Quarter 1
Q2 2026 Earnings Call — July 21, 2026
Analyst Steve Richardson (Evercore): Good morning. Jeff, last quarter, I think you showed quite a bit of foresight by talking about kind of the end of white space and the pickup of inbounds in North American completion specifically. I was wondering if you could talk about how that evolved during the quarter price costs and how much of that is kind of feeding into the margin outlook you have in the second half of the year, particularly in C&P.
Executive Jeff (Title): Thank you, Steve. Look, as I described, we see positive margin trajectory and white space is filled. We've seen rig ads. We're seeing white space filled, and it's a very constructive environment. We are seeing price increases, and it's a steady march. It doesn't all happen at once. Anecdotally, we can describe price increases, but what our primary focus is is across the entire fleet. And I'm very confident that we are seeing that trajectory continue actually into Q3. So white space filled up, looking forward Q3, Q4, pleased with that. And so we are, again, focused on margin expansion, but all around the fleet, the entire fleet, not just one at a time. And in some cases, when we work on price that includes moving some equipment overseas and to do better margins. And so when we think about maximizing value in North America, that includes moving on price and also maximizing the value of the entire fleet, which will include putting equipment to work where it has the highest margins.
Analyst Steve Richardson (Evercore): I appreciate that. And then I was also wondering if you could just follow up on last quarter, last you all were talking about sort of itemized the impact of what we're seeing in the Middle East and talked about a seven to nine cent kind of headwind. Can you maybe just maybe mark us to market on what you saw in the business and how you've kind of thought about the dislocations as it pertains to the second half?
Executive Shannon (Title): Yeah, Shannon here and Steve, I'll have Eric provide a little color on the guide. I guess let me just talk about activity in general in the Middle East. It's been really highly fluid. Customers are thinking about their long-term view. They're looking at capacity. They're looking at risk and really understand how quickly they can bring that back. In Q2, we saw a positive progression in the Middle East of what was going on. And then when we got here over the last week or so, obviously we've seen a little bit of step back of escalations. So we've kind of had a little bit of starting up and then a bit of pulling back. But I think it's important to maybe emphasize the bigger picture here as far as we think about what's going on in the Middle East. Regardless of the pace of when it comes back, Halliburton will be ready. We have the operational footprint intact. And also important to note is the business that we are winning in the Middle East, which is work that is absolutely going to get done. We talked about going back to work in Jafura and unconventional. The integrated work we want in reentry, the integrated work we want offshore and also a really exciting project in Iraq with IFMS. So the pace is highly dependent and fluid, but we're winning work that will mean something to Halliburton in the future.
Executive Eric (Title): Yes, Steve, it's Eric. Regarding what's built in the guide, so our assumptions are for a steady activity compared to where we are today. So we haven't put in our guidance any recovery to pre-war level, neither have we built in any major disruption. So it's basically steady from where we are. It's just very difficult to forecast, as you understand.
Analyst David Anderson (Barclays): Thank you and good morning. So you had a number of really nice wins in offshore this quarter. Europe-Africa outperformed as well. I was wondering if you could talk about your offshore business and kind of how you see that performing over the next 12 to 18 months. Should we start to see an inflection here by the fourth quarter and what are some of the key drivers? You're talking about technology a lot as an enabler here. So maybe if you could spend a little bit more on how that's driving growth going forward.
Executive Jeff (Title): Yeah, thanks, David. I guess first, really love our position. Maybe just an industry comment. Then maybe a little bit more about Halliburton on the inflection point. Yeah, big markets around the world, deep water markets like in the Caribbean, the revitalization of tieback work, deepwater Gulf of America, Brazil, West Africa, as you mentioned, Norway and East Med are all really busy markets for us. And while we're seeing a tightening of, we're seeing rigs being tendered for those spaces, we're seeing a tightening of FPSOs in that market. Don't see that as a probably a Q4 event, what I see that as more of a 27 event, probably later half of 27. But I think really important here is to emphasize the bigger picture here is we were winning in all those markets. Just announced a really sizable win with Total Energies in Suriname. We still have a great footprint with Guyana there. West Africa, Namibia, Nigeria, and even Ivory Coast adding have a good footprint there or winning there. And obviously, Norway North Sea has been a big market for us moving forward. So really like the direction we're offshore going.
And I think, again, more importantly is that we're winning in that space. And maybe a comment technically, Dave, just to follow that up. I think a lot of those wins, most of that winning that you're seeing us do is on the back of two things, really. Our value proposition to collaborate and engineer solutions to maximize asset value for our customers, and technology advances that we've made over just really the last few years with closed-loop geosteering, for example. You saw Sequire-Sakal. That's an important step towards better adoption of that technology. It broadens our ability to implement that technology on more rigs than before, and so very positive technically around what we're doing, and again, how we're working with our customers are delivering real results.
Analyst David Anderson (Barclays): I appreciate those comments, Jeff. Maybe if we could shift over to the international side. International unconventionals are becoming a bigger part of your portfolio. Vakamurta is clearly in growth mode. You talked about Algeria. I think you're also in UAE and Jafura. I was wondering if you could kind of put all this together and sort of kind of walk us through those various opportunities and your strategy. I'm also sort of wondering about the impact on the C&P margins. Is sort of the ramp up, is that kind of weighing down margins to a certain extent as you're sort of building up in these different countries and you're not quite at the scale you want to be?
