HAL - NYSE

Good day, and thank you for standing by. Welcome to the Q4 2024 Halliburton Company Earnings Conference Call. At this time, all participants are in a listen-only mode. Please be advised that today's conference is being recorded. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] I would now like to hand the conference over to your speaker today, David Coleman, Senior Director of Investor Relations.

Hello, and thank you for joining the Halliburton fourth quarter 2024 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 Jeff Miller, Chairman, President and CEO; and Eric Carre, Executive Vice President and CFO. Some of today's comments may include forward-looking statements reflecting Halliburton'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's Form 10-K for the year ended December 31, 2023, Form 10-Q for the quarter ended September 30, 2024, recent current reports on Form 8-K and other Securities and Exchange Commission filings. We undertake no obligation to revise or publicly update any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures. Additional details and reconciliation to the most directly comparable GAAP financial measures are included on our fourth quarter earnings release and in the quarterly results and presentations section of our website. Now, I'll turn the call over to Jeff.

Thank you, David, and good morning, everyone. 2024 was a solid year for Halliburton. Here are the full year highlights. We delivered full year total company revenue of $22.9 billion. Our international business grew for the fourth year in a row with 6% year-over-year revenue growth led by Middle East/Asia, which delivered an increase of 8%. Our North America business declined 8% year-over-year, but outperformed the rig count and completion activity. Halliburton generated $3.9 billion of cash from operations and $2.6 billion of free cash flow. Finally, we repurchased $1 billion of our common stock and paid $600 million of dividends to our shareholders, representing a 60% return of free cash flow. Before we move on, I would like to thank our employees for their extraordinary work this year, delivering record performance in both safety and service quality. You, our employees, are the ones that deliver our value proposition every day, to collaborate and engineer solutions to maximize asset value for our customers. Thank you for your commitment and hard work. Let me begin with my outlook for the industry and for Halliburton. I expect energy will continue to play a critical role in economic growth and prosperity and per capita energy consumption to grow for decades to come. We see this trend today as oil and gas consumption reached record highs alongside growth in renewable energy. I believe the accessibility, affordability and dependability of oil and gas are simply too compelling to ignore. I'm confident that as we move forward, the attitudes and approaches to hydrocarbon development will be pragmatic rather than idealistic. I believe there is no way we meet the energy demands around the world without oil and gas in large quantities for a long time and that gives me great confidence. This is a great environment for Halliburton and we begin the second half of this decade in a strong position with a transformed balance sheet, leading returns and strong free cash flow. In the years ahead, I am confident Halliburton will strengthen its competitive advantage and financial position for three fundamental reasons. First, the depth of our technology portfolio, combined with our global reach make Halliburton a leader in the global services marketplace. We focus our investments in market segments where our unique strengths generate attractive returns and I expect our targeted technology developments and electrification, automation and digital solutions to further increase these advantages. Second, our unique value proposition aligns Halliburton with our customers to deliver leading results and maximize asset values. We see the value of this alignment demonstrated again and again in the deepening of our customer strategic alliances. Lastly, I see customer activity shifting towards drilling technology, unconventionals, well intervention and artificial lift, all of which are areas where Halliburton excels today and where we are uniquely positioned to outperform in the future. Turning to our results. I'll begin with the international markets where Halliburton delivered another year of profitable growth. Our full year international revenue grew 6% year-over-year, led by the Middle East/Asia region, which grew 8%. I am pleased with our performance and the growth of our international business. In 2025, we expect flat international revenues for Halliburton year-over-year with growth in most international markets offset by activity reduction in Mexico. Absent Mexico, we expect our international franchise will grow low to mid-single digits next year. Beyond 2025, I am confident in the long-term outlook for Halliburton, in particular the next five years based on the growth engines in our international business and the power of our customer alliances. These growth engines include Halliburton's drilling technologies, unconventionals, well intervention and artificial lift businesses. I believe these growth engines could collectively generate an additional $2.5 billion to $3 billion of annual revenue in three to five years. Even more exciting than the growth I see in these areas, is the trend I see of customers embracing our value proposition to work in increasingly more collaborative and innovative ways. They adopt this way of working because it has proven to consistently improve performance and create value for them. While the power of our collaborative value proposition has traction all around the world, it's most visible in Norway. Halliburton has a growing and profitable business in Norway built on strong customer alliances. These alliances apply leading technologies and collaborative work environments. Together with our customers, we have successfully pioneered several advances that have delivered significant improvements in performance and safety. Over time, I see the rest of our international business moving in the same direction. What is clear to me and equally so to a growing group of operators is that the future of performance lies in deep collaboration. For the last decade, we have made strategic choices in the development of our people, processes and technology to reinforce a culture that is highly collaborative and creates exceptional performance in these environments. I expect this change will create unique value for Halliburton and our customers. To summarize international markets, I expect our value proposition, driving deep collaboration will further differentiate us and create clear value for both Halliburton and our customers. And our growth engines will contribute meaningfully to our international business in the years to come. I'm excited about these opportunities and I believe Halliburton has a terrific platform to outperform the international services market in 2025 and beyond. In North America, our full year revenue of $9.6 billion was an 8% decrease from 2023. Fourth quarter 2024 revenues were 7% lower than third quarter 2024 due to seasonality and customer budget exhaustion. As we look to 2025, I expect our North America revenue to decrease low to mid-single digits from 2024 levels or approximately flat with the second half of 2024. This lower revenue for the year is driven in part by lower negotiated prices for a portion of our fleet and we expect to see the majority of the margin impact from these price revisions in our first quarter results. Despite pricing, I am confident our financial performance will widely outpace our competition. If I step back from the numbers for a minute, I'm excited about several things Halliburton is doing in North America this year. Let me tell you what's going on under the hood that has me so excited. First, we are sold out. All of our fleets are working under committed or contracted programs. Next,

