HALLIBURTON CO

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, our customers’ expectations about future prices, global oil supply and demand, the impact on natural gas supply and

demand in North America of electrification and data centers power requirements, completions intensity, the world economy, the

availability of capital, government regulation, and global stability, which together drive worldwide drilling and completions

activity. We 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

Geopolitical tensions in the Middle East and the Russia-Ukraine conflict continue to cause high volatility in oil

markets. Additionally, the unwinding of OPEC+ supply cuts and tempered demand growth expectations due to trade tensions

contributed to decreases in the average WTI and United Kingdom Brent crude oil prices. As of October 21, 2025, WTI crude oil

prices had decreased by approximately 12% since the end of the second quarter of 2025. In response to these factors, we have

seen customers reduce their expected spend on oil and gas exploration and production activities and engage in other cost-cutting

activities, which has caused us to lower our expectations of activity over the short to medium term.

We expect our full year 2025 international revenue to decrease year over year primarily driven by further activity

reductions in Saudi Arabia and Mexico. We continue to expect revenue growth in Brazil and Norway, as well as offshore

frontier basins, to partially offset these reductions. We also expect North America full year 2025 revenue to decline year over

year driven by lower drilling and completion activity and pricing pressure. While increases in gas activity are likely to absorb

some service capacity in North America this year, it is unlikely to offset the decreases in oil-directed activity. To address the

softness in the market, in the third quarter of 2025, we reduced our variable and fixed cash costs to size our business

accordingly, which we expect will save us approximately $100 million per quarter going forward. Furthermore, we will

continue to idle, relocate, or retire equipment that does not meet our return thresholds and will remain focused on generating

free cash flow and returns, and capital discipline.

Despite the softening market described above, we believe the combination of long-cycle international investment and

emerging structural demand for natural gas driven by data centers, electrification, and power reliability, positions our business

for durable growth over the medium and long term. Additionally, we believe increased investment in existing and new sources

of oil and natural gas production is needed to address future demand. This will necessitate production from conventional and

unconventional, deep-water and shallow-water, and short and long-cycle projects. We expect that increased oil and natural gas

production requirements will in turn create demand for our products and services.