Executive Jeff (Title): Yeah, let me, I'll comment on some of the activities and ask Eric to give more of the guidance here. But hey, as you said, we're really excited about, David, the scale, converting at scale. Argentina with YPF, you know, Bigwin multi-year, multi-billion with Zeus. Going back to Aramco and Jafura, and if you kind of look at the big markets out there, Argentina starting there, it's growing market. Really, Argentina, Algeria, Kuwait, Saudi, UAE, we have frack spreads in all of those locations today doing unconventional work. But what I think is important across what we're doing in unconventional. This has been a deliberate focus of ours is continue to use our scale with a real emphasis on, as Jeff said, returns, but also putting technology at play globally and competing on technology, not on horsepower. So I think that has been the recipe for us to be in scaling this globally. Let me take the last bit of that as well in terms of margin as you think about those businesses around the world. Yes, there's some mobilization that goes on around that, but it's part of our growth engines, and we know that with that scale comes margin expansion.
Analyst Arun Jayaram (J.P. Morgan): Good morning, team. Jeff, I was wondering if you could comment on and Shannon on. Clearly, it appears that Halliburton is taking market share in international markets is just highlighted by a number of awards in the Middle East, LATAM, etc. I wondered if you could maybe break down what you think is driving some of those share gains. Shannon did mention that he would expect these new opportunities to be margin accretive and maybe you could just touch upon that as we think about framing second half of the year and into 27.
Executive Jeff (Title): I guess the short answer is yes, these wins that we're talking about, we do see them as future work that will be accretive for a business. I think a couple of things have been driving it. One, the market is tight. Nobody's really overbuilt in that market, and that's a good thing, opportunity for expansion of margins for us and we think that macro outlook for what we're seeing will continue but I think going back to how we engage with our customers on some of these projects, we knew they were coming down the pipe, I think our value proposition, how we collaborate with our customers and really if you look at Halliburton's portfolio globally, technically, there's no real holes in it. We compete all over the world in 70 countries and I think it's a combination of Value Profit Technology has been the difference maker for us over the last 12 months.
Analyst Arun Jayaram (J.P. Morgan): Got it, got it. And then maybe just to follow up on North America, one of the things that caught our attention is your intention to continue to perhaps mobilize equipment out of North America to meet some of these international opportunities. Is that just a reflection as you see better margin opportunities for unconventional now outside of NAMM?
Executive Jeff (Title): It really comes down to this. It's price first. We are actively working our entire fleet and getting price on that in North America. But we have zero hesitation of moving equipment around the world, whether it be in CNP or D&E, to a place that generates returns for Halliburton. And when there's opportunities, we'll do that. That's what you've been seeing on the C&P side frack with Argentina. You've seen that in Middle East, Algeria, UAE. All of these places have been going to a home that makes better margins returns for Halliburton.
Analyst Sir Rob Pant (Bank of America): Hi, good morning, Jeff, Shannon, and Eric. Eric, maybe I'll start with a quick clarification question for you. I want to make sure I heard it right. I think the revenue guidance, Eric, for the third quarter calls for both segments. I think CLP flat to down 2%, D&E down 3% to 5%. And I think within that, in response to one of the initial questions, you were thinking Middle East is steady, right? So flat, let's call it on a 100 basis. Can you maybe talk to how should we think about the 2Q to 3Q revenue decline? Where is that coming from? Is it timing? I know the chemical business sale happened in May of this year. Is it past that? Maybe just talk to that a little bit, Eric, just to give us some color.
Executive Eric (Title): Yeah, so I'll give you some color on the guide. So starting with the D&E division, revenue are primarily affected by a drop in revenue in our drilling fluid and testing business. The drilling fluid in the Gulf of America and Europe testing across most international region. And there's really nothing structural. It's simply rig moves, end of programs, etc. Part of that is offset by the seasonal pickup of our software business in Q3. So that's kind of on the revenue side. On the margin side, the improvement is due to mix. Drilling fluid was a very large contributor to Q2. In Q3, we're going to see less drilling fluids, more software sales, which are running at a structurally higher margins, which explain the guidance. On the CNP side, top line revenue, you mentioned it, we have sold our chemical business, so we're not going to have any revenue coming from that in Q3. We're going to be slightly down in Latin America and Europe, Africa, which had a fantastic Q2 of 19%, and some of that is going to be offset by the recovery of our Middle East business. On the margin side, the main drivers of the improvements in our margins is the North America land frac business, which is going to see improved margins, the lift business as well, recovery of completion to delivery in the Gulf of America, and also the Middle East recovery as in D&E. So these are the main elements of our Q3 guidance.
Analyst Sir Rob Pant (Bank of America): I got it, Eric. That's very helpful. And then, Jeff or Shannon, maybe this one is for you. I want to touch on your landmark business a little bit. I know digital and software doesn't come up too much here in the Q&A for you guys, but you've had a strong business. Landmark has been a strong business for you, especially in drilling, logics, decision space. I think you've had a lot of success in that. And then, like you had in your prepared remarks, you acquired Seca last quarter. And today, in your press release, you had the acquisition of Informatec. Maybe just talk to the landmark business a little bit. It seems like it's making a lot of positive progress. But maybe just talk to what you're doing there and maybe the opportunities over the next few years.
Executive Jeff (Title): Yeah, thank you. Look, we really like our approach to digital broadly, both the software business and the automation business. And from a software perspective, you know, our absolute focus on open architecture is very attractive to customers. And so strategically AI, open architecture and then deep science, deep data management. Those are the four areas that I feel the most confident about where we are and look forward to watching that continue to get legs. Had several strategic wins over the last year and I expect not only do those grow but we just start to see a strengthening of that over time. From an automation perspective, you're correct. Zeus IQ, Logix, Sakal, acquisitions that we make that we know help our customers drill better, more precise wells or improve recovery or hydraulic fracturing for unconventional completions. And so that automation and answer products in terms of IQ, Zeus IQ and Logix and what it does have been a big part of recent awards. And so we're seeing that manifest in actually the contracts that we are winning. It is a differentiator and gives me a lot of confidence around why I believe or why the contracts that we're winning are creative over time.
