Q1 2026 Earnings Call Transcript

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the First Quarter 2026 Halliburton Company Earnings Conference Call. At this time, participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session.

To ask a question, simply press star 11 on your telephone keypad. As a reminder, this conference call is being recorded. I would now like to turn the conference over to David Coleman, Senior Director of Investor Relations. Please begin.

Hello, and thank you for joining the Halliburton Company First Quarter 2026 Conference Call. We will make the recording of today’s webcast available for seven days on Halliburton’s website after this call. Joining me today are Jeffrey Miller, chairman, president, and CEO; Unknown Speaker, executive vice president and COO; and Eric Carre, executive vice president and CFO. Some of today’s comments may include forward-looking statements that reflect Halliburton Company’s views about future events.

These matters involve risks and uncertainties that could cause our actual results to materially differ from our forward-looking statements. These risks are discussed in Halliburton Company’s Form 10-K for the year ended 12/31/2025, current reports on Form 8-K, and other Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason, except as required by law. Our comments today also include non-GAAP financial measures.

Additional details and reconciliations to the most directly comparable GAAP financial measures are included in our first quarter earnings release and in the Quarterly Results and Presentations section of our website. I will now turn the call over to Jeffrey Miller.

Thank you, David, and good morning, everyone. Before I get into my thoughts on the current market and Halliburton Company’s outlook, let me begin with a few highlights from the first quarter. We delivered total company revenue of $5.4 billion and operating margin of 13%. International revenue was $3.3 billion, an increase of 3% year-over-year.

North America revenue was $2.1 billion, a decrease of 4% year-over-year. During the first quarter, we generated $273 million of cash flow from operations, $123 million of free cash flow, and repurchased $100 million of our common stock. Now let us turn to our market outlook. I believe the situation in the Middle East will have meaningful and long-lasting implications for the global energy sector.

Here is what I expect. First, energy security is no longer simply a talking point. It demands action by every nation to ensure a reliable supply of oil and gas. I expect we will see increased investment in localized oil and gas developments and urgency to diversify sources of oil and gas for those countries without their own resources.

Second, recovery of oil and gas production and inventories will not be a quick or simple process. Cumulative production deficits are in the several hundreds of millions of barrels and trending towards a billion. This represents several years of meaningful incremental demand to replace strategic reserves on top of what I believe will be continued structural demand growth. Big picture, this means the world is fundamentally tighter in oil and gas than it was sixty days ago.

In my view, that supports a durably stronger commodity environment and a far more constructive backdrop for upstream investment and oilfield services activity. I believe Halliburton Company will thrive in this market. We are active in all the major markets that matter, with the right service lines, strategy, and technology. In addition, we are the services leader in North America which, in my thirty years of experience, has always been the first market to respond to price signals.

With that, I will turn the call over to our COO.

Thanks, Jeff. Before I get into our operational results, I want to recognize our employees around the world, but especially in the Middle East. They are executing under challenging circumstances, staying focused on our customers, and are keeping each other safe. Their fortitude and resilience represent the best of Halliburton Company.

I want to personally thank them. Now let us turn to our international business, where our first quarter revenue was $3.3 billion. I will start with the Middle East, where we have remained closely engaged with our clients through disruptions. Activity has been most impacted in the region’s offshore markets in Qatar, UAE, and Saudi Arabia, and the land markets in Iraq and Kuwait.

Halliburton Company continues to support our customers in these areas with the service capability they require to navigate current conditions and resume activity as markets recover. In the broader region, the closure of the Strait has resulted in our use of alternative supply chain routes, which has increased logistics cost. We have also seen price increases in purchased materials and supplies related to the conflict. In my view, these are manageable disruptions as we work closely with our customers to mitigate these additional costs within the terms of our contracts and agreements.

Outside the Middle East, we saw better-than-expected results for the quarter, and we expect year-over-year revenue growth in the mid- to high-single digits for the full year, led by Latin America. I recently returned from the region, and I came away even more confident in our outlook. Activity is strong, customer engagement is high, and our growth engines are performing in several important markets. In unconventionals, YPF recently awarded Halliburton Company a multibillion-dollar award for integrated completion services in Argentina.

