Registered number: SC690869
FOR THE YEAR ENDED 31 DECEMBER 2024
NOV HOLDING UK 2 LIMITED
COMPANY INFORMATION
NOV HOLDING UK 2 LIMITED
CONTENTS
NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their Strategic Report for the year ended 31 December 2024.
The Company is an investment holding company and the principal activity of its subsidiary undertakings is the provision of a wide range of goods and services to the energy and other industries. The Company's ultimate parent company is NOV Inc., a company incorporated and listed in the USA. (Listed on NYSE as 'NOV', further published information is available at www.nov.com). The Company's functional and reporting currency is Canadian dollars (CAD).
On 31 December 2024 an intercompany loan note receivable of CAD $46,724,000 from NOV Intervention and Stimulation Equipment – Aftermarket Comércio de Equipamentos e Serviços Ltda. was converted into equity in subsidiary.
The results of the Company for the year, as set out on page 20, show a loss before tax of CAD $67,188,000 (2023 - profit CAD $47,095,000). The shareholders’ funds of the Company at 31 December 2024 total CAD $282,238,000 (2023 - CAD $335,354,000). Income received during the year from shares in group undertakings was CAD $14,426,000 (2023 - CAD $nil).
On 31 December 2024 an intercompany loan note receivable of CAD $46,724,000 from NOV Intervention and Stimulation Equipment – Aftermarket Comércio de Equipamentos e Serviços Ltda. was converted into equity in subsidiary.
The results of the Company for the year, as set out on page 20, show a loss before tax of CAD $67,188,000 (2023 - profit CAD $47,095,000). The shareholders’ funds of the Company at 31 December 2024 total CAD $282,238,000 (2023 - CAD $335,354,000). Income received during the year from shares in group undertakings was CAD $14,426,000 (2023 - CAD $nil).
The macro environment and geopolitical uncertainties continue to drive volatility and pressure commodity prices, with oil prices reflecting growing concerns regarding diminishing demand from weakening global economies, excess OPEC capacity, and rising non-OPEC production.
Despite growing concerns that global oil and U.S. natural gas markets may be oversupplied in 2025, management believes commodity prices and activity levels should remain relatively rangebound, with any pullback in activity short-lived, and that the industry remains in an extended recovery due to:
(1) current inventory levels in relation to OECD demand that are lower than historical averages;
(2) natural oil production decline rates that average almost 15 percent;
(3) anticipated increases in LNG exports from the U.S.;
(4) increasing focus on energy security; and
(5) capital discipline across the industry, which has diminished the global oil and gas industry’s ability to easily ramp production.
Regardless of the operating environment, NOV remains committed to improving organizational efficiencies while focusing on the development and commercialization of innovative products and services, including technologies to reduce the environmental impact of oil and gas operations, and technologies to improve the economics of alternative energy that are responsive to the longer-term needs of NOV’s customers. We believe this strategy will further advance the Company’s competitive position in all market conditions.
Despite growing concerns that global oil and U.S. natural gas markets may be oversupplied in 2025, management believes commodity prices and activity levels should remain relatively rangebound, with any pullback in activity short-lived, and that the industry remains in an extended recovery due to:
(1) current inventory levels in relation to OECD demand that are lower than historical averages;
(2) natural oil production decline rates that average almost 15 percent;
(3) anticipated increases in LNG exports from the U.S.;
(4) increasing focus on energy security; and
(5) capital discipline across the industry, which has diminished the global oil and gas industry’s ability to easily ramp production.
Regardless of the operating environment, NOV remains committed to improving organizational efficiencies while focusing on the development and commercialization of innovative products and services, including technologies to reduce the environmental impact of oil and gas operations, and technologies to improve the economics of alternative energy that are responsive to the longer-term needs of NOV’s customers. We believe this strategy will further advance the Company’s competitive position in all market conditions.
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Interest rate risk
The Company's financial instruments have fixed rates and therefore had no risk from interest fluctuations.
Currency risk
The Company is exposed to foreign currency exchange rate fluctuations associated with financial instruments. Such exposures are considered temporary and insignificant. The Company manages this risk by recognising when foreign currency exposure is expected and minimises the risk accordingly.
Liquidity risk
The Company has available cash reserves along with availability of a bank overdraft facility. As such, the Directors consider the Company’s exposure to liquidity risk to be low.
The Company's financial instruments have fixed rates and therefore had no risk from interest fluctuations.
Currency risk
The Company is exposed to foreign currency exchange rate fluctuations associated with financial instruments. Such exposures are considered temporary and insignificant. The Company manages this risk by recognising when foreign currency exposure is expected and minimises the risk accordingly.
Liquidity risk
The Company has available cash reserves along with availability of a bank overdraft facility. As such, the Directors consider the Company’s exposure to liquidity risk to be low.
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The Company is a wholly-owned subsidiary of NOV Inc. (“NOV”). NOV and the Company are committed to, and recognise the importance of, good corporate governance and high ethical standards. Information on NOV’s Corporate Governance and Corporate Responsibility, including an introduction to the NOV Board of Directors and the relevant governance of the NOV group of companies, can be found at www.nov.com under the relevant section.
The Company’s Directors are fully aware of their duties under Section 172 of the UK Companies Act 2006.
Section 172 of the Companies Act 2006 requires that a director of a company must act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
a) the likely consequences of any decisions in the long-term;
b) the interests of the company’s employees;
c) the need to foster the company’s business relationships with suppliers, customers and others;
d) the impact of the company’s operations on the community and environment;
e) the desirability of the company maintaining a reputation for high standards of business conduct; and
f) the need to act fairly as between members of the company.
The Directors and senior management of the Company execute decision-making with the above principles embedded in their consideration. Stakeholder groups include shareholders, employees, customers, suppliers, the local communities in which the Company operates, trade unions, pension trustees, regulators, government agencies, and non-governmental organizations.
Stakeholder engagement at the Company is conducted at the level and in a format best suited to the context and the stakeholder. Depending on the stakeholder, this engagement may occur globally, locally, regionally or functionally, and may be by the board or senior management of the Company.
The below table sets out the Company’s key stakeholder groups, their material issues and how the Company engages with and considers the interest of each group.
The Company’s Directors are fully aware of their duties under Section 172 of the UK Companies Act 2006.