Analyst James West (Melius Research): Hey, thanks. Good morning, guys. Good morning. Jeff, you guys have stuck to your knitting in North America as the only integrated service provider, a fully integrated service provider that's really left in the market, but you've also used it as a cash flow harvesting machine and that's led to, I think, some of the significant growth that you're now seeing in the international markets as you deploy capital to those markets, as you deploy capital into technologies and are increasingly taking share or at least minimum holding your own as others have failed there. Could you talk about that strategy how you see the evolution of that strategy in those international regions which are now coming to you. Just the amount of awards you've announced in the last two weeks has been highly impressive. I wanted to just touch on where are we in that kind of, I don't know if I want to call it a pivot, but just the deliberate strategy.
Executive Jeff (Title): Look, it is a deliberate strategy. It's where we have market leading both capability and technology that's sought after internationally. And as that market grows, we are leading that market and plan to continue to lead in that market. Unconventionals have been proven to be a successful way to deliver oil and gas. And now the rest of the world is doing more of it. We plan to lead there. Still focused on North America. And so, you know, we see solid trajectory in North America as well. However, we have leading margins in North America today and plan to continue to keep those. And so as we push price up, there's always going to be some bumping around in the market. And that bumping around in the market when you're already the market leader in terms of performance and margins comes with bringing up some equipment as we push. And the point is we've got opportunities around the world as well to put equipment to work. So this is, I wouldn't describe it as a pivot, James, I'd describe it as a conscious, deliberate strategy to take advantage of our competitive advantage around the world while continuing to drive better performance in North America. I don't think the two are mutually exclusive, but some of the bumping around you're going to see in North America is us putting real pressure on pricing and margins in North America.
Analyst James West (Melius Research): Okay, got it. That makes perfect sense. And then as we think about moving of equipment abroad, how should we think about, I guess, the kind of margin opportunity set. I mean, I know Eric already gave us some guidance for just next quarter, which is margin, pretty significant margin improvement sequentially. But how should we think about the competitive landscape internationally when you do move equipment? You have two things. You have one, it's going to be better pricing, but also two, you're not going to need to put as much capital into the market because you've already got, you have the steel already ready to go.
Executive Jeff (Title): Yeah, I'll talk a bit about margins, James, and then I'll let Shannon talk about the competitive environment. So I think that directionally, I mean, you heard the Q3 guide, so margins are going to be up in both completion, production, drilling, and evaluation. I think the trend will continue with margin up in D&E in Q4. We think it continues in 27. We think that the same trend is going to be there for CNP, although you got to take into account the typical seasonality in Q4. So we'll have to see. And then you get some Middle East unknown around all of that.
Executive Shannon (Title): Yeah, James, I guess kind of the short answer on how we think about when we move things around. You know, the country is moving to what is the efficiencies and logistics challenges around that? What's the scope of work? How long does it last? Everything from volumes being pumped to stages and access to sand and water. But really it's a pretty straightforward answer after you get through all that is do we have term and do we make better margins if we put it in XYZ country? And we make those decisions every quarter when we're looking at that as if we have an opportunity to move it or somewhere in the world. And it's really, there's different levels of maturity around unconventionals around the world. Those are mature, obvious, and ones we probably want to move as quickly as we can to. Others, we look and say, okay, is it AWELL or is it a long-term program? And we base our decisions around that.
Analyst Derek Podhazer (Piper Sandler): Hey, good morning, everyone. So you mentioned North America land, you know, that's helping improve the CNP margins. I think the guide at the midpoint was 150 basis points. Top line seems to be impacted by the chemical business sale. Talked about Latin America, Europe, Africa, which had a stellar quarter. But maybe some more color on what you're seeing activity-wise impacting your U.S. land frack revenue. 2Q, the theme was absorbing the white space. Are you still seeing that full calendar in 3Q as well? And the indication on pricing will be there to help even reactivate some sideline equipment? Or you mentioned maybe that international unconventional market is more attractive to deploy that idled equipment. Just some more color on U.S. landfracks specifically impacting C&P.
Executive Shannon (Title): Yeah, sure. This is Shannon here, Derek. Yeah, hey, we're seeing a positive margin trajectory for C&P and certainly Dean as well. White space in Q2 was taken up. Q3, we're seeing the same thing in Q3. And I think an important point is we're also seeing pretty significant rig ads here. Over 30 plus rigs being added to North America. Not only is that a real positive for a D&E business, but kind of raises the bar, if you will, of activity sets moving in the future. So it makes us feel really good. And, you know, there's not a very little capacity at all in the market on gas substitution, zero at all on electric. And so as we start seeing some of these smaller and medium sized players moving a little quicker, you know, nobody's doing less out here. So I think that's an environment. It doesn't happen overnight. It's a steady march and something, as Jeff mentioned, we look across our entire fleet, not just one fleet of raising, if we'll that tied up on the entire scope of work we do.
Analyst Derek Podhazer (Piper Sandler): Okay, that's helpful. And then maybe moving over to Jafora, you won an award there deploying a frac fleet for the basin. Obviously, there's a player over there that won majority of the committed work. Is this the uncommitted work? Is there upside to the fleet that you're deploying over there? Maybe talk about some of the technology you could add into the Jafora basin as it continues to scale over time. Just an exciting award, so maybe a little more color there.
Executive Shannon (Title): Yeah, that's my exact words. It's exciting. I'm really excited about it. It is committed scope. You know, we get terms that we're satisfied with, volumes and wells per pad. And I think a big driver is, of course, we moved it because of long-term work there in the gas. We can continue to see that market, in particular gas growing, not just in conventionals but unconventionals. But a big driver that was bringing really our automation subsurface and surface moving that to kingdom. And yeah, I think, you know, we're excited to be back and that will be a long term program for us moving forward.