This award expands our position in Argentina and represents an important milestone for Halliburton Company. Under this contract, we will deploy a full completions portfolio including Zeus electric fracturing services for the first time outside of North America. The award also includes Octiv AutoFrac, which brings electrification, automation, and digital workflows to unconventional fracturing in Argentina. In drilling, we continue to build momentum with our automated offerings.

We recently closed our acquisition of Sekal, a global leader in rig automation. With this acquisition, our portfolio now combines Halliburton LOGIX drilling automation with Sekal’s Drilltronics platform and services. This means Halliburton Company has the technology in-house to fully close the loop for automated geosteering. This includes the bottom hole assembly, the hydraulics, and now the rig itself.

We have worked with Sekal for several years and recently delivered this technology offshore Guyana. Our closed-loop automation technologies delivered better-than-expected drilling times and, most importantly, better reservoir contact. I am confident in the power of these technologies working together to maximize asset value for our customers. As our drilling technology continues to advance, so does my confidence in our offshore business.

Our drilling capabilities and collaborative model were key drivers of a recent win in Suriname with PETRONAS. They selected Halliburton Company and Valaris for a strategic collaboration agreement to support the development of its offshore assets. The agreement brings the teams together early in the development cycle and reflects exactly the kind of close alignment that creates value for customers and for Halliburton Company. More broadly, I am increasingly confident in our offshore outlook.

Across markets, customers are choosing Halliburton Company for offshore projects because of our technology, our execution, and our ability to collaborate earlier and more effectively throughout the well life cycle. We see that in Guyana, we see it in Suriname, and we see it increasingly in other offshore markets around the world. To conclude on international, I am confident in our business outlook based upon the strength of our growth engines, the value of our collaborative model, and the differentiation of our technology. While the Middle East remains the key near-term variable, we see real momentum across the rest of our international portfolio, and I believe Halliburton Company will continue to win and deliver profitable growth.

Turning now to North America, where Halliburton Company delivered first quarter revenue of $2.1 billion. Early in the quarter, winter weather delayed services activity in the Permian and Northeast, but those impacts were more than offset by stronger-than-anticipated activity for the remainder of the quarter. In a recovery in North America, there are several signposts I expect to see. Today, we are already seeing a couple of important ones.

First, the frac calendar white space in the first half of the year is now gone. As we entered this year, there was a risk that completion work might slip to the right and that gaps in the calendar could widen. That is no longer a concern. Second, we have seen an uptick in inbound calls for spot work.

While these calls are not for committed crews, they do suggest incremental demand is building in spot markets with smaller operators. This is the leading edge of capacity tightening. While we are in the early innings, in my view, the setup for North America is constructive. Premium equipment is already tightening, the commodity price is supportive, and we see signs of incremental demand.

As we look to the rest of the cycle, our strategy to maximize value in North America will not change. Here is how we will approach this market. First, we are going to focus on returns, not market share, which means our priority is to improve the returns of our existing fleets before we add capacity. Clearly, restoring price to acceptable levels is a key component of this.

Second, we will deploy differentiated technology at scale that solves for customers’ greatest opportunities, improving recovery with Zeus IQ and drilling efficiency with iCruise. In summary, I am excited about North America. We see a recovery in progress. As activity grows, we believe customers will place high value on technology, efficiency, and execution, which plays to Halliburton Company’s strengths.

With that, I will turn the call over to Eric to provide more details on our financial results.

Thank you, and good morning. Our Q1 reported net income per diluted share was $0.55. Total company revenue for Q1 2026 was $5.4 billion, flat when compared to Q1 2025. Operating income was $679 million and operating margin was 13%. Our Q1 cash flow from operations was $273 million and free cash flow was $123 million. During Q1, we repurchased $100 million of our common stock.