Section 172 of the Companies Act 2006 requires that a director of a company must act in the way he or she considers, in good faith, would be most likely to promote the success of the company for the benefit of its members as a whole, and in doing so have regard (amongst other matters) to:
a) the likely consequences of any decisions in the long-term;
b) the interests of the company’s employees;
c) the need to foster the company’s business relationships with suppliers, customers and others;
d) the impact of the company’s operations on the community and environment;
e) the desirability of the company maintaining a reputation for high standards of business conduct; and
f) the need to act fairly as between members of the company.
The Directors and senior management of the Company execute decision-making with the above principles embedded in their consideration. Stakeholder groups include shareholders, employees, customers, suppliers, the local communities in which the Company operates, trade unions, pension trustees, regulators, government agencies, and non-governmental organizations.
Stakeholder engagement at the Company is conducted at the level and in a format best suited to the context and the stakeholder. Depending on the stakeholder, this engagement may occur globally, locally, regionally or functionally, and may be by the board or senior management of the Company.
The below table sets out the Company’s key stakeholder groups, their material issues and how the Company engages with and considers the interest of each group.
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
In accordance with The Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022, the Directors present climate disclosures aligned with the Task Force on Climate-related Financial Disclosures.
Board Oversight of Climate-Related Risks and Opportunities
The Company's ultimate parent company, NOV Inc. ("NOV") has a nine-member board of directors (the “Board”), eight of which are non-executive directors. The Board meets quarterly, and also attend occasional ad hoc meetings. The Board bears responsibility for oversight of Company management, including overall direction and implementation of business strategy, enterprise risk management, and protection of shareholder and other stakeholder interests. The Board has three standing subcommittees: Audit Committee; Nominating and Corporate Governance Committee; and Compensation Committee. At the Board level, progress on selected sustainability strategies is reviewed at scheduled meetings at least annually.
The Board provides strategic oversight to management, provides overall budgetary approval of resources as necessary to successfully execute the selected strategies, and gives direction on potential additional climate-related risks and opportunities (“CROs”) and sustainability topics for evaluation. Given the increasing scope of financial reporting requirements concerning climate change and greenhouse gas emissions, the Audit Committee receives periodic reports on regulatory requirements concerning disclosure and financial reporting and the Company's progress toward compliance with such requirements.
NOV's management of CROs is comprised of activities at multiple layers of the Company’s day-to-day activities, with reporting and compliance centred around the Sustainability Committee.
The Sustainability Committee is made up of senior Environmental, Human Resources, Operations and Legal Compliance management and is responsible for evaluating relevant aspects of sustainability (including climate-related aspects), reviewing for materiality to NOV's global operations, and where appropriate, formulating and proposing strategies to address relevant items identified.
These strategy proposals are then submitted for review and consideration by other members of the broader NOV management team. Approved strategies are then resourced and implemented accordingly.
Sub-groups consisting of subject matter experts provide best-practice recommendations and research data to the Sustainability Committee on identified topics to ensure the Committee remains appropriately informed.
In the UK, the Directors of NOV Holding UK 2 Limited ("NOVHUK2L") have formed a UK Leadership Committee (the “LeadCo”) made up of leaders throughout our business activities and corporate functions. This LeadCo will meet semi-annually and will be joined by subject matter experts in areas such as Environment, Human Resources, Health & Safety and Finance. These subject matter experts will present CROs identified by NOVs Board and Sustainability Committee for awareness and assessment. The objectives of the LeadCo include (1) raising awareness of approved sustainability strategies and support their implementation where relevant and, (2) ensuring that NOVHUK2L has identified and is monitoring the CROs within our UK business activities. Discussions continue to focus on raising awareness of approved sustainability strategies and global CROs.
Management’s role in assessing and managing climate-related risks and opportunities
Potential sustainability risks and opportunities, including climate-related risks, are identified by ongoing NOV management (global and UK) which bases its analysis on a broad range of resources, including facility insurer climate impact analyses, consultation with internal & external expertise, and reference to global reporting frameworks and sustainability disclosure legislation.
Board Oversight of Climate-Related Risks and Opportunities
The Company's ultimate parent company, NOV Inc. ("NOV") has a nine-member board of directors (the “Board”), eight of which are non-executive directors. The Board meets quarterly, and also attend occasional ad hoc meetings. The Board bears responsibility for oversight of Company management, including overall direction and implementation of business strategy, enterprise risk management, and protection of shareholder and other stakeholder interests. The Board has three standing subcommittees: Audit Committee; Nominating and Corporate Governance Committee; and Compensation Committee. At the Board level, progress on selected sustainability strategies is reviewed at scheduled meetings at least annually.
The Board provides strategic oversight to management, provides overall budgetary approval of resources as necessary to successfully execute the selected strategies, and gives direction on potential additional climate-related risks and opportunities (“CROs”) and sustainability topics for evaluation. Given the increasing scope of financial reporting requirements concerning climate change and greenhouse gas emissions, the Audit Committee receives periodic reports on regulatory requirements concerning disclosure and financial reporting and the Company's progress toward compliance with such requirements.
NOV's management of CROs is comprised of activities at multiple layers of the Company’s day-to-day activities, with reporting and compliance centred around the Sustainability Committee.
The Sustainability Committee is made up of senior Environmental, Human Resources, Operations and Legal Compliance management and is responsible for evaluating relevant aspects of sustainability (including climate-related aspects), reviewing for materiality to NOV's global operations, and where appropriate, formulating and proposing strategies to address relevant items identified.
These strategy proposals are then submitted for review and consideration by other members of the broader NOV management team. Approved strategies are then resourced and implemented accordingly.
Sub-groups consisting of subject matter experts provide best-practice recommendations and research data to the Sustainability Committee on identified topics to ensure the Committee remains appropriately informed.
In the UK, the Directors of NOV Holding UK 2 Limited ("NOVHUK2L") have formed a UK Leadership Committee (the “LeadCo”) made up of leaders throughout our business activities and corporate functions. This LeadCo will meet semi-annually and will be joined by subject matter experts in areas such as Environment, Human Resources, Health & Safety and Finance. These subject matter experts will present CROs identified by NOVs Board and Sustainability Committee for awareness and assessment. The objectives of the LeadCo include (1) raising awareness of approved sustainability strategies and support their implementation where relevant and, (2) ensuring that NOVHUK2L has identified and is monitoring the CROs within our UK business activities. Discussions continue to focus on raising awareness of approved sustainability strategies and global CROs.
