Halliburton executives: Smaller operators vacuuming up equipment slack
Smaller North American oil-and-gas operators have moved quickly since the start of the Iran war to capitalize on higher commodity prices, leaders of equipment and services titan Halliburton recently told investors.
The trend, Halliburton executives said after the Houston-based company reported its first-quarter results, has begun to significantly tighten the North American market for gear and crews this spring and is starting to move into second-half 2026 as well.
“We’ve seen a lot of pull-forwards. We’ve seen inbounds. We’re also seeing H2 [second half] firming up,” Shannon Slocum, Halliburton’s chief operating officer, said on a conference call. “I think the next flip of the coin would be rig adds and some longer-term discussions on frac activity.”
Slocum said the surge in activity from smaller firms has put to rest the Halliburton team’s previous concerns that there might be gaps in the first-half calendar for fracturing work. Now, he said, the focus of many conversations with customers and prospects is turning to the summer and beyond and “about getting back to work and grabbing the value that’s out there.”
Slocum and Miller, Halliburton’s chairman, president, and chief executive officer, said large producers aren’t yet pitching in on the pick-up in work because they typically invest more evenly over the cycle and need more certainty to commit more capital.
That idea surfaced regularly in a recent special survey by the Federal Reserve Bank of Dallas. A follow-up poll to researchers’ regular quarterly questionnaire showed that a large majority of roughly 110 executives expect US oil production to increase by less than 500,000 b/d both this year and next. The big reason: No one has a clue as to when the Iran war will end and it’s too early to make big calls.
“Closing the supply gap from the Iran conflict will require greater certainty and higher 2027 future prices to incentivize additional rig and frack deployments,” one respondent said. “This is also keeping supply-chain inflation in the industry under check.”
Still, one survey respondent who works at a support services firm echoed Halliburton executives’ assessment that smaller operators are stepping into the breach, adding rigs and moving up drilling schedules. It’s a bet that, even when the Iran war ends, prices won’t reset to the levels of early this year.
“We don’t expect an immediate ramp-up to previous (to closure) levels on account of the infrastructure damage during the bombing campaign,” the executive wrote. “We are roughly estimating that, when the strait [Hormuz] reopens, we’ll be working with a $70-80 per barrel floor for WTI in the near future.”
Halliburton’s Miller echoed that idea on his team’s earnings call, saying the price of oil will be “structurally higher than what it was” and will create opportunities for operators.
“That tightness that we’re seeing created by smaller operators shouldn’t be overlooked,” Miller said. “The front edge of what we’re seeing here, a lot of inbounds, are smaller operators taking capacity out of the market.”
About the Author
Geert De Lombaerde
Senior Editor
A native of Belgium, Geert De Lombaerde has more than two decades of business journalism experience and writes about markets and economic trends for Endeavor Business Media publications Healthcare Innovation, IndustryWeek, FleetOwner, Oil & Gas Journal and T&D World. With a degree in journalism from the University of Missouri, he began his reporting career at the Business Courier in Cincinnati and later was managing editor and editor of the Nashville Business Journal. Most recently, he oversaw the online and print products of the Nashville Post and reported primarily on Middle Tennessee’s finance sector as well as many of its publicly traded companies.