Now turning to the segment results. In Q1, both of our divisions were impacted by the conflict in the Middle East, which resulted in an impact of approximately $0.02 to $0.03 per share. Beginning with our Completion and Production division, revenue in Q1 was $3.0 billion, a decrease of 3% when compared to Q1 2025. Operating income was $439 million, a decrease of 17% when compared to Q1 2025, and operating margin was 15%. These results were primarily driven by lower stimulation activity in North America, and lower completion tool sales and decreased pressure pumping services in the Middle East.

Partially offsetting these decreases were higher completion tool sales in the Western Hemisphere and improved pressure pumping services in Africa. In our Drilling and Evaluation division, revenue in Q1 was $2.4 billion, an increase of 4% when compared to Q1 2025. Operating income was $351 million, flat when compared to Q1 2025, and operating margin was 15%. These results were primarily driven by higher project management activity in Latin America and increased drilling-related services in Europe and in the Western Hemisphere. Partially offsetting these increases were lower activity across multiple product service lines in the Middle East, lower wireline activity in the Eastern Hemisphere, and decreased fluid services in the Gulf of America.

Now let us move on to geographic results. Our Q1 international revenue increased 3% when compared to Q1 2025. Europe/Africa revenue in Q1 was $858 million, an increase of 11% year-over-year. This increase was primarily driven by increased drilling-related services and higher completion tool sales in Norway, and improved pressure pumping services in Angola. Middle East/Asia revenue in Q1 was $1.3 billion, a decrease of 13% year-over-year.

This decrease was primarily driven by conflict-related disruptions that resulted in lower activity across multiple product lines. Latin America revenue in Q1 was $1.1 billion, a 22% increase year-over-year. This increase was primarily driven by higher activity across multiple product service lines in Ecuador, the Caribbean, and Brazil, and improved stimulation activity in Mexico and Argentina. North America Q1 revenue was $2.1 billion, a 4% decrease year-over-year.

This decline was primarily driven by lower stimulation activity and decreased artificial lift activity in U.S. land, and lower stimulation activity and decreased fluid services in the Gulf of America. Moving on to other items. In Q1, our corporate and other expense was $69 million. We expect our Q2 corporate expenses to increase about $5 million.

In Q1, we spent $42 million on SAP S/4 migration, which is included in our results. For Q2, we expect SAP expenses to be about $45 million. Net interest expense for the quarter was $82 million, lower than expected due to favorable interest income. For Q2, we expect net interest expense to increase about $5 million.

Other net expense in Q1 was $28 million. We expect Q2 expense to be about $35 million. Our effective tax rate for Q1 was 18.5%. Based on our anticipated geographic earnings mix, we expect our Q2 and full-year effective tax rate to be approximately 20%.

Capital expenditures for Q1 were $192 million. For the full year 2026, we expect capital expenditures to be about $1.1 billion. Now let me provide you with comments on our expectations for Q2 2026. In the Middle East, the timing and path of a recovery to pre-conflict activity levels is unclear. In addition to lost revenue, we also expect higher costs related to supply chain logistics and fuel.

We estimate the impact in the second quarter will be approximately $0.07 to $0.09 per share, which is embedded in our divisional guidance. In our Completion and Production division, we anticipate sequential revenue to increase 4% to 6% and margins to improve 50 to 100 basis points. In our Drilling and Evaluation division, we expect seasonal software sales to roll off in the second quarter. As a result, we expect sequential revenue to be flat to down 2% and margins to decline 75 to 125 basis points.

I will now turn the call back to Jeffrey Miller.

Thanks, Eric. Here is what you should remember from today’s call. The macro environment has changed in the last sixty days. I believe Halliburton Company will thrive in the market that we see.

In North America, we already see the early signs of recovery. Outside of the Middle East, we expect our international business to grow. Our growth engines delivered significant milestones during the quarter, and our collaborative value proposition is winning in the offshore market. We will now open the call for questions.

Ladies and gentlemen, if you have a question or comment at this time, please press 11 on your telephone keypad. If your question has been answered or you wish to remove yourself from the queue, simply press 11 again. Please stand by while we compile the Q&A roster. Our first question or comment comes from the line of David Anderson from Barclays. Your line is now open.

