J. David Anderson

J. David Anderson from Barclays PLC asked about the growth opportunity in SLB's production and recovery segment over the next few years, specifically mentioning OneSubsea, ChampionX, and Artificial Lift. He also inquired about the geothermal business, the partnership with Ormat, and the confidence in scaling enhanced geothermal to 100+ MW plants.

Answer

CEO Olivier Le Peuch described production recovery as a new strategic chapter with significant value creation potential through technology, integration, and digital, benefiting from the ChampionX acquisition. He noted positive customer response due to the focus on 'higher barrel for lower cost,' leading to strong intake for lift solutions, digital production, and chemistry. He highlighted integrated capabilities for improving existing assets and transforming them with recovery and optimization solutions. Regarding geothermal, Mr. Le Peuch explained the partnership with Ormat combines SLB's subsurface leadership with Ormat's power plant expertise to optimize and scale unconventional geothermal economically and safely, aiming to offer integrated solutions to the market.

J. David Anderson of Barclays asked for more detail on the flat second-half outlook, questioning if it was mainly due to short-cycle slowdowns in the U.S. and Saudi Arabia. He also inquired about changes in customer behavior since OPEC's recent announcements and whether SLB is concerned about near-term deepwater activity slowing, citing Namibia as an example.

Answer

CEO Olivier Le Peuch explained that the second-half guidance reflects growth when adjusted for portfolio changes, driven by Production Systems and Digital, which offset headwinds. He stated that major international spending adjustments are largely complete, though short-cycle markets remain reactive. Regarding deepwater, Le Peuch characterized the slowdown in Namibia as a temporary, project-specific effect and expressed confidence in the long-term outlook, highlighting a rich pipeline of projects in the Americas, Africa, and Asia, with a potential rebound in 2026.

J. David Anderson asked about the rebalancing of the North America stimulation market, including pricing stability and the impact of equipment movement to international markets. He also inquired about the Completion and Production (C&P) division's margin progression throughout 2026 and the implications of the Multi-Chem sale.

Answer

Jeff Miller, Chairman, President, and CEO, stated that frac pricing in North America is stable in Q4 and Q1, likely at a bottom, with rational behavior leading to equipment movement outside the U.S. and stacking. Eric Carre, Executive Vice President and CFO, confirmed the Multi-Chem sale should complete this quarter with a positive but not material impact on margins. He detailed the Q1 C&P margin decline (300 basis points) as primarily due to the roll-off of completion tool sales, international seasonality, and geographic mix, noting the absence of a typical U.S. frac business tailwind.

J. David Anderson asked about the rebalancing of the North American stimulation market, specifically regarding frac pricing stability, the impact of equipment attrition and international redeployment, and the progression of Completion and Production (C&P) division margins throughout 2026, including the effect of the Multi-Chem sale.

Answer

Jeff Miller, Chairman, President, and CEO, stated that frac pricing in North America was fairly stable in Q4 and Q1, suggesting it's at a bottom due to lack of investment, equipment wear-out, and redeployment/stacking. Eric Carre, Executive Vice President and CFO, noted the Multi-Chem sale, expected to complete in Q1, would have a positive but not material impact on margins. Carre explained the Q1 C&P margin decline (300 basis points) was primarily due to the roll-off of Q4 completion tool sales, typical international seasonality, and geographic mix, with no uplift from U.S. frac business as it remained flat sequentially.

J. David Anderson of Barclays asked for an assessment of the current E&P program reset in North America, questioning if a Q4 bottom is likely and seeking more detail on pricing pressure. He also inquired about the current and potential future scale of Halliburton's international unconventional services business.

Answer

Chairman, President & CEO Jeff Miller explained that a market bottom depends on when demand absorbs spare capacity and production declines manifest, noting current activity is below maintenance levels. On pricing, he emphasized that Halliburton will choose to stack fleets rather than accept uneconomic work. Regarding international unconventionals, Miller described it as a significant growth area with double-digit year-over-year growth, highlighting opportunities in Argentina, the UAE, and North Africa, driven by both oil and gas demand.

J. David Anderson of Barclays asked about the timeline for E&P program resets in North America, questioning if a Q4 bottom is likely and seeking more detail on pricing concessions. He also inquired about the current and potential future scale of Halliburton's international unconventional business.