Analyst Neil Mehta (Goldman Sachs): Yeah, thank you so much, team. Jeff Shannon, maybe you can unpack a little bit about the opportunity set in Iraq. We've seen some of your large customers really lean into it and some big announcements last week. So as we think about the margin, the profitability associated with the opportunity set, but also how you're thinking about the some of the moving pieces around the geopolitics and the above ground concerns that the market historically has had in that region.
Executive Jeff (Title): I'd say today things obviously are very fluid in Iraq. I was just there a couple weeks ago and just spent some time with the Prime Minister actually here over the last week. You know, I'm encouraged by the direction of policy that's being made within the country, wanting companies like Halliburton to come to work within country. As far as the war right now, it's still impacted as far as it's not close to pre-war levels, but what I'm really excited about is this integrated field management award that we got. It really encompasses, if you think about everything that Halliburton does, from field development planning, production optimization, responsible for well construction, digital, a bit of the UPCM work in there. But I think what's important is the big picture here is that is a contract for Halliburton that, yes, it's good for Iraq, yes, it's good for Halliburton, but it is.
Analyst Neil Mehta (Goldman Sachs): Thanks for joining us. One thing that has been a constant of 2026 is volatility, including your share price, which has done well but consolidated from peaks. And so, you know, how do you think about the buyback? Do we keep the $200 million run rate or is there an opportunity to be opportunistic with shares trading at a discount potentially, at least relative to where we were a couple months ago?
Executive Jeff (Title): Yeah, look, we haven't really changed our philosophy around buyback, Neil. We were a bit more conservative at the beginning of the year, as we indicated on the Q4 call, because the macro situation was very different at that time. Now our thinking is to reestablish pretty much the run rate that we've been on for the last couple of years. So you can expect buybacks to.
Analyst Doug Becker (Capital One): Thank you. It really seems like we're seeing evidence of the international growth engines revving up. Back in January of last year, you mentioned the international growth engines could add $2.5 to $3 billion of annual revenue in three to five years. Is that still a reasonable target, or is there some upside there? And could we get a sense how each of the four engines is progressing relative to your expectations?
Executive Jeff (Title): Yeah, Doug, hey, I think not only we're ahead of schedule as far as that – you know 2.5 to 3 billion by 2028. We think there's upside on that number. We really love our position offshore and land on the drilling side of things. I think the acquisition of Saccol in particular on the offshore has really strengthened our offshore positioning or technology advantage there. Unconventionals we talked about a lot already whether it's the YPF or you know the Ramco work, SonicTrack all good business for us and I think that whole technology that we're deploying internationally will give us more legs in the future. And as far as, you know, intervention and lift, you know, we have a really, we have a significant footprint on the intervention space, in particular, HDWO and coal tubing. But we're really excited also about the trajectory we're seeing on our artificial lift business globally. So, yeah, I think there's upside on that number.
Analyst Eric (Title): Certainly sounds encouraging. Eric, I did want to just first the second quarter C&P margin a little bit more. The guidance was for 50 to 100 basis points of sequential margin improvement, a little bit less than that, and just trying to get a sense how much of that was related to the chemical business versus a lower Middle East activity. Just want to understand that a little bit better.
Executive Eric (Title): Yeah, I think in both divisions, we were a little higher than guidance on revenue. We were on the lower end of margin overall for both divisions as well. There's not a lot to read into it if you take the C&P margins, for example. We had higher maintenance costs and mobilization of equipment that hit the numbers. We had delays in the Gulf of Mexico, which is structurally a high margin business. And it was essentially a product line mix as well that drove the same results and the D&E guidance.
Analyst Scott Gruber (Citigroup): Thanks. Good morning, everybody. I actually wanted to stay on the near-term margin guide. Eric, you mentioned mobilization, impact. I think it was C&P. Just broadly, you know, given the pace of growth for you guys, which is pretty impressive, and the new contract wins, are mobilization and start-up costs a significant weight on margins today? And are those completely fading in 3Q? Are they still impacting just some more color on the mobilization and start-up costs and the trend towards normalizing?
Executive Eric (Title): Yeah, I mean, I can't give you an exact number in terms of the impact of mobilization because you have mobilization happening, mobilization or movement of equipment happening at all times in our business as we try to optimize where we put asset to work. The contract wins that we have had have elevated that number a little bit. So we have some headwinds related to that. I just can't quantify it exactly. I think one of the things just to point out under the hood in North America, we are seeing pricing and we are seeing improvement in that business. So as Eric described, Gulf of Mexico moves and mobilizations, etc. Underneath the hood, we're pleased that we are getting the traction in pricing and improvement in performance in our North America land business.
Analyst Scott Gruber (Citigroup): Yeah, that's where I wanted to go to next is on the medium to longer term outlook for improvement. And I heard you guys mentioned the new work is coming in. and that's going to be margin accretive. I'm just curious on how to dimension that as we think about the go forward. You know, we normally think about incrementals for Halliburton in that 30, 35% range, but, you know, a lot of the new contract wins, you know, seem to be propelled by new technologies and those mobilization and startup costs, you know, should settle down in the years ahead and then hopefully we have normalization of activity in the Middle East. As you kind of think through the potential path for margins, given those factors, should we be thinking about a couple years of above normal incrementals for Halliburton in 27 and 28? Is that possible?
Executive Jeff (Title): Yeah, your incremental expectations aren't wrong. Those are my expectations as well. We're getting underway. I like the trajectory that we're seeing on the ground in North America. We're winning big contracts all around the world. Yeah, there's always going to be mobilization associated with those, but that doesn't diminish my, when I say revenue growth and margin expansion.
Quarter 2
Q1 2026 Earnings Call — April 21, 2026
Analyst David Anderson (Barclays): Thank you very much. Good morning, Jeff. Obviously, the Iran conflict isn't resolved, so it's really hard to guide for the next several quarters. I think everybody's just trying to figure out what the other side of this looks like. I realize it's early, but with global supply now a priority, how does this shape your views over the next few years, and how has that really changed over the last 60 days?
