Halliburton Announces First Quarter 2021 Results

• Net income of $0.19 per diluted share
• Cash flow from operating activities of $203M and free cash flow of $157M

Halliburton Company announced today net income of $170M, or $0.19 per diluted share, for the first quarter of 2021. This compares to a net loss for the fourth quarter of 2020 of $235M, or $0.27 per diluted share, as well as adjusted net income for the fourth quarter of 2020, excluding impairments and other charges, of $160M, or $0.18 per diluted share. Reported operating income was $370M in the first quarter of 2021 compared to reported operating loss of $96 M and adjusted operating income of $350M in the fourth quarter of 2020, excluding impairments and other charges.

“I am pleased with our first quarter performance, which demonstrates the benefits of our strong operating leverage in a recovering global market. We achieved total company revenue of $3.5B and operating income of $370M, representing increases of 7% and 6%, respectively, compared to revenue and adjusted operating income in the prior quarter,” commented Jeff Miller, Chairman, President and CEO.

“The first quarter marked an activity inflection for the international markets, while North America continued to stage a healthy recovery. I expect international activity growth to accelerate, and the early positive momentum in North America gives me confidence in the activity cadence for the rest of the year.

“Our free cash flow performance in the first quarter was a great first step to delivering strong free cash flow for the full year. It demonstrates our margin progression and focus on managing all aspects of capital efficiency, including technological advancements, process improvements, and working capital efficiencies.

“I am optimistic about how this transition year is shaping up. Our focus on technology innovation, digital investments, and capital efficiency positions us for profitable growth internationally and maximizing value in North America. Halliburton will continue to execute our key strategic priorities to deliver industry-leading returns and solid free cash flow as the multi-year recovery unfolds,” concluded Miller.

Operating Segments

Completions and Production
Completion and Production revenue in the first quarter of 2021 was $1.9B, an increase of $60M, or 3%, when compared to the fourth quarter of 2020, while operating income was $252M, a decrease of $30M, or 11%. The increase in revenue was driven by higher stimulation and artificial lift activity in North America, higher cementing activity in the North Sea, improved stimulation activity in Argentina and Mexico, and higher completion tools sales in Latin America. This increase was partially offset by lower cementing services in Russia, lower pressure pumping activity in the Middle East, reduced seasonal completion tools sales, and lower well intervention services in the Eastern Hemisphere. Operating income was negatively impacted primarily by decreased completion tools sales, as well as reduced pressure pumping activity in the Eastern Hemisphere.

Drilling and Evaluation
Drilling and Evaluation revenue in the first quarter of 2021 was $1.6B, an increase of $154M, or 11%, when compared to the fourth quarter of 2020, while operating income was $171M, an increase of $54M, or 46%. These increases were primarily due to higher software sales globally, improved drilling-related services and wireline activity in the Western Hemisphere and Norway, and increased project management activity internationally, which were partially offset by lower drilling-related services in Asia.

Geographic Regions

North America
North America revenue in the first quarter of 2021 was $1.4B, a 13% increase when compared to the fourth quarter of 2020. This increase was driven by higher drilling-related services, stimulation, and artificial lift activity in North America land, as well as higher wireline activity and software sales in North America land and the Gulf of Mexico. Partially offsetting these increases were reduced completion tools sales and lower cementing and fluids activity in the Gulf of Mexico.

International
International revenue in the first quarter of 2021 was $2B, a 2% increase when compared to the fourth quarter of 2020. This improvement was driven by higher activity across multiple product service lines in Latin America and the North Sea, coupled with increased software sales and project management activity internationally. Partially offsetting these increases were lower completion tools sales, reduced well intervention services in the Eastern Hemisphere, lower stimulation activity in the Middle East, reduced cementing activity in Russia, and lower drilling-related services in Asia.

Latin America revenue in the first quarter of 2021 was $535M, a 26% increase sequentially, resulting primarily from increased activity in multiple product service lines in Argentina and Mexico, as well as higher fluid services in the Caribbean. Partially offsetting these improvements was reduced activity across multiple product service lines in Colombia.