Answer

Chairman, President & CEO Jeff Miller explained that a market recovery hinges on demand absorbing spare capacity and natural production declines. He confirmed Halliburton is stacking frac fleets rather than accepting uneconomic work. Regarding international unconventionals, he highlighted double-digit year-on-year growth and significant opportunities beyond Argentina and Saudi Arabia, including in Australia, the UAE, and North Africa.

Dave Anderson inquired about the potential impact of the U.S. election on the energy sector, particularly regarding onshore permitting and Gulf of Mexico activity. He also asked about the current U.S. onshore market slowdown, pricing spreads for different frac technologies, and whether Halliburton would accelerate its Zeus platform rollout.

Answer

Chairman, President and CEO Jeffrey Miller stated that the election outcome is unequivocally positive for the industry, reducing regulatory risk and encouraging investment. He noted that while demand for the Zeus platform is growing, its expansion will be driven by customer contracts rather than a strategic push, aligning with the company's goal to maximize value and replace diesel fleets with superior electric technology.

J. David Anderson asked about the importance of emerging unconventional resource plays in Saudi Arabia (Jafurah) and UAE (ADNOC) for Tenaris's Middle East business over the next couple of years, considering the substantial uptick in planned wells and assumed seamless pipe demand.

Answer

Gabriel Podskubka, COO, expressed excitement about unconventional opportunities in the Middle East, noting Tenaris's significant market share in the seamless unconventional space in Saudi (Jafurah) and participation in UAE's unconventional plays with ADNOC. He expects growth in this resilient area. J. David Anderson followed up on pipe sourcing for these Middle East unconventional projects, given Tenaris's lack of seamless manufacturing in the region. Gabriel Podskubka explained that for pipelines in Saudi, they source domestically from their SAW large OD pipeline mill. For OCTG, it's a mix of domestically produced welded (ERW) and seamless sourced from local mills in Saudi. For UAE, material is brought from main mills in Argentina and Mexico, largely threaded in their Abu Dhabi finishing facility.

J. David Anderson asked for the outlook for the Middle East into 2026, with a specific focus on Saudi Arabia, and also questioned the impact of Pemex's slowdown in Mexico and the potential opportunity for the coming year.

Answer

COO Gabriel Podskubka stated that while Saudi activity is down, inventories are now lean, and the broader MENA region remains resilient, leading to stable shipment expectations into 2026. Chairman & CEO Paolo Rocca commented that Pemex's new financing is a positive sign, with rig counts already recovering, which should help support Tenaris's North American sales.

J. David Anderson of Barclays asked for details on Ormat's exploration program, including capital allocation and drilling activity, and inquired about the growth outlook for the product segment given a recent decrease in its backlog.

Answer

CEO Doron Blachar detailed a robust exploration program with $125M-$150M in annual CapEx, including active full-size drilling at two U.S. sites. Regarding the product segment, he explained that backlog fluctuates due to the timing of large EPC contracts and pointed to a strong future pipeline, particularly from New Zealand and Indonesia, which will support future growth.

J. David Anderson from Barclays asked about the company's ability to adjust costs in the thermal barrier business if GM volumes decline, and questioned the slowdown in the Subsea business given the strong backlog at key customers like TechnipFMC.

Answer

President and CEO Don Young explained that the company's cost structure is now better positioned to achieve its 35% gross margin target and has flexibility. Regarding Subsea, he clarified that Aspen is in a temporary lull after two exceptionally strong years averaging $30 million in revenue, and noted that not all subsea projects require their specific pipe-in-pipe insulation.

J. David Anderson of Barclays asked for an outlook on how the drilling, completions, and production components of the U.S. business are expected to trend in the second half of the year. He also inquired about Cactus's strategic approach to turning around the newly acquired Baker Hughes surface pressure control business in the Middle East.

Answer

CEO Scott Bender clarified that both completions and production businesses softened in Q2, and he expects frac-related activity to decline more significantly than drilling activity for the remainder of the year. Regarding the Baker Hughes business, Bender stated that while Baker has improved its international operations, Cactus will bring a flatter organization, its own supply chain philosophy, and a more focused cultural approach to enhance the business further.

J. David Anderson inquired about Solaris's plans for capacity growth beyond the current order book, the state of the OEM order queue, and whether third-party rental fleets represent a potential M&A opportunity.