Executive Jeff (Title): Look, I think the most important change is that the supply overhang is no longer a concern. That's swept away. And demand, structural demand remains intact. And so I think that combination sort of moves the rebalancing up closer. You know, that's sort of done. And when I look out, I think equally important is the, you know, the view that energy security is no longer a talking point. I mean, I said that, but I mean, that's going to drive activity. And so, and I think that change is not temporal, but that's a few years, a solid few years. So that's what's changed in the last 60 days, in my view. And then, you know, you touched on North America. North America is kind of always the first one to see a reaction. It sounds like you're saying kind of early innings here. Shannon, you were trying to talk about some of this white space shrinking. Are you starting to see E&P customers showing signs of picking up activity? Is everybody kind of waiting on the back part of the curve to lift up? Just kind of a little bit more color on kind of what you're seeing on the ground and on U.S. onshore. Thanks.
Executive Shannon (Title): Yeah, thanks, Dave. The short answer is yes. We've seen a couple really good signposts. As I said, white space for Q2 is all but gone. We've seen a lot of pull forwards. We've seen inbounds. We're also seeing H2 firming up as well. I think the next flip of the coin would be rig ads and some longer-term discussions on frac activity. And I think as far as investments of the smaller and the bigger operators, the bigger operators tend to invest throughout the cycle. The smaller and medium-sized ones usually move a little quicker. But, hey, I think they are looking at the front end of the curve, the back end of the curve, but they're also looking at the front end of the curve as well. We like this market. We believe being the only fully integrated service company in North America is a fantastic position for us, along with our E-Fleets, Zeus IQ, and also really the demand for iCruise as well in this market. So the short answer is yes, early innings, but we like where we are. Thank you very much.
Analyst Arun Jayaram (JP Morgan): Yeah, good morning, team. Shannon, maybe I could start with you. I was wondering if you could walk us around your core international and offshore markets outside of the Middle East and perhaps elaborate on the strength in LATAM and Europe, Africa. I believe you mentioned that outside of the Middle East you expect international revenues to grow mid-single to high single digits. And just wondering how that compares to your thought process maybe before the conflict.
Executive Shannon (Title): Yeah, thanks, Arun. Yeah, hey, a lot to be excited about. A lot of bright spots. Latin America leading the way. Really excited about the work we're doing in the Caribbean in particular, Guyana and Suriname, working in a very collaborative way. But, you know, Argentinians are really exciting. We just announced a multi-year, multi-billion, first-ever deployment of track spreads in Argentina with YPF. That's going to be a really great business for us moving forward. The deep water work as well in Brazil. But, hey, if you move east, outside of Middle East, the Norway market is one that we've had a real strong position in. We're very collaborative with a number of customers there. We're starting to see rig ads coming towards the back half of this year, early next year. And, you know, with regard to West Africa, we're seeing some light at the end of the tunnel, real sizable programs both in Namibia, Nigeria. We have a sizable footprint in both of those places and two countries we like our contracts in. And I would just put Asia-Pac just as a really resilient market for us. Throughout the cycle, it stayed busy. Expect that to continue. And yeah, we expect a full year, mid to high single digits outside of Middle East. We think certainly a lot of unknowns in Middle East, but still feel pretty good about where we are with that guy.
Analyst Arun Jayaram (JP Morgan): Great. And my follow-up is in North America, we have a bit of an unusual dynamic where we have relatively modest natural gas prices, including kind of in markets like the West Texas, which are significantly below diesel prices. You know, one of the things about Halliburton's FRAC fleet is you have a lot of exposure to natural gas kind of burning equipment, E-fleets that use natural gas as an input. But I was wondering if you could talk about opportunities to arbitrage this delta to the benefit of how shareholders in terms of, you know, arbitraging that delta in terms of pricing, you know, pricing power?
Executive Jeff (Title): Well, look, I think that that just reinforces the value in our E-Fleets and, yeah, clearly an opportunity. And, look, we work that all of the time in terms of pricing and where is that going and But yeah, I would describe that as an opportunity. It's certainly a benefit for operators that are consuming natural gas. And I think just to add to that, in terms of the E-Fleets that we have, the Zeus platform is proving itself such a unique solution, particularly with respect to Zeus IQ and the ability to move on recovery, that while the ability to you know, be more economic with the gas consumption due to the arbitrage. I think the real power in the Zeus IQ and the Zeus platform has been what it's able to do subsurface. Great. Thanks a lot.
Analyst Saurabh Pant (Bank of America): Hi. Good morning, Jeff, Eric, and welcome. We're standing to the call. Thank you. Jeff, obviously you had your comment on North America in the press release. You gave us a lot of good color in your prepared remarks. But I recall last quarter we were talking about this and you were talking how the supply side of the equation, again, this is mostly a frack comment, right? It's a lot tighter than people think and it would take just a little bit of demand coming back for pricing power to come back. How are you thinking about that right now, Jeff? Shannon, maybe you want to pitch in, right? How do we move through the remainder of 26 based on what we know right now, right, on the demand side and then on the pricing power side of things?
Executive Shannon (Title): Yeah, this is Shannon here. Yeah, we're seeing some, as I mentioned earlier, some really good signposts. What that is doing is driving some real constructive conversations with our operators. There's a handful of fleets that can go to work. And the way we think about it is first is we have to address the pricing of their existing fleets. Those conversations are happening. I think the next flip of the coin, longer-term programs, more rigs being added, that creates another level of constructive conversations for us. But first things first for us is focus on the fleets we have now. And it doesn't take much attrition for things to get tight. And early innings, but starting to see signs of that.
