Good day, ladies and gentlemen, and welcome to the Halliburton Second Quarter 2018 Earnings Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions] And as a reminder, today’s conference call is being recorded. I’d now like to turn the conference call over to Lance Loeffler. Please go ahead.

Good morning. And welcome to the Halliburton second quarter 2018 conference call. As a reminder, today’s call is being webcast and a replay will be available on Halliburton’s website for seven days. Joining me this morning are Jeff Miller, President and CEO; and Chris Weber, CFO. Some of our comments today may include forward-looking statements, reflecting 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, 2017, Form 10-Q for the quarter ended March 31, 2018, recent current reports on Form 8-K, and others Securities and Exchange Commission filings. We undertake no obligation to revise or update publicly any forward-looking statements for any reason. Our comments today also include non-GAAP financial measures. And unless otherwise noted, in our discussion today, we will be excluding the impact of the first quarter charges related to Venezuela. Additional details and reconciliation to the most directly comparable GAAP financial measures are included in our second quarter press release and can be found in the Investor Downloads section of our website. Finally, after our prepared remarks, we ask that you please limit yourself to one question and one related follow-up during the Q&A period, in order to allow more time for others who may be in the queue. Now, I’ll turn the call over to Jeff.

Thank you, Lance, and good morning, everyone. This was an excellent quarter. Thanks to all the Halliburton employees for their hard work and dedication to superior service quality. Activity improved in all geographic markets in the second quarter. And I’m happy with how Halliburton continues to outperform our major competitors. I believe that our strategy to collaborate in engineered solutions to maximize asset value for our customers will continue to generate industry-leading returns for the remainder of 2018 and beyond. Now, before we dive into the details, here are a few highlights for the quarter. Total Company revenue was $6.1 billion, representing a 7% increase; and operating income was $789 million, a 27% increase, compared to the first quarter of 2018. Our Completion & Production division grew operating income by 34% sequentially, primarily driven by the strength of U.S. land. North America had a strong performance this quarter, once again outgrowing the rig count; and U.S. land margins are closing in on the 2014 peak. During the quarter, we launched our new Sperry ICRUISE rotary steerable in U.S. land, and it looks like a big success. We acquired Athlon Solutions, providing expertise and a manufacturing footprint to develop our reactive chemistry capabilities. And finally, we generated approximately $1 billion in operating cash flow. This is a great step towards generating solid cash flow for the year. And no doubt about it, this was an excellent quarter. We executed on our plan and delivered strong results. Our overall strategy continues to work and we plan to stay the course. We remain focused on consistent execution, generating superior financial performance, and providing industry-leading shareholder returns. As I said in the highlights, U.S. land achieved margins in the second quarter that are closing in on our peak margins from 2014. I want to…

Thanks, Jeff. I will start with a summary of our second quarter results compared to the first quarter of 2018. Total Company revenue for the quarter was $6.1 billion and operating income was $789 million, representing increases of 7% and 27%, respectively. These results were primarily driven by increased activity in U.S. land. Looking at our division results. In our Completion and Production division, revenue increased by 9% while operating income increased 34%, and operating margin increased by nearly 300 basis points. These results were primarily driven by increased pressure pumping and artificial lift activity in the United States land sector as well as increased pressure pumping services in Europe, Africa and CIS. These increases were partially offset by reduced completion tool sales in Europe, Africa and CIS, and reduced pressure pumping services in the Middle East. In our Drilling and Evaluation division, revenue increased by 3% while operating income increased 2% and operating margin was roughly flat. These results were primarily due to increased drilling activity in United States land sector, as well as increased drilling services and project management activity in the Middle East and India. These increases were partially offset by reduced drilling fluid activity in the Gulf of Mexico. In North America, revenue increased by 9%. This improvement was led by increased activity throughout the United States land sector within the majority of Halliburton’s product service lines, primarily pressure pumping, as well as higher drilling and artificial lift activity. Partially offsetting these increases were lower pressure pumping activity in Canada and reduced drilling fluid activity in the Gulf of Mexico. Latin America Revenue grew by 5%, resulting primarily from increases in software sales and project management activity in Mexico as well as stimulation activity in Argentina. Turning to Europe, Africa and CIS, revenue was slightly improved.…

Thanks, Chris. To summarize, despite the temporary challenges affecting North America, I believe we are in the beginning of a prolonged cycle to continue to expand our revenues and improve our margins. The international markets continue to see pricing pressure, but we are seeing signs that pricing is stabilizing. We’re experiencing the positive impact of incremental activity on margins. We believe that the second half of 2018 will be better for our international markets. And contract wins in key segments are providing us the foundation to expand international margins in 2019. We will generate strong free cash flow through the balance of the year and look forward to reducing debt levels and initiating buybacks. Halliburton is the best positioned for this market. Our value proposition resonates with our customers. And we will continue to maximize their asset value while providing industry-leading returns for our shareholders. Now, let’s open it up for questions.

