Halliburton Announces First Quarter 2022 Results

Halliburton Company announced today net income of $263M, or $0.29 per diluted share, for the first quarter of 2022.

• Reported net income of $0.29 per diluted share
• Adjusted net income of $0.35 per diluted share

​Halliburton Company announced today net income of $263M, or $0.29 per diluted share, for the first quarter of 2022. This compares to net income for the first quarter of 2021 of $170M, or $0.19 per diluted share. Adjusted net income for the first quarter of 2022, excluding impairments and other charges and a loss on the early extinguishment of debt, was $314M, or $0.35 per diluted share. Halliburton's total revenue for the first quarter of 2022 was $4.3 B compared to revenue of $3.5B in the first quarter of 2021. Reported operating income was $511M in the first quarter of 2022 compared to reported operating income of $370M in the first quarter of 2021. Excluding impairments and other charges, adjusted operating income was $533M in the first quarter of 2022.

“I am pleased with Halliburton’s first quarter results. Our performance demonstrated the resilience of our unique strategy in action and the importance of our competitive positioning both in North America and international markets,” commented Jeff Miller, Chairman, President and CEO.

“Total company revenue increased 24% and adjusted operating income grew 44% compared to the first quarter of 2021. Both of our divisions delivered strong margin performance despite weather and supply chain disruptions, with Drilling and Evaluation margin eclipsing 15% in the first quarter for the first time since 2010.

“We see significant tightness across the entire oil and gas value chain in North America. Supportive commodity prices and strengthening customer demand against an almost sold-out equipment market are expected to drive expansion in Completion and Production division margins.

“I expect our strong international business to increase throughout the remainder of the year. First quarter revenue growth in all our international regions together with North America demonstrates that this multi-year upcycle is well underway.

“I'm excited about the accelerating pace of global activity, pricing improvement, and Halliburton's strong outlook. With our unique value proposition, clearly defined strategic priorities, leading technology portfolio, and global market presence, I expect Halliburton will deliver profitable growth, strong free cash flow and industry-leading returns,” concluded Miller.

Operating Segments
Completions and Production
Completion and Production revenue in the first quarter of 2022 was $2.4B, an increase of $483M, or 26%, when compared to the first quarter of 2021, while operating income was $296M, an increase of $44M, or 17%. These results were driven by increased pressure pumping services and artificial lift activity in the Western Hemisphere, higher completion tool sales throughout the Western Hemisphere and the Middle East, increased cementing activity in Africa and Middle East/Asia, and improved well intervention services in North America land and the Eastern Hemisphere. These improvements were partially offset by lower activity across multiple product service lines in Europe and lower completion tool sales throughout Asia.

Drilling and Evaluation
Drilling and Evaluation revenue in the first quarter of 2022 was $1.9B, an increase of $350M, or 22%, when compared to the first quarter of 2021, while operating income was $294M, an increase of $123M, or 72%. These results were due to increased drilling-related services globally, improved wireline activity in North America land, Latin America, and the Middle East, increased testing services internationally, and higher project management activity in Latin America, India, and Oman. Partially offsetting these increases were lower project management activity in Iraq, as well as lower fluid services in the Caribbean, Brunei, and Mozambique.

Geographic Regions
North America
North America revenue in the first quarter of 2022 was $1.9B, a 37% increase when compared to the first quarter of 2021. This increase was primarily driven by increased pressure pumping activity and drilling-related services in North America land, higher stimulation, artificial lift, and drilling-related activity in Canada, and higher completion tool sales in the Gulf of Mexico. These increases were partially offset by reduced fluid services in the Gulf of Mexico.

International
International revenue in the first quarter of 2022 was $2.4B, a 15% increase when compared to the first quarter of 2021. This improvement was primarily driven by increased activity across multiple product service lines in Brazil, Argentina, Mexico, and Egypt, increased drilling-related activity in Europe/Africa/CIS and Latin America, improved well construction services in the Middle East, Colombia, and West Africa, increased testing services in all regions, and higher completion tool sales throughout the Middle East and Latin America. Partially offsetting these increases were reduced activity across multiple product service lines in the United Kingdom and lower completion tool sales in Norway and throughout Asia.