Europe/Africa/CIS revenue in the first quarter of 2021 was $634M, a 1% decrease sequentially, resulting primarily from reduced completion tools sales and well intervention services across the region, coupled with lower activity in Russia and lower fluid services in Kazakhstan. These decreases were partially offset by higher well construction activity in the North Sea and increased software sales across the region.

Middle East/Asia revenue in the first quarter of 2021 was $878M, a 6% decrease sequentially, largely resulting from lower stimulation and well intervention services in the Middle East, reduced drilling-related activity in Indonesia and China, and lower completion tools sales across the region. These decreases were partially offset by improved project management activity in Iraq and Saudi Arabia, and higher wireline activity in Asia.

Selective Technology & Highlights

• Halliburton successfully delivered real-time control of fracture placement while pumping on a multi-well pad using the SmartFleet intelligent fracturing system in the Permian Basin. An industry first, SmartFleet applies automation enabled by subsurface measurements and real-time visualization to intelligently adapt and respond to reservoir behavior, driving real-time improvement in completion execution and fracture outcomes.
• Halliburton introduced the Ovidius isolation system, a new packer that transforms from an engineered metal alloy into a rock-like material when it reacts with downhole fluids, creating a long-lasting seal for improved well integrity. Operators can deploy Ovidius in wellbore isolation applications, where it will provide the traditional benefits of expanding elastomers with new capabilities to withstand differential pressures and extreme temperatures found in the most challenging high-pressure/high-temperature environments while providing unparalleled anchoring forces.
• Kuwait Oil Company (KOC) awarded Halliburton a contract to collaborate on their digital transformation journey through the maintenance and expansion of digital solutions for their North Kuwait asset. It will allow KOC to accelerate their data-to-decisions cycle by designing and operating digital twins of the field to automate work processes, supported by DecisionSpace 365, a cloud-based subscription service for E&P applications.
• Halliburton signed an eight-year contract with the Norwegian Petroleum Directorate (NPD) to deploy and operate Diskos, the national repository of seismic, well, and production data for the Norwegian oil and gas industry. Halliburton Landmark will deliver Diskos 2.0 using DecisionSpace 365 cloud services in iEnergy – the industry’s first E&P hybrid cloud. The cloud-native services are Open Subsurface Data Universe compliant and provide high-quality data, security, and governance, so users can easily access, visualize, and interpret data from the Norwegian Continental Shelf.
• Halliburton and Optime Subsea formed a global strategic alliance to apply Optime’s innovative Remotely Operated Controls System (ROCS) to Halliburton’s completion landing string services. The companies will also collaborate and offer intervention and workover control system services leveraging Optime’s Subsea Controls and Intervention Light System (SCILS) technology, a remote digital enabled system that complements Halliburton’s subsea intervention expertise. The alliance will provide umbilical-less operations and subsea controls for deepwater completions and interventions delivering increased operational efficiencies while minimizing safety risk through a smaller offshore footprint. Halliburton will offer Optime’s innovative technologies as a service across its global portfolio.
• Bhavesh V. (Bob) Patel joined Halliburton’s board of directors effective February 17, 2021. He will stand for election by shareholders at the Company’s annual meeting on May 19,2021. Mr. Patel serves as chief executive officer of LyondellBasell, one of the largest plastics, chemicals, and refining companies in the world. Prior to becoming CEO, he served in senior executive leadership roles for LyondellBasell’s largest business segment.
• Halliburton Labs announced the inaugural group of companies selected to participate in its collaborative environment where entrepreneurs, academics, and investors come together to advance cleaner, affordable energy. Enexor BioEnergy, Momentum Technologies and OCO Inc. will have access to Halliburton’s deep business and technical expertise, facilities, and network to accelerate their respective offerings.

About Halliburton
Founded in 1919, Halliburton is one of the world's largest providers of products and services to the energy industry. With approximately 40,000 employees, representing 130 nationalities in more than 70 countries, the company helps its customers maximize value throughout the lifecycle of the reservoir – from locating hydrocarbons and managing geological data, to drilling and formation evaluation, well construction and completion, and optimizing production throughout the life of the asset. For more information, visit www.halliburton.com.