Thank you very much. Good morning, Jeff.

Morning.

Obviously, the Iran conflict is not resolved, so it is really hard to guide for the next several quarters. I think everybody is just trying to figure out what the other side of this looks like. I realize it is early, but with global supply now a priority, how does this shape your views over the next few years? And how has that really changed over the last sixty days?

Look, I think the most important change is that the supply overhang is no longer a concern. That is swept away, and structural demand remains intact. That combination moves the rebalancing up closer. When I look out, equally important is the view that energy security is no longer a talking point.

That is going to drive activity, and I think that change is not temporal, but a solid few years. That is what has changed in the last sixty days in my view.

And then you touched on North America. North America is always the first one to see a reaction. It sounds like you are saying early innings here. Could you talk about some of this white space shrinking?

Are you starting to see E&P customers showing signs of picking up activity? How much is everybody waiting on the back part of the curve to lift up? Just a little bit more color on what you are seeing on the ground and in U.S. onshore?

Yes. Thanks, Dave. The short answer is yes. We have seen a couple of really good signposts.

As I said, white space for Q2 is all but gone. We have seen a lot of pull-forwards. We have seen inbounds. We are also seeing H2 firming up as well.

I think the next flip of the coin would be rig adds and some longer-term discussions on frac activity. As far as investments of the smaller and the bigger operators, the bigger operators tend to invest throughout the cycle. The smaller and medium-sized ones usually move a little quicker. They are looking at the front end of the curve and the back end of the curve.

We like this market. We believe being the only fully integrated service company in North America is a fantastic position for us, along with our e-fleets, Zeus IQ, and the demand for iCruise in this market. So, short answer is yes. Early innings, but we like where we are.

Thank you very much. Thank you.

Our next question or comment comes from the line of Arun Jayaram from JPMorgan. Your line is open, sir.

Good morning, team. Maybe I could start with you. I was wondering if you could walk us around your core international and offshore markets outside of the Middle East and perhaps elaborate on the strength in LATAM and Europe/Africa. I believe you mentioned that outside of the Middle East, you expect international revenues to grow mid- to high-single digits.

How does that compare to your thought process before the conflict?

Thanks, Arun. A lot to be excited about and a lot of bright spots, with Latin America leading the way. We are really excited about the work we are doing in the Caribbean, in particular Guyana and Suriname, working in a very collaborative way. Argentina is really exciting.

We just announced a multiyear, multibillion-dollar, first-ever deployment of frac spreads in Argentina with YPF. That is going to be a really great business for us moving forward. The deepwater work as well in Brazil. If you move east outside of the Middle East, the Norway market is one where we have had a large, strong position.

We are working very collaboratively with a number of customers. We are starting to see rig adds coming towards the back half of this year and early next year. Regarding West Africa, we are seeing some light at the end of the tunnel—real sizable programs both in Namibia and Nigeria. We have a sizable footprint in both of those countries, with contracts we like.

I would add Asia Pac as a really resilient market for us throughout the cycle. It stayed busy. We expect that to continue. We expect full-year mid- to high-single-digit growth outside of the Middle East.

There are certainly a lot of unknowns in the Middle East, but we still feel pretty good about where we are with that guide.

And my follow-up is in North America. We have a bit of an unusual dynamic where we have relatively modest natural gas prices, including in markets like West Texas, which are significantly below diesel prices. One of the things about Halliburton Company’s frac fleet is you have a lot of exposure to natural-gas-burning equipment—e-fleets that use natural gas as an input. Could you talk about opportunities to arbitrage this delta to the benefit of shareholders in terms of pricing power?

That just reinforces the value in our e-fleet. Yes, clearly an opportunity. We work that all the time in terms of pricing and where that is going. I would describe that as an opportunity.

It is certainly a benefit for operators that are consuming natural gas. To add to that, the Zeus platform is proving itself a unique solution, particularly with respect to Zeus IQ and the ability to move on recovery. While the ability to be more economic with gas consumption due to arbitrage is valuable, the real power in the Zeus IQ and the Zeus platform has been what it is able to do subsurface.