Executive Jeff (Title): Yeah, I think just to follow that up, what in my view is even clearer than it was is sort of the availability of equipment in the market. And that's what those early signposts are calling out is the fact that equipment is tighter, we're getting calls. And I think we're within a handful of fleets, sort of premium fleets, dual fuel type fleets of being absolutely sold out as an industry. Now, that's helpful color of Shannon, Jeff. I think that's very positive for the industry and for Halliburton in particular.
Analyst Saurabh Pant (Bank of America): My second question, Jeff, Shannon, is on the international side of things. Obviously, like you said in the beginning, there's going to be almost a billion barrels of lost production from what's happening in the Middle East that's bound to have profound impact. If we just focus on the international side of things, which markets which kind of customers operators do you think would be the first to change their behavior which regions should we expect to benefit first i know you talked about latin america which has been really strong for you and then just how would halliburton seek to benefit from that i know your collaborative approach has been really helpful in outperforming the market.
Executive Jeff (Title): Yeah, just finished a bit of a tour around all the international location regions. Conversations that I'm having with customers and energies and ministers are, you know, the dependency of being down to a straight is in their mind. Anybody that's a net importer of oil is thinking about bringing forward programs and reevaluating their capital budgets. I think that's one. I also think our growth engines, really excited about where we're heading with growth engines on how we can apply that to what would be a hopefully improved drilling program in some of these locations. But Asia, Pacquia, all of those, West Africa, all those areas are really markets that we see potentially picking up with what's going on in the straits. And I guess last to add is you're right. The collaborative model that we work under has been big for us. A lot of the areas that I mentioned earlier, we work very collaborative. We were invited in earlier, and I think that's been a big support of us in winning the work we have in a number of those markets. Right. No, that makes sense. And, Shannon, thank you. I know we have seen that in North Sea and now in Suriname, so that's all fantastic to see. Okay, guys, I'll turn it back. Thank you very much.
Analyst Steve Richardson (Evercore): Hi, good morning. Appreciate the guidance on 2Q in terms of the EPS impact of the conflict and how it's embedded in your guidance. Could you just talk a little bit about how you thought about, you know, we think about the two to three cents that you experienced really just in the month of March. You know, how does that roll over? What have you, like, you know, it's a tough situation to game. So how have you kind of thought about escalation or de-escalation and the timing at which that seven to nine cents will kind of be de-risked?
Executive Eric (Title): Yes, Steve, it's Eric. I'll take that one. So let me tell you what we saw in Q1 and what we have built in our guidance for Q2. So as you mentioned, Q1, 2 to 3 cents. Q2, 7 to 9 cents. Again, built into the guidance that we gave are two major buckets of impact to our business. One is lost revenue. The second one is inflated costs primarily through logistics, fuel costs, etc. So the assumptions we made for the Middle East for the second quarter is a bit of our best guess. It is to assume that the level of disruptions are similar to what we had when we exited Q1. We're also building a restart of some of the offshore work kind of halfway through the quarter. So that kind of is what drives our $0.79 commentary. Now, I would say as well that if the restart that we are assuming around some of the offshore operations are delayed, this could mean another impact to our business of, say, $0.03 to $0.05 potentially. Very helpful. Thanks.
Analyst Steve Richardson (Evercore): So if we could follow up just quickly on the Argentina contract and YPF. I mean, clearly the situation there has changed a lot on the ground from a regulatory and above ground situation. Can you talk to, there's clearly other operators in the basin and also still a lot of interest in other geographies, you know, such as Australia in terms of unconventionals. Can you talk about how much you view this contract as somewhat of a template or a good baseline for how Halliburton will approach some of these other unconventional jurisdictions?
Executive Jeff (Title): Yeah, thanks. Look, this is a huge opportunity for Halliburton in Argentina, but I do believe it speaks to the maturity of that market in terms of growth. It's not mature by any means, but it's in terms of a growth trajectory that it's demonstrating what's really required for meaningful growth. By that, I mean multiple fleets over multiple years. They're building out infrastructure there in order to make FRAC more efficient. I mean, it's going to be very competitive from a cost standpoint with the rest of the world. In addition to that, that's attracting new investors into that market, which I think are good both for the market itself in terms of developing the resources, but also speaks to what I think of you is of how important Baca Muerta is to Argentina, broadly, economically. And so all of that very positive for Argentina.
And your point about this being a template is spot on because when we look around the world, we look obviously Australia, but Algeria, Kuwait, UAE, Saudi, Qatar, all of these places are in different places along sort of a continuum of but all working towards some form of stability and then growth and then maturation into what we're describing in Argentina. So fantastic for those countries, but more fantastic for Halliburton in terms of where we are technically, clearly one of our growth engines, and a place where we have meaningful competitive advantage. And the uptake on the... The electric fleets and the Zeus IQ platform in Argentina is a great first step to broadening that capability around the world. Thanks so much.
Analyst James West (Mellius Research): Thanks. Good morning, Jeff Shannon and Eric. Good morning.
Executive Jeff (Title): Good morning, James.
Analyst James West (Mellius Research): Jeff, I wanted to ask a bit about, you know, obviously the year of what we called, you know, three months ago, rebalancing is no longer the year of rebalancing. It's a much different environment, as you've noted, and you've talked about the NAM recovery, and you've announced a number of major contract awards internationally. And so I'm curious about the customer conversations, Jeff and Shannon, that you're having with today. Is there a sense of urgency building? Is it still a little bit too early? Do they understand? I mean, the customers, I'm assuming they do because the boardrooms have to be talking about it. The CEOs have to be talking about it, thinking about it. But is the sense of urgency of getting these projects going faster starting to unfold?