Latin America revenue in the first quarter of 2022 was $653M, a 22% increase year over year due to improved activity across multiple product service lines in Brazil, Argentina, and Mexico, increased well construction services in Colombia, higher completion tool sales in Guyana, improved project management activity in Ecuador and Colombia, increased testing services and wireline activity across the region, and increased artificial lift activity in Ecuador. Partially offsetting these increases were reduced fluid services in the Caribbean and lower project management and stimulation activity in Mexico.

Europe/Africa/CIS revenue in the first quarter of 2022 was $677M, a 7% increase year over year. This improvement was primarily driven by higher activity across multiple product service lines in Egypt, increased drilling-related activity in Azerbaijan, increased well intervention and testing services across the region, improved well construction services in West Africa, and higher completion tool sales and cementing activity in Angola. These increases were partially offset by reduced activity across multiple product service lines in the United Kingdom, reduced well construction services and completion tool sales in Norway, and decreased fluid services in Mozambique.

Middle East/Asia revenue in the first quarter of 2022 was $1.0B, a 17% increase year over year, primarily resulting from improved well construction services in Saudi Arabia and Oman, increased wireline activity and completion tool sales in the Middle East, and increased testing services across the region. These increases were partially offset by reduced project management activity in Iraq, lower completion tool sales throughout Asia, decreased fluid services in Brunei, and lower stimulation activity in Bangladesh.

Other Financial Items
Halliburton recorded a pre-tax charge of $22M in the first quarter of 2022 primarily related to the write down of all its assets in Ukraine, including $16M in receivables, due to the ongoing conflict. This charge was included in "Impairments and other charges" on the Company's condensed consolidated statement of operations for the three months ended March 31, 2022.

Halliburton redeemed $600M of its $1B aggregate principal amount of 3.80% Senior Notes due November 2025. The redemption of the notes resulted in a loss of $42M consisting of premiums and unamortized expenses. This first quarter loss was included in "Loss on early extinguishment of debt" on the Company's condensed consolidated statement of operations for the three months ended March 31, 2022.

Selective Technology & Highlights
Halliburton opened the Halliburton Chemical Reaction Plant - the first of its kind in Saudi Arabia - to manufacture a broad range of chemicals for the entire oil and gas value chain as well as many other industries. The facility expands Halliburton's manufacturing footprint in the Eastern Hemisphere and strengthens and accelerates its ability to serve the chemical needs of Middle East customers.

Halliburton introduced Obex IsoLock, a new compression-set packer that prevents sustained casing pressure. The Obex IsoLock packer collar serves as an effective barrier to mitigate fluid migration and support multiple-stage cementing through integrated stage cementing ports in the tool.

Halliburton introduced StrataStar, a deep azimuthal resistivity service that provides multilayer visualization to maximize well contact with the reservoir and improve real-time reserves evaluation. For more decisive well placement, the StrataStar service acquires real-time measurement and visualization of surrounding geology and fluids up to 30 feet around the wellbore. It applies a sophisticated algorithm to accurately map the position, thickness, and resistivity of interbedded rock and fluid layers to stay within targeted boundaries.

Halliburton announced that Petrobel, a joint venture between ENI and the Egyptian General Petroleum Corporation, awarded it a contract to deploy iEnergy Stack, Halliburton's cloud solution that runs on-premise, to manage petrotechnical software applications.

Halliburton announced that Energean plc, an independent E&P company focused on developing resources in the Mediterranean and the North Sea, awarded it a study to assess carbon storage potential of the Prinos basin in Greece.

Halliburton announced the addition of Ms. Tobi Young and Mr. Earl Cummings to its board of directors. The appointments went into effect on February 23, 2022, and both will stand for election by shareholders at the annual meeting on May 18, 2022.

Halliburton Labs selected three new companies to participate in its collaborative environment to advance and scale cleaner, affordable energy. Chemergy, EVA, and Novamera will receive access to a broad range of industrial capabilities, technical expertise, and global network connections to scale their respective businesses. Halliburton Labs also added two new advisory board members - Jennifer Holmgren, CEO, LanzaTech and Maynard Holt, CEO, Veriten.

About Halliburton
Founded in 1919, Halliburton is one of the world's largest providers of products and services to the energy industry. With more than 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.