Thank you, Jeff, and good morning. Our Q4 reported net income per diluted share was $0.70. Total company revenue for Q4 '24 was $5.6 billion, a decrease of 2% sequentially. Operating income was $932 million and operating margin was 17%. Now turning to the segment's results. Beginning with our Completion and Production division, revenue in Q4 was $3.2 billion, a decrease of 4% sequentially. Operating income was $629 million, a decrease of 6% sequentially. Operating margin was 20%, a sequential decrease of 49 basis points. Revenues were primarily driven by lower stimulation activity in North America and decreased pressure pumping services in Latin America, partially offsetting these decreases were improved artificial lift activity in North America and increased stimulation activity in Africa and the Middle East. In our Drilling and Evaluation division, revenue in Q4 was $2.4 billion and operating income was $401 million, both flat sequentially. Operating margin was 16%, a sequential decrease of 44 basis points. Revenues were driven by increased fluid services in the Middle East and Europe/Africa and improved drilling related services in the North Sea, offset by decreased drilling services in the Middle East and Latin America. Now let's move on to geographic results. Our Q4 international revenue increased 3% sequentially. Latin America revenue in Q4 was $953 million, a decrease of 9% sequentially. This decrease was primarily due to lower activity across multiple product lines in Mexico, partially offsetting these decreases were higher activity across multiple product lines in Brazil. Europe/Africa revenue in Q4 was $795 million, an increase of 10% sequentially. This increase was primarily due to improved drilling related services in the North Sea, as well as increased pressure pumping services and higher fluid services in Africa. Partially offsetting these increases were lower cementing activity and decreased pipeline services in the North Sea. Middle East/Asia revenue in Q4 was $1.6 billion, an increase of 7% sequentially. This increase was primarily due to higher stimulation activity, fluid services and completion tool sales in the Middle East, partially offset by decreased drilling throughout Asia. In North America, Q4 revenue was $2.2 billion, a decrease of 7% sequentially. This decline was primarily driven by lower stimulation activity across the region, partially offset by higher artificial lift activity and increased completion tool sales. Moving on to other items. In Q4, our corporate and other expense was $65 million. We expect our first quarter 2025 corporate expenses to decrease slightly. In Q4, we spent $33 million or about $0.04 per diluted share on SAP S4 migration, which is included in our results. For Q1 2025, we expect SAP expenses to be about $25 million. For the full year '25, we expect SAP expenses to be approximately $100 million. Net interest expense for the quarter was $84 million. For Q1 2025, we expect net interest expense to be about $90 million. Other net expense for Q4 was $47 million, which was driven by unfavorable foreign exchange movements in multiple currencies. For Q1 2025, we expect this expense to be approximately $40 million. Our effective tax rate for Q4 was 22.6% and we expect our Q1 2025 effective tax rate to be approximately 23%. For the full year 2025, we expect our effective tax rate to be approximately 25.5%, an increase of 300 basis points over our 2024 effective tax rate. This increase is driven in equal parts by fewer anticipated discrete tax items, the implementation of Pillar Two taxes and the shift in geographic earnings mix. Importantly, I expect full year cash taxes to be approximately flat with 2024. Capital expenditure for Q4 were $426 million, which brought our full year CapEx total to $1.4 billion or about 6% of revenue. For the full year of 2025, we expect capital expenditures to remain approximately 6% of revenue. Our Q4 cash flow from operations was $1.5 billion, driven by exceptionally strong collections during the quarter. Our free cash flow in Q4 was $1.1 billion, bringing our full year free cash flow to $2.6 billion, a 16% increase over 2023. Now let me provide you with comments on our expectations for our divisions for Q1 2025. In our Completion and Production division, we anticipate sequential revenue to decline 3% to 5% and margins to decline 175 basis points to 225 basis points. In our Drilling and Evaluation division, we expect sequential revenue to decline 8% to 10% and margins to be flat to down 50 basis points. I will now turn the call back to Jeff.