Executive Shannon (Title): Yeah, James, this is Shannon here. You know, while it's still early innings, as I said, we had the signpost, but it's It was encouraging to us to see the white space in Q2 just really get taken out in a very short period of time. I think another tell was really it wasn't just a short-term blip in trying to take advantage of the current curve right now. We're seeing H2 firming up as well. I don't know if I used the word urgency. I'd say just really constructive conversations about getting back to work and grabbing the value that's out there that they see not only now, but, you know, for the future.
Analyst James West (Mellius Research): Okay. That's very helpful. And then maybe you could briefly talk about what you're seeing on the exploration side. It seems to me a lot of the super majors have at least added a few incremental dollars to their exploration budgets. Is that, am I reading that correctly? Is exploration going through a little bit of a, after a 10-year lull, kind of a rebirth cycle?
Executive Jeff (Title): Look, I think we're seeing a little bit of exploration, but I think, you know, exploration, you know, we've done some of that in different places, but I think a lot of the muscle is around development. I mean, in terms of producing more barrels, and that gets very much into what we're seeing in Namibia, West Africa, actually largely in Africa, Let's say Suriname, for example, we participated in a fair amount of exploration, but more importantly, we're getting into the heavy lifting of development in the Caribbean broadly and elsewhere. Actually, in Brazil, we've been quite successful in Brazil as well. So while some exploration, but I think really what we're seeing ahead of us is a lot more development in a lot of places.
Analyst Neil Mehta (Goldman Sachs): Yeah, good morning. Greg Corder here, Jeff. I guess the first question I had is just around capital returns. The buyback at $100 million was, I think, a little bit lighter than the run rate we've seen at $250 million a quarter. Was that just a timing thing? And just How are you guys thinking about the share return over the course of the year?
Executive Daniel (Title): So overall there's been no change in our focus on shareholder returns or our overall philosophy around buybacks, to be very clear. We started the year lower than our run rate, the run rate we were on in 2025. That is something that we actually mentioned on the Q4 call, and we mentioned that that was our intent. considering the macro situation we were facing at the time and, you know, some of the concerns around the speed of activity increase in the Middle East, et cetera. What you can expect from here is you can expect Q2 to be higher than Q1. You can expect H2 to be higher than H1 in terms of overall buyback. So our objective long term remains per share value creation, really.
Analyst Neil Mehta (Goldman Sachs): Now, that's very clear. And then the follow-up is just on the technology side. You guys have had a lot of success here with VoltaGrid and your investment there. And, of course, you're looking to deploy that over time bigger in the Middle East. But any of your perspective on the power side of the business and Volta in particular and your perspective on driving value from that side?
Executive Jeff (Title): Yeah, look, we're – We really like our position in VoltaGrid, and we like where we are today, and we like what the company is doing. So from a shareholding position in VoltaGrid, very pleased with where we are and what the company is doing. I think separate from that, but along with that, is the international market. pursuit that we have underway and venture that we have with VoltaGrid, and I'm very excited about that, very much on track, and I don't constrain that to the Middle East. In fact, lots of inbounds, lots of back and forth with potential customers in, you know, Australia, Japan, Canada, all around the world, and so I don't, I'm actually very encouraged about that where we have 400 megawatts sort of in the queue, ready to get placed, and have a lot of line of sight around how that might happen. So very excited about that still. Thanks, Jeff.
Analyst Sebastian Erskine (Rothschild & Company): Yeah, hi, good morning, guys. Hopefully you can hear me. Just to focus on portfolio longevity, that seems to be the theme kind of du jour for the IOCs. Investors are rewarding growth. They're focused on reserve replacement ratios. And I guess Venezuela, we've kind of moved on a bit from that. But of course, with the higher commodity price environment, I presume that those barrels look more interesting now for operators. What are you hearing from the customers and what's the latest on the remobilization there?
Executive Jeff (Title): Yeah, thanks. Look, making progress in Venezuela. I spent some time there. We're having great discussions with customers. We're talking about commercial terms. You know, we've been in business at our bases or our facilities there. Those are in better shape than I expected. Lots of inbounds. And, yeah, clearly that is an opportunity. You know, there's work to do without question. I think some of that work comes faster than others. But really, really pleased to be back in Venezuela, have Venezuela back in business and the opportunity to work on really productive things. So share your view.
Analyst Sebastian Erskine (Rothschild & Company): Really appreciate that. And just a question back on the U.S. land environment. So obviously we talked a lot about the track market and kind of the tightness there. Of course, it only requires a little bit to see a step up in pricing. What might that mean for your incremental margins in the C&P business? I'm thinking about kind of 2027 if we presume there's a little bit of a slow start given a lot of CapEx budgets already set in the U.S. What might that mean for your incremental margins in C&P going forward?
Executive Jeff (Title): Well, I think it'd be solidly up from here. Look, and again, that's an efficient business. We're running at the top of the market today in spite of where the market is, and it doesn't take much at all in order for incrementals to be strong in North America. But it's the tightness that matters the most. And I think that as we've described before, the frack market sizes to what's in the market pretty quickly just because the absence of maintenance and other things, equipment runs down fairly quickly and sizes to what's in the market today. One of the reasons why we're so disciplined about stacking or setting equipment aside so that we force that level of discipline and efficiency on our operations all of the time. But with that said, it's right there. It's very close to being, I would say, at a sold-out point for equipment that is effective and operating and maintained and all of those things. Really appreciate the color there, and I'll turn it back now. Congrats on a solid quarter.
Analyst Scott Gruber (Citigroup): Yes, good morning. I want to come back to the shale developments abroad, which we're picking up even before the Middle East conflict, as you mentioned, now that those could accelerate. Do you see the international shale opportunities outside of Argentina utilizing more Zeus fleets, given the efficiency advantage, or do Most of those plays, just simply because they're less mature than Argentina, maybe they don't have the supply chains required for Zeus, do they end up pulling more of the legacy diesel fleets from the U.S.? Just some color on how you see the equipment demand evolving internationally.
