Halliburton Company (NYSE: HAL) Q4 2025 Earnings Call dated Jan. 21, 2026
Corporate Participants:
David Coleman — Senior Director of Investor Relations
Jeff Miller — Chairman, President and Chief Executive Officer
Eric Carre — Executive Vice President and Chief Financial Officer
Analysts:
Saurabh Pant — Analyst
Neil Mehta — Analyst
J. David Anderson — Analyst
Arun Jayaram — Analyst
James West — Analyst
Stephen Gengaro — Analyst
Scott Gruber — Analyst
Derek Podhaizer — Analyst
Marc Bianchi — Analyst
Presentation:
Operator
Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Fourth Quarter 2025 Halliburton Company Earnings Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.
At this time, I would like to turn the conference over to Mr. David Coleman, Senior Vice President of Investor Relations. Sir, please begin.
David Coleman — Senior Director of Investor Relations
Hello, and thank you for joining the Halliburton Fourth Quarter 2025 Conference Call. We will make a 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 that reflect 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, 2024; Form 10-Q for the quarter ended September 30, 2025; recent 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 reconciliation to the most directly comparable GAAP financial measures are included in our fourth quarter earnings release and in the quarterly results and presentation section of our website.
Now I’ll turn the call over to Jeff.
Jeff Miller — Chairman, President and Chief Executive Officer
Thank you, David, and good morning, everyone. I am pleased with Halliburton’s fourth quarter performance and the way we closed out 2025. We outperformed our expectations with stronger-than-anticipated activity and solid execution in both our North America and international Completion and Production businesses. It is clear that Halliburton’s strategy and value proposition deliver differentiated results. Here are some of the highlights from 2025.
We delivered total company revenue of $22.2 billion and adjusted operating margin of 14%. International revenue was $13.1 billion, down 2% year-over-year. North America revenue was $9.1 billion, a decrease of 6% year-over-year. During the year, we generated $2.9 billion of cash flow from operations, $1.9 billion of free cash flow and repurchased $1 billion of our common stock. Finally, we returned 85% of our free cash flow to shareholders, reducing our share count to its lowest levels in 10 years. These results reflect hard work and dedication by the men and women of Halliburton all around the world. I want to thank each Halliburton employee for your dedication to safety and our value proposition, maximizing value for our customers and delivering returns for our shareholders.
Now let’s turn to our macro outlook for 2026. We believe 2026 will be a year of rebalancing. The return of OPEC spare capacity and higher non-OPEC production have created a market with abundant supply. We expect supply increases to moderate this year as demand continues to rise. Near term, absent geopolitical disruptions, we expect commodity prices are unlikely to rise. We anticipate moderate softness in some key markets, particularly North America. We expect international activity to be stable year-over-year. Medium term, we believe supply and demand will rebalance. We expect the combination of steeper decline rates, diminishing reservoir quality and limited exploration success to create favorable tailwinds for oilfield services. I expect the next cycle to begin where it always has in North America, followed by a global push to meet the growing demand. Let me close our macro outlook with this. I am confident in the future of oilfield services and excited about Halliburton’s opportunities now and in the years ahead.
Let’s turn to our international business. Halliburton delivered another solid quarter, underscoring the strength of our global franchise and the resilience of our strategy. For the full year, international revenue was $13.1 billion, a decrease of 2% year-over-year, outperforming a 7% decline in rig count. While we experienced notable declines during the year in Saudi Arabia and Mexico, the remainder of our international business demonstrated strong growth of about 7%. Looking ahead to 2026, we expect total international revenue to be flat to up modestly.
I am confident in the outlook for our international business. First, our collaborative value proposition is winning. What began as alliances with independents has expanded to include IOCs and NOCs across all of our regions. Today, this collaborative approach consistently drives outperformance for Halliburton and our customers. Deep collaboration is in our DNA, and we believe it is the future of oilfield services. I am confident Halliburton is uniquely positioned to lead and thrive through this collaborative strategy.
Second, our drilling and formation evaluation technology is now a differentiator for Halliburton in all markets. The depth of our drilling portfolio allows us to compete and win in the most technically demanding integrated projects worldwide. Finally, I believe the market structure is evolving in a way that differentially favors Halliburton. We see consistent international growth in unconventionals, development drilling and intervention, all of which are directly aligned with Halliburton’s strengths.
Let’s take a closer look at our international growth engines: unconventionals, drilling, production services and artificial lift, where we have a clear line of sight to outperform the overall market. We continue to make great progress. In unconventionals, Halliburton uniquely brings North America technology to the international market. Today, we operate in seven countries and see growing adoption of simul-frac and continuous pumping operations along with our Auto Frac and Sensori technology.
In drilling, we completed the first fully autonomous geosteering run for a customer in the Caribbean, where we maximized reservoir contact and delivered outstanding performance for the customer. Finally, artificial lift delivered record international quarterly revenue and is now active in 15 countries.