Great. Thanks a lot.

Our next question or comment comes from the line of Saurabh Pant from Bank of America. Your line is now open.

Hi. Good morning, Jeff, Eric, and welcome to the call.

Thank you.

Jeff, you gave us a lot of good color in your prepared remarks. Last quarter, we were talking about how the supply side of the equation—mostly a frac comment—is tighter than people think, and it would take just a little bit of demand coming back for pricing power to come back. How are you thinking about that right now? And how do we move through the remainder of 2026 based on what we know right now on the demand side and the pricing power side of things?

We are seeing some really good signposts. That is driving constructive conversations with our operators. There are a handful of fleets that can go to work. The way we think about it is, first, we have to address the pricing of our existing fleets.

Those conversations are happening. The next step is longer-term programs and more rigs being added—that creates another level of constructive conversations for us. First things first is focus on the fleets we have now. It does not take much attrition for things to get tight.

Early innings, but we are starting to see signs of that.

To follow that up, what is even clearer than it was is the availability of equipment in the market, and that is what those early signposts are calling out. Equipment is tighter. We are getting calls. We are within a handful of premium fleets—dual fuel–type fleets—of being absolutely sold out as an industry.

That is helpful color. My second question is on the international side of things. If we just focus on the international side, which markets or operators do you think would be the first to change their behavior? Which regions should we expect to benefit first? And how would Halliburton Company seek to benefit from that?

I just finished a tour around international locations. Conversations with customers and energy ministers are focused on the dependency of being down to a Strait—it is on their mind. Anyone who is a net importer of oil is thinking about bringing forward programs and reevaluating their capital budgets. Our growth engines are well positioned to apply to improved drilling programs in some of these locations.

Asia Pac and West Africa are markets that we see potentially picking up with what is going on in the Strait. You are right—the collaborative model we work under has been big for us. In a lot of the areas I mentioned earlier, we work very collaboratively and are invited in earlier, and that has supported us in winning work in a number of those markets.

Thank you.

Our next question or comment comes from the line of James West from Melius Research. Your line is now open.

Thanks. Good morning, Jeff, and Eric. Jeff, three months ago we talked about 2026 as the year of rebalancing. It is a much different environment now, as you have noted. You have talked about the NAM recovery and announced a number of major contract awards internationally. Are customer conversations showing a sense of urgency, or is it still a little bit too early?

While it is still early innings, it was encouraging to see the white space in Q2 get taken out in a very short period of time. It was not just a short-term blip to take advantage of the current curve. We are seeing H2 firming up as well. I would not use the word urgency—I would say constructive conversations about getting back to work and capturing value they see not only now, but for the future.

That is very helpful. On exploration, it seems a lot of the supermajors have added a few incremental dollars to their exploration budgets. Is exploration going through a bit of a reverse cycle after a ten-year lull?

We are seeing a little bit of exploration, but a lot of the muscle is around development—producing more barrels. That is what we are seeing in Namibia and West Africa, and largely in Suriname. We participated in a fair amount of exploration in the Caribbean, but more importantly, we are getting into the heavy lifting of development there and elsewhere. In Brazil, we have been quite successful as well.

So while there is some exploration, what we see ahead of us is a lot more development in a lot of places.

Got it.

Our next question or comment comes from the line of Neil Mehta from Goldman Sachs. Your line is now open.

Yes. Morning. Great quarter here, Jeff. First, on capital returns. The buyback at $100 million was a little lighter than the run rate we have seen at $250 million a quarter. Was that just a timing thing, and how are you thinking about share return over the course of the year?

Neil, overall there has been no change in our focus on shareholder returns or our overall approach around buybacks. We started the year lower than our run rate in 2025. We mentioned on the Q4 call that this was our intent considering the macro situation we were facing at the time and concerns around the speed of activity increase in the Middle East. You can expect Q2 to be higher than Q1, and H2 to be higher than H1 in terms of overall buyback. Our long-term objective remains per-share value creation.

