Douglas Becker

Douglas Becker of Capital One asked about the sand and logistics business, specifically seeking a full-year production growth range given strong first-half volumes but limited second-half visibility. He also inquired about the logistics margin outlook for the year, considering trucking challenges, upward rate momentum, and the Dune Express's impact after a slow start.

Answer

President and CEO John Turner stated that overall volumes are expected to be up year-over-year, despite second-half uncertainty tied to commodity prices, with a focus on driving down variable costs. CFO Blake McCarthy explained that Q1 logistics margins would be similar to Q4 2025 due to heavy load bonuses and weather, but Q2 is projected to see a significant step up into double digits, driven by incremental Dune Express volumes and a return to normal cost structures.

Douglas Becker inquired about Atlas Energy Solutions' full-year production growth outlook for the sand and logistics business, given strong first-half volumes but limited second-half visibility, and sought color on the logistics margin outlook for the year, particularly after a challenging start with the Dune Express.

Answer

President and CEO John Turner stated that while the second-half outlook remains opaque, overall volumes are expected to be up year-over-year, with a focus on driving down variable costs through dredge commissionings. CFO Blake McCarthy explained that Q4 2025 and Q1 2026 logistics margins were burdened by heavy load bonuses, but Q1 margins are expected to be similar to Q4, with a significant step up into double digits projected for Q2, driven by incremental Dune Express volumes and new customer wins.

Douglas Becker asked for an update on the prospects for the Noble Black Rhino, specifically whether it's likely to secure short-term or long-term work in the U.S. Gulf or other regions. He also questioned if the Noble Interceptor's reactivation signals a meaningful tightening in the Norway market.

Answer

President and CEO Robert Eifler indicated that Noble is discussing both short-term and long-term opportunities for the Noble Black Rhino, both within and outside the U.S. Gulf. For Norway, he noted more opportunities than six months prior, leading to the Interceptor's reactivation, but couldn't confirm a 'flood of work,' expecting the rig to be highly marketable.

Douglas Becker asked for an update on the prospects for the Noble Black Rhino, specifically whether it's likely to secure short-term or long-term work in the U.S. Gulf or other regions. He also questioned if the reactivation of the Noble Interceptor signals a meaningful tightening in the Norwegian market for CJ70 jackups.

Answer

President and CEO Robert Eifler indicated that Noble is discussing both short-term and long-term opportunities for the Noble Black Rhino in the U.S. Gulf and internationally, with no definitive direction yet. Regarding Norway, Robert Eifler stated that while there are more opportunities than before, he couldn't claim a 'flood of work' for CJ70s, but the Interceptor's reactivation positions it well as a marketable rig in the region.

Douglas Becker inquired if there have been material changes to other contract economics like mobilization fees and asked for commentary on the likelihood of outstanding contract options being exercised.

Answer

President and CEO Robert Eifler noted that while contract terms are correlated with day rates, the recent shift in rates has not caused a meaningful change in broader terms like fees. On options, he stated the company now assumes a lower exercise rate (perhaps 50-75%) and acknowledged that a non-negligible number of options across the industry are not being exercised, which has impacted Noble's 2025 outlook.

Douglas Becker from Capital One inquired about the growing role of private investment projects in Mexico, asking for color on their current status and what milestones might signal a broader acceleration. He also asked if Borr is having direct conversations with Pemex about paying outstanding accounts receivable.

Answer

CCO Bruno Morand explained that private investment projects are already a reality, with one Borr rig currently on such a project, and these are expected to grow to represent a quarter of Mexico's production by 2033. CFO Magnus Vaaler clarified that the optimism regarding receivables is based on the Mexican government's public announcement of a $13 billion financing program, not on direct conversations with Pemex.

Douglas Becker from Capital One inquired about Helmerich & Payne's growth strategy in Saudi Arabia and the broader Middle East following the KCA acquisition, and asked for an update on the timeline for suspended rigs returning to work.

Answer

President & CEO John Lindsay and SVP Trey Adams responded that significant growth opportunities in the Middle East are anticipated for 2026, not 2025, enabled by the newly acquired assets and personnel. Regarding the suspended rigs, they believe the worst is over but stated a return to work is likely a 2026 event due to customer budgeting cycles, with no definitive timeline available yet.