Thank you. [Operator Instructions] And our first question comes from James West of Evercore ISI. Your line is now open.

Hey. Good morning, guys.

Good morning, James.

So, Jeff, I want to make sure I get your guidance correct here, specifically with regards to North America. So, clearly, it’s temporary, but we’re going to see some weakness. The Marcellus, I think, is one that’s a little bit new to at least myself. We obviously understand the issues in the Permian. But, I guess, are you suggesting that revenue comes down in the second half and there’s a commensurate impact on the margin profile in North America, in the second half? And then at some point, in -- obviously, in ‘19, we’re going to see again a short squeeze and a pick-up in activity pretty significant. But, is that kind of the profile you’re thinking about over the next several quarters?

Yes, James. Look, when I talk about flat earnings that does not mean flat revenues. We see revenues up in North America and quite frankly internationally, and expect to outgrow the rig count in both. From an earnings perspective, let me say this, internationally, we face the same issues as our competitors. In North America, quite frankly, no one knows it better than we do. And I’ve already mentioned a lot of those challenges in my remarks. So, the bottom line is, I think that headwinds and the tailwinds are about the same, but very positive in terms of outlook as we look at 2019.

Okay. Fair enough. And then, on the international side, there is a little bit of pricing starting to at least tighten as we go into 2019. Are you already having these discussions with the customer base at this point, and do you see your utilization of equipment, basically getting to that trigger point where you have to raise pricing in order to justify CapEx investments before year-end?

Well, James, clearly having those discussions with clients, we are seeing the ramp up in activity internationally, and seeing some tightness in certain product lines. For example, we bumped up CapEx last quarter at Sperry and anticipate rolling out technology, and what we see is that runway. But, we’re coming off of a tough bottom here. So discussions don’t necessarily mean price increases, certainly not immediate.

Thank you. The next question comes from Jud Bailey of Wells Fargo. Your line is now open.

Jeff, I wanted to narrow that down on the North America margin kind of topic. You cited several things that’ll probably impact things in the back half of the year. Pricing in some areas little bit of risk, new mix chemical is now in there, uncertainty in a couple of basins. How should we think about -- you can frame it as C&P or just North America margins, do margins flat to down in the third quarter or up? And then, how do we think about them in the back half of the year? And what are going to be the main moving pieces that will impact profitability in North America over the next couple of quarters in your mind?

Well, I think, look, maybe I’ll just take a minute on the second half or this quarter and look ahead. I mean this was a fantastic quarter and delivered the highest revenue, highest margins and best returns. But, I did talk about customer dislocation in the northeast to a degree as they’ve met their production goals, and at least likely moderation or perception of moderation in the Permian Basin. But, I do know with certainty that 2019 is going to be humming. I mean, we’re looking at demand that’s already on the books. And I know this business. And so, whenever equipment moves around or we see any kind of slack in the system at all, I know the maintenance goes up, cost. And I’ve told our people to take advantage of that and spend more but be ready for 2019, which realistically translates into about $0.04 incremental impact on Q3. And that additional $0.04 is already baked into the guidance that I gave you. So, I don’t know, if that gives you a little more color. I mean, this is great market and great business.

Okay. So, should -- I mean to just to circle back on that, do we think margins can hold firm or they deteriorate a little bit due to all -- some of these issues we’re talking about in the third quarter?

Look, I think in the third quarter, because of the things I’ve talked about, there may be some softening, but we’re going to be still at or well above kind of where the rest of market is.

Okay. I appreciate that. And then, maybe if you could talk a little bit more detail perhaps about Athlon, the acquisition during the quarter, you touched on in your prepared comments. Maybe you could give us a little bit more detail on how you view that business and how it’s going to impact North America business moving forward?