Management’s role in assessing and managing climate-related risks and opportunities
Potential sustainability risks and opportunities, including climate-related risks, are identified by ongoing NOV management (global and UK) which bases its analysis on a broad range of resources, including facility insurer climate impact analyses, consultation with internal & external expertise, and reference to global reporting frameworks and sustainability disclosure legislation.
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Risks are evaluated for their likelihood and financial impact by subject matter experts, and the conclusions validated by management, using a matrix that considers potential short, medium, and long-term severity, scope, and (where applicable) remediability. Mitigated risks are monitored by the relevant disciplines to ensure ongoing alignment with strategic goals.
Risks are managed by engaging appropriate expertise and implementing steps as needed to control and/or mitigate the risks. The specific approach varies depending on the nature of the risk (physical, transitional market, transitional reputation, legislative, etc.). Appropriate sub-groups from within NOV are tasked with ongoing implementation and monitoring to ensure adequate long-term mitigation.
Climate change and the energy transition present opportunity along with risks. At NOV, opportunities are evaluated for strategic alignment and potential returns as part of the broader business opportunity spectrum, with input from relevant business operations and marketing leaders. Some of the identified opportunities include:
Fixed Offshore Wind: NOV is a global leader in the design and manufacture of installation systems for fixed offshore wind turbine installation vessels (WTIVs). Most of the world’s installed offshore wind power outside of China has been built with NOV-designed equipment. In the North Sea alone, two-thirds of wind turbines are installed with an NOV-designed jack-up system. Engineering and manufacturing resources currently operating as part of fellow UK group companies are already supporting clients in this subsection of energy transition.
Floating Offshore Wind: To address the shortage of installation vessels for floating wind, NOV is developing the Enhydra Modular Service and Operations Vessel (MSOV). This flexible and integrated design serves a wind farm’s entire lifecycle, from construction to decommissioning. NOV also continues to pursue opportunities to supply its floating and mooring system for offshore wind projects in development. Engineering and business development resources currently operating as part of fellow UK group companies are already supporting clients in this subsection of energy transition.
Onshore Wind: NOV, through its Keystone Tower Systems business that has patented a tapered spiral-welding process for wind turbine towers, is advancing the technology and manufacturing processes needed to build taller wind towers for onshore projects. Taller towers will unlock stronger, steadier winds at higher altitudes. Additionally, at greater heights, higher capacity turbines with longer blades can be used, increasing the swept area and energy potential of onshore wind developments. NOV currently has no resources dedicated to onshore wind opportunities in the UK.
Geothermal: NOV continues to develop high-performance bits with leading edge cutters to drill through hard, abrasive granite formations in less time, with less bit damage, and fewer trips. NOV also continues to offer and develop improved drill pipe liner technologies targeted at improving corrosion resistance, thermal insulation, and flow efficiency that help reduce our customers’ carbon footprint. Engineering and technical support resources currently operating as part of fellow UK group companies are already supporting clients with their geothermal initiatives.
Carbon Capture & Storage: NOV has designed and engineered carbon capture systems for specific customer needs, including modular and standardized post-combustion carbon capture flue systems for smaller facilities and dehydration technologies that process CO2 using triethylene glycol, molecular sieves, and sorbent gel beds. For CO2 deoxygenation, we offer efficient catalyst-based systems, and for CO2 transport, we offer fiberglass and glass-reinforced epoxy (GRE)-lined pipe technologies with a proven performance record in oil and gas. Our Fiber Glass Systems (FGS) business unit provides corrosion-resistant composite equipment for CCUS applications, including post-combustion ducting, CO2 handling/transport, and water treatment. Engineering and manufacturing resources currently operating as part of fellow UK group companies are already supporting clients in this subsection of energy transition.
Risks are managed by engaging appropriate expertise and implementing steps as needed to control and/or mitigate the risks. The specific approach varies depending on the nature of the risk (physical, transitional market, transitional reputation, legislative, etc.). Appropriate sub-groups from within NOV are tasked with ongoing implementation and monitoring to ensure adequate long-term mitigation.
Climate change and the energy transition present opportunity along with risks. At NOV, opportunities are evaluated for strategic alignment and potential returns as part of the broader business opportunity spectrum, with input from relevant business operations and marketing leaders. Some of the identified opportunities include:
Fixed Offshore Wind: NOV is a global leader in the design and manufacture of installation systems for fixed offshore wind turbine installation vessels (WTIVs). Most of the world’s installed offshore wind power outside of China has been built with NOV-designed equipment. In the North Sea alone, two-thirds of wind turbines are installed with an NOV-designed jack-up system. Engineering and manufacturing resources currently operating as part of fellow UK group companies are already supporting clients in this subsection of energy transition.
Floating Offshore Wind: To address the shortage of installation vessels for floating wind, NOV is developing the Enhydra Modular Service and Operations Vessel (MSOV). This flexible and integrated design serves a wind farm’s entire lifecycle, from construction to decommissioning. NOV also continues to pursue opportunities to supply its floating and mooring system for offshore wind projects in development. Engineering and business development resources currently operating as part of fellow UK group companies are already supporting clients in this subsection of energy transition.
Onshore Wind: NOV, through its Keystone Tower Systems business that has patented a tapered spiral-welding process for wind turbine towers, is advancing the technology and manufacturing processes needed to build taller wind towers for onshore projects. Taller towers will unlock stronger, steadier winds at higher altitudes. Additionally, at greater heights, higher capacity turbines with longer blades can be used, increasing the swept area and energy potential of onshore wind developments. NOV currently has no resources dedicated to onshore wind opportunities in the UK.
Geothermal: NOV continues to develop high-performance bits with leading edge cutters to drill through hard, abrasive granite formations in less time, with less bit damage, and fewer trips. NOV also continues to offer and develop improved drill pipe liner technologies targeted at improving corrosion resistance, thermal insulation, and flow efficiency that help reduce our customers’ carbon footprint. Engineering and technical support resources currently operating as part of fellow UK group companies are already supporting clients with their geothermal initiatives.
