Although 2012 E&P budgets supported strong capital expenditures, as we enter the beginning of the E&P 2013 budgeting cycle, continued growth in capital spending may be facing some headwinds. The global demand outlook for 2013 is ambiguous at best. The slow growth of the U.S. economy, election year, continued discussions of environmental regulation on fracing, tension in the Middle East, Europe’s continuing fiscal issues and slowing growth in Asia will factor into 2013 spending plans. In addition, it is difficult to project the effect of favorable gas pricing hedges rolling off through the balance of 2012 and through 2013 on capital spending budgets. We will continue to evaluate E&P capital spending information through the balance of this year. At this juncture, we expect E&P capital spending to mirror the current rig count activity for YTD 2012 where dry and wet gas markets will likely continue to see cutbacks with capital reallocated to oily markets.
M&A activity has remained strong. NOV has made approximately $4 billion of acquisitions over the past 6 months. Additionally, in September we have tracked 8 announced transitions, including Waste Connections (NYSE: WCN) purchase of R360 Environmental Services, Inc. for $1.3 billion.