Answer

Chairman & CEO William Zartler stated that any new equipment orders would need to be tied to specific projects, given that delivery times from OEMs have extended. He framed potential M&A as part of an ongoing "build vs. buy" analysis, emphasizing that they are selective and focus on high-quality assets with favorable maintenance and emissions profiles.

J. David Anderson of Barclays inquired about the composition of the strong Subsea order book, whether the strength in Subsea Services is a sustainable trend, the mix of future awards, and the potential for achieving $10 billion in orders again in 2026.

Answer

CEO & Chair Douglas Pferdehirt confirmed that Subsea Services strength is a sustainable trend driven by the company's growing installed base from its iEPCI model, not a one-off event. He stated that second-half awards will come from both the public opportunities list and a growing private list of direct awards. Pferdehirt also affirmed that another $10 billion in Subsea inbound for 2026 is a reasonable assumption.

J. David Anderson asked for details on the market dynamics in Saudi Arabia, questioning how Weatherford is achieving growth amid softness and when a recovery might occur, while also inquiring about the broader international outlook for 2026.

Answer

President and CEO Girish Saligram explained that despite market softness in Saudi Arabia, Weatherford is growing by addressing its underpenetration with new technology and strong execution. He anticipates continued softness through 2025, with a potential recovery not expected until the second half of 2026. Saligram noted this trend of a delayed recovery extends across most international markets, particularly offshore.

J. David Anderson of Barclays asked for an expansion on the IET order performance, questioning the trend for gas tech equipment versus the surprisingly strong services orders. He also inquired about the outlook for the remainder of the year and what could drive the high end of the order guidance, as well as how orders are shaping up for 2026, particularly with data center demand exceeding targets.

Answer

Chairman & CEO Lorenzo Simonelli expressed satisfaction with the $3.5 billion in IET orders, which brought the year-to-date total to $6.7 billion. He highlighted that growth was driven by non-LNG markets like data centers and gas infrastructure, with over $550 million in data center power generation orders in the quarter alone. He noted the company is on track to meet its $1.5 billion three-year data center target ahead of schedule. Simonelli also pointed to strong GasTech Services and Cordant Solutions orders. He expressed confidence in the full-year guidance, expecting LNG orders to strengthen in the second half, and projected that 2026 IET orders would be consistent with 2025 levels.

J. David Anderson of Barclays requested more detail on the IET segment's order performance, asking about the trend for gas tech equipment versus services, the path to the high end of the order guide, and the outlook for 2026, particularly given the strong data center orders.

Answer

Chairman & CEO Lorenzo Simonelli stated he was very pleased with the $3.5 billion in IET orders, driven by non-LNG markets like data centers and gas infrastructure. He highlighted record data center awards for NovaLT turbines, strong GasTech services and upgrades, and record Cordant Solutions orders. He expressed confidence in the full-year guide, expecting LNG orders to strengthen in H2, and projected that 2026 IET orders would be consistent with 2025 levels.

J. David Anderson of Barclays asked for an expansion on the IET segment's order performance, questioning the trends for GasTech equipment versus services for the remainder of the year and what factors could lead to reaching the high end of the order guidance. He also inquired about the outlook for 2026, particularly given the strong data center orders.

Answer

Chairman & CEO Lorenzo Simonelli stated he was very pleased with the $3.5 billion in IET orders, driven by non-LNG markets like data centers, where the company booked 1.2 gigawatts of power year-to-date. He noted strong performance in GasTech services, upgrades, and Cordant Solutions. Simonelli expressed confidence in the full-year guidance, anticipating a strengthening of LNG orders in the second half, and projected that 2026 IET orders would likely be consistent with 2025 levels.

J. David Anderson from Barclays asked about the upstream spending dynamics in Saudi Arabia amid OPEC production changes, the potential for a rig count floor, and the impact of unconventional gas projects on NESR's outlook. He also inquired about the drivers of Q1 margin compression and the timeline for returning to target margin levels.

Answer

Chairman and CEO Sherif Foda explained that while conventional Saudi activity will soften, growth in unconventional gas, where NESR is well-exposed, will drive outperformance. He expects key tender results in the next quarter. CFO Stefan Angeli clarified that returning to 25% margins is a goal for 2026, not 2025, with full-year 2025 margins expected to be 100-200 basis points below the 2024 exit rate.