The operator introduces the Halliburton Company's third quarter 2023 earnings conference call and hands it over to David Coleman, Senior Director of Investor Relations. He introduces the CEO and CFO and mentions that the conference is being recorded. The CEO discusses the company's forward-looking statements and risks, as well as non-GAAP financial measures. He then praises the company's performance in the third quarter, particularly in North America and international markets.

The company had a successful quarter with overall revenue and operating income increasing. International revenue saw strong growth while North America revenue remained flat. The completion and production division had the highest revenue growth and margins, followed by the drilling and evaluation division. The company also generated a significant amount of cash and used it to repurchase stock and pay off debt. The CEO believes that the global demand for energy will continue to drive growth in the oilfield services industry and is confident in the company's strategy to deliver strong financial results and return cash to shareholders.

Halliburton's North America business has performed well despite a decrease in the U.S. rig count. This is due to their strategy of maximizing value, which includes investing in new technologies, only building equipment under long-term contracts, and retiring old equipment when necessary. They have also made structural cost reductions and have improved efficiency in their operations. The E&P and services markets have also undergone significant changes.

Halliburton's focus on returns and free cash flow has led to a successful North America business, aligned with the success of its customers. International markets have also seen growth through differentiated technology offerings, selective contract wins, and a collaborative approach. With increasing offshore activity, the market for oilfield services is expected to tighten, providing a great opportunity for Halliburton's profitable international growth strategy. The company is on track for high teens year-on-year growth in 2023 and expects double-digit market growth in 2024. The global offshore business is also expected to see growth.

Offshore operations make up more than half of Halliburton's business outside of North America. 25% of their C&P revenue and 40% of their D&E revenue is generated offshore. All regions contribute to this revenue and all product lines operate offshore. Halliburton's collaboration with customers and leading product lines contribute to their success in offshore well construction. They have a strong track record of performance, particularly in Norway, and offer leading solutions for complex wells. This has led to a strong offshore business and the ability to compete in all aspects of offshore operations. The company is confident in their strategy and execution.

In the third quarter, the company reported a net income per diluted share of $0.79, with total revenue of $5.8 billion and operating income of $1 billion. The company's operating margin increased by 207 basis points compared to the same quarter last year. The completion and production division saw an increase in revenue and operating income, driven by international stimulation activity and improved completion tool sales. The drilling and evaluation division also saw increased revenue and operating income, driven by higher fluid services and wireline activity in certain regions. International revenue increased by 3%, with strong performance in Latin America and Europe/Africa.

In the third quarter, the company saw an increase in revenue due to improved well construction services and higher completion tool sales in Norway and the Caspian area. However, there was a decrease in activity in Africa and some product service lines. In the Middle East Asia region, revenue remained flat due to higher well construction in Iraq and increased drilling and completion tool sales in Qatar, offset by lower activity in Kuwait and India. In North America, revenue decreased due to lower pressure pumping services in U.S. land and well intervention services in the Gulf of Mexico. Corporate expenses are expected to increase in Q4 due to timing and special items, and the company spent $23 million on SAP S4 migration in Q3. Net interest and other net expenses are expected to remain flat in Q4, and the effective tax rate for the quarter was 21%.

In the third quarter, Halliburton had a strong performance with capital expenditure of $409 million and cash flow from operations of $874 million. They anticipate generating over $2 billion of free cash flow for the full year and have a capital return policy of returning at least 50% of free cash flow to shareholders. In the fourth quarter, they expect a decrease in revenue in the Completion and Production division but an increase in the Drilling and Evaluation division. Overall, the company's strategy for maximizing value in North America and profitable international growth has been successful.

The company has successfully executed their value proposition and has a strong offshore business. They are able to compete in all parts of the business and are expecting double-digit growth in the international market in the next 12 to 24 months. The company's strategy is focused on profitable growth and improving margins. The recent M&A activity in the industry may provide more visibility for the company's development programs but could potentially limit pricing leverage with a smaller number of large customers.

Halliburton's CEO, Jeff Miller, believes that the recent developments in the oil and gas industry demonstrate the long-term importance of North America. The company has a strong position with its customer mix, which is mostly made up of large private and public companies. These customers value Halliburton's focus on productivity, efficiency, and recovery. The company's e-frac technology has been well-received by its customers, with over 60% of its business coming from repeat customers. The company also plans to continue its strategy of returning over 50% of its free cash flow to shareholders through a combination of dividends and share repurchases.