Look, really excited about the Athlon acquisition. And it’s part of a strategy that we’ve had in place to grow our chemicals business. It’s a small acquisition, but it’s the kind of thing that I’d like to do because it gives us all of the platform to grow at organically from here, and it complements some things we’re doing internationally. Over time, it’s going to deliver terrific returns. We are early in that cycle having just closed. But, the approach that we take on these kind of acquisitions, really works. This is an example where we buy a plant that’s sort of moderately utilized. We’ve got internal utilization that will actually ramp it up to a high rate of efficiency and lower our costs. So over time, that’s going to be a very good acquisition and part of our strategy around chemicals.

Thank you. And our next question comes from Angie Sedita of UBS. Your line is now open.

So, Jeff, just to dig into a little bit further, the comments on the Permian and the customer behavior, some are moving forward and very active and then some you’re saying are reducing activity or adding fewer than expected rigs. And then, maybe you could give a little bit more color on the mix as far as the number of customers that are starting to see some slowing of activity? And then, also your comments on the pricing pressure in some areas, just a little more color there would be great.

Okay. Thanks, Angie. But look, Permian off-take has nominal impact today. But, as I described, it’s not naïve to the math. I mean, clearly, this is the world class resource. And the entrepreneurs in that market will get it solved, I mean never bet against them. But in the near term, I think perception has as much impact as anything. And by that, I mean weighs on customer urgency, which ultimately has an impact on our utilization and efficiency. But look, no doubt this is world class resource. As far as more color, not much more to give other than a couple of very small but leading, and I would say, nominal factors at this point with respect to off-take.

Okay. So, as I think about 2019 and obviously you’re positive on the outlook for 2019, but if we put in the context of pricing is flattish, I think you’ve done a very good job in the past. And correct me if I am wrong that the biggest driver of your margins are efficiency gains, not pricing. So, thoughts on the ability to drive margins in 2019 and maybe potentially a flat market environment for pricing?

Look, Angie, we’re very confident in the levers that we have and excited about how those continued to get rolled out, and I described some of them in the call. But I think what’s important is along the way as we get the ‘19 and beyond, I want to deliver the highest North American revenues and the best returns in North America. So, we’re going to take whatever the market gives us and get an outsized share of that. Also along the way, we delivered terrific free cash flow. And so, I believe Halliburton is where you want to be. And I think those other levers, in fact I know those other levers well in place, moving to ‘19.

Yes. I mean, you look at ‘19, and Jeff talked about demand on the books starting in early next year. We would expect that to positively impact utilization and positively impact pricing.

Thank you. And our next question comes from Sean Meakim of JP Morgan. Your line is now open.

So, Jeff, maybe just to clarify little further on frac. Leading edge in the Permian, can you give us a sense of where your folks in the field see pricing heading and how you think that could eventually flow through into your fleets over the next couple of quarters?

Look, Sean, I’ll be crazy to talk about pricing strategy on this call. I mean, this is not a place where we’ll discuss that. I know that our competitors, all of our competitors, probably most of our customers are listening. But, what we’re committed to do is what’s best for both our customers and our shareholders.

Okay. Fair enough. So, internationally, it sounds like you’re going to feel some impact of the startup cost in some of these projects, similar to what you’ve heard from your peers. Is that a fair characterization? And as we look towards 2019, would you say that there is going to be opportunities for increased growth capital, internationally?

Yes, I think there will be in 2019. I’m very, very excited about what we’re seeing unfold internationally. And we’ll see some of that in the second half of 2018 with respect to increase in activity. There will be some mobilization around that. But, as we look out to 2019 and really beyond, yes. I mean, I see a solid demand set coming together in front of us. And I’ve been I think pretty clear on international outlook over this last cycle and believe we’re right now. And as we see that grow into 2019, we’ll need some capital, but it’s probably, as we get into the year.

Thank you. And our next question comes from Bill Herbert of Simmons. Your line is now open.

Hey. Good morning, guys. So, I just want to discuss a little bit with regards to the timing of the proceeds, kind of recovery if that’s the right word for the Permian with regard to the resolution, these takeaway capacity issues. Totally agree that these are transient, but most of the incremental capacity comes on second half of ‘19. We’ve got an exceptionally tight labor market in the Permian, the whole value chain is super tight. This could actually get pushed out by a little bit. So, I’m just curious, in light of the fact that this could be a multi-quarter stagnation, if you will, with regard to Permian, call it four quarters, maybe a bit more, who in the heck knows, yet we’re maintaining the capital spending budget, Chris at $2 billion for this year. Walk us through that.