Very clear. Follow-up on the technology side. You have had success with VoltaGrid and your investment there. You are looking to deploy that over time, including internationally. Any perspective on the power side of the business and VoltaGrid in particular, and driving value from that side?

We really like our position in VoltaGrid, and we like what the company is doing. Separate from that, but along with it, is the international pursuit we have underway and the venture we have with VoltaGrid. I am very excited about that and it is very much on track. I do not constrain that to the Middle East.

We have lots of inbounds and back-and-forth with potential customers in Australia, Japan, Canada—all around the world. We have 400 megawatts in the queue ready to get placed, and have a lot of line of sight around how that might happen. Very excited about that.

Thanks, Jeff.

Our next question or comment comes from the line of Stephen Gengaro from Stifel. Your line is now open.

Thanks. Good morning, everybody. Two for me. First, going back to the U.S. frac business and pricing potential. Are your customers willing to take diesel if you have any diesel available? How much are they thinking about the price arbitrage, which should lead to higher prices for gas-burning fleets? How are customers thinking about that right now?

Our customers are always looking for the most effective solution. I do not know that fuel choice is what would motivate tightness in the market. That is more of a decision between equipment, and less of a decision about adding equipment. The more important point is the value of the commodity and the demand for the commodity.

That is more of the driver than arbitrage in terms of pick up a fleet or not. Arbitrage makes it more economic and should create more willingness to pay more, but I do not know that it is what is driving tightness. Two separate ideas in my view.

Thank you. The other question: for years we have heard about E&P capital discipline and being unwilling to add a lot of rigs and frac fleets back. Are you seeing any shift in that? How should we think about this over the next several quarters, especially in what is probably a tighter oil market for the next couple of years?

We are in the early innings. Big public companies typically come later in the cycle. Early movers are smaller companies, and that early move is what takes capacity out of the market and creates tightness. Timing of big operators is less clear today.

However, commodity prices are structurally higher than they were, there is going to be more demand growth, and fewer barrels in the market. That creates an opportunity for operators of all sizes to make more money. The tightness we are seeing created by smaller operators should not be overlooked. A lot of inbounds are from smaller operators taking capacity out of the market, and that is good for Halliburton Company.

Our next question or comment comes from the line of Scott Gruber from Citigroup. Your line is now open.

Good morning. I want to come back to the shale developments abroad, which were picking up even before the Middle East conflict. Now that those could accelerate, do you see international shale opportunities outside of Argentina utilizing more Zeus fleets given the efficiency advantage, or do most of those plays—because they are less mature—lack the supply chains required for Zeus and end up pulling more legacy diesel fleets from the U.S.? How do you see equipment demand evolving internationally?

Zeus is a unique solution. It is time to go to work in Argentina because there is scale, runway, and a focus on improving recovery. That combination makes it so valuable there. Others are at different places in maturity.

They are not at a place where they can take advantage of Zeus. I will describe it in technology terms because that is where it creates the most value and commands a premium—its ability to measure where the sand is going, move the sand around, and create a closed-loop fracturing environment. That is very different than simply the arbitrage on gas to oil. Markets in the earlier stages do not demand that level of capacity.

We have taken the same approach to Zeus internationally that we did in the U.S.—we deploy Zeus to contracts that have the duration to return the cost of capital and the capital during the term of the first contract. We do not see those conditions in a lot of other markets today. That does not mean we will not get there; we feel certain we will, but that may not be today.

The YPF contract sounds meaningful to your business in-country. Can you dimension that at all for us—how much bigger it will grow your business in the country, the timing of that growth, and given the integrated nature and efficiency gains you will deliver, how you think about the margin profile of the contract relative to your 15%?

It is a huge win for Halliburton Company. We had a good footprint before the award; we have an even better footprint now. This is already being rolled out. We have fleets coming in now, then toward the end of the year and into next year.

We will send equipment to the best places as far as returns and pricing. We are moving that equipment out of North America where we believe we have good pricing and a sustainable program. It also demonstrates the importance of our technology and improved recovery. YPF sees that.

It is long-term work and we are really pleased with that win.

