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Halliburton focuses on non-frack land business in North America as key to growth

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Halliburton focuses on non-frack land business in North America as key to growth

Halliburton Co. remains committed to the North American land markets but opportunities to grow its revenue lie in non-frack businesses, the company's chief executive said Sept. 4.

Since the first quarter of 2017, Halliburton's non-frack revenue per rig has increased by 40%. In the first half of 2019 alone, non-frack revenue has grown 13%, CEO Jeffrey Miller said during a Sept 4 presentation at Barclays CEO Energy-Power Conference.

He said the oilfield services company has grown its share of services per well in the North American land market as it invests in non-frack service lines including cementing, wireline and artificial lift.

This revamped focus addresses market changes as shale plays industrialize and mature, and as operators address a shift in shareholder interests including production growth, capital discipline and healthy free-cash-flow generation, Miller said.

Producers are focused on efficiency and well productivity as they exercise capital discipline but also attempt to offset declines from a maturing production base. Miller noted that addressing productivity challenges requires multi-well pad penetration, longer lateral lengths and increased proppant loading. However, operators continue to attempt to push service prices down to lower well costs, he said.

"The operators' objective of lowering well cost per [estimated ultimate recovery] is aligned with our value proposition: collaborate and engineer solutions that maximize asset value for our customers," Miller said.

The industry structure will improve as it adjusts to the new environment through consolidation and rationalization in pressure pumping, he said.

Ahead of the industry structure improvements, Halliburton is taking additional cost reduction measures. The company is seeking opportunities to increase efficiencies and is stacking equipment if it does not meet return thresholds.

"We won't burn up our fleet chasing market share," Miller said. "We may lose some top line in the process, but we'll adjust to ensure our decisions are accretive to returns."