Carbon Capture & Storage: NOV has designed and engineered carbon capture systems for specific customer needs, including modular and standardized post-combustion carbon capture flue systems for smaller facilities and dehydration technologies that process CO2 using triethylene glycol, molecular sieves, and sorbent gel beds. For CO2 deoxygenation, we offer efficient catalyst-based systems, and for CO2 transport, we offer fiberglass and glass-reinforced epoxy (GRE)-lined pipe technologies with a proven performance record in oil and gas. Our Fiber Glass Systems (FGS) business unit provides corrosion-resistant composite equipment for CCUS applications, including post-combustion ducting, CO2 handling/transport, and water treatment. Engineering and manufacturing resources currently operating as part of fellow UK group companies are already supporting clients in this subsection of energy transition.
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Processes for identifying, assessing, and managing climate-related risks
We assess climate change risk as an integral part of our risk management processes, which select and evaluate potential risks using climate-related research and reporting frameworks to assess both physical risks (primarily the potential impact of drought, storms, flooding on business operations) and transitional risks (e.g., potential impacts of market changes, legislative reporting burdens, carbon taxes, and environmental policy changes) and incorporate them into our broader risk framework.
Having completed a review of climate risks and opportunities, we have concluded that CROs identified are most appropriately managed by existing operational infrastructure, supported by appropriate internal and external subject matter expertise.
Time Horizons
The climate-related risk and opportunity assessment was evaluated across the following defined time horizons:
- Short term: 0 – 1 years. Our analysis of climate-related risks and opportunities identified in the short term provides leadership with visibility to ensure our operational and financial planning is appropriately aligned to mitigate impacts and/or leverage opportunities.
- Medium term: 2 - 5 years. Striving to understand potential risks and opportunities in the medium term, in addition to optimizing alignment of resources, is intended to provide sufficient time to design and implement more comprehensive strategic plans where required.
- Long term: > 5 years. Study, analysis, and continued assessment of long-term potential risks and opportunities and technological development support NOV’s consideration of the myriad uncertainties inherent in the trends and key variables affecting climate risk, energy transition, and the opportunity landscape. This extended perspective allows for appropriate strategic or structural adjustments to be implemented.
Actual and potential impacts of the principal climate-related risks and opportunities
We have undertaken transitional and physical climate risk analyses across a range of climate-related issues potentially relevant to our business, and the results of these analyses have been incorporated into our materiality assessment.
Physical Climate Risk Analysis
NOV works closely with our insurance provider, FM Global, which conducts regular inspections across NOV facilities. It is our understanding that FM Global uses sophisticated computer modelling to assess physical risk from weather events.
NOV’s threshold for conducting a periodic physical inspection of a facility is a total insured value, inclusive of business interruption, of USD 25,000,000. “Total insured value” is defined as the aggregate of property value (leased & owned) including physical inventory plus business interruption insurance values. NOVHUK2L has no physical locations in the UK.
The scenarios used in the analysis consider Representative Concentration Pathways (RCP). These pathways describe the future evolution of CO2 concentration in the atmosphere in response to greenhouse gas emissions and the radiative forcing induced by it at the top of the atmosphere, which in turn affects global temperatures.
We assess climate change risk as an integral part of our risk management processes, which select and evaluate potential risks using climate-related research and reporting frameworks to assess both physical risks (primarily the potential impact of drought, storms, flooding on business operations) and transitional risks (e.g., potential impacts of market changes, legislative reporting burdens, carbon taxes, and environmental policy changes) and incorporate them into our broader risk framework.
Having completed a review of climate risks and opportunities, we have concluded that CROs identified are most appropriately managed by existing operational infrastructure, supported by appropriate internal and external subject matter expertise.
Time Horizons
The climate-related risk and opportunity assessment was evaluated across the following defined time horizons:
- Short term: 0 – 1 years. Our analysis of climate-related risks and opportunities identified in the short term provides leadership with visibility to ensure our operational and financial planning is appropriately aligned to mitigate impacts and/or leverage opportunities.
- Medium term: 2 - 5 years. Striving to understand potential risks and opportunities in the medium term, in addition to optimizing alignment of resources, is intended to provide sufficient time to design and implement more comprehensive strategic plans where required.
- Long term: > 5 years. Study, analysis, and continued assessment of long-term potential risks and opportunities and technological development support NOV’s consideration of the myriad uncertainties inherent in the trends and key variables affecting climate risk, energy transition, and the opportunity landscape. This extended perspective allows for appropriate strategic or structural adjustments to be implemented.
Actual and potential impacts of the principal climate-related risks and opportunities
We have undertaken transitional and physical climate risk analyses across a range of climate-related issues potentially relevant to our business, and the results of these analyses have been incorporated into our materiality assessment.
Physical Climate Risk Analysis
NOV works closely with our insurance provider, FM Global, which conducts regular inspections across NOV facilities. It is our understanding that FM Global uses sophisticated computer modelling to assess physical risk from weather events.
NOV’s threshold for conducting a periodic physical inspection of a facility is a total insured value, inclusive of business interruption, of USD 25,000,000. “Total insured value” is defined as the aggregate of property value (leased & owned) including physical inventory plus business interruption insurance values. NOVHUK2L has no physical locations in the UK.
The scenarios used in the analysis consider Representative Concentration Pathways (RCP). These pathways describe the future evolution of CO2 concentration in the atmosphere in response to greenhouse gas emissions and the radiative forcing induced by it at the top of the atmosphere, which in turn affects global temperatures.
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Low: Based on the RCP 2.6 scenario, the radiative forcing is limited to 2.6 W/m2. This scenario is considered the best case for limiting climate change impacts. It requires a major turnaround in climate policies and concerted worldwide actions.
Intermediate: Based on the RCP 4.5 scenario, the radiative forcing is limited to 4.5 W/m2. This scenario assumes a stabilization of greenhouse gas emissions by 2050 and declining afterwards.
High: Based on the RCP 8.5 scenario, the radiative forcing is assumed to increase up to 8.5W/m2. This scenario represents a possible worst-case scenario with continued rise of greenhouse gas emissions.
The analysis considers both acute and chronic risks.
Acute: Event-driven risks, including the increased severity of extreme weather events such as tropical cyclones or floods.