From that capital budget perspective, we planned or set, and we’ve got a good view with regards to what we’re putting into Sperry and what we’re doing. So, it’s allowed us about positioning for ‘19 but and a lot of that capital is focused towards international, not necessarily just North America. So, we feel like it’s still in the right place.

I guess, I’ll follow that up as well, Bill. I’ll go back to the ability to react very quickly, to capital requirements in North America. So, unlike our competitors, there are no orders that we placed a year ago that are being delivered today. We can move as quickly as 30 days, if required to move in 30 days. So, we continue to look for leading edge, pricing returns, and we have a really great business development organization. So, we know how to get things placed quickly and don’t pull the capital lever until all of those conditions are right.

Okay. So, in the event that this is a little bit slower for longer than anticipated, and the deployment of incremental horsepower slows down?

Yes.

Okay. Got it. And then, the second question for me is switching gears to international. At this stage, it just seems like rest of the world oil prices ex-Permian, if you will, look to be pretty constructive with regard to supply and demand fundamentals, based upon a myriad of different factors that we all know about. So, in light of the visibility improving for international, do you think at this juncture, the expectation for a double-digit increase in revenues for 2019 is realistic, and ditto for D&E, as a result of that formulation?

Realistic is the short answer. I mean, all of the things that we sort of thought would unfold around supply are unfolding. And declines because of underinvestment are starting to manifest. And that sets us for a terrific sort of long-term ramp internationally. And feel like, even in the Permian, as we described that that’s a moderation in growth as opposed to a pullback.

Thank you. And our next question comes from Jim Wicklund of Credit Suisse. Your line is now open.

Good morning, guys. Jeff, you have laid out the long-term -- the longer term issues very well. There is no question that that the Permian is a world class asset and will -- supposed to be 60% of global oil growth for the next three to five years. But, what this does do is it -- is sets it back a couple of quarters. Investors often care more about the short-term than the longer term and your sock is down 7% on the open on this morning. And so, the real question is, how long does it take you to get back to where we expected Q3 to be in your internal planning? And I’m not going to -- I don’t want to belabor earnings or anything, but you just got it down $0.10 for Q3, and that obviously means we’re going to have some got down in Q4. In your planning, when do we get back on track to where Q3 was expected to be? Is this a two-quarter event, a three-quarter event, or fourth-quarter event? And while I -- I know we don’t know, I’m just talking about your expectation of the market today. When do we get back on track? The market’s at discounting mechanism, we’re now discounting different -- six months ahead. So, it’s kind of like when do we get back on track? I have no question of long-term trajectory but how long does this garden leave this pause actually last?

Well, Jim, I think we see -- I will go back to the perspective on what we saw the Williston recover; we’ve seen the DJ Basin is in the midst of takeaway capacity, and that’s being resolved. And I would bet on the sooner rather than later in terms of West Texas. But, I expect that we do in the meantime is make a lot of free cash flow between now and when that’s resolved and expect that it happens -- while I say sooner rather than later, there are probably lots of things that can be done to improve that as they work through 2019, but it’s certainly within the confines of 2019.

Okay, within the confines of 2019 helps a lot. And you’ve had a higher debt-to-cap ratio following the paycheck to Baker, running about 50%. You talked about how you’re going to pay off your $500 million and your $400 million this year, and then look at buying back stock. What’s the current goal or objective on a debt-to-cap ratio or an EBITDA ratio, however you want to do it? Where do you need to get the balance sheet to go before you start getting more aggressive in stock buybacks with all the free cash flow generation?

So, we’ve talked about target credit metrics, debt-to-EBITDA under 2.5 times and comfortable on that. Debt-to-cap, as you mentioned is still low 50s. We want that to be down in the 30. So, some work to do there. We’ve made a lot of progress on debt repayment, $1.5 billion in 2017, targeting about another $1 billion in second half of this year. That’s 2.5 billion in total over two years, and that’s put a meaningful impact on credit metrics. But, we still have some work to do. And we’ll be thoughtful about looking for opportunities to do that going forward, as we think about how to deploy excess cash. But, consistent with what we said before, we’re not going to look to pay big premiums to retire debt. We will be thoughtful and efficient about how we do it, but again, balancing that with growth, things like the Athlon acquisition and return of cash to shareholders.