During a recent conference call, Jeff Miller, CEO of a major oil and gas company, discussed the company's current approach to buybacks and their plans for the future. He mentioned that they have already returned $1 billion to shareholders this year and expect to see even higher returns in 2024 as their business continues to grow and margins improve. When asked about guidance for the next quarter, Miller and his team declined to give specific numbers but did mention that they typically provide guidance on a division basis. Miller also provided some insight into the competitive landscape, noting that there has been a shift in the market with one competitor moving into non-oil and gas businesses, leaving a duopoly between his company and their main competitor, both of whom are focused on returns.

In paragraph 12, Jeff Miller discusses the competitive environment in the marketplace and Halliburton's focus on maximizing value, growing profitably, and driving capital efficiency. He also mentions the company's strategy to develop R&D that is more capital efficient, which has led to improved cash flow. Miller acknowledges that North America is a cash machine for the company and expects continued growth in the future, citing the recent consolidation activity as evidence of the region's importance.

The speaker believes that the current environment will drive activity in the market and that their company's focus on retiring diesel fleets and investing in electric technology will drive margins. They are confident in the stability of the market and have mostly contracted for 2024. When asked about the outlook for the next few quarters, the speaker says they have given clear guidance and are confident in their market analysis.

The speaker discusses the seasonality of business in North America and expects international growth to continue. They express confidence in their outlook for the year and anticipate growth in North America in the first half of next year. The company is adjusting their cost structure to be more variable and focus on margin expansion rather than just incremental margins. They are unable to make predictions for the rest of next year but believe that their customers will execute their plans.

The speaker discusses the importance of cost reductions and maximizing value in North America for their business strategy. They expect to see stronger incrementals as they pivot from diesel to electric equipment and improve capital efficiency in their drilling business. They have a positive outlook for the market in 2024, with potential for increased demand for their services.

Halliburton's drilling business presents an asymmetric opportunity due to advances in technology, which could benefit from an increase in rig count. The company is also seeing success in its production business outside of the U.S., particularly in the Middle East and Latin America. The chemical facility in the Middle East is on track, and the company has high expectations for its international growth opportunities. Analysts have a positive outlook for Halliburton's production and chemical businesses.

Luke Lemoine asks Jeff Miller about the company's progress with signing new fleets and customer interest in their program for 2024. Jeff Miller responds that they have seen strong demand and have signed up new fleets this quarter, which is in line with their expectations. He also mentions that their electric equipment has lower total cost of ownership and they have been able to retire diesel fleets, which has accelerated the market. When asked about the level of frac fleet activity needed to keep production flat, Miller says it will vary for different operators and their efficiency levels.

The speaker believes that more information about production levels will become available in the coming year. They note that there was a lot of activity by operators in the early part of the year, but less activity in the late summer, which may impact production levels in 2024. However, the commodity market is supportive and activity is expected to increase. The speaker also mentions that having lesser Tier 1 acreage may drive up service intensity and efficiency, which is beneficial for Halliburton. They also highlight the importance of technology, specifically their downhole diagnostics tool called SmartFleet, in addressing productivity and efficiency in well design and production.

The speaker believes that the oil and gas industry is constantly improving and customers are competitive. This drives more revenue for Halliburton and will continue to bring down production costs. The speaker expects strong performance from C&P in the fourth quarter due to the high demand for development work and tight equipment. Despite a decrease in rig count, C&P has seen flat margins thanks to successful execution in North America.

The speaker is asked about international growth and how they expect different regions to perform. They respond by saying they expect high double-digit growth overall and are not concerned with quarter-to-quarter changes. They also mention that they put assets where they see the best returns, and that pricing is continuing to strengthen.

The company expects margins to strengthen internationally due to a tightening of capacity and growth in offshore work. This is driving pricing and will continue to do so as planned activity extends into the decade. The company is confident that it can grow its North America revenue, even if overall activity is flat or down, due to its unique positioning with electric fleets and drilling technology.

In the paragraph, Jeff Miller discusses how Halliburton is looking to maximize value in North America by offering e-fleet opportunities to customers. He explains that the company is seeking 3-year contractual commitments from customers and that this is a low-risk decision for operators. Miller believes that this commitment is not a hurdle for customers who are committed to the long term in the business, as the e-fleet offers the lowest cost operating fleet and high efficiency. He concludes by stating his confidence in the company's strategy and the strength of their third quarter performance.

The speaker is excited to speak with Carmen in the next quarter and Carmen will end the call. The operator thanks the participants and informs them that they may now disconnect.

This summary was generated with AI and may contain some inaccuracies.