Chronic: Longer-term shifts in climate patterns such as sustained higher temperatures changes in drought and sea level rise.
A facility visited within the last 5 years is assessed using site visit information, natural hazard maps, and global climate model data. The five climate perils considered are:
Extreme precipitation: A location exposed to 100-year or 500-year flood.
Wind: A location situated in a region with 100-year wind speeds exceeding 100 mph.
Temperature and Drought: A location situated in a region where future changes in temperature or drought exceed the 75th percentile of the global climate change model projections for any of three climate change scenarios and based on the selected time period (by 2030 or by 2050).
Sea level rise: A location situated in a coastal flood zone as determined by engineering data (if available), or low elevation coastal zone (defined as a region with less than 10m terrain elevation above mean sea level and within 60 miles of the nearest coastline).
NOVHUK2L has no physical locations in the UK and as such no exposure to physical risk.
Transitional Climate Risk Analysis
For this transitional assessment, NOV chose the Stated Policies Scenario (STEPS) produced by the International Energy Agency (IEA). We also considered the Net Zero Emissions by 2050 (NZE) Scenario, however we consider it an extremely unlikely scenario considering the historic lack of progress towards global decarbonization.
The STEPS Scenario, which uses the Global Energy and Climate (GEC) model, runs to the year 2100 and is based on stated policies and targets. Potential transitional climate risks are considered in the following timelines and from the perspectives of double materiality:
Intermediate: Based on the RCP 4.5 scenario, the radiative forcing is limited to 4.5 W/m2. This scenario assumes a stabilization of greenhouse gas emissions by 2050 and declining afterwards.
High: Based on the RCP 8.5 scenario, the radiative forcing is assumed to increase up to 8.5W/m2. This scenario represents a possible worst-case scenario with continued rise of greenhouse gas emissions.
The analysis considers both acute and chronic risks.
Acute: Event-driven risks, including the increased severity of extreme weather events such as tropical cyclones or floods.
Chronic: Longer-term shifts in climate patterns such as sustained higher temperatures changes in drought and sea level rise.
A facility visited within the last 5 years is assessed using site visit information, natural hazard maps, and global climate model data. The five climate perils considered are:
Extreme precipitation: A location exposed to 100-year or 500-year flood.
Wind: A location situated in a region with 100-year wind speeds exceeding 100 mph.
Temperature and Drought: A location situated in a region where future changes in temperature or drought exceed the 75th percentile of the global climate change model projections for any of three climate change scenarios and based on the selected time period (by 2030 or by 2050).
Sea level rise: A location situated in a coastal flood zone as determined by engineering data (if available), or low elevation coastal zone (defined as a region with less than 10m terrain elevation above mean sea level and within 60 miles of the nearest coastline).
NOVHUK2L has no physical locations in the UK and as such no exposure to physical risk.
Transitional Climate Risk Analysis
For this transitional assessment, NOV chose the Stated Policies Scenario (STEPS) produced by the International Energy Agency (IEA). We also considered the Net Zero Emissions by 2050 (NZE) Scenario, however we consider it an extremely unlikely scenario considering the historic lack of progress towards global decarbonization.
The STEPS Scenario, which uses the Global Energy and Climate (GEC) model, runs to the year 2100 and is based on stated policies and targets. Potential transitional climate risks are considered in the following timelines and from the perspectives of double materiality:
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
Short term (0 - 1 years):
We included transitional risks such as geo-political, emerging legislation, supply chain constraints, and trade compliance in our short-term analysis. We also considered adverse weather events such as hurricanes, tsunamis, and tornados. NOVHUK2L subsidiaries serves international clients in Europe, Middle East and Africa and there is no over-reliance on client activities in specific countries. Therefore, no specific UK risks have been identified.
Opportunities for the short term include the application of our established engineering and project execution and support capabilities to the renewable infrastructure build-out. In addition, the global demand for oil and gas is driving sustained high prices and provides an opportunity for ongoing profitability in our legacy hydrocarbon businesses.
Medium term (2 - 5 years):
For medium-term transitional risks, we considered potential adverse investor opinions, employee hiring, and retention concerns due to industry reputation, the potential for increasing air quality and emission restrictions, the potential implications of carbon taxation, global pressures towards localization, possible local energy blackouts, and regional energy cost increases. By constantly screening climate related developments by internal subject matter experts, the Directors will continue to raise awareness of specific trends and strategies to the LeadCo. The LeadCo may also escalate developments they have become aware of to the Directors to derive the risk exposure. No specific medium-term risks have been identified for the UK at this time.
Long term (5+ years):
Long term transitional risks considered include the impacts of future, potentially more stringent carbon- and energy-related policies, the possibility of a faster-than-expected decline in the fossil fuel market and corresponding obsolescence of current product lines, potential challenges with diversifying into the renewables market, possible pressures to move towards cyclic business models, and increasing sector-specific pressure and associated reputational risks. Again, by constantly screening climate related developments by internal subject matter experts, the Directors will continue to raise awareness of specific trends and strategies to the LeadCo. The LeadCo may also escalate developments they have become aware of to the Directors to derive the risk exposure. Depending on the risk exposure rating this may be escalated to NOV’s Sustainability Committee for further action as appropriate. No specific long-term risks have been identified for the UK at this time.
Analysis of the resilience of the business model and strategy, taking into account consideration of different climate-related scenarios
Both globally and in the UK, we have developed extensive, world-class engineering, manufacturing, project execution and aftermarket support capability within the energy industry. Our strategy is to leverage our scale and global footprint to deliver technologies, equipment, and services that help lower the marginal cost and environmental impact of the development and production of oil, gas, and renewable sources of energy.
We leverage our core capabilities and competencies to assist our customers’ efforts to reduce their environmental impact and support the energy transition. When evaluating potential energy transition opportunities, we look for opportunities and attractive industry structure and, where possible, look for opportunities in which we can lean into what we view as one of our chief competitive advantages, namely the manufacturing of complex equipment that improves the efficiency, profitability, emissions, and safety profile of our customers. By focusing on areas where we believe we are capable of supporting our customers’ success, such as wind, geothermal, and carbon capture and sequestration, we believe we can generate greater returns on capital.
