Josh Jane

Josh Jané, an analyst at Daniel Energy Partners, asked for a geographical overview of offshore opportunities, the company's growth positioning, and the role of facility utilization in market share expansion. He also sought insight into the company's perspective on the current offshore cycle, questioning whether the strong backlog reflects a catch-up or the early phase of a multi-year growth trend, especially with new product lines. Additionally, Mr. Jané inquired about the impact of tariffs on the company's business, particularly the perforating segment, in light of recent Supreme Court developments.

Answer

President and CEO Cindy Taylor identified Brazil, Guyana, and Southeast Asia as strong offshore bases, with recovering activity in West Africa, and outlined efforts to expand the full product suite globally. She expressed belief that the industry is in the early stages of a multi-year offshore cycle, driven by underinvestment and waning U.S. shale growth. Ms. Taylor explained that while Offshore Manufactured Products were largely unaffected by tariffs due to temporary import bonds, the perforating business was significantly impacted by increased tariffs on gun steel from China, making a reversal favorable for cost predictability.

Josh Jane of Daniel Energy Partners questioned the outlook for international markets in 2025, asking about bright spots and how the current backlog compares historically. He also inquired about capital allocation priorities, specifically the attractiveness of M&A versus the share repurchase program.

Answer

CEO Rob Saltiel stated that the international backlog is at its highest level in years and the business continues to be strong, driven by margin-accretive valve sales for projects in Europe and Asia Pacific. He highlighted strength in Norway, the U.K., and Central Europe, as well as more activity in energy transition projects abroad. On capital allocation, Saltiel emphasized the priority of achieving a 1.5x net debt leverage ratio in 2025 while also executing on the new share buyback program starting in Q2. He noted that with the balance sheet now strengthened, M&A will be considered again after a decade-long hiatus.

Josh Jane of Daniel Energy Partners inquired about Civeo's capital return framework going forward, particularly as a percentage of free cash flow, and asked how the company is balancing the current rightsizing of its Canadian business with its long-term optimism for the region.

Answer

President and CEO Bradley Dodson reiterated that Civeo's capital allocation framework remains unchanged: a fundamental dividend supplemented by opportunistic buybacks, while targeting a leverage ratio of around 1x. He stated that post-acquisition, leverage will be approximately 1x, allowing the framework to continue. Regarding Canada, Dodson explained that the business has been rightsized for the current market reality, and the company will consistently evaluate its cost structure against its evolving outlook.

Josh Jane inquired if modifications are needed for the Globetrotter rigs to compete in the intervention market and asked for more detail on potential tariff impacts.

Answer

President and CEO Robert Eifler stated that no significant modifications are needed for the Globetrotters, as most intervention equipment is transferable and provided by service companies. CFO Richard Barker addressed tariffs, calling the situation fluid but noting that the 2025 guidance already includes a 3-4% general cost inflation assumption to account for such risks.

Josh Jane from Daniel Energy Partners asked about the success of Weatherford's Managed Pressure Drilling (MPD) offerings and the outlook for that technology. He also inquired about the sense of urgency in the offshore market and which regions might see a pickup in activity in the second half of the year.

Answer

CEO Girish Saligram expressed continued excitement for the MPD product line, noting that its new Motus system will see a significant contribution in the coming year. On the offshore market, Saligram stated that while the cycle has long-term strength, there is some near-term choppiness. He identified Brazil, the Caspian region, and the Norwegian North Sea as positive areas, while noting challenges in the U.K. He confirmed the company has good line of sight to a pickup in activity based on firm rig schedules and contracts.