HALLIBURTON CO

BUSINESS ENVIRONMENT AND RESULTS OF OPERATIONS

We operate in more than 70 countries throughout the world to provide a comprehensive range of services and products to the energy industry. Our revenue is generated from the sale of services and products to major, national, and independent oil and natural gas companies worldwide. The industry we serve is highly competitive with many substantial competitors in each segment of our business. During the first six months of 2024, based on the location of the services provided and products sold, 41% of our consolidated revenue was from the United States, compared to 46% of our consolidated revenue from the United States in the first six months of 2023. No other country accounted for more than 10% of our revenue for those periods.

Activity within our business segments is significantly impacted by spending on upstream exploration, development, and production programs by our customers. Also impacting our activity is the status of the global economy, which impacts oil and natural gas consumption.

Some of the more significant determinants of current and future spending levels of our customers are oil and natural gas prices and our customers’ expectations about future prices, global oil supply and demand, completions intensity, the world economy, the availability of capital, government regulation, and global stability, which together drive worldwide drilling and completions activity. Additionally, during 2024, we generally expect that many of our customers in North America will continue their strategy of operating within their cash flows and generating returns rather than prioritizing production growth. Lower oil and natural gas prices usually translate into lower exploration and production budgets and lower rig count, while the opposite is usually true for higher oil and natural gas prices. Our financial performance is therefore significantly affected by oil and natural gas prices and worldwide rig activity, which are summarized in the tables below.

The table below shows the average prices for West Texas Intermediate (WTI) crude oil, United Kingdom Brent crude oil, and Henry Hub natural gas.

The historical average rig counts based on the weekly Baker Hughes rig count data were as follows:

Business outlook

As we consider the balance of 2024, we remain positive on the oil and natural gas markets and continue to see strength across our portfolio. We expect strong oil and natural gas demand growth for the rest of 2024 as concerns about a potential economic slowdown ease. We believe long-term demand growth will be driven by economic expansion, energy security concerns, and population growth. Oil and natural gas continue to demonstrate their critical roles in the global economy in meeting this long term demand, and necessitate sustained capital investment in existing and new sources of production. To meet this growing demand, production will be needed from conventional, unconventional, deep-water, shallow-water, and short and long-cycle projects. Capital discipline by major oil and natural gas producers continues to underpin a more durable and less volatile upstream spending cycle versus prior cycles.

As noted above, rig counts and, as a result, service activity in North America continued to decline in the second quarter of 2024. Consequently, we expect our revenues in North America to decline in 2024 as compared to 2023. Nevertheless, we expect our international business to deliver about 10% revenue growth for the full year. and we remain confident that over the longer run investment in upstream activity will grow (including in North America) in order to meet growing demand for oil and natural gas and that demand for our products and services will grow accordingly.