Our next question or comment comes from the line of Marc Bianchi from TD Cowen. Your line is now open.

Hello. Can you hear me?

Yes. Loud and clear.

If the Strait were to open tomorrow and it were a green light to get back to normal operations in the Middle East, how quickly could that happen? Maybe walk us through some of the industrial challenges and opportunities that exist there.

It is unclear how quickly that comes back. We are ready. Halliburton Company’s operational footprint is intact. Most of our business is working today.

Our biggest hit areas were in Iraq and Qatar. We are in constant contact with our customers and will support them when they are ready and able to go back to work. The first things you will see are likely wells turning back on, and that will be a well-by-well situation of how they produce and flow. The longer they get shut in, the more complex that gets.

That likely comes first, and it puts Halliburton Company in a fantastic position. We are the market leaders for intervention work in the Middle East with our HWO and coiled tubing work. Then you would start seeing customers offshore drilling more in the deeper reservoir sections. Work offshore right now is mostly on top holes.

Unclear timing, but we are ready.

At a high level, turning back on is not immediate by any means. There is a gap in the supply chain in terms of oil to market. It is not an overnight matter. Equally important to the timing is the change in perception with respect to energy security. That is a bigger, overriding impact on supply, demand, and price.

One for Eric on CapEx. You reiterated the $1.1 billion, which would imply an uptick in spending for the balance of the year. Is there a shot that we end up doing better than the $1.1 billion, or is that just timing? And does your proportional spend for the 400 megawatts with VoltaGrid happen within that guidance?

The target for CapEx in 2026 is $1.1 billion. It is a bit higher than the $1.0 billion we had initially guided to. That is not related to the market situation; it is due to delayed delivery of capital equipment. We intend to stay within our range of 5% to 6% of revenue for CapEx spend.

We guided 2026 on the low side of that range. Depending on how things shape up and our opportunities, we might move slightly within that range, particularly with the macro picture we see today. CapEx is overweight toward the growth engines we keep discussing. Regarding the 400 megawatts, it does not happen in 2026, so we kept it separate.

Our next question or comment comes from the line of Keith MacKey from RBC Capital Markets. Your line is now open.

Morning. Can you expand a little more on your offshore comments? You mentioned a few markets where you are seeing incremental demand, but how is the market shaping up versus what you might have thought three months ago?

We really like our position in offshore. I view the offshore business from our perspective of what we are winning and the kind of work we have in the queue. We won a lot of work last year, and that is very strong for us. We continue to be quite successful in the offshore market.

That is led by our value proposition—to collaborate in engineered solutions to maximize asset value for our customers—which meets an unmet market need in how we work and perform with our customers. Equally important is the progress we have made with technology, particularly closed-loop automated geosteering. It is a significant step forward in terms of reservoir contact. We feel good about the offshore business, really like our position, and we see solid growth in 2026, 2027, and 2028 in the offshore market from what we are going to be doing.

And on the Middle East, what will it actually require to restart production when it is safe and feasible to do so? Walk us through what will be required, whether workovers or other items, and how that translates into service line potential for Halliburton Company.

We are focused on drilling and the upstream. There is clearly storage and facility work that has to happen before us. As far as bringing wells back on that might be shut in, as described earlier, that will span the spectrum of how quickly they come on. It would be irresponsible to project timing—it would be a guess.

The longer things are shut in, typically the more complex they are to bring back on. There is a lot of capacity with Halliburton Company in the Middle East to participate in bringing those wells back on, whatever might be required.

This concludes the Q&A portion of our call. I would now like to turn the conference back over to Jeffrey Miller for any closing comments.

Thank you. Before we wrap up today’s call, let me close with this. I believe the oil and gas markets are structurally tighter, and I am convinced that Halliburton Company has the right service lines, strategy, and technologies across the key oil and gas basins around the world. I believe this is a market where Halliburton Company will thrive.

I look forward to speaking with you again next quarter. Thank you.

Ladies and gentlemen, thank you for participating in today’s conference. This concludes the program. You may now disconnect. Everyone, have a wonderful day. Speakers, stand by.