Jeffrey Miller: Look, I think the surprise will be West Africa and North Sea in terms of ’25 and beyond. I think really we’re planning work now. There are great opportunities today that are being planned by clients with the full expectation that we see a meaningful step up as we go into ’25 and beyond. And these are all long-term type projects that will extend into the end of the decade. So, but I do think that’s where we’ll see a lot of activity.
James West: Okay. Okay. That makes sense. And then, maybe just back to North America to pivot back there. Again, I don’t want to beat a dead horse, but you guys are dramatically outperforming some of the peers in North America. And where do you hold the line, I guess on kind of pricing? And where do you sacrifice utilization in a market that may be down a little bit? Is it — we just we’ll give up the utilization to keep our pricing, or do you — are you willing to give some discount to keep utilization high?
Jeffrey Miller: Yes. Look, James, do we see some pressure? Yes. But does that affect our strategy? Absolutely not. We’ve got a strategy with maximized value in North America. 40% of our equipment is contracted under long-term contracts, and we’re not terribly exposed where we do see that pressure. And I think maybe more answer than you want, but I think it’s important that we keep central as our strategy is delivering unique technologies that create real value for customers. And so, that’s what lowest TCO looks like and that’s why we’re also work solving for recovery with ZEUS platform and Sensory. We think those two things alone create significant value for customers and so we keep that central.
James West: Right, right. Totally get it. Thanks, Jeff.
Jeffrey Miller: Thank you, James.
Operator: Thank you. One moment for our next question, please. And it comes from the line of Scott Gruber with Citigroup. Please proceed.
Scott Gruber: Yes. Good morning.
Jeffrey Miller: Good morning, Scott.
Eric Carre: Good morning, Scott.
Scott Gruber: Well, it’s getting later in the call, so I’ll give you a chance to mention AI a few times. Not that it’s needed. But are global customers starting to discuss additional demands from power for data centers? And do you think this has the potential to pull forward additional gas developments over the next few years around the world? Or is this still off the horizon?
Jeffrey Miller: I think gas is a critical fuel. And look, yes, I think we mentioned in the prepared remarks that the growth in demand for gas or gas and electricity and that being the most effective way to deliver power certainly today in the most reliable. So, I think that this is almost becoming, it’s one of those things that you don’t see it until it’s on top of you. And I think that right now that demand is on top of us. And so, I think that can only be additive to demand. I have no question that will be additive. And clearly, AI consumes more power than traditional data centers. So, I think all of that combined, there’s almost it’s not almost, it is a secular trend towards demanding more power and that can only be good for our industry and for Halliburton.
Scott Gruber: Yes, it’ll be interesting to watch. Just turning back to the near-term, Latin America was a big outperformer versus our expectation. Can you just provide some more color on the details of what drove the outperformance in Latin America? And overall, what type of growth would you anticipate from the market this year?
Jeffrey Miller: Look, Latin America performed very well. It’s broad based growth in Latin America. So, really it’s several geographies and types of markets, whether Argentina, Mexico, Caribbean, Ecuador. So, we saw strong growth all over. And important to say, our team in Latin America is doing an exceptional job. I’m very appreciative and pleased with the work that team does. And I think it also demonstrates how oil and gas is critical to economies. Those are economies that require oil and gas. They view oil and gas as critical to both security and economic growth, things that are important in Latin America. And so, I expect there’s more to come.
Scott Gruber: Got it. Appreciate it, Jeff. Thank you.
Jeffrey Miller: Thank you.
Operator: Thank you. One moment for our next question, please. And it comes from the line of Luke Lemoine with Piper Sandler. Please proceed.
Luke Lemoine: Hey, good morning. Jeff, you’ve reiterated your full-year international revs up low-double-digits with margins expanding this year. But could you maybe talk more specifically about how you see the D&E margins unfolding on a full-year basis? And then also, as we kind of look over the next couple of years as international continues to unfold, you roll out new products and services like iStar and iCruise, what are kind of the aspirational targets here in D&E?