Thanks, Eric. Here are the key points I would like you to take away from our discussion today. I am confident in the long-term outlook for oil and gas, and I am pleased with the shift towards a pragmatic development of hydrocarbon resources. In the international markets, we see long-term growth as a result of the broader adoption of our collaborative value proposition and our growth engines. In North America, we are sold out on our Frac capacity. We see strong adoption of both our Completions and Drilling technologies and I am confident our financial performance will widely outpace our competition. Finally, we had a strong year for cash returns to shareholders and expect to return at least $1.6 billion to shareholders in 2025. And now let's open it up for questions.

Thank you. [Operator Instructions] Our first question comes from David Anderson with Barclays. You may proceed.

Hi. Good morning, Jeff.

Good morning, Dave.

So this past year, you had North America revenue fell 8%, a bit worse than you expected, yet C&P margins held pretty flat compared to 2023. On pricing, I guess, can you maybe talk about a little bit kind of how you did that? Was it pricing, more resilient cost structure? Then secondarily, just talked about lower negotiated prices and we see C&P margins coming down this year. So what changed here? Can you talk about kind of what part of your fleet was renegotiated? Was it the

Yeah. Thanks, David. Look, 2025 -- 2024, yeah, we were able to manage through a market that has been following actually for 18 months in 2024. And in 2025, we expect our outlook is down slightly. Yeah. I think it was the ability to introduce

So one of the things, a big topic out there is completion efficiencies around the E&Ps. It's continued to be kind of a story out there. And I think that topic for a lot of investors means it's deflationary to services, basically being able to do more with less. On the other hand, how about you're enabling a lot of these efficiencies through your

Yeah, David. I mean, clearly our -- the efficiency, we want to be at the leading edge of that efficiency. In some ways, I would argue the opposite with you in the sense that what we are doing is at the leading edge and creating outsized value for us. So it clearly offsets the stability of pricing in '24 and quite frankly, the very muted impact of pricing in 2025 relative to what I expect the market is, is on the basis of driving that efficiency and creating more evolutions for Halliburton and the ability to create more value. And quite frankly, it requires investment in equipment and technology to achieve that. And so, look I'm pleased with where we are. And when I look at the market, things like the Coterra announcement are a great example of what that technology does. I mean that's precisely the type of performance and value that we're creating not only in efficiency, but ultimately pointed towards recovery. I mean, and I think that's when I think about our technology and where we sit in the marketplace, we're able to have a very different conversation with customers. Clearly, efficiency is part of that, but there's also a more important dialog to have around the answer products that we're able to achieve with our technology. And answer products are not typically something people talk about with respect to Frac equipment. And so this is not just Frac equipment, it is in fact a platform delivering real answers. And so -- and that's what gives me confidence as I even look ahead into 2025, I think that C&P looks a little bit softer than 2024, but I also expect margin in the second half to firm up relative to the first half. As we see the full impact of getting back to work and then more broadly, tool sales stabilize and then we see growth in interventions and other things. So look, I'm really confident in the business that we have and that the -- this technology is driving a differential outcome for Halliburton.

Great. Thank you very much, Jeff.

Thank you. Our next question comes from Roger Read with Wells Fargo Securities. You may proceed.

Yeah. Thanks. Good morning. I'd like to follow-up, Jeff, if you can on your comments about more U.S. gas needed and how we should think about how Halliburton is positioned for that? Meaning, as Dave was asking about productivity and efficiency trends have been impressive, but a lot of it's also been above ground, not just below ground. So as we ultimately have to increase activity in gas areas, how do you think that works through for you and for the industry?

