Halliburton at Wells Fargo Conference Notes

Mark A. McCollum

Never been more differentiation between the service companies

“it strikes me at this point in time there is probably more differentiation between the major service companies than there ever has been. And so, if I am an investor in terms of thinking about who I would invest with, I don’t think at any point in time there has been a clear line of sight as to how everybody is attacking the market.”

Coming off the bottom, but lower slope recovery

“We think at this point in time in the cycle the market itself will be – we’re coming off of the bottom and we feel like we have kind of at the bottom at least in North American and approaching a bottom internationally. But that the recovery itself is going to be a lower slope recovery than maybe some others have been.”

This was a supply based downturn

” it’s probably not to going to be a straight line for the fact that this was a supply based downturn that you have a relatively low demand growth overall and the fact that North America is also now the swing producer in the world with relatively little energy policy and a free market at a lot of access to capital that the recovery itself may be somewhat choppy, because you have shorter cycles here, that as your best foot comes in prices modulate around the supply/demand equation.”

Unconventionals in NA are the swing supply

” let me also say that in this recovery we think that unconventionals in North America clearly are the first mover. They are the cheapest, fastest barrel to market and so they become the swing barrel, the incremental barrel out there.”

It is ugly out there from a pricing standpoint

” I mean clearly guys it is ugly right? I mean everybody is underwater at this point in time and there is – that’s you know, that is definition of an unsustainable market. Right? So, they cannot hold here for any of this and so we are going to do need some pricing relief here at some point of time. It’s really going to depend on who you are, where you are right? For us when we are negative, but yet, I mean essentially says you’re not covering your depreciation and may be some of the fixed cost allocation that’s you are making to your business, utilization actually becomes a more important factor than just price. “