Jeffrey Miller: Yes. Look, I like the trajectory that we’re seeing in D&E. And I say that because we’re growing the business, but we’re growing the business at a pace that’s profitable and building the kind of foundation that we can use the technology in markets where we know we’ve got solid growth and profitability and then be able to reach out from there. But clearly, it is a balance of growing margins while opening for example, new businesses. So, we’ve opened a few new markets while growing profitably. And I think that’s sort of the foundational part of our D&E trajectory. So, I expect to continue to see it aspirationally, continue to expect it to go up and expand quarter-over-quarter, year-on-year. And in the first quarter, we actually saw flooding in some markets.
We saw weather in some others, maybe more than we would have expected. Though I expect that we continue on the trajectory in spite of all of the things that sort of come along and businesses that are open. So, should expect to continue to see that moving up.
Luke Lemoine: Okay. Thanks, Jeff.
Jeffrey Miller: Thank you.
Operator: Thanks. And one moment for our next question. And it comes from the line of Stephen Gengaro with Stifel. Please proceed.
Stephen Gengaro: Thanks. Good morning, everybody.
Jeffrey Miller: Good morning, Stephen.
Stephen Gengaro: Two from me, the first, you mentioned the strength in iCruise in North America. I think you said more than double a year ago footage drilled. Is that displacing competitors? Is that organic growth? Is that replacing all technology that you’re offering? Can you give some color around that?
Jeffrey Miller: Look, it’s performing very well and the uptake has been strong. And so, it is different technology than what we’ve ever had in the past. It’s designed for this market. It’s built on the iCruise platform. So, how it gets to market is really customer driven and there’s been just more uptake on the technology self. Yes, it’s all organic. In terms of it, we developed the technology ourselves. We’ve worked on it for some time. We built a platform that has been very effective internationally and now we’ve gotten to the North America part of it. So, it’s early days, but stay tuned. I mean, we’re really pleased with the advancement that it’s making, but it’s really customers will drive the uptake for that. So, the increase in footage drilled is indicative of customers gaining confidence in the performance of that technology, particularly in the curved lateral.
Stephen Gengaro: Great. Thank you. And I know this may be a little harder for you to answer directly, but when we think about the CHX, SLV deal and what’s going on in production chemicals, I would imagine it’s an area that would have interest to you. But my question is really, you had a great amount of success with Summit and what you bought and built over the last, I guess five, six years plus and the strength of that business. Is that something that you can replicate in production chemicals if you went down that road?
Jeffrey Miller: Look, I think, I’ll revert back to strategically we like to grow things organically. We own the kernel of a business there. We continue to make progress. We’ve got the plant. The capacity is filling up in the Middle East. So, the trade-off is speed, but I think also the trade-off from our perspective anyway has been, we know how to do this and we believe it generates a lot of value for our shareholders when we go about it this way. And so, we’re going to continue to grow our chemicals business around the world on the back of some assets that we built ourselves. And so, I’m pleased, I think there’s opportunities for organic growth in chemicals, organic growth, and strong growth in intervention, a whole lot of different areas.
Stephen Gengaro: Okay, great. Now, thank you for the call.
Jeffrey Miller: Yes. Thanks.
Operator: Thank you. One moment for our next question, and it comes from the line of Marc Bianchi with TD Cowen. Please proceed.
Marc Bianchi: Hi. I wanted to circle back to the discussion on pricing for North America just because you made the comment that you’ve seen some softening, but you’re not changing your strategy. Could you just comment on how sort of the market has evolved over the last 90 days, if anything has changed. We’ve had a competitor out there saying that they’re going to go after share at the expensive price.
Jeffrey Miller: Look, I don’t comment on competitors, but from a strategic perspective we haven’t changed. What we’re doing and I like where we are. A big part of our fleet is contracted today. We focus on delivering top-notch efficiency, sort of record-setting efficiency, and also lowest ECO. And so, that’s where our primary focus is, and we plan to stay with that.
Marc Bianchi: Okay, great. Thanks for that, Jeff. And then, on the second quarter outlook, you gave the C&P and D&E, should we assume that that’s a similar profile for international in North America or anything that we should be contemplating there?
Jeffrey Miller: In terms of — I don’t —
Marc Bianchi: Yes. Go ahead Jeff.