Look, I think it tightens it meaningfully and quickly. I mean, I think from a availability of equipment, this market is always shrinking in effect to what's required or demanded at a point in time. And we've seen attrition, we talked even at Halliburton about how we have retired equipment rather than work-in the spot market, but that's broadly across the industry. And so I think you'll see a lot of tightness in Frac, for example, as we see gas activity pick up.

And one of the -- probably also getting kind of at the question Dave was asking about making sure you get things priced properly, you get the right returns for your company and for shareholders. What's the right way for us to think about where pricing is today versus what you would consider more equitable or even theoretically advantaged situation for Halliburton? Just obviously, you've got pricing pressure now that's worked into the system. It's worked into expectations. But when things start to reverse, kind of where you -- maybe another way to ask a question, where do you think margins can go?

Yeah. Look, I think margins can move up and I expect that what we had been seeing, I've always thought that in the right kind of market and that pricing would move up well above where we were even in 2024. And so, I don't think it takes a lot of tightness to see that. And when I think about the catalysts of North America, I think that we are more likely to move up than down. And so, the combination of gas activity and we don't talk enough about, but private operators getting back into the business is assets are divested. I'm quite aware of several groups that have raised money that are in the market looking for assets and that's going to drive activity as well. And so, as you described it, we're at a place in the cycle where, yes, we are not immune to pricing, but the reality is, we haven't changed our strategy around that and we expect that we create outsized value and expect to get paid for that.

All right. I appreciate it. I’ll turn it back. Thanks.

Thank you. Our next question comes from Saurabh Pant with Bank of America. You may proceed.

Hi. Good morning, Jeff, Eric.

Good morning.

Good morning.

Hey, Jeff. Maybe I want to touch on the four growth engines that you talked about on your call, drilling tech, unconventionals, intervention and then artificial lift. It's really interesting, I think, Jeff, correct me, if I'm wrong, but I think I heard you talking about $2.5 billion to $3 billion in additional revenue over the next, I think you said three to five years. Maybe talk to that a little bit and give us a little more color on which of those four growth engines you see the most opportunity and which ones you think are going to be the most powerful over the next couple of years?

Well, I think all four of them are going to have meaningful impact. Let's start with unconventionals just internationally. We're a global leader today and we see that market growing. And we also see demand for the technology that we talked about in North America. That same demand for technology and better recovery is universal and so that's certainly not limited to the U.S. I'd also talk about intervention. And again, this is an area where we've developed technology. We continue to develop technology that is differentiated. For example, we talked about riserless coil last quarter, but there's a whole suite of power mechanical tools, our overall focus on execution. And we think that's just a market where we'll see more dollars spent and we'll probably see more of that in sooner rather than later. And then, lift in some ways just given our relative size internationally, we've seen growth, but we've got a lot more upside for Halliburton uniquely as we grow that business and really take the same leadership technology that we see in North America internationally. And so -- and then drilling technology, there's a lot that we're doing around our drilling offering, whether it's closed loop drilling and automation and that's really where we see outsized growth for Halliburton. And so again, I think there's real value to be created there and I think they're all right in our wheelhouse to go do. We're well positioned and have a great suite of technology.

Great. Now, that's a very helpful context, Jeff. And then maybe one -- a question on Mexico. Jeff, Eric, if I understood your guidance right, I think you said excluding Mexico, international, you expect to be up low to mid-single digit, right? And including Mexico, it's flat. If I'm doing the math right, I know I don't have all the numbers, right. But if I'm doing the rough math right, that implies Mexico maybe it's down like 25% year-over-year. First thing, can you maybe validate that kind of math? And then what's exactly the expectation for Mexico through 2025? Do you expect things to improve in the back half of the year or do we not have any visibility there?

Look, I think that what we see in Mexico is a new administration, new management team for Pemex and a bit of an activity reset. I say all of that and that is our outlook today, but at the same time, oil and gas is hypercritical to the economy in Mexico. And so it's hard for me to imagine that they don't find their footing as we work through the year. And we have a fantastic market position in Mexico. One of the reasons it's important to us and we have a great team there. And so I'm quite confident Halliburton will execute well in that market. But I think it's more a question around timing in terms of as Pemex finds its footing. And that's certainly not clear today, but I expect that it happens. It has in the past and I expect it will again.

Okay. Perfect. I got that. Okay, Jeff, I'll turn it back. Thank you.

Thank you.

Thank you.

Thank you. Our next question comes from Arun Jayaram with J.P. Morgan Securities. You may proceed.