Executive Jeff (Title): Well, the Zeus fleet's a unique solution, and because of that, it's time to go to work in Argentina. There's scale, there's runway of work to do, and absolute focus on improving recovery. And that combination is what makes it so valuable in Argentina, for example. I would argue as others are at different places in maturity, they're not at a place where they take advantage of Zeus. And so, you know, you described it in economic terms, but I'm going to describe it more in technology terms because I think that's where it creates the most value. And quite frankly, the reason it commands a premium is because of its ability to measure where the sand is going, move the sand around, and create a closed-loop fracturing environment. That's very different than simply the arbitrage on gas to oil. And I would say the markets that are in the earlier stages, let's call it exploration phase, for lack of a better word, really don't demand that level of capacity. And so for that reason, we've taken the exact same approach to Zeus internationally that we did in the U.S., which is we deploy Zeus to contracts that have the duration to return the cost of capital and the capital during the term of the first contract. And so we view that the same around the world, and we just don't see those conditions in a lot of other markets. Doesn't mean we don't get to that. In fact, I feel certain we will get to that But that may not be today.
Analyst Scott Gruber (Citigroup): Gotcha. And, you know, the YTF contract sounds meaningful to your business and country. Can you dimension that at all for us? You know, just how much bigger it'll grow your business in the country, the timing of that growth, and just giving the integrated nature and the efficiency gains that you're going to deliver. You know, how do you think about the margin profile in the contract relative to your C&P segment average of around 15%?
Executive Jeff (Title): Yeah, a huge win for Halliburton there. We had a good footprint before the award. We have even a better footprint now. This is already being rolled out. We've got fleets coming in literally now and then towards the end of the year and to next year. So in the way we kind of think about our fleets just generally is it's going to go to the best place as far as returns and pricing. And so we're moving that equipment out of North America because we believe we have good pricing there and a sustainable program. And I think it also just demonstrates the importance of our technology and improved recovery, YPSC's that, and should be some really long-term work and really pleased with that win, huge win for us. Great. Appreciate the call, and congrats on the win.
Analyst Stephen Gingaro (Stiefel): Thanks. Good morning, everybody. I think two for me, and one just going back to the U.S. frack business and pricing potential. Are your customers willing to take diesel if you have any diesel available, and And how much are they thinking about the price arbitrage, which should, I would think, lead to obviously higher prices for gas burning? But how are customers thinking about that right now?
Executive Jeff (Title): Look, I think our customers are always looking for the most effective solution they can find. That's certainly the case. But I don't know that that is what would motivate tightness in the market. So I think that's more of a decision between equipment and less of a decision about ad equipment. And so I think the more important point is if we just look at oil exports today and kind of where the market is in terms of the value, the price of the commodity and the demand for the commodity, I think that's more of the driver than it is arbitrage in terms of pick up a fleet, don't pick up a fleet. I think it's certainly valuable and it makes it more economic and it should create more pricing opportunities or your willingness to pay more. But I don't know that that's what's driving what we see as tightness. Two separate ideas in my view.
Analyst Stephen Gingaro (Stiefel): Okay, great. Thank you. And the other question, we've heard for years now about E&P capital discipline and kind of being unwilling to add a lot of rigs and frack fleets back. Are you seeing any shift in that? Like, how should we be thinking about this over the next several quarters? And obviously, we'll listen to what the E&P say, but how are you viewing that, especially in what was probably a tighter oil market for the next couple of years?
Executive Jeff (Title): Well, look, I said we're in the early innings, and we are in the early innings. And by that, I mean big public companies typically would come later in that cycle. But the early movers are the smaller companies. But that's an important move because that early move by small operators are what take capacity out of the market and creates tightness. And so, you know, Timing of big operators, et cetera, is less clear today. However, what is clear is commodity price is structurally higher than what it was, and there's going to be more demand growing and fewer barrels in the market. And that's going to create an opportunity for operators of all sizes to make more money. And so I think that... But that tightness that we're seeing created by smaller operators shouldn't be overlooked. And I think the front edge of what we're seeing here, a lot of inbounds, are smaller operators taking capacity out of the market. And that's a good thing. That's really good for Halliburton. Great. Thank you for all the details.
Analyst Mark Bianchi (TD Cowan): Hello, can you hear me?
Executive: Loud and clear.
Analyst Mark Bianchi (TD Cowan): Okay, great, guys. Thanks. I guess the first one is, you know, if the Strait were to open tomorrow and it were kind of a green light to get back to normal operations in the Middle East, how quickly could that happen? Maybe walk us through some of the industrial challenges and opportunities that exist there.
Executive Shannon (Title): Yeah, this is Shannon here. You know, it's really, I'll start with what's really kind of unclear how quickly that comes back. I'd say that, hey, we're ready. Halliburton's operational footprint is intact. Most of our business is working today. Our biggest hit areas was in Iraq and Qatar. But we are in constant contact with our customers and there to support them when they're ready and able to go back to work. But the things that you'll start seeing first moving is probably just turning back on wells. And that would be a well-by-well situation of how they produce and how they flow. I'd say the longer they get shut in, the more complex that gets. So that would be probably the first thing, and I think that puts Halliburton in a fantastic position. We're market leaders when it comes to intervention work in the Middle East with our HWO and coal tubing work. So that would probably be first, and then you would start seeing customers offshore starting to drill more in the deeper reservoir sections. For the most part, the work that is going on offshore is on top holes. But like I said, unclear, but we're ready, and it would just take time to figure that out.
Executive Jeff (Title): Great. Thanks for that. Go ahead, Eric.
Executive Eric (Title): Sorry, Jeff. Go ahead, please.
Executive Jeff (Title): No, that's fine. Look, I think that the turning back on just at a high level is not immediate by any means. And there's certainly a gap in the supply chain in terms of...