Thank you. And our next question comes from David Anderson of Barclays. Your line is now open.

You talked about having seeing some of these efficiency drags in the past, not the first you’ve seen some of efficiencies creep up. I was hoping you could talk about kind of how this cycle compares to last cycle, particularly with E&P trends. So, we’ve been hearing a lot of about these four-well pads being the preferred size, some of them being drilled simultaneously here in bigger pads. So, I am just curious, as the operations start to scale up, I would think this really increases your visibility into customer activity quite a bit more, particularly with DUC inventories. Can you talk about how that potentially can help you during issues like this and whether or not that can actually ultimately lift your margins going forward, this increased visibility you have? Because I don’t think you’ve ever had visibility like this in the past on your customers.

No. I mean, these -- thank you, David. These are bigger capital expenditures than what you typically see in unconventionals but it also increases utilization and your better utilization throughout the day. It also allows us to better organize work. And because of the size of these, yes, there is more visibility of them sort of as the say manifest out in front of us. I also think though, it’s a demonstration of just the market moving towards better returns, in general. So, it’s as our customers look for ways to produce more and more quickly and try to give returns sooner in the cycle on the types of capital investments required for these larger pads.

On the completely different subject. On your international commentary, you’ve talked about competitors aggressively taking up some of these lower price tenders out there. You talked somewhat positively about pricing going forward. I got this sense in your commentary that capacity is tightened up now to the point internationally that you feel better about the pricings on contract going forward or is there something with the mix of the contracts that are coming out that suggest the pricing or margins for bidders could be better.

Couple of things there. So, first, we are seeing some tightening in certain markets. And I think, it’s got going to be -- sort of international is a really big place. We can’t paint it with only one brush. As I described North Sea, seeing some tightness there, we’ll see some tightness in markets as we move around. And as a baseline of work is tendered, the follow-on work after that quite frankly is where there is more opportunity from a pricing standpoint or bidding, tendering standpoint to do things around price. And I expect that will unfold as we work into ‘19. But the base level of business is always very competitive, and that’s where a lot of efficiencies and work is done to improve those. But, so, my comment around tightness is, I think I’m seeing some tightness in certain service lines, as I described billing tools, which I think will drive some tightness. But, it’s more -- it will come in sort of geographies. Now, unfortunately, we’re seeing this across a number of geographies in terms of an uptick. But as far as that tightness goes, that will be sort of one at a time, I expect.

Thank you. And our next question comes from Scott Gruber of Citigroup. Your line is now open.

Jeff, I want to circle back to Bill’s line of inquiry and international growth potential, double-digit potential next year, which is great to hear. What’s your view on how the international cycle evolves, not just over the next 12 months, but let’s look out over the next three years. What I’m curious about are, are we going to see a genuine deepwater recovery, are we going to see a genuine exploration cycle? And what I mean by genuine is not just a bounce off the bottom, which given the decline we’ve seen, 10% would really be just that, just the bounce off the bottom. Are we setting the stage here for multiple years of double-digit growth on international side and within deepwater?

Yes. Deepwater, as I’ve always said is sort of the last to come back into the frame. And I think deepwater still is push to the right as far as widespread recovery. But, the macro that we see shaping up is certainly encouraging, but the kind of deepwater, new AFE type activity I expect is going to require confidence in what is the long term outlook on the forward-look on oil, which I think is improving and is reaching a point that it’s supportive. So, as we look out a couple of years, I think that’s where we see inside of that three-year window, as you described it, as we see deepwater pick up, probably in a more meaningful way. And exploration, again, the exploration that we’re seeing so far has been certainly more focused around sort of step outs and things that are near to existing infrastructure, generally speaking. And I think more confidence, a, in cash flows and by our clients. And again, speculating here, but I would expect that as confidence builds, so will that.

Got it. And an unrelated follow-up here. What’s your view on the market penetration potential of electric frac fleets? Is this a technology that can move beyond a niche application? And where do you stand on the development of a fully electric frac offering?

Well, we look at everything through the lens of returns, and that hasn’t changed. So, we’ve certainly done some work around electric frac fleets and have tested that process and how -- and what we think about it. Not convinced today that -- well, I shouldn’t say that, but we need to see that unfold and see what are the real return capabilities of that, mean the physics say, it still has to generate energy. We have to move big things around. So, I’m not as convinced that we see the type of return around the cost of that, it’s probably a 2X cost of getting into that electric sort of power generation versus what we’re able to accomplish today.