Jeffrey Miller: Look, in terms of growth, I think the margin growth I expect will continue. I mean, I think that we talked about expanding margins and D&E and also C&P is continuing to grow. And I think we’re solid. We’re in a number of very good businesses around C&P.
Marc Bianchi: Okay. Maybe just to clarify, the question was more on revenue, so I guess what I’m wondering is to get to the low double digits for international, it would seem that you need a pretty healthy growth in the remaining — all three remaining quarters of the year sequentially.
Jeffrey Miller: Oh, yes, sorry, I —
Marc Bianchi: Could you talk about where that’s coming from?
Jeffrey Miller: Yes. So, that’s pretty broad-based. I mean, and so for C&P that’s completion tools around the world. It’s production enhancement around the world. So, in a very strong position, and we see a number of things growing, not the least of which would be lift, for example, and some things like that. So, I had heavy lift, I don’t see it as a — I see it as a very middle of the fairway, very doable from where we sit today. And again, equipment’s tight. I think that we’ll continue to see strengthening there as well, expanding margins in price.
Marc Bianchi: Very good. Thank you.
Jeffrey Miller: Thank you.
Operator: Thank you. One moment for our next question, and it comes from the line of Kurt Hallead with Benchmark. Please proceed.
Kurt Hallead: Hey, good morning. Good morning, everybody. Thanks for slotting me in here. So, Jeff you’ve been at this a long time. You referenced on more than one occasion, not just today, but in other calls about increasing level of visibility, especially on the international front and talking about opportunities that could extend out to the end of the decade. I think a lot of investors are wanting to kind of get inside the room with you, if you will, and try to get the same sort of conviction you have with respect to that duration. So, I’m just kind of curious if you could give us some perspectives and insights on how those conversations are taking place, how much lead time your customers are asking for, and effectively, what two or three things are you seeing that continue to underpin this confidence and conviction that this cycle is going to extend through the end of the decade?
Jeffrey Miller: Yes, thanks. Look, some of its work that will begin in ’25 that is planned to go through the end of the decade. So, I feel very confident about that. Others are work that we’re working on planning with clients that again are the types of projects that extend that far. I think just the price of the commodity and the tightness and the rising demand for oil and gas gives me confidence and it gives our clients confidence. And clearly, we’ve seen a bit of a return to oil and gas and its importance in a lot of places, but the type of work that we’re starting, the type of offshore work that we’re starting is takes time to get started and it takes a long time to do, and so, very confident about that broadly. And I would include, anyway, the outlook for North America is similar in terms of duration.
I mean, this is the kind of investments that we’ve seen in North America that are not for a quarter or two. These are decade-long investments that we’ve seen happen. And the next leg on gas and the demand for gas, it’s already been talked about on this call. I feel very confident in the resilience of this cycle.
Kurt Hallead: That’s great. I appreciate that. So, the other dynamic you referenced was approving margins, right? So, you’ve booked contracts that tend to last, I don’t know, two to three years on average in the international market, so those will roll through this year and next year and so on. Just curious in the context of that margin improvement from here, right, if you were to try to rank and order it. Is how much of the pricing how much is it? Is it volume? How much is the technology value proposition? Can you give us some additional sense on how you see that? What’s driving that margin improvement?
Jeffrey Miller: Look, I think it’s a combination of those. Some of it is certainly tightness in the market and pricing, but at the same time we’ve talked about our R&D investment over the last eight years has all been directed at better capital efficiency, and that drives margin also. That drives margins in our drilling business, it drives margin in our frac business. But these are deliberate choices that we’ve made to drive down or to improve capital efficiency and return. And I think that’s evident, probably most evident in our drilling technology and our ZEUS technology. But at the same time, that’s been a practice in all of our business. And so, anything that we’re producing today, sort of its first criteria has to be improved capital efficiency and better returns out of R&D.
And so, I’m really pleased with the success we’ve had there. And so, I would say all are contributing today, in addition to having sort of more market access, more opportunity to compete on the back of improved technology.
Kurt Hallead: I appreciate that. Thanks, Jeff.
Jeffrey Miller: Thank you.
Operator: Thank you. One moment for our next question, and it comes from the line of Doug Becker with Capital One. Please proceed.
