Key Technology and Collaborations: In Q4 2023, Halliburton (HAL) introduced EquiFlow Density to lower reservoir fluid uncertainties and enhance hydrocarbon recovery. During the quarter, HAL and Core Laboratories announced a strategic collaboration to compress the delivery time of digital rock data solutions. The company also collaborated with OIS on innovative deepwater managed pressure drilling (MPD) solutions. HAL announced that it will participate in developing a pre-salt field system in Brazil. With Sekal AS, it will combine its digitally integrated, well-construction solutions with the Sekal DrillTronics automation platform.
A Slight Revenue Deceleration, But Management Stays Positive: Quarter-over-quarter, the drop in revenues in the company’s Completion and Production operating segment was partially offset by a rise in revenues in the Drilling and Evaluation segment in Q4. Geographically, North America witnessed a sharp decline (7.1% down), while Europe/Africa/CIS and Middle East/Asia saw a topline growth. Lower stimulation and artificial lift activity in the US and Mexico and lower completion tool sales in Latin America obstructed its sales growth.
In contrast, higher software sales, increased completion tool sales in the Gulf of Mexico, and improved fluid services in the Western Hemisphere and Africa pushed revenues higher. Its management sees the “outlook for oilfield services demand remains strong,” which would enhance HAL’s free cash flow in 2024.
Cash Flows And Balance Sheet Continue To Strengthen: HAL’s cash flow from operations improved remarkably (54% up) in FY2023 compared to a year ago. As a result, its FCF increased by 69% in FY2023. Debt-to-equity (0.81x) also showed improvement from a year ago (0.99x) due to lower long-term debt and higher shareholders’ equity. Higher cash flows allowed the company to raise quarterly dividend by 4%. 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. Â Soon, we will present a second update on HAL earnings highlighting its current strategy, news, and notes we extracted from our deeper dive.