Yeah. Good morning, Jeff. I have a follow-up maybe to David's question. Could you give us a sense -- we understand in talking to E&Ps that the Octiv Auto Frac service can be deployed with different kind of configurations. So I was wondering maybe you could briefly describe how it works and if you do pair it with the Sensori Frac monitoring service, the different configurations and maybe just talk a little bit about the commercial model if you do it on a standalone basis again versus combining it with Sensori, because I think you mentioned it's now running on 50% of your e-fleets.

Yeah. Look, I'm -- effectively, it gives you perfect control over the fracking so that this is Octiv Auto Frac. And so the result is that the frac fleet is programmed to deliver, what is designed and because of the ability to control the horsepower, it can deliver what is designed. And so I think that is something that's never been done before in terms of having the confidence that precisely what is designed is in fact what is delivered. And then Sensori, in effect is the ability to verify where the sand is going at its core. And again, that's an answer product we've never had in hydraulic fracturing since its inception. As where did the sand go? I think of it not too different from an MWD log-in some ways. You wouldn't drill a well without an MWD log of where the well -- where the bit went, where the wellbore is. And quite frankly, why would you not want to know and how is that not part of the solution? Where did the sand go since that's the only really active ingredient in creating production. And so I think we have -- together you've created sort of the design, the delivery, the control and the verification around where did the sand go in the wellbore. And because of that, now when you can change design, that the change design actually got delivered as well. I think this is something we've never been able to know or control in the Frac business before. I hope that's helpful.

Yeah. And just maybe the commercial model on how you're pricing this kind of service?

Yeah. It's priced for sure. I'm not going to get into the details here, but it's -- yes, it's a -- look, it's a valuable solution. It is, yes, standalone separate from the Frac service delivery and that's really all I'm going to say about that.

Fair enough. Jeff, my follow-up, I was wondering if you could give us some thoughts on what you're seeing offshore. I believe about 50% of your international business is tied to offshore markets. Obviously, some white space concerns in second half of the year. But any thoughts on how offshore revenues could trend industry wide in 2025 and how is -- how revenue would fare offshore in 2025?

Yeah. Look, I will have a -- we have a strong business offshore as you described, and I think that from our perspective, we don't see white space. What we see are rigs that move from market-to-market, which is not too unusual. We see quite a few FIDs sort of in the hopper as we get into, well, early '25 and then even activity beginning even more so later in '25 into '26 and '27. So, solid pipeline of growth internationally. And part of that international growth that we see obviously will be tied to offshore. And so, look, I think we'll fare well. I think that's going to be an important component of our international growth, save Mexico. And so I wouldn't over worry about the white space because that sort of occurs all the time I think.

All right. Thanks a lot, Jeff.

Thank you.

Thank you. Our next question comes from Kurt Hallead with Benchmark. You may proceed.

Hey. Good morning, everybody. Thanks for the time here this morning. Got a question related to some of the dynamics at play. With respect to the opportunity related to the power generation sale of power in the Permian Basin, cut to the chase, right. You had one of your smaller competitors basically go out and buy some megawatts to sell power in the Permian. Is that something that's on your radar screen, Jeff? And if not specifically on your radar screen, how do you think that plays out and is there an opportunity for Halliburton to participate?

Yeah. Certainly, it's on my radar screen and we are in that business today, with VoltaGrid and we have a front row seat. And so the exposure to that market through our participation investment in VoltaGrid is solid and we like the business a lot and fortunately, through VoltaGrid and sort of what we do, we are getting a view of this with what I would describe as a real player in that market, which is VoltaGrid. And so look, that's -- stay tuned, but that's an area that is attractive to us and very consistent with our core competencies at Halliburton. And we think we're aligned with and invested in far and away the largest player in that business today.

Okay. That's great. Appreciate that color. Now the follow-up as well, you referenced that you see an opportunity for Halliburton to generate an incremental, would you say, $2.5 billion to maybe $3 billion of revenue over the next couple of years predicated on three specific areas of focus. Can you just give us a sense as to, is that going to be with new products and technologies already in place? And then, with the adaptation or adoption of that, or is it going to be continued incremental evolution of those technologies over time or some combination of both? Just looking for a little bit of incremental color on how you see that evolving?

