partly because it restructured its business in 2019 to operate with a lower cost structure.
"Our cash position is very strong at over $399 million at year-end 2019 and our balance sheet remains debt-free.
"We will continue to look at ways to reduce costs, including thoughtfully re-evaluating our capital expenditures and re-prioritising R&D ...until there is better line of sight on global oil demand and the ultimate impact of the coronavirus.”