We included transitional risks such as geo-political, emerging legislation, supply chain constraints, and trade compliance in our short-term analysis. We also considered adverse weather events such as hurricanes, tsunamis, and tornados. NOVHUK2L subsidiaries serves international clients in Europe, Middle East and Africa and there is no over-reliance on client activities in specific countries. Therefore, no specific UK risks have been identified.
Opportunities for the short term include the application of our established engineering and project execution and support capabilities to the renewable infrastructure build-out. In addition, the global demand for oil and gas is driving sustained high prices and provides an opportunity for ongoing profitability in our legacy hydrocarbon businesses.
Medium term (2 - 5 years):
For medium-term transitional risks, we considered potential adverse investor opinions, employee hiring, and retention concerns due to industry reputation, the potential for increasing air quality and emission restrictions, the potential implications of carbon taxation, global pressures towards localization, possible local energy blackouts, and regional energy cost increases. By constantly screening climate related developments by internal subject matter experts, the Directors will continue to raise awareness of specific trends and strategies to the LeadCo. The LeadCo may also escalate developments they have become aware of to the Directors to derive the risk exposure. No specific medium-term risks have been identified for the UK at this time.
Long term (5+ years):
Long term transitional risks considered include the impacts of future, potentially more stringent carbon- and energy-related policies, the possibility of a faster-than-expected decline in the fossil fuel market and corresponding obsolescence of current product lines, potential challenges with diversifying into the renewables market, possible pressures to move towards cyclic business models, and increasing sector-specific pressure and associated reputational risks. Again, by constantly screening climate related developments by internal subject matter experts, the Directors will continue to raise awareness of specific trends and strategies to the LeadCo. The LeadCo may also escalate developments they have become aware of to the Directors to derive the risk exposure. Depending on the risk exposure rating this may be escalated to NOV’s Sustainability Committee for further action as appropriate. No specific long-term risks have been identified for the UK at this time.
Analysis of the resilience of the business model and strategy, taking into account consideration of different climate-related scenarios
Both globally and in the UK, we have developed extensive, world-class engineering, manufacturing, project execution and aftermarket support capability within the energy industry. Our strategy is to leverage our scale and global footprint to deliver technologies, equipment, and services that help lower the marginal cost and environmental impact of the development and production of oil, gas, and renewable sources of energy.
We leverage our core capabilities and competencies to assist our customers’ efforts to reduce their environmental impact and support the energy transition. When evaluating potential energy transition opportunities, we look for opportunities and attractive industry structure and, where possible, look for opportunities in which we can lean into what we view as one of our chief competitive advantages, namely the manufacturing of complex equipment that improves the efficiency, profitability, emissions, and safety profile of our customers. By focusing on areas where we believe we are capable of supporting our customers’ success, such as wind, geothermal, and carbon capture and sequestration, we believe we can generate greater returns on capital.
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NOV HOLDING UK 2 LIMITED
STRATEGIC REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
By continuing to provide for long-term, essential fossil fuel demand during the energy transition, as well as developing products and services to support the emerging renewables industries, we believe that we will have the flexibility to adapt to the changing needs of the global energy industry and thereby build resilience into our long-term business strategy.
Metrics and targets
We have not yet set a net zero target. We have been unable to identify a credible path to net zero emissions by 2050 within the current global low-carbon manufacturing and energy technology infrastructure. In our view like research scientists working to cure a disease without a specified timetable, the fact that we have not established a specific date by which we can achieve success, does not diminish our efforts or commitment. As noted above, NOV is actively engaged in reducing its carbon footprint and supporting the efforts of industry participants to reduce GHG in meaningful ways. NOV’s technology to support renewable energy and support the energy transition have the potential to substantially exceed NOV’s total GHG emissions.
Metrics and targets
We have not yet set a net zero target. We have been unable to identify a credible path to net zero emissions by 2050 within the current global low-carbon manufacturing and energy technology infrastructure. In our view like research scientists working to cure a disease without a specified timetable, the fact that we have not established a specific date by which we can achieve success, does not diminish our efforts or commitment. As noted above, NOV is actively engaged in reducing its carbon footprint and supporting the efforts of industry participants to reduce GHG in meaningful ways. NOV’s technology to support renewable energy and support the energy transition have the potential to substantially exceed NOV’s total GHG emissions.
This report was approved by the board on 29 September 2025 and signed on its behalf.
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NOV HOLDING UK 2 LIMITED
DIRECTORS' REPORT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors present their report and the financial statements for the year ended 31 December 2024.
The loss for the year, after taxation, amounted to $53,116,000 (2023 - loss $36,630,000).
No dividends were paid or proposed during either period.
The Directors who served during the year were:
Likely future developments in the business of the Company are discussed in the Strategic Report.
Exposure to financial risks are discussed in the Strategic Report.
The Directors have considered the Company's current and future prospects, and its availability of financing, and are satisfied that the Company can continue to pay its liabilities as they fall due for a period of 12 months from when the financial statements are authorised for issue. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and have no reason to believe that a material uncertainty exists that may cast significant doubt over the ability of the Company to continue as a going concern. In an unlikely event that the Company requires assistance to meet its financial obligations, a fellow group undertaking would be able to provide support to the Company. The Directors have received a letter of support from the fellow group undertaking, confirming it will provide financial support to the Company if needed, for a period of 12 monthsfrom when the financial statements are authorised for issue. The Directors have assessed the ability of the fellow group undertaking to provide financial support and are confident that the fellow group undertaking has adequate cash resources to assist the Company in meeting its liabilities as and when they fall due, if necessary. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.
On 25 September 2025 the Company made a capital contribution to NOV Wellbore Technologies do Brasil Equipamentos e Serviços Ltda of USD $3,252,000 (equivalent to CAD $4,469,000).
There have been no other significant events affecting the Company since the year end.
There have been no other significant events affecting the Company since the year end.
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NOV HOLDING UK 2 LIMITED
DIRECTORS' REPORT (CONTINUED)
FOR THE YEAR ENDED 31 DECEMBER 2024
The auditor, Ernst & Young LLP, will be proposed for reappointment in accordance with section 485 of the Companies Act 2006.
This report was approved by the board on 29 September 2025 and signed on its behalf.
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NOV HOLDING UK 2 LIMITED
DIRECTORS' RESPONSIBILITIES STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2024
The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.