Douglas Becker of Capital One Securities, Inc. asked about the potential proceeds from rigs slated for disposal and sought an update on the timeline to achieve the company's 3.5x net debt to EBITDA target.

Answer

President and CEO Keelan Adamson stated that the liquidity forecast includes only a nominal amount for rig disposals, essentially assuming cash breakeven transactions. He reaffirmed that the company's objective to reach its 3.5x net debt to EBITDA target remains on track for the late 2026 timeframe, which would then allow for consideration of shareholder distributions.

Douglas Becker inquired about the expected timing for contract awards from Petrobras's Buzios and Marrow tenders in Brazil and sought details on a potential third tender. He also asked for an update on the finality of the arbitration case that benefited Q2 results.

Answer

CCO Matt Lyne confirmed Petrobras is back in the market to keep its rig count flat, with the Buzios tender under evaluation and others expected. CEO Anton Dibowitz highlighted that growing IOC activity in Brazil adds to the market's strength. Regarding the arbitration, Dibowitz stated that while a right to appeal exists, the bar is high, and the company is pleased with the favorable outcome.

Douglas Becker asked for the expected timing of Petrobras contract announcements for the Buzios and Marrow fields and inquired if the favorable arbitration outcome from Q2 was fully resolved.

Answer

SVP & CCO Matt Lyne indicated Petrobras is expected to maintain its fleet count, with tenders underway to recontract rigs. President & CEO Anton Dibowitz added that growing IOC activity in Brazil is also a positive market driver. Regarding the arbitration, Dibowitz confirmed the favorable outcome, noting that while an appeal is possible, the legal bar for it is very high.

Douglas Becker of Capital One Securities, Inc. asked for context on the size of the market NOV is preparing for with its cost reduction initiatives and what other cost-saving measures might be available. He also sought clarification on the timing for realizing the announced $100 million in cost savings.

Answer

Clay Williams, Chairman & CEO, stated that while managing for the current environment, NOV is preparing for a larger market driven by international unconventionals and deepwater growth. Jose Bayardo, President & COO, clarified that the cost reductions are a continuation of a multi-year strategy to reposition the company, not a reaction to a fundamentally smaller market. Bayardo suggested the $100 million in savings would be realized ratably through 2026 but noted these savings would be offset by increased tariff impacts in the near term.

Douglas Becker of Capital One Securities, Inc. asked for more color on the moving parts within the Q3 Drilling Services guidance, noting it implied a significant decline in daily margin. He also asked for an update on current pricing for super-spec rigs.

Answer

President & CEO William Hendricks attributed the Q3 margin pressure to the logistical costs of moving rigs between different basins with non-concurrent activity changes, which makes achieving cost efficiencies more challenging. He stated that leading-edge pricing for super-spec rigs remains relatively steady in the low-to-mid $30,000s range, with growing demand for layered-on digital products.

Douglas Becker asked about the extent of pricing pressure, questioning which countries and product lines are most affected, and how to quantify the benefits from the company's ongoing cost-reduction measures.

Answer

President and CEO Girish Saligram identified North America and international service businesses, particularly in the DRE segment, as areas with the most pricing pressure. He explained that cost-out measures have so far offset revenue declines and are designed to deliver 25-75 basis points of annualized productivity gains, with benefits becoming more visible in 2026.

Douglas Becker of Capital One Securities, Inc. asked for an updated outlook on full-year free cash flow given the market softness and whether the company's stated cash return target remains intact.

Answer

EVP & CFO Eric Carre revised the full-year 2025 free cash flow guidance to a range of $1.8 billion to $2.0 billion. He affirmed that this change does not alter their perspective on shareholder returns and that the company will likely maintain its current pace of buybacks and dividends, having already exceeded its 50% return target for the year through Q2.

Douglas Becker of Capital One Securities, Inc. asked for an updated full-year free cash flow outlook given the market softness and whether the company's cash return framework and targets remain intact.

Answer

EVP & CFO Eric Carre revised the full-year 2025 free cash flow guidance down to a range of $1.8 billion to $2.0 billion. However, he affirmed that the company's commitment to shareholder returns is unchanged and that Halliburton will exceed its target of returning 50% of free cash flow to shareholders for the year.