Halliburton Company
Energy · Oil & Gas Equipment & Services
Cyclical OFS franchise levered to global upstream capex; pure-play exposure to completion intensity (frac fleets) and international/offshore drilling activity. Structural read: NAm land frac is mature/oversupplied - pricing and utilization peaked in 2023, fleet attrition + electric frac (Zeus platform) is the consolidation lever.
International + offshore is the secular leg - Saudi Aramco, Pemex, ADNOC, Petrobras spending insulated from US shale rollover. Capital return prioritized: 50%+ of FCF to buybacks + dividend.
- International revenue ~60% of mix, growing mid-single digits while NAm flat-to-down
- Zeus e-frac platform commands 20-30% pricing premium, ~40% of HAL's NAm fleet by YE26
- $1.6B+ annual FCF supports ~5% buyback yield + 2% dividend
- Offshore deepwater reactivation cycle (GoM, Guyana, Brazil) lifts D&E margins
- Saudi Aramco unconventional gas (Jafurah) is multi-year contracted backlog
- NAm pressure pumping is 35%+ of revenue, structurally oversupplied, pricing -10-15% YoY
- WTI <$65 triggers US E&P capex cuts - frac fleet utilization the first to crack
- $SLB and $BKR competing aggressively in international tenders, margin compression risk
- Energy transition discount: terminal multiple compressed vs historical 12-14x EBITDA range
- China demand wobble + OPEC+ production restraint caps upstream activity ceiling