Company law requires the Directors to prepare financial statements for each financial year. A true and fair view of the state of affairs of the Company and of the profit or loss of the Company for that period.
In preparing these financial statements, the Directors are required to:
∙select suitable accounting policies for the Company's financial statements and then apply them consistently;
∙make judgements and accounting estimates that are reasonable and prudent;
∙present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information;
∙provide additional disclosures when compliance with the specific requirements in FRS 102 is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the Company’s financial position and financial performance;
∙state whether applicable UK Accounting Standards have been followed, subject to any material departures disclosed and explained in the financial statements;
∙prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company will continue in business.
The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and to enable them to ensure that the financial statements comply with the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.
Under applicable law and regulations, the Directors are also responsible for preparing a Directors’ Report that complies with that law and those regulations. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website.
Page 15
INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOV HOLDING UK 2 LIMITED
We have audited the financial statements of NOV Holding UK 2 Limited for the year ended 31 December 2024, which comprise the Profit and Loss Account, the Statement of comprehensive income, the Balance Sheet, the Statement of changes in equity and the related notes 1 to 19, including a summary of significant accounting policies. The financial reporting framework that has been applied in their preparation is applicable law and United Kingdom Accounting Standards FRS 102 ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).
We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the company in accordance with the ethical requirements that are relevant to our audit of the financial statements in the United Kingdom, including the Financial Reporting Council's Ethical Standard and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
In auditing the financial statements, we have concluded that the directors’ use of the going concern basis of accounting in the preparation of the financial statements is appropriate.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that, individually or collectively, may cast significant doubt on the company’s ability to continue as a going concern for a period of 12 months from when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with respect to going concern are described in the relevant sections of this report. However, because not all future events or conditions can be predicted, this statement is not a guarantee as to the company’s ability to continue as a going concern.
The other information comprises the information included in the Annual Report other than the financial statements and our Auditor's Report thereon. The directors are responsible for the other information contained within the Annual Report.
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
Our opinion on the financial statements does not cover the other information and, except to the extent otherwise explicitly stated in this report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the course of the audit, or
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOV HOLDING UK 2 LIMITED (CONTINUED)
otherwise appears to be materially misstated. If we identify such material inconsistencies or apparent material misstatements, we are required to determine whether this gives rise to a material misstatement in the financial statements themselves. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
In our opinion, based on the work undertaken in the course of the audit:
∙the information given in the Strategic Report and the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and
∙the Strategic Report and the Directors' Report have been prepared in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the company and its environment obtained in the course of the audit, we have not identified material misstatements in the Strategic Report or the Directors' Report.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an Auditor's Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOV HOLDING UK 2 LIMITED (CONTINUED)
expected to influence the economic decisions of users taken on the basis of these financial statements.
Explanation as to what extent the audit was considered capable of detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance with laws and regulations. We design procedures in line with our responsibilities, outlined above, to detect irregularities, including fraud. The risk of not detecting a material misstatement due to fraud is higher than the risk of not detecting one resulting from error, as fraud may involve deliberate concealment by, for example, forgery or intentional misrepresentations, or through collusion. The extent to which our procedures are capable of detecting irregularities, including fraud is detailed below. However, the primary responsibility for the prevention and detection of fraud rests with both those charged with governance of the entity and management.
• We obtained an understanding of the legal and regulatory frameworks that are applicable to the company and determined that the most significant are those that relate to the reporting framework (UK GAAP and Companies Act 2006) and the relevant tax compliance regulations in the UK. In addition, the Company has to comply with laws and regulations relating to its operations, including health and safety, GDPR and anti-bribery and corruption.
• We understood how NOV Holding UK 2 Limited is complying with those frameworks by making enquiries of management to understand how the company maintains and communicates its policies and procedures in these areas. We corroborated our enquiries through our examination of board minutes and by obtaining copies of communications in these areas, noting there was no contradictory evidence.
• We assessed the susceptibility of the company’s financial statements to material misstatement, including how fraud might occur by making enquiries with management and other employees within the company to understand the entity’s policies and procedures. We also obtained documentation on the entity-level controls environment to determine whether it supports the prevention, detection, and correction of material misstatements, including those that are due to fraud.
• Based on this understanding we designed our audit procedures to identify non-compliance with such laws and regulations. Our procedures involved enquiry with management and considering whether any events or conditions during the audit might have indicated non-compliance with laws and regulations.
• Our procedures on journal entry testing included a focus on journals meeting our defined risk criteria, including those posted by those charged with governance, based on our understanding of the business and enquiry with management. Where instances of higher risk journals were identified, we performed additional audit procedures to address each identified risk. These procedures included testing transactions back to source information. We incorporated unpredictability into our testing of manual journals.
• Our procedures on significant judgements and estimates made in the financial statements included challenging the assumptions made and models used in determining estimates and sought to obtain both contradictory and corroborative evidence to challenge and/or support estimate inputs.
A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting Council's website at: www.frc.org.uk/auditorsresponsibilities. This description forms part of our Auditor's Report.
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INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF NOV HOLDING UK 2 LIMITED (CONTINUED)
This report is made solely to the Company's members, as a body, in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been undertaken so that we might state to the Company's members those matters we are required to state to them in an Auditor's Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company's members, as a body, for our audit work, for this report, or for the opinions we have formed.
for and on behalf of
Aberdeen
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NOV HOLDING UK 2 LIMITED
PROFIT AND LOSS ACCOUNT
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOV HOLDING UK 2 LIMITED
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOV HOLDING UK 2 LIMITED
REGISTERED NUMBER: SC690869
BALANCE SHEET
AS AT 31 DECEMBER 2024
The financial statements were approved and authorised for issue by the board and were signed on its behalf on 29 September 2025 .
The notes on pages 24 to 36 form part of these financial statements.
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NOV HOLDING UK 2 LIMITED
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
NOV Holding UK 2 Limited is a limited liability company incorporated in Scotland. The registered office is c/o National Oilwell Varco, Badentoy Crescent, Badentoy Park, Portlethen, Aberdeen, AB12 4YD.
2.Accounting policies
The financial statements have been prepared under the historical cost convention unless otherwise specified within these accounting policies and in accordance with Financial Reporting Standard 102, the Financial Reporting Standard applicable in the UK and the Republic of Ireland and the Companies Act 2006.