Thank you. And our next question comes from Kurt Hallead of RBC. Your line is now open.

So, hey, Jeff, great color, commentary so far. So, something to maybe explore a little bit more on the fact that you talked about, you have demand on the books going out into 2019. It sounds like that is very much geared toward the international market. I just want to get some clarity that is it mostly international or does it also include some Permian. And in your mind is this tend to be a little bit earlier than usual and all your customers, especially on the international front getting some sense of urgency to get moving?

No. That’s more -- I mean, that comment is a North America comment in terms of activity that we see in 2019. Certainly, in markets where -- really across the piece, there is demand. We still have inbound demand in a market like this. So, I’m describing efficiency, the challenges to utilization efficiency through the second half of the year. But, that’s not to say we don’t see inbound demand today. And we also see very strong demand as we go into 2019. That’s the North America comment. As I talked about international, again, we see a contract set that we won today. And we also have visibility of, sort of, as I described last quarter, the doubling of tender activity. That’s all going to manifest over the second half of this year. And so, I’d make the same comment internationally. I mean, just like I say, this is a great outlook and a great market.

Okay. And then, you referenced the fact that U.S. land margins were approaching that peak level in 2014. I know that in prior comments target’s been put out there, about 20% -- reaching 20% by the end of 2018. Given your most recent comments about some elements of slowdown or increased maintenance CapEx, do you still think it’s feasible to get to the 20% margin by the end of the year?

Look, what we are doing is making decisions around longer term. And it’s critical that we deliver leading returns and most free cash flow that we can deliver, we’re going to lead the market in doing those things. And so, the kind of decision we could have made -- getting to the target could have happened last quarter, this quarter or next quarter. But, those decisions would be shortsighted, in my view, not right for the business. So, as I said, what hasn’t changed is Halliburton does have largest revenues, highest margins, best returns. And so, we’re going to do those things to capture as much of 2019 as you expect and probably more. All of these things, as I’ve said solve themselves as we go into 2019, and I’m really excited about next year.

Thank you. And our next question comes from Waqar Syed of Goldman Sachs. Your line is now open.

Good morning. My question relates to pressure pumping capacity. I think, in the past you’ve said that the market may still be undersupplied by about 0.5 million hydraulic horsepower. What’s your current thinking and where do you think in the second half, based on what capacity additions are coming in, what the supply demand balance looks like?

Yes. Thanks, Waqar. I mean, because of the things I’ve described this morning, I mean, I think the total market is temporarily balanced. And I know our equipment is sold out and we could sell more. And that’s because of there’s a lot of demand for what Halliburton does from a service quality standpoint, reliability, efficiency and technology. And the demand or the pressure, the work rolled on the equipment hasn’t changed, and that’s the -- so, it means that the attrition story hasn’t changed either. And we still see probably half of the incremental horsepower that comes into the market being ploughed back into existing fleets, and that’s reason I spend so much time and we spend so much time managing fleet size. And we have fleet sizes that are well below the industry average and that’s how we -- one of the ways that we deliver leading returns.

Okay. And just a follow-up on that. We had about decoupling pumping services from fracs and supply. Are you seeing the same trends and how would that impact margins for you guys and then are you going to change any strategy as a result of that changing trend?

I mean, with respect sand, the de-bundling, that’s a mixed bag. Ultimately, customers hire Halliburton to pump sand downhole, that’s what we get paid for. And we make money off a range of business models today and will continue to make margins off of making better wells. So, I don’t see a change in our strategy there. But, obviously, we look at everything through a returns lens and whatever that best returning model is, is how we view that.

Thank you. And that concludes our question-and-answer session for today. I would like to turn the conference back over to Jeff Miller for any closing remarks.

Thank you, Candice. Before we close, I would like to wrap up with a few key points. First, I believe we are in the beginning of a prolonged upcycle in both North America and the international markets, and Halliburton is best positioned to grow and expand margins. Second, we expect to generate strong free cash flow and plan to reduce our outstanding debt levels, and are targeting to initiate share repurchases. Finally, our value proposition resonates with our customers and delivers industry-leading returns to our shareholders. So, I’ll look forward to speaking with you next quarter. Candice, please close out the call.

Ladies and gentlemen, thank you for participating in today’s conference. This does conclude the program. And you may all disconnect. Everyone, have a great day.