Turning to our international power business. Our strategic collaboration with VoltaGrid continues to gain momentum. I am pleased with our progress so far. Customers recognize that Halliburton’s global footprint and reputation for execution are a strong complement to VoltaGrid’s distributed power platform. The opportunity pipeline is expanding rapidly across the Eastern Hemisphere with several projects already in engineering review. During the quarter, Halliburton and VoltaGrid secured manufacturing capacity for 400 megawatts of modular power systems. I am convinced, more than ever, that these opportunities will manifest and provide a significant avenue for future growth. To summarize, Halliburton’s international business is strong. Our collaborative value proposition is winning. Our technology is delivering and our growth engines are aligned with the evolution of the market. I am confident that Halliburton will outperform in 2026.
Before we leave international, here are a few of my views on Venezuela. I have always believed that oil and gas is the key to Venezuela’s economic recovery. I’m excited about the tremendous opportunity for Halliburton in Venezuela. Halliburton entered Venezuela in 1938 and only exited in 2019 because we are an American company in compliance with U.S. sanctions. Halliburton knows this market well, and we will grow our business there as soon as commercial and legal terms are resolved, including payment certainty. The early steps are already well underway.
Now moving on to North America. Halliburton delivered a strong fourth quarter, supported by less-than-anticipated white space and solid execution. For the full year, revenue was $9.1 billion, down 6% year-over-year. As we look towards 2026, we expect North America revenue to decline high-single digits compared to 2025. This outlook reflects the full year impact of reduced customer activity in land operations, our decision to stack uneconomic fleets and the timing of customer programs in the Gulf of America.
Here are three observations on North America that shape our view and strategy. First, attrition is accelerating at a time when new capital investment is falling. The equipment is working harder than it ever has due to widespread adoption of continuous pumping and simul-frac. This is why I believe a small increase in demand will tighten the market quickly. Second, the largest opportunity for the industry is to increase recovery, and I believe that this is only possible with technology adoption. This is why I am so excited about ZEUS IQ. Third, when the commodity outlook improves, we believe North America will be the first to recover. We have seen this countless times in the past, and the same drivers are in place today. Our strategy in North America is to maximize value. This means that we prioritize returns over market share, and we develop technology that addresses customers’ most critical opportunities, improving recovery and drilling longer, faster, more precise wells. Let’s look at how we do that.
First, with respect to return, as we have done in the past, we will continue to stack equipment that is uneconomic. Prudent stacking of equipment preserves it for the recovery in North America and becomes an avenue to feed our growing international unconventionals business. With respect to technology, our differentiated ZEUS platform is driving value through automation and subsurface measurement. Only Halliburton’s ZEUS platform directly measures and automates the control of sand placement, which I believe are critical building blocks for improving recovery. This quarter, customer adoption of ZEUS IQ, Sensori and auto frac increased by 18%, which tells me it is working.
We are also differentiated with our iCruise rotary steerable system and LOGIX automation, which deliver precision and reliability in long laterals. No trend in unconventionals is more clear than the growth of lateral lengths along with complex geometries such as horseshoe wells. We see this trend in every major basin. The impact of iCruise has been dramatic on our North America drilling services business, which grew meaningfully this year despite a 6% decline in rig count. The high performance of iCruise and LOGIX and the secular trend towards rotary steerable drilling in North America give me great confidence in the continued success of our drilling services business. To summarize North America, our priority is clear. We will maximize value. We have consistently executed this strategy and delivered differentiated results. I am confident this strategy will deliver value for our customers, Halliburton and our shareholders.
Before I turn the call over to Eric, let me close with this. I’ve never been more excited about the future of Halliburton, and here’s why. Oil and gas have a critical and recognized role to play in the energy mix of the future. The shift from idealism to pragmatism is refreshing and consistent with the reality that there will be growing demand for oilfield services for decades to come. Our value proposition is clear. We collaborate and engineer solutions to maximize asset value for our customers. The proven outperformance of our strategy and the ongoing shift towards collaborative work means Halliburton is squarely where the market is headed. And finally, our differentiated technology delivers exceptional value for our customers and for Halliburton. I am confident Halliburton will deliver leading returns and capitalize on future growth opportunities.
Finally, I’m also pleased to announce an important leadership update. Shannon Slocum has been promoted to Chief Operating Officer effective January 1st. Shannon’s COO role will be important to our success as we execute our strategy, and I look forward to him joining us on future earnings calls.
With that, I’ll turn the call over to Eric to provide more details on our financial results. Eric?
Eric Carre — Executive Vice President and Chief Financial Officer
Thank you, Jeff, and good morning. Our Q4 reported net income per diluted share was $0.70. Adjusted net income per diluted share was $0.69. Total company revenue for Q4 2025 was $5.7 billion, flat when compared to Q3 2025. Adjusted operating income was $829 million and adjusted operating margin was 15%. Our Q4 cash flow from operations was $1.2 billion and free cash flow was $875 million. During Q4, we repurchased $250 million of our common stock. For the full year, we repurchased approximately 42 million shares at an average price of $23.8 per share.
