Jeffrey Miller: Yes. Look, if I’m thinking about production growth in ’24, production is a function of service intensity. So simply put, more sand, more barrels. And we saw peak levels of service intensity throughout last — really in the first half of last year, and a lot of that comes on in the latter half. And I think some of this is efficiency in the sense that we are delivering more sand to the reservoir. And that comes in a lot of forms. E-fleets are part of that and some of the technology that we brought to market. But I also think that the market that we see for next year, it’s hard for me to forecast at this point exactly what operators will do because every operator plays their own game. But at the same time, I would probably be over on rigs because I think that we’ll run out of DUCs at some point.
I think I would take the under only production only because whatever you think it is, I’ll take the under only because what we see are stable customers delivering to their plans. But what we don’t see as a lot of the smaller companies coming into the market in an effort to really ramp up production. So I think from our perspective at Halliburton, very stable market. But from a production standpoint, as we watch it unfold, it will be a matter of how much incremental sand gets pumped to overcome what is clearly going to be a decline rate that comes with when we add barrels rapidly, obviously, they fall off rapidly.
Neil Mehta: Good color there. And then you made a comment that you feel like you have international visibility through the end of the decade. Can you expand there and help give the market a little more confidence about what the post 2024-2025 file looks like?
Jeffrey Miller: Well, look, I mean we are working on tenders today for work all of next year and the following year. I mean when we talk with customers, I think about what’s going to happen. Really, I don’t think the North Sea and West Africa even really wake up until 2025. We’ve seen strong in those markets. However, the real growth we’re working on planning today doesn’t even start until ’25. And all of these things are 3- and 4-year-type efforts. I mean these aren’t individual wells in places like that. These are programs. And so we spent — we’re actually on contract with a client working on just the planning of logistics for ’25-’26 and beyond. And so I’ve just got a lot of confidence in terms of what we see in hand, the tender pipeline and then the pipeline of work that we are planning with customers that may or may not even be tendered. It’s just more a matter of it will be done. And we’ve got clarity on that in ’25 and beyond.
Operator: Our next question comes from Arun Jayaram with JPMorgan.
Arun Jayaram: Jeff, you mentioned that 40% of your contracted fleets this year will be Zeus going to 50% or more in ’25. I was wondering if you could give us a sense of how your commercial model for Zeus has evolved. And one of the things we get questions on is just the significant amount of completion efficiency gains that the industry is generated. And what is the sharing of that between E&P and service company?
Jeffrey Miller: Well, look, I think, number one, it’s the value created by Zeus is what drives the contracting nature. A couple of things. When we started to develop Zeus, we started, like I said, quite a while back, our view was we want to maximize value to North America, number one. And in order to do that, we just had to — we believe that the technology created enough value, so much value that we aren’t going to build it unless it’s demonstrated for customers. And I think the contracting nature of the longer-term contracts, 3-year-type contracts is because we let the market pull rather than trying to push thing into the market. It is that different and special. And as that system continues to develop and evolve, meaning automation, measurement, all of these things that drive really meaningful value, that is what’s creating, I think, the different dialogue around Zeus with our customers because it will become more and more integral to how they create value as well.
And then from an efficiency standpoint or like volume standpoint, our equipment is very efficient. So as we go from zipper frac to simo frac to, in this case, trial frac with the customer, that is not a one-to-one increase in horsepower requirements. So we become more efficient as those volumes go up. But that is also a unique feature, though, of Zeus and its ability to scale up, but it’s not 1 one for one. And so from Halliburton perspective, we do create outsized value for Halliburton and also for our clients because we’re using less equipment than we would had we gone at it in a traditional fashion. So I think that the combination of reliability but also automation, because it’s — as those fracs — as fracs get larger, the precision gets more important.
There are a whole lot of things that start to happen. And so very collaborative efforts with our clients to utilize that technology. In the case of a trial frac, really groundbreaking type work, super excited to do it with this customer.
Arun Jayaram: Great. Jeff, my follow-up, natural gas is on people’s minds in North America. Just given the contango in the market, 2024 is just above 2 50. I was wondering if you could give us a sense of how much of your activity is levered just to dry gas. And what are some of the risks to the earnings picture from a soft market for gas this year?
Jeffrey Miller: Look, we’ve got very little gas exposure in our business. Today, the ones — the exposure that we do have is contracted under — is sort of the Zeus solution somewhat and then we’ve got, I guess, a little bit of other things. But look, the gas work that we have is not a significant part of our overall portfolio. And so we plan for what we can see. I think legitimately, there could be equal upside on gas as LNG comes on. But we haven’t baked it into our outlook today. But I would say that’s clearly one of the upsides to North America, maybe more so than a downside to North America.
