Key projects in Q2 and digital initiatives: In Q2 2023, Halliburton (HAL) and Vår Energi (a Norwegian oil and gas company) entered into a multi-year agreement focused on the Balder/Grane area, the North Sea, the Norwegian Sea, and the Barents sea. It also reached a deal with Nabors (NBR) that will allow collaboration of HAL’s Well Construction 4.0 digital surface and subsurface drilling technologies and NBR’s SmartROS and RigCLOUD digital infrastructure platform. It also received a UK carbon capture and storage (CCS) system contract in Q2.
HAL acquired Resoptima AS in Norway, specializing in data-driven reservoir management. The acquisition will complement HAL’s Landmark DecisionSpace 365 suite. During the quarter, it introduced SpyGlass – a cloud-based, cross-platform web application allowing operators to design, build, and analyze electric submersible pump (ESP) performance. It recently launched National Data Repository (NDR) for the Norwegian Petroleum Directorate to store critical exploration and production data.
International activity gains and management stays positive: The company’s operating segments saw nearly similar quarter-over-quarter revenue rise in Q2. Revenues in the Completion and Production and Drilling and Evaluation segments increased by 2% and 2.4%, respectively. Geographically, North America witnessed a decline (2.5% down), while Latin America saw the sharpest rise (8.6% up). Increased pressure pumping, wireline, and completion activity in Latin America helped it recover the topline in Q2. However, a fall in stimulation activity depressed its sales in North America onshore. Despite some headwinds, its management continued to place its confidence in “the strength and duration of this upcycle.”
Cash flow strengthens, and leverage goes down: HAL’s cash flow from operations improved remarkably (260% up) in 1H 2023 compared to a year ago. As a result, its FCF turned positive in 1H 2023. Debt-to-equity (0.91x) also showed improvement from a quarter ago due to higher shareholders’ equity. You may read more about the company in our previous article here.
Thanks for reading the HAL take three, designed to give you three critical takeaways from HAL’s earnings report. Soon we will present a second update on HAL earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