Now turning to the segment results. Beginning with our Completion and Production division, revenue in Q4 was $3.3 billion, flat when compared to Q3 2025. Operating income was $570 million, an increase of 11% when compared to Q3 2025, and the operating income margin was 17%. Revenue improvements were primarily driven by higher year-end completion tool sales globally and offset by lower stimulation activity in the Western Hemisphere. Operating income increased due to activity mix improvements from completion tool sales.
In our Drilling and Evaluation division, revenue in Q4 was $2.4 billion, flat when compared to Q3 2025. Operating income was $367 million, an increase of 5% sequentially and operating income margin was 15%. Revenue improvements driven by higher wireline activity in the Eastern Hemisphere and increased year-end software sales were offset by lower fluid services in North America. Operating income increased due to better activity mix from our wireline business in the Eastern Hemisphere and the year-end software sales.
Now let’s move on to geographic results. Our Q4 international revenue increased 7% when compared to Q3 2025. Europe/Africa revenue in Q4 was $928 million, an increase of 12% sequentially. This increase was primarily driven by higher completion tool sales in the North Sea and improved activity across multiple product service lines in Africa.
Middle East/Asia revenue in Q4 was $1.5 billion, an increase of 3% sequentially. This improvement was primarily driven by increased well intervention services and higher stimulation activity in the Middle East, and improved activity across multiple product service lines in Asia. Latin America revenue in Q4 was $1.1 billion, a 7% increase sequentially. This increase was primarily driven by higher completion tool sales in Brazil and the Caribbean, and higher software sales in Mexico. In North America, Q4 revenue was $2.2 billion, a 7% decrease sequentially. This decline was primarily driven by lower stimulation activity in U.S. land and Canada, decreased fluid services in the Gulf of America, and lower well intervention services in U.S. land.
Moving on to other items. In Q4, our corporate and other expense was $66 million. We expect our Q1 corporate expenses to increase about $5 million. In Q4, we spent $42 million on SAP S/4 migration, which is included in our results. For Q1, we expect SAP expenses to be about $45 million. Net interest expense for the quarter was $86 million. For Q1, we expect net interest expense to increase about $5 million. Other net expense in Q4 was $25 million. We expect Q1 expense to be about $35 million. Our normalized effective tax rate for Q4 was 19.8%. Based on our anticipated geographic earnings mix, we expect our Q1 and full year 2026 effective tax rate to be approximately 21%.
Capital expenditures for Q4 were $337 million, which is $100 million lower than expected due to late equipment deliveries. For the full year 2026, we expect capital expenditures to be about $1.1 billion, consistent with our prior guidance adjusted for the timing impact of late deliveries. This guidance excludes any capital spending necessary for a potential reentry into Venezuela.
Now let me provide you with comments on our expectation for Q1 2026. In our Completion and Production division, in Q1 we anticipate a higher-than-normal roll-off of year-end completion tool sales and lower international activity. As a result, we anticipate sequential revenue to decrease 7% to 9% and margins to decline about 300 basis points. In our Drilling and Evaluation division, we expect sequential revenue to decline 2% to 4% and margins to decline 25 basis points to 75 basis points.
I will now turn the call back to Jeff.
Jeff Miller — Chairman, President and Chief Executive Officer
Thanks, Eric. Let me summarize the key takeaways from today’s discussion. Halliburton delivered solid Q4 results and closed 2025 with strong execution despite the market environment. Oil and gas have a critical and recognized role to play in the energy mix of the future. I expect 2026 to be a rebalancing year, which I am confident is followed by a period of sustained strong growth. Halliburton’s international business is strong. Our collaborative value proposition is winning, our technology is delivering, and our growth engines are aligned with the evolution of the market.
In North America, we will maximize value; meaning, we will stack fleets that do not make adequate return and focus our investments on differentiated technologies that solve for our customers’ greatest opportunities. I expect that as macro fundamentals improve, North America will be the first to respond. I am confident in the outlook for our business and Halliburton’s ability to deliver leading returns and capitalize on future growth opportunities.
And now let’s open it up for questions.
Questions and Answers:
Operator
[Operator Instructions] Our first question or comment comes from the line of Saurabh Pant from Bank of America. Mr. Pant, your line is open.
Saurabh Pant
Good morning, Jeff and Eric.
Jeff Miller
Good morning.
Eric Carre
Hey, Saurabh.
Saurabh Pant
Jeff, maybe I want to start with the topic, which everybody has been bombarding us for the past two weeks, which is Venezuela, if you don’t mind. I noted, Jeff, you said in your prepared remarks, right, that — I know it’s early days, right? But you talked about early steps are well underway, right? So my question is, maybe just help us think about how quickly can Halliburton, your customers move into the country? What do you need to see to start doing that? And then secondly, ultimately, I know this is not certain, right? But what is the potential size of the opportunity and how quickly can you scale up in Venezuela?
