Halliburton (NYSE:HAL)'s CEO, Jeff Miller, projected continued demand for oil and gas services beyond 2024 during a recent Q3 earnings call. This projection aligns with OPEC's forecast predicting 10 million barrels of oil demand growth before the end of the 2020s, which emphasizes the need for investments in short- and long-cycle barrels.
Despite a 20% reduction in US rig count resulting in less work, demand from unconventional reservoirs in North America is intensifying. In Q3, Halliburton's North American revenue stood at $2.6 billion, marking a 3% sequential decrease but only a 1% YoY decline. Strong tailwinds are expected to drive increased activity in 2024.
The company's confidence in market stability is reinforced by operators favoring expansion amidst $85-$90/b WTI oil prices. Most contracts for 2024 have already been secured by Halliburton.
Internationally, Halliburton has observed growth in its completions/production and drilling/evaluation segments. Their Q3 international revenue was reported at $3.2 billion, a YoY increase of 17%. Despite flat revenues in the Middle East and Asia, full-year growth for 2023 and high teens year-on-year in 2023 revenue growth is expected.
The consolidation wave in North America, marked by ExxonMobil’s $60 billion acquisition of Pioneer Natural Resources (NYSE:PXD) and Chevron’s $53 billion purchase of Hess Corp (NYSE:HES), underlines the long-term significance of the oil and gas sector and North America's role.
Halliburton's automated services for unconventional oil and gas operations are expanding. Their electric frac fleets have seen high adoption rates, with over 60% of business from repeat customers. Furthermore, drilling outside traditional Tier 1 acreage into less productive rock increases service intensity.
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