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The preparation of financial statements in compliance with FRS 102 requires the use of certain critical accounting estimates. It also requires management to exercise judgement in applying the Company's accounting policies (see note 3).
The following principal accounting policies have been applied:
The Company has taken advantage of the following disclosure exemptions in preparing these financial statements, as permitted by the FRS 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland":
• the requirements of Section 7 Statement of Cash Flows;
• the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
• the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47,
11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
• the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a),
12.29(b) and 12.29A;
• the requirements of Section 33 Related Party Disclosures paragraph 33.7.
• the requirements of Section 7 Statement of Cash Flows;
• the requirements of Section 3 Financial Statement Presentation paragraph 3.17(d);
• the requirements of Section 11 Financial Instruments paragraphs 11.42, 11.44 to 11.45, 11.47,
11.48(a)(iii), 11.48(a)(iv), 11.48(b) and 11.48(c);
• the requirements of Section 12 Other Financial Instruments paragraphs 12.26 to 12.27, 12.29(a),
12.29(b) and 12.29A;
• the requirements of Section 33 Related Party Disclosures paragraph 33.7.
The information required by sections 11 and 12 noted above is included in the consolidated financial statements of NOV Inc. as at 31 December 2024 and these financial statements may be obtained from its principal office at 10353 Richmond Avenue, Houston, Texas, 77042, USA.
The Company is a wholly owned subsidiary company of NOV Inc. and the Company and all of its subsidiary undertakings are included in the consolidated accounts of NOV Inc. The registered office of NOV Inc. is 10353 Richmond Avenue, Houston, Texas, 77042, USA. The Company is therefore exempt from the requirement to prepare group accounts by virtue of section 401 of the Companies Act 2006. These financial statements therefore present information about the Company as an individual undertaking and not about its group.
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
The Directors have considered the Company's current and future prospects, and its availability of financing, and are satisfied that the Company can continue to pay its liabilities as they fall due for a period of 12 months from when the financial statements are authorised for issue. The Directors have a reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future and have no reason to believe that a material uncertainty exists that may cast significant doubt over the ability of the Company to continue as a going concern. In an unlikely event that the Company requires assistance to meet its financial obligations, a fellow group undertaking would be able to provide support to the Company. The Directors have received a letter of support from the fellow group undertaking, confirming it will provide financial support to the Company if needed, for a period of 12 months from when the financial statements are authorised for issue. The Directors have assessed the ability of the fellow group undertaking to provide financial support and are confident that the fellow group undertaking has adequate cash resources to assist the Company in meeting its liabilities as and when they fall due, if necessary. Accordingly, the Directors continue to adopt the going concern basis in preparing the financial statements.
Functional and presentation currency
Transactions and balances
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
2.Accounting policies (continued)
Tax is recognised in profit or loss except that a charge attributable to an item of income and expense recognised as other comprehensive income or to an item recognised directly in equity is also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date in the countries where the Company operates and generates income.
The current income tax charge is calculated on the basis of tax rates and laws that have been enacted or substantively enacted by the Balance Sheet date in the countries where the Company operates and generates income.
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
a. Critical judgements in applying the entity’s accounting policies
Investment impairment
The Company considers all investments for evidence of impairment annually. For the 2024 review, management has assessed all relevant external and internal sources of information including; key industry indicators for oil and gas and related industries, outlook for the oilfield services sector, future energy transitional opportunities, as well as consideration of financial results to date and forecasts for future performance. Based on managements assessment of these factors, indicators of impairment were considered to exist at the reporting date. In determining the recoverable amounts of investments management has calculated the value in use based on a discounted cash flow model using expected cash flows derived from the budget for the next five years. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the expected future cash flows and the growth rate used for extrapolation purposes. Judgement is also applied in assessing the amount by which to impair any investments where future profitability cannot be certain or where specific circumstances have led to a reduction in net assets.
b. Critical accounting estimates and assumptions
In the course of preparing the financial statements, no critical accounting estimates or assumptions have been made in the process of applying the Company’s accounting policies, other than those involving judgements (which are described above) that have had a significant effect on the amounts recognised in the financial statements.
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
The Company has no employees.
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
11.Taxation (continued)
UK corporation tax is calculated at 25% (2023 - 23.52%) of the estimated assessable profit or loss for the period.
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NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
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The Company considers all investments for evidence of impairment annually. For the 2024 review, management has assessed all relevant external and internal sources of information including; key industry indicators for oil and gas and related industries, outlook for the oilfield services sector, future energy transitional opportunities, as well as consideration of financial results to date and forecasts for future performance. Based on managements assessment of these factors, indicators of impairment were considered to exist at the reporting date. In determining the recoverable amounts of investments management has calculated the value in use based on a discounted cash flow model using expected cash flows derived from the budget for the next five years.
An impairment charge of $16,000,000 was recorded against National Oilwell Varco do Brasil Ltda., and CAD $6,489,000 against NOV Wellbore Technologies do Brasil Equipamentos e Serviços Ltda., reflecting a decline in their net assets.
An impairment charge of $16,000,000 was recorded against National Oilwell Varco do Brasil Ltda., and CAD $6,489,000 against NOV Wellbore Technologies do Brasil Equipamentos e Serviços Ltda., reflecting a decline in their net assets.
Page 31
NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Page 32
NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Subsidiary undertakings (continued)
Page 33
NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Subsidiary undertakings (continued)
Page 34
NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
Share premium account
Capital contribution reserve
Page 35
NOV HOLDING UK 2 LIMITED
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2024
There were no other significant events affecting the Company since the year end.
The Company’s immediate parent undertaking is Varco BJ B.V., a company formed in the Netherlands.
The Company’s ultimate parent undertaking is NOV Inc., a company incorporated in the United States of America. The consolidated accounts of NOV Inc. are those of the smallest and largest group of which the Company is a member and for which group accounts are prepared. Copies of these accounts are available from its principal office at 10353 Richmond Avenue, Houston, Texas, 77042, USA.
The Company’s ultimate parent undertaking is NOV Inc., a company incorporated in the United States of America. The consolidated accounts of NOV Inc. are those of the smallest and largest group of which the Company is a member and for which group accounts are prepared. Copies of these accounts are available from its principal office at 10353 Richmond Avenue, Houston, Texas, 77042, USA.
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