Yeah. Fair enough. And I see that as a continued drumbeat of technology development and introduction along with we do bolt-on type M&A and we're doing that all of the time, but more targeted at these areas to create technology and integration of technology that I believe will be unique and continue to be unique in these spaces. And so it's -- we've talked about a few of them, we'll continue to talk about technology deliveries in this space. And we've been working at sort of the technology development for a few years. And so, I think we're set up with sort of waves of technology over the next two to three years that will give us better opportunity to outgrow the market. They are businesses that we are in today, but I think we have a -- we're positioned both technically and from a value proposition standpoint to deliver outsized growth.

Great. Always appreciate the color, Jeff. Thank you.

Thank you.

Thank you. Our next question comes from Doug Becker with Capital One. You may proceed.

Thank you. The first quarter revenue declined a little bit sharper than we've seen recently. Just want to get a little more color on which regions you see driving that decline. Granted, some of those are obvious and just how you see the revenue progression the rest of the year? It sounds like it will be a more gradual recovery over the course of the year rather than a sharp 2Q bump.

Yeah, Doug. So the main drivers behind the reduction in revenue for Q1, I'll take it by division. It's probably clear if you look at it that way from a trend perspective. On the C&P side, it's primarily the roll-off of very strong completion tool sales, excuse me, in Q4, that's partially offset by pickup of activity in North America and then you have some seasonal mix around the world. So that's on the C&P side. On the D&E side, the biggest impact is coming from Mexico, which we discussed earlier. And then we had a particularly strong Q4 in D&E on the back of direct sales items of products. Some of it was in the Middle East, but in other regions as well. So these are the main drivers behind the revenue change Q1 over Q4.

Thank you. And maybe another one for you, Eric. Just wanted to get a little more color on the D&E operating margin outlook. Last year up just a hair, had very strong margin improvement in 2023. You've had some product introductions that seem to be getting good traction. Is it reasonable to expect some margin improvement this year in the D&E segment versus last year?

Yeah. I mean the -- I think the way we're looking at the D&E margins for the year is basically fairly flat. So think about D&E margins in 2025 as being in the relative same zip code as we had in 2024 overall. That's how we're looking at it now.

That makes sense. Thank you.

Thank you. [Operator Instructions] Our next question comes from Stephen Gengaro with Stifel. You may proceed.

Thanks. Good morning, everybody. Two from me. The one, and I know Kurt brought up the power generation question, but I had a question around the cost of power to the frac fleets. And I know your alignment with VoltaGrid, but is there any concern around the power gen being pulled out-of-the oil patch in any large ways and then increasing kind of the underlying price for power-to-power e-fleets and how that kind of impacts the business?

Well, we've consciously stayed away from owning that power for our own fleets, partly because we do believe that's an arm’s length transaction that may or may not fluctuate, but I think that operators will own that part of the business in terms of the contracting from an availability standpoint, we're in a very good place with our current contracting and relationship with VoltaGrid. So I feel quite confident in the availability of power to us through that mechanism. And so, no, I'm not particularly concerned about the power availability nor really the price of power. I think that the power is valuable and I think that the value created by the entire package is outsized. So as a result, I think we're in a good place strategically how we've gone about power as Halliburton. And I think from a market standpoint, if there is tightness in power, I think we will be protected from that based on really decisions we made early on about how we would align around power.

Great. Thanks. And my follow-up, we've heard from the folks over at Kimberlite Research that the sort of preference for Frac fleets going forward is skewed towards dual fuel over electric with kind of this maybe, 20%, 25% of the respondents sort of talking about electric as sort of the go-to, which is sort of different than your mix. And I'm curious what you're hearing from customers and this is probably related to sort of your customer mix versus others. But I'm curious what you're seeing from customers as far as preference for dual fuel versus electric and how that kind of aligns with your mix of assets?

Look, we have continued deliveries for 2025. We have deliveries. I suspect we'll be planning deliveries for 2026 and we're extending the fleets that we have. So -- and so I am quite confident in sort of the demand set for our solution and it's really the platform as much as obviously the substitution is important for dual fuel fleet from a cost perspective and then the increased value creation that we see with Auto Frac and Sensori, they really are becoming more and more important.

Great. Thanks for the color.

Thank you. I would now like to turn the call-back over to Jeff Miller for any closing remarks.

Yeah. Thank you, Josh. As we close the call today, let me wrap up with this. I'm excited about both the year ahead and the long-term for Halliburton. We expect to execute our value proposition, deepen our leading and differentiated technology portfolio and deliver incremental revenue through our growth engines. I'm committed to prioritizing cash flow and I expect all of this results in a return of at least $1.6 billion of cash in 2025. Look forward to speaking with you next quarter. Thank you.