Jeff Miller
Yeah. Thanks. Saurabh. Look, I think we could scale up fairly quickly. We’re working through the mechanics around licenses and things that we’re certain will get in place. But as far as returning to the country, we move equipment around all over the world. So we can move equipment quite quickly. We still have a footprint there in Venezuela in terms of operating bases and whatnot. And so getting equipment there to work, fairly straightforward. There are operators in Venezuela today. And so I think there are opportunities for us sooner rather than later to get back to work. And so we’re assessing what we would do and where we would start. I have — my phone is ringing off the hook in terms of interest in Halliburton being there. And so confident that we can move fairly quickly in Venezuela and excited about that.
As far as the size of the market, small market today relative to what it was a decade ago. A decade ago it was probably a $0.5 billion business for us pretty consistently. Now as time dragged on, that market started to shrink and it got smaller. But I — quite optimistic about longer term being a much bigger business. And I think in the near term, getting back to work and contributing to our business at Halliburton.
Saurabh Pant
Right. No, that’s a good update, Jeff. I think we need to keep — we need to stay in tune on what’s going on, but that sounds like a good opportunity. Just a very different pivot going back to 2026, Jeff, I know you gave some color on your expectations for activity, for revenue, which frankly is in line to a little better than I think several people were thinking. So that’s a good place to start. But on the margin side of things, Jeff, as we think about the pluses and minuses, pricing is part of it and not just NAM, but international pricing, operating leverage, cost is part of it. And then Eric, maybe a little color on SAP spending trajectory. If we put all of that together, what does the margin side of the story look like for ’26? Any preliminary thoughts on that?
Jeff Miller
Well, look, I think the second half looks stronger than the first half, most certainly. When we look around the world, it’s pretty steady around the world. Obviously, larger tenders are going to be more competitive and we see some of those. But by and large, it’s a stable market internationally. And so I see, again, progress as we get certainly into the second half of the year around margins.
Eric Carre
Yeah, Saurabh, and as it relates — go ahead, Saurabh — no, no, I was going to jump to your SAP question, but if you have a follow-up for Jeff, go ahead.
Saurabh Pant
No, SAP, let’s cover SAP first, Eric.
Eric Carre
Okay. Yes. So SAP, we guided $45 million for Q1, and that’s pretty much the run rate that you should be thinking about throughout 2026. So $40 million to $45 million. We anticipate the project to complete in Q4 of this year, which is a little later than we had earlier guided. We’ve adjusted the plan slightly as we learn progressing through the rollout of the system. We’ve also broadened the scope of the project to include some of the adjacent processes such as outsourcing our payroll and redesigning our overall OTC process. So in summary, about $45 million — $40 million, $45 million a quarter until the end of the year and project completed in Q4 with expected savings of about $100 million a year after the project is completed.
Jeff Miller
Saurabh, if I may go back to your first question a little bit here as well. So if I look at all of 2026, as I said, I think second half is better than the first half. But again, North America is taking a conservative posture. I think we’ve got some bright spots internationally. But I think the more important point is what’s happening in terms of the rebalancing of the market. And that’s really this pragmatic view of the world as opposed to idealistic, barrels are being absorbed, decline rates are higher now than they were in terms of — because unconventionals are a larger part of the supply stack. And quite frankly, exploration success has been anemic. And while all that’s happening, demand is growing. So I think we’re setting up for a rebalancing year in ’26 of supply and demand to be followed by very sustained strength.
Saurabh Pant
Right. No, that makes a ton of sense, Jeff. Like you said, rebalancing year and really the focus should be on ’27, ’28, right? And hopefully, things go in the right direction. So, thank you. Jeff, Eric, thanks a lot.
Jeff Miller
Thank you.
Eric Carre
Yeah, thank you.
Operator
Thank you. Our next question or comment comes from the line of Neil Mehta from Goldman Sachs. Mr. Mehta, your line is now open.
Neil Mehta
Hey, Jeff, and good morning, team. A quick question here first on the international breakout. You said up slightly ’26 versus ’25. Can you just go — give us a tour around the world, Jeff, and give us perspective by market? Where do you see increments and decrements?
Jeff Miller
Yeah. Look, in our outlook at this point is flattish to maybe up a little modestly. Look, I think Latin America leads the way in terms of growth. Brazil, deepwater is powering ahead. Argentina, we see quite a bit of growth, and that’s obviously right in our wheelhouse. Ecuador, Guyana. Obviously, Guyana has been a strong business for us and will continue to be. And so overall, Latin America, very much a bright spot.
Middle East, I think it’s flattish, flattish, maybe even down slightly. And I say that just because I’m well aware of the activity growth in Saudi Arabia, but taking a bit more conservative view of the timing and pacing of that coming back, it likely will, but it’s less clear to me sort of how impactful and how early that would be. But overall, the rest of the Middle East is solid business, pleased with that business. And then Asia Pacific really looks fairly flattish to us. A lot of gas demand in Asia. So positive things happening, but overall flattish for ’26, anyway.
Neil Mehta
Got it. That’s a helpful break. And Jeff, maybe take a moment to talk about VoltaGrid. I think we’ve gotten more comfortable as an investment community around that business and the potential, and you’ve announced an important joint venture in the Middle East. From where you sit, how important is this business for you guys? How big can it be? Do you see yourselves as a logical consolidator over time? Do you like the minority position? Just your perspective, anything you’re willing to share about it.
Jeff Miller
Yeah. Look, I’d say I’m really excited about where we are in the outlook for that business and the international piece of that business. I won’t comment on the U.S. I think that’s well understood and the pace of growth there and our role and ownership in VoltaGrid. As we look around the world, a lot of interest from customers around the combination of VoltaGrid technology and Halliburton’s proven execution and footprint and capability. And so solid pipeline, like the volume. And so I think that this could be a very big business over time.
I mean it’s like all businesses we’re starting. We’re fairly — very familiar with the business. It’s going to grow at the pace that it will, but we’ve already committed to 400 megawatts. I think 400 megawatts is a good start as we place those. And what we’ve seen historically is that we place a few hundred megawatts and then that tends to grow over time as data centers expand. And there’s — just no question that there’s not enough electricity power generation in the world today, in the U.S. or anywhere else. So very confident in this, and I think it could be a very big business over time.
Neil Mehta
Yeah. Thanks, Jeff.
Operator
The next question or comment comes from the line of David Anderson from Barclays. Mr. Anderson, your line is now open.
J. David Anderson
Good morning, Jeff. How are you?
Jeff Miller
Good morning, Dave.
J. David Anderson
You’ve talked about rebalancing of the market. I was wondering if you could talk more specifically about North American stimulation market and how that’s rebalancing? You talked about the attrition going on, but I’m wondering how pricing is holding up here and whether or not you see this firming up throughout the year because you’re also seeing equipment moving out to Middle East. I know you talked about — you’re bringing some equipment down to Vaca Muerta. So how is that component kind of factoring into pricing? Do you expect pricing to kind of hold up here and is this sort of a part of the rebalancing story?
Jeff Miller
Yeah. Look, I think frac pricing is fairly stable at this point. We did — Q4 is fairly stable. And as we go into Q1, our frac business stays very stable as well going into Q1. Now from a pricing standpoint, broadly I think that given where pricing is and performance of companies in that market, we are fortunate that we outperformed the market by quite a bit. But pricing reaches a point where it’s not — companies aren’t investing in it. We are moving equipment away from it. And so I think it’s certainly stable at that level. And yeah, I think there’s incentives to move equipment outside the U.S., which we’re doing in some cases. And so I think we’re at a bottom, and I would expect that, that improves over time, but I’m not going to give you a date when it improves. But I think the bias is towards there’s not investment in the market in terms of more equipment and equipment is wearing out, which we know. And equipment, in some cases, is moving outside the U.S. and some equipment, ours in some cases is being stacked. So I think all of those are positive and rational behavior in a market where we require returns.
J. David Anderson
That makes a lot of sense. Of course, you do on that side. I was wondering if you could talk — Eric, maybe you could talk a little bit more about the C&P margin progression throughout the year. The guide for first quarter is more or less in line with what we were looking for. But how should we think about kind of where the rest of the year shakes out on the margin side? And perhaps you could also just talk a little bit how Multi-Chem — the sale of Multi-Chem impacts that and maybe the decision to sell Multi-Chem? And does that provide an uplift for margins throughout the year?
Eric Carre
So the — let me start with the Multi-Chem. So we think the sale should be completed this quarter. The impact on the margin will be positive, but frankly, it will not be material overall. Talking about the progression of C&P margin, we think the margin progress throughout the year. But let me give you some color as well to the guide of margins from Q4 to Q1 because while it is not out of line with the differential in margin that we’ve seen in prior year, the actual makeup is a bit different.
So if you look at the Q1, so we guided about 300 basis points down for C&P margin. So that is actually coming from three buckets. The first bucket, which is over half of the drop is related to the roll-off of completion tool sales. That part is not unusual. What is a bit unusual is the amount of completion tool sales we had in Q4. If you look at the progression Q3 to Q4, our completion tool revenue increase was 3 times, what we saw in the prior two years. So that talks a lot to the strength of our completion business. But that’s about over half of the drop. Then you get about 25% of the drop that’s related to the typical seasonality in the international business for C&P as our C&P business is increasingly — has an increasingly large footprint in the international markets, and that’s about 3% to 6% reduction in revenue. So that’s kind of typical with historical decreases. And the rest is really a product geographic mix issue, which is really not structural as it relates to C&P.
And then there is a bit of a kind of an optical view on Q4 to Q1, which is we typically have a lot of tailwind with the U.S. frac business, which goes through seasonal factor, I mean, seasonality in Q4 and benefits from an uplift going into Q1. We don’t have any of that this year as our Q1 frac business in the U.S. looks to be just straight flat to Q4. So again, a little bit of color as the makeup of the delta is a bit different from prior years.
J. David Anderson
Understood. Thank you very much.
Operator
Thank you. Our next question or comment comes from the line of Arun Jayaram from JP Morgan. Mr. Jayaram, your line is now open.
Arun Jayaram
Yeah. Good morning. Jeff and Eric, appreciate the outlook on 2026. I was wondering if we could maybe think about what your outlook comments around international and North America could mean for overall margins. You gave us some good color on where you expect revenues to kind of shake out. But just trying to narrow thoughts around — the Street today sitting at just under $4 billion of EBITDA for ’26. I’m just trying — want to get just general comfort level of where the Street sits today based on your outlook comments?
Jeff Miller
Yeah. Go ahead, Eric.
Eric Carre
No. If you look at just kind of margins overall, as Jeff professes, we think H2 is better than H1. So you’re going to see some slight progression through the year. And while we typically don’t comment on Street estimates or provide guidance at this stage on margins, the $4 billion that you quoted is really within the range of outcomes that we are looking at.
Arun Jayaram
Great. That’s helpful, Eric. And just my follow-up. Jeff, in your prepared comments, you talked about ZEUS IQ and some of the things that Halliburton is doing to help North American operators boost well productivity. I also wanted to talk to you a little bit about some of the updates we’ve gotten from the majors where they’re talking about using lightweight proppant and surfactants. And I was wondering if you could discuss some of these efforts and maybe how you’re helping clients maybe to use some of these emerging technologies, and could these be needle movers for HAL?
Jeff Miller
Look, my comments are around our technology and the technology that we produce, and very pleased with what we are doing. And I think that the ability to place proppant and do things with proppant effectively is one of the really unique features of ZEUS IQ. And I think that’s under all conditions a very valuable solution, and as I said, a building block to how recovery has improved because quite frankly, where the sand goes has been an unknown in this business since it started in 1947. And really just in the last year or two have we been able to directly measure sand placement and also control where sand goes. And this is primarily because of the ZEUS setup and its ability to handle the pressure and the things required in order to respond to the reservoir.
Arun Jayaram
Great. Thanks.
Operator
Thank you. Our next question or comment comes from the line of James West from Melius Research. Mr. West, your line is open.
James West
Thanks. Good morning, Jeff and Eric.
Jeff Miller
Good morning, James.
Eric Carre
Hey, James.
James West
So Jeff, clearly, international outlook, second half better than first half, we get that. Venezuela, a little bit of a wildcard. But curious where you think there could be pockets of strength that emerge, knowing that neither you or I, as long as we’ve been doing this, have a crystal ball and the cycle is always going to play out a little bit differently. But we’ve got a lot of things in the works here that could influence the oil price, and so could cause some markets to either inflect higher or lower. But where do you think maybe the surprises could come from if you think about a higher oil price environment in the second half and leading into, of course, as you described, a solid upturn in ’27, ’28?
Jeff Miller
Well, look, I think Argentina is one that’s going to respond. It’s already responding. But I think when I think about that market, the pace of interest in international investors in that market is high. I mean, that’s become a very solid market that’s going to become more and more responsive to commodity price in a positive way. Kudos to the operators in that market today who have taken on the challenge of building infrastructure and evacuating the hydrocarbons from the market. I mean, these are all of the things that a very dynamic market can do and will do, and that’s what we’re seeing being done in Venezuela — excuse me, in Argentina.
I think the Caribbean is another place we’re really excited about possibilities and what could happen sort of throughout the Caribbean as we look at next year. I think that West Africa is another where we’re seeing sort of renewed interest and better — it seems like better terms for operators and better terms for us, where we’re able to execute sort of all of our services in these markets. So I’m pleased with that. I think that’s a bright spot. And then ultimately, Algeria, I think over time, in ’26 could become a brighter spot than we would expect. So I’m thinking about upside surprise, I think those are some of the places where we could see those.
James West
Okay. That’s very helpful, Jeff. And then just a follow-up for me on the power markets broadly, VoltaGrid is obviously with your investment there and taking them into the Middle East and leveraging your platform is critical for you. How are you thinking about other potential investments in power? Is VoltaGrid kind of your main objective here? Or are you talking with others? I mean, how do you think about just the build-out of the electrification theme and the data center theme and the power theme as it relates to Halliburton?
Jeff Miller
Well, thanks. It’s one of the things that we take a step at a time is the bottom line. I mean, we’re certainly aligned with VoltaGrid in the U.S. We’re knowledgeable and have built out a team around power that’s looking at our international business, both in the Middle East and beyond the Middle East, most certainly. And so I think what we’ll do, like we do in all things around here, is we take them a step at a time. We build businesses. We don’t get ahead of our skis, and we look for the things that we think will be contributing to that. And so the outlook is really good in this area. We know a lot about it and would expect that we continue to grow that business as we get deals done.
James West
Got it. Thanks, Jeff.
Jeff Miller
Thank you.
Operator
Thank you. Our next question or comment comes from the line of Stephen Gengaro from Stifel. Mr. Gengaro, your line is open.
Stephen Gengaro
Thank you. Good morning, everybody.
Jeff Miller
Good morning.
Stephen Gengaro
So curious, Jeff, what do you think about — like the fourth quarter was stronger than we had thought and there was less downtime, white space, etc. We’ve heard that from many — going into earnings. Why do you think that was? Like does that tell you anything about the way E&Ps are thinking about it or is it just weather related? Is there any drivers behind that and what it might mean going forward?
Jeff Miller
Look, I think weather was a factor. I think a number of things conspired to make Q4 more solid than we expected. I think the operators that we work for stayed busy. I mean, we’ve got a solid group of customers that take a long view of unconventionals and technology for that matter. And so for that reason stayed busier, certainly for us. And I think that that’s probably how this market may look more this way over time, although I expect there probably will be solid inflection if commodity price gives it some help.
Stephen Gengaro
Thank you. And then the follow-up is just around sort of your expectations for sort of completion efficiency and sort of the impact on U.S. production, just as we’re sort of thinking about kind of frac demand relative to some of the other high-tech services you provide and how that kind of impacts U.S. production and if you think we have enough activity right now to sustain production?
Jeff Miller
Yeah. Outlook is we’re probably at maintenance sort of levels today if not below those is my view. And I think that technology driving better recovery is really the key as we look ahead. I mean, to go faster, we are going faster, but we’re pumping — continuous pumping at rates that you really just can’t pump any faster. And so I think the real hurdle is going to be how to better produce a fantastic resource. And I know that technology is at the core of that, same as it has been everywhere. And so look, I think our frac fleets get bigger than they were in the past. And so I think it takes more horsepower to do more work. It takes more technology to keep the equipment both working, continuous pumping requires technology as does certainly the ability to place sand.
That said, our drilling services business is continuing to strengthen into what has been a slowing market, at least from a rig count standpoint. And I think that’s a reflection again of technology, what we do with LOGIX, which is our automation platform for drilling, what the tools themselves are able to do. We see similar — I mean, the uptake on that has been fantastic. And I think that’s all driven by the real drilling requirements to drill longer wells, more complex wells. And so look, I’m just pleased with the growth of technology for both of our divisions today.
Stephen Gengaro
Great. Thanks for all the color.
Jeff Miller
Yeah, thank you.
Operator
Thank you. Our next question or comment comes from the line of Scott Gruber from Citigroup. Mr. Gruber, your line is now open.
Scott Gruber
Yes, good morning, Jeff and Eric.
Jeff Miller
Good morning.
Scott Gruber
So, good morning. I want to come back to power as the growth prospects are certainly exciting and excited to hear that they’re bubbling to the surface internationally. How do the prospective returns on these power projects compare to your organic investments? You also have pockets of growth, obviously, within your core and maybe that expands with Venezuela. So just curious how the power project returns kind of compare? Are they higher, lower, broadly in line? And more importantly, kind of how does that shape the vigor with which you could deploy capital into the power opportunity set?
Eric Carre
It’s Eric here. So I think it will depend on the opportunities, the country, what type of other potential power sources we would be competing with. So it’s really early to tell you that it’s accretive, dilutive to our current return, it will depend. But overall, these are typically very long-term contracts where you enter in it with a fairly low risk, long-term very good view of what you have to deliver. And if we look at the comparison of what’s been happening in North America, then you could say the returns are probably higher than what we have today.
Scott Gruber
Got it. Thank you, Eric. And then, Eric, maybe if you could walk through some of the items that will impact cash conversion this year. Thinking about working capital, do you anticipate continued catch-up payments from your customer in Mexico? Anything to note on cash taxes? And any comment on SAP spending for the full course of the year would be appreciated.
Eric Carre
Yeah. I mean, look, there’s a lot of moving parts in what you’re describing. It’s a bit early to comment on working capital impact, collections, etc. I mean, collections have been great throughout the year. It was a bit challenging as we talked on several calls, collecting from Mexico, the situation seems to be going a lot better. So look, we’ll give more details and we’ll update our thoughts overall on all the kind of ins and outs that touches the projection around free cash flow.
Scott Gruber
Okay. Thank you.
Operator
Our next question or comment comes from the line of Derek Podhaizer from Piper Sandler. Mr. Podhaizer, your line is now open.
Derek Podhaizer
Hey, good morning. Just wanted to go back to the attrition discussion in U.S. land. Obviously, a lot of moving pieces here between equipment high-grading, idling, stacking legacy diesel fleets, redeploying some of those fleets to international unconventional markets. But just when you look at your fleet and maybe canvas the market, is everything deployed that could be? Or are there a few fleets that could be thrown together? Just trying to think through the tangible attrition and your comment around the small increase in demand could tighten this market quickly. What does that look like for you and the market and what could it mean for C&P specifically this year?
Jeff Miller
Well, we have consciously stacked fleets. We stacked fleets in Q3, and we stacked some more fleets in Q4, all of which could go back to work for returns that are acceptable to us, and some of those may go internationally. But from our standpoint, our fleet is in really good shape. And there are things that could go to work that aren’t working, and they will go to work when we see the appropriate level of pricing for those.
But when I look at the whole market in terms of attrition, I’ll just use an observation in terms of fleet size. We’ve got, let’s say, 65,000 horsepower out for a simul-frac. We see a number of fleets in the market running 120,000 horsepower to do similar work that tells me that equipment is being repaired and put together in an effort to keep it working, which tells me that expanding or taking those apart would be really a challenge. And so the market is moving more towards bigger fracs that require more equipment. And I think the ability to add fleets is just really not there. And so it doesn’t take much, in my view, to create tightness just because the performance requirements are high, the technology requirements are increasing and all of those things create quite a bit of tightness.
Derek Podhaizer
Got it. That’s helpful. Moving over to the Middle East. I know in your comments you talked about a flattish outlook, even slightly down. Can you just maybe walk through some of the regions for us and what you’re seeing specifically Saudi, UAE, Kuwait, Oman, Iraq, and anything else you’d like to highlight?
Eric Carre
Look, actually fairly stable in most of those markets. There’s always shifting from completion to drilling and drilling to completion in some markets. I’d say UAE is strong. Kuwait is very strong for us. And I think Iraq is a good story in terms of activity that we see coming up. And so look, I think as I look across the entirety of the Middle East, fairly stable. See, again, rigs being added in Saudi Arabia, very positive, but taking a bit of a more cautious view around the timing of that.
Derek Podhaizer
Got it, great. Thanks, Jeff. I’ll take it back.
Operator
Thank you. Our next question or comment comes from the line of Marc Bianchi from TD Cowen. Mr. Bianchi, your line is open.
Marc Bianchi
Hey, thank you. Jeff, I was hoping you could comment on the offshore market outlook in a little bit more detail. I think everybody is sort of anticipating some sort of uptick in the second half of ’26, but there have been prior calls for upticks that didn’t materialize. So just kind of curious what your view is on that?
Jeff Miller
Look, I’ll leave a lot of that to the rig contractors in terms of rig placements, etc. But we’ve won a lot of offshore work. It’s very strong for us, continues to be a significant part of our international business. And I’d say the bias towards integration and our value proposition in offshore is important, and it’s one of the reasons that we’re winning work in offshore. It’s really strong in Norway, Latin America, West Africa. All of those will be busy for us. And I think the other indicator is our completion tool order book is at an all-time high, which tends to be, again, biased towards deepwater and offshore work. So from our perspective, that’s a strong business for us and expect it — where we are for it to stay strong in 2026.
Marc Bianchi
Okay. Great. And then the other question I had was on Venezuela, going back to that. So you had mentioned that you’re looking to grow the business as soon as commercial and legal terms are resolved and including payment certainty. Can you maybe level set for us what that time line might look like? And is this going to be led by the IOCs and then Halliburton will follow? Or do you anticipate Halliburton moving in either coincident or perhaps before some of these IOCs make up their mind?
Jeff Miller
Well, I think there’s paths to both of those. And as we work through what payment certainty looks like and how we solve for that, obviously, IOCs are an important part of that, but we — also there are companies operating there today that we can work for under the right conditions and circumstances. And so from a timing perspective, as we solve those, which I don’t — I think there’s a lot of will to solve for these things. And so I — this is — we can mobilize in weeks. I think it’s in months that we — but again, we work through those things, but I feel confident we can move fairly quickly as opportunities arise. And again, talking with lots of customers, some operating, some wanting to operate, and this will all be a continuum of getting back to work in Venezuela.
Marc Bianchi
Great, very good. I’ll turn it back.
Operator
Thank you. I’m afraid that’s all the time we have for questions at this time. I would like to turn the conference back over to Mr. Miller for any closing remarks.
Jeff Miller
Yeah. Thank you, Howard. Before we wrap up today’s call, let me close with this. I’m excited about Halliburton’s opportunities now and in the years ahead. Our differentiated technology delivers exceptional value for our customers and for Halliburton and the ongoing shift towards collaborative work means Halliburton is squarely where the market is headed. Look forward to speaking with you again next quarter.
